First Metals Inc.

First Metals Inc.

June 05, 2007 09:30 ET

First Metals Signs Definitive Custom Milling Agreement With Xstrata Copper

TORONTO, ONTARIO--(Marketwire - June 5, 2007) - First Metals Inc. (TSX:FMA) is pleased to announce that it has signed the definitive agreement with Xstrata Copper Canada ("Xstrata") whereby Xstrata has agreed to mill Fabie Bay ore at the Horne Mill in Rouyn-Noranda, Quebec and purchase the copper concentrates on industry standard terms.

Xstrata, working together with First Metals, has begun refurbishment of the affected portions of the mill in order to optimize copper recovery from the Fabie Bay orebody. The Fabie Bay flow-sheet, equipment refurbishment and tailings disposal plan have been finalized and contractors are being selected. Mill staffing and training initiatives are also underway. It is expected that the mill will employ approximately 30 people. The project is expected to be completed by the fourth quarter of this year.

First Metals has all of the requisite funding in place to complete the mill refurbishment.

Initial ore production from Fabie Bay will come from a 10m open pit bench. 80,000 tonnes of ore are already drilled off and are ready for extraction. All of the reports required to obtain a production licence have been filed.

Chairman and C.E.O. James Beatty, stated that: "Securing the use of the Horne Mill is a critical component to attaining rapid production. The proximity of the mill to the deposit and the fact that test milling was successfully carried out there in the past, make this the best solution. We welcome the opportunity to create employment in the community and avail ourselves of the expertise of Xstrata.

First Metals Inc. is bringing into production the Fabie Bay and Magusi River Copper, Zinc, Gold and Silver Projects, 35 km north-west of Rouyn-Noranda, Quebec, Canada acquired from Globex Mining Enterprises, Inc. last year. First Metals has approximately 32 Million shares issued and outstanding and is listed on the Toronto Stock Exchange.

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