First Quantum Minerals Ltd.

First Quantum Minerals Ltd.

February 20, 2008 13:10 ET

First Quantum Minerals Receives Notice From DRC Mining Contract Review in Regard to the Kolwezi Tailings Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 20, 2008) - First Quantum Minerals Ltd. ("First Quantum" or the "Company") (TSX:FM)(LSE:FQM) announces that on Feb 19, 2008, it received a letter from the Democratic Republic of Congo Minister of Mines advising of the results of the Congolese Government's Mining Contracts Review Commission revisitation of the Kingamyambo Musonoi Tailings Sarl ("KMT") Mining Convention ("Convention"). KMT is owned by First Quantum 65%, La Generale Des Carrieres et Des Mines ("Gecamines") 12.5%, Industrial Development Corporation of South Africa ("IDC") 10%, the International Finance Corporation ("IFC") 7.5% and the Government of the Democratic Republic of Congo 5% ("RDC").

The Convention was one of over 60 contracts reviewed by the government.

A translation of the letter indicates the following:

1. Reproaches

1.1 The creation of KMT SARL has been carried out in breach of the
provisions of the Royal Arrete of 22 June 1926 on SARL, in particular
article 1.1, as the Decree N degrees 04/020 of 15 March 2004
authorising the creation of KMT SARL is dated before the incorporation
of the company (authentification of the articles of association of 16
March 2004);

1.2 The terms of the tender offer's submission have been breached, in
particular in relation to the price of the transfer of the mining
rights from Gecamines to KMT lowered from 130 millions USD to 15
millions USD, of which 5 millions USD have been paid as of today;

1.3 The shares have been set arbitrarily in the absence of a feasibility
study capable of identifying the resources and of determining the
participation of each party in the share capital;

1.4 Since the conclusion of this partnership in 1997, the prospecting
works only begun in 2007, thus leading to the freezing of the

1.5 The grants of the majority of the shares to CMD was made against a
simple undertaking to search for the financing, the repayment of which
is however to be borne by the joint venture.

2. Position of the Government

The Government requests the termination of this contract to the best interest of each party.

Considering the arrival of the new partner First Quantum Ltd, this partnership can however be maintained, under the following conditions:

- to regularise the incorporation of the company in strict conformity to the Congolese law on commercial companies;

- to respect the terms of the initial tender offer and its implications, in particular the up-front payment (pas de porte);

- to transmit to the Government the feasibility study of the project. This feasibility study shall, inter alia, identify and evaluate the real contribution of the parties to the company in order to achieve an equitable allocation of the shares;

- to propose a schedule of the social actions which have a visible impact;

- Gecamines must have an active role in the day-to-day management of the company.

The Company has advice that the Convention is valid and binding and that KMT has complied with all its terms. The Convention provides a dispute resolution mechanism through international arbitration. The Company will liaise with its financially contributing partners the IFC and IDC and, as invited by the Minister, will through KMT respond to the letter shortly and arrange to meet with him in due course.

Further information will be provided as it becomes available.

On Behalf of the Board of Directors of First Quantum Minerals Ltd.

G. Clive Newall, President


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Certain information contained in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information, including but not limited to those with respect to the prices of gold, copper, cobalt and sulphuric acid, estimated future production, estimated costs of future production, the Company's hedging policy and permitting time lines, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such factors include, among others, the actual prices of copper, gold, cobalt and sulphuric acid, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the Alberta, British Columbia, and Ontario Securities Commissions, the Autorite des marches financiers in Quebec, the United States Securities and Exchange Commission and the London Stock Exchange.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • First Quantum Minerals Ltd.
    Clive Newall
    +44 140 327 3484
    +44 140 327 3494 (FAX)
    Hogarth Partnership Ltd.
    Harriet Pask
    +44 (0) 20 7357 9477
    Hogarth Partnership Ltd.
    Sarah MacLeod
    +44 (0) 20 7357 9477