First Quantum Minerals Ltd.
LSE : FQM
TSX : FM

First Quantum Minerals Ltd.

November 08, 2006 03:01 ET

First Quantum Minerals Updates the Copper Resource and Reports Results From a Technical Report on the Frontier Copper Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 8, 2006) -

(All figures expressed in United States dollars)

First Quantum Minerals Ltd. "First Quantum" or the "Company", (TSX:FM)(LSE:FQM) is pleased to announce the results of a technical report (the "Report"), dated October, 2006, for development of its 95% owned Frontier copper project located in Haut Katanga Province, Democratic Republic of Congo ("DRC"). The Report was compiled by Dan Ryan a project manager and engineer employed by First Quantum and contains the results of an independent engineering study ("Study") prepared by Intermet Engineering Pty Ltd. together with independent reports provided by Gayle Hanssen of Digital Mine Services, and Tony Cameron of A & J Cameron and Associates Ltd. In addition, First Quantum is pleased to publish the results of an updated independent copper resource estimate completed at the Frontier project by Gayle Hanssen of Digital Mining Services, Harare, Zimbabwe.

Economic Highlights

The following results are on a 100% project basis, excluding debt financing.



------------------------------------------------------------
Copper Price ($/lb) 1.50 2.00 2.50 3.00
------------------------------------------------------------
Pre-tax IRR (%) 24 58 92 124
------------------------------------------------------------
Pre-tax NPV (10%) ($M) 213 739 1,299 1,858
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Pre-tax NPV (12%) ($M) 156 605 1,083 1,561
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Net cash flow after capital
and before tax ($M) 957 2,365 3,862 5,360
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Payback period (years) 3.6 1.5 less less
than than
0.4 0.4
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Philip Pascall, Chairman and CEO, commented, "We are very pleased with the outcome of the Report which demonstrates the robust economics of the Frontier project. First Quantum's board of directors has approved the project, subject to the receipt of the final technical report. Long lead items have been ordered and pre-stripping and construction have commenced. Commissioning and commercial production are expected in the third quarter 2007. Frontier will be financed using a combination of internal resources and a corporate bank facility. The Frontier project is situated on the DRC-Zambia border. It will employ approximately 450 construction personnel at its peak, with an operating workforce of approximately 830 and approximately 300 additional contractors. The development of Frontier will provide long lasting benefit to the Democratic Republic of Congo and will also serve as a catalyst for further public and private investment in the country. We are very pleased with the support that we have received from the Government of the Democratic Republic of Congo to date and we look forward to jointly expediting the construction of the project. I also would like to acknowledge the cooperation and support of the Government of Zambia."

Project Highlights (at a copper price of $1.50/lb)



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Key Data
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Mine Life 19 years
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Construction Capital Cost $226.4 million
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Life of Mine Capital Cost $448.7 million
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Throughput 8.0 million tonnes/year
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Ore Mined and Processed 151.8 million tonnes
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Waste Mined 522.1 million tonnes
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Strip Ratio 3.44
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Concentrate Grade 25%
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Total Copper in Concentrate Production 1.43 million tonnes
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Total Refined Copper Production 1.39 million tonnes
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Average Annual Refined Copper Production 73,000 tonnes
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Average Operating Cash Costs
(incl royalties but before realization) 0.58 $/lb
----------------------------------------------------------------
Average C1 Cash Costs
(incl royalties and realization) 1.04 $/lb
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Operating Costs

----------------------------------------------------------------
$/tonne of ore $/lb of refined copper
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Mine 6.42 0.32
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Milling 3.98 0.20
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General and Administration 0.86 0.04
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Royalties 0.42 0.02
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Realization 9.25 0.46
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Total 20.93 1.04
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Note:
The above realization costs incorporate $4.80/wet metric tonne
concentrate transport, $75/dry metric tonne toll treatment charge ("TC"),
$0.075/lb of payable copper refining charge ("RC"), price participation of
+/-10% from a base copper price of $1.20/lb to an upper limit of $0.06/lb
and freight capture payable to the local smelter equivalent to
approximately 50% of the transport saving. TCs and RCs are considered
conservative and are primarily based on 2006 mid year settlements between
Escondida and various smelters.
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Capital Costs

The total construction capital cost for the Frontier project is forecast to be $226.4 million. Life of mine capital for the project is estimated at $448.7 million. The cost estimates have been based on detailed engineering estimates and where appropriate, known costs from First Quantum's Kansanshi project in Zambia.

Project Overview

The project consists of the open pit mining and processing of primary sulphide ore. The current measured and indicated sulphide resource at a 0.35% copper cut-off totals 182.1 million tonnes grading 1.16% total copper which contains 2.1 million tonnes of copper. In addition to the sulphide resource, the project hosts a measured and indicated oxide/mixed resource at a 0.35% copper cut-off of 26 million tonnes grading 1.19% total copper which contains 0.31 million tonnes of copper. For the purpose of the Report the oxide/mixed mineralization has been considered waste, although in practice it will be stockpiled separately for possible processing in the future or for treatment at First Quantum's Bwana Mkubwa plant.

The Report is based on the treatment of 8 million tonnes of sulphide ore per year for the production of copper concentrate which will be shipped for treatment at the Mufulira smelter of Mopani Copper Mines plc ("Mopani") located (30 kilometres) to the northwest of Frontier on the Zambian Copperbelt. A toll smelting refining and off-take contract for 100% of production has been entered into with Mopani for the treatment of the concentrate production and Glencore International AG for the sale of the refined copper production. Metallurgical test work indicates an estimated life of mine recovery of 89.3% copper to a concentrate grading 25% copper. Recovery of copper to payable metal is estimated to be 86.4% from concentrator feed.

The Frontier site is a greenfield development, with the advantage of being relatively close to significant existing mine developments in the Zambian Copperbelt. As a result, issues of access and housing are relatively straight forward. All other mine site infrastructure will need to be developed, including power supply, water supply, offices, workshops and other buildings, mobile equipment and fuel storage. Power will be supplied from an existing substation approximately 28 kilometres to the west in Zambia. Water will be supplied from mine dewatering.

During the life of mine, Frontier is expected to produce 1.43 million tonnes of copper in concentrate. On site operating cash costs are expected to average $0.58/lb of refined copper and $1.04/lb after all realization costs, assuming a copper price of $1.50/lb.

Project Funding

The Frontier project is expected to be financed through a combination of internal resources and a corporate bank facility.

Qualified Persons and NI 43-101 For The Report

The Report was compiled by First Quantum and reconciled to the standards specified in National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). Contributions by qualified persons to the report include: Ian Thomas an independent professional metallurgist with 27 years experience and a member of the Australasian Institute of Mining and Metallurgy and; Tony Cameron an independent professional engineer of with 19 years experience and a fellow of the Australasian Institute of Mining and Metallurgy. All co-authors are acceptable "members of professional associations" under NI 43-101 and are the "Qualified Persons" under that instrument for the preparation of the Study and Report compiled by First Quantum. The co-authors have verified the data disclosed in this news release including reviews of the metallurgical data, mine planning simulations, capital cost estimates and operating cost estimates pertinent to the Report. There were no known limitations on the verification process. A NI 43-101 compliant technical report will be filed on SEDAR within 45 days.

Updated Independent Copper Resource

First Quantum has conducted four phases of reverse circulation drilling, and three phases of diamond drilling since the shallow first pass air core drilling initially outlined the Frontier deposit in 2002. This resource estimate is based on 360 drill holes (60,931 metres). A previous resource estimate for this deposit was released on May 12, 2005.

At a 0.35% total copper cut off, the measured and indicated resource is estimated to be as follows:



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Cut off Total Acid Soluble Total Total
Mineral Total Copper Copper Contained Soluble
Resource Copper Ores Grade Grade Copper Copper
Category (%) (tonnes) (%) (%) (tonnes) (tonnes)
--------------------------------------------------------------------------

Sulphide
Measured 0.35 120,265,000 1.16 1,390,000
Indicated 0.35 61,803,000 1.17 723,000

--------------------------------------------------------------------------
Total Sulphide 182,068,000 1.16 2,113,000
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Oxide/Mixed
Indicated 0.35 25,967,000 1.19 0.65 308,000 169,000
--------------------------------------------------------------------------

Total
Measured 0.35 120,265,000 1.16 1,390,000
Indicated 0.35 87,771,000 1.18 1,032,000 169,000

Measured &
Indicated 208,036,000 1.16 2,422,000 169,000

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Inferred
(Sulphide &
Oxide/Mixed) 0.35 81,890,000 1.15 943,200
--------------------------------------------------------------------------


Mineralization at Frontier is hosted predominantly within altered and veined Katangan metapelites, interpreted to be contained within a shallow south eastwardly plunging, north eastward dipping, overturned anticline, with the thickest mineralization developed in the nose region of this fold. Oxidation extends to variable depths across the deposit, and is strongly influenced by post mineral faulting. The effective date of the estimate for the measured and indicated resource was September 2006.

Frontier is located near the town of Sakania in the DRC, within 2 km of the Zambian border, and the paved highway that parallels it, roughly equidistant between the city of Ndola (35 kilometres) to the southeast and the Mopani smelter at Mufulira. It is also approximately 45 kilometres from First Quantum's Bwana Mkubwa SX/EW facility. The main railway from the Copperbelt in Zambia to Lubumbashi in the DRC passes within 5 kilometres of the Frontier site.

Qualified Person and NI 43-101 For The Updated Independent Copper Resource

The Frontier resource estimate was produced to JORC (Joint Ore Reserve Committee of the Australasian Code for Reporting of Mineral Resources and Reserves, September 1999.) standards and prepared and verified by Gayle Hanssen, an Independent Consultant with Digital Mining Services, Harare, Zimbabwe, and reconciled to the standards specified in NI 43-101. Ms. Hanssen is a professional natural scientist of the South African Council for Natural Scientific Professions (SACNASP), an acceptable "member of a professional association" under NI 43-101 and is the "Qualified Person" for the estimate of the mineral resource. A NI 43-101 compliant technical report will be filed on SEDAR within 45 days.

Alan J. Stephens FIMMM, a geologist with more than 30 years of experience, and previously Vice President of Exploration for, and since January 1, 2005, a consultant to First Quantum, was responsible for the design and conduct of the program.

Drilling at Frontier was carried out by SDS Drilling, a subsidiary of Boart Longyear Inc. and Stanley Mining Services Ltd. a subsidiary of Layne Christensen Company. Survey and Technical Services (STS), Masvingo, Zimbabwe surveyed all drill hole collars. Down hole surveys were completed on 90 of the diamond drill holes and partial or complete down hole surveys were completed on 32 of the reverse circulation drill holes. Diamond drill holes were drilled at HQ size, with reduction to NQ as required. Half core samples were taken with individual sample intervals reflecting geology and respecting core loss, and a minimum sample interval of 0.5 metres. Core recovery was generally better than 90%. All RC samples were split to normal industry standards. First Quantum personnel conducted all sampling, and supervised the chain of custody from the drill site to the assay laboratories.

The data verification process was conducted in accordance with normal verification processes associated with deposits of this nature. All samples were prepared to normal industry standards, with all diamond and Phase II & III RC drill holes and assayed for total copper, ambient temperature acid soluble copper and total cobalt, at Scientific Services (Pty.) Ltd in Capetown, South Africa or Genalysis Laboratory Services Pty Ltd of Maddington, Western Australia. Phase I RC drill holes and air core holes were assayed for total copper and ambient temperature acid soluble copper at Antech Laboratories, Kwekwe, Zimbabwe. Appropriate standards, blanks and duplicates were employed. A laboratory check assaying program, comparing Scientific Services (Pty.) Ltd with Genalysis Laboratory Services Pty Ltd, was performed with acceptable results. There were no known limitations on the data verification processes.

In accordance with the requirements of NI 43-101, readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Company is not aware of any environmental, permitting, legal, title, taxation or other relevant issue which may materially affect the estimate of the mineral resources contained in this news release other than those which have been disclosed in the documents it files from time to time with the relevant securities regulatory and listings authorities in Canada, the United States and the United Kingdom.

Forward-Looking Statements

Certain information contained in this news release "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 copper, 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, 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 Alternative Investment Market operated by the London Stock Exchange.

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

G. Clive Newall, President

12g3-2b-82-4461

Listed in Standard & Poor's

Sedar Profile #00006237


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.
    Geoff Chater
    North American contact
    (604) 688-6577 or Toll Free: 1-888-688-6577
    or
    First Quantum Minerals Ltd.
    Bill Iverson
    North American contact
    (604) 688-6577 or Toll Free: 1-888-688-6577
    (604) 688-3818 (FAX)
    Email: info@fqml.com
    or
    First Quantum Minerals Ltd.
    Clive Newall, President
    United Kingdom contact
    +44 140 327 3484
    +44 140 327 3494 (FAX)
    Email: clive.newall@fqml.com
    or
    First Quantum Minerals Ltd.
    Carina Corbett
    United Kingdom contact
    +44 20 7907 4761
    Website: www.first-quantum.com