LONDON, ENGLAND and TORONTO, ONTARIO--(MARKET WIRE)--Apr 21, 2008 -- First Quantum Minerals Ltd. ("First Quantum") (Toronto:
FM.TO -
News)(LSE:
FQM.L -
News) and Scandinavian Minerals Limited ("Scandinavian Minerals")
(Toronto:
SGL.TO -
News)(Frankfurt:
W3M.F -
News) today announced that they have
entered into a definitive agreement pursuant to which a
wholly-owned subsidiary of First Quantum will acquire, by
way of a court-approved plan of arrangement, all of the
outstanding common shares of Scandinavian Minerals on the
basis of Cdn.$9.00 in cash plus 0.01 common shares of First
Quantum for each common share of Scandinavian Minerals.
The implied value of the purchase price is Cdn.$9.89 per
Scandinavian Minerals share (based on the closing price
of First Quantum shares on the Toronto Stock Exchange of
Cdn.$89.36 on April 18, 2008), representing a 41.3% premium
to the closing price of Scandinavian Minerals shares on
the Toronto Stock Exchange of Cdn.$7.00 on April 18, 2008
and a 53.8% premium to the volume-weighted average trading
price of the Scandinavian Minerals shares on the Toronto
Stock Exchange of Cdn.$6.43 for the 20 trading days ended
April 18, 2008.
The Board of Directors of Scandinavian Minerals has unanimously
approved the transaction and resolved to recommend to the
holders of Scandinavian Minerals shares that they vote in
favour of the transaction. In addition, the directors and
senior officers of Scandinavian Minerals have entered into
voting agreements with First Quantum, pursuant to which
they have irrevocably agreed to vote their shares (including
any shares issuable upon the exercise of options), representing
approximately 13.6% of the issued and outstanding common
shares of Scandinavian Minerals, in favour of the transaction.
In determining to recommend the transaction to the shareholders
of Scandinavian Minerals, the Board of Directors considered
a number of factors and relied, in part, on an opinion from
Paradigm Capital Inc., financial advisors to Scandinavian
Minerals, to the effect that, subject to the assumptions
and conditions set forth in such opinion, the consideration
to be received by the holders of Scandinavian Minerals common
shares pursuant to the transaction is fair, from a financial
point of view, to such holders.
Commenting on the transaction, Mr. Peter Walker, President
and Chief Executive Officer of Scandinavian Minerals, said,
"We believe that the transaction creates a compelling opportunity
for the shareholders of Scandinavian Minerals to realize
immediate and substantial value for their shares whilst
also gaining exposure to profitable and fast-growing metal
production through the receipt of First Quantum shares.
First Quantum has the experience and track record to take
the Kevitsa project through development to production smoothly
and expeditiously."
Mr. Philip Pascall, Chairman and Chief Executive Officer
of First Quantum, said, "The acquisition of the Kevitsa
nickel-copper-PGE deposit fits First Quantum's strategy
of developing or acquiring projects where, with our experience,
we can add material value to the process of bringing them
to commercial production and their subsequent efficient
operation. Accordingly we look forward to lending our expertise
to the development of one of the world's major undeveloped
sulphide nickel deposits and one of the largest mineral
discoveries in Finland's history. This acquisition is also
consistent with our goal of diversifying our assets geographically
and across commodities."
About the Transaction
The transaction will be carried out by way of a statutory
plan of arrangement pursuant to the Canada Business Corporations
Act and must be approved by the Ontario Superior Court of
Justice and the affirmative vote of Scandinavian Minerals'
shareholders at a special meeting of shareholders to be
called and held to consider the transaction.
The proposed transaction is expected to close in the second
quarter of 2008, shortly after receipt of shareholder and
court approvals.
The completion of the transaction is subject to customary
closing conditions, including the receipt of any required
regulatory approvals.
The arrangement agreement contains customary non-solicitation
provisions, but permits Scandinavian Minerals, in certain
circumstances, to terminate the arrangement and accept an
unsolicited superior proposal, subject to fulfilling certain
conditions. Scandinavian Minerals has agreed to pay First
Quantum a break fee of US$8 million in such circumstances
and certain other limited circumstances if the transaction
is not completed.
First Quantum will finance the acquisition through a combination
of cash-on-hand and access to existing credit facilities.
The transaction is not contingent on any financing condition.
Details regarding these and other terms of the transaction
are set out in the arrangement agreement, which will be
filed by First Quantum and Scandinavian Minerals on the
Canadian SEDAR website at www.sedar.com.
Further information regarding the transaction will be contained
in a proxy circular that Scandinavian Minerals will prepare
and mail to holders of Scandinavian Minerals common shares
in connection with the special meeting of shareholders to
be held to approve the transaction. It is expected that
these materials will be mailed in May 2008 for a meeting
to be held in June 2008. Once mailed, the proxy circular
will also be available on SEDAR at www.sedar.com.
All shareholders are urged to read the proxy circular once
it becomes available as it will contain additional important
information concerning the transaction.
Paradigm Capital Inc. has acted as financial advisor to
Scandinavian Minerals in connection with the transaction.
RBC Capital Markets has acted as financial advisor to First
Quantum in connection with the transaction.
About Scandinavian Minerals
Scandinavian Minerals is a Canadian public company listed
on the Toronto Stock Exchange under the symbol "SGL" and
on the Frankfurt Freiverkehr market under the symbol W3M.
The Company's current focus is the development of its 100%-owned
Kevitsa nickel-copper-PGE project in northern Finland.
Kevitsa, situated in northern Finland, is one of the world's
major undeveloped sulphide nickel deposits and one of the
largest mineral discoveries in Finland's history. The Kevitsa
deposit is easily accessible by road. Water and hydroelectric
power are available nearby.
In April 2007 Scandinavian Minerals commenced the Feasibility
Study for the Kevitsa project. The Study is being coordinated
by St Barbara LLP of London, UK. The metallurgical process
has been developed by the Mineral Processing Laboratory
of the Geological Survey of Finland. Plant engineering and
design is being performed by Outotec Oyj. The Feasibility
Study is based on an open pit operation mining approximately
5 million tons per year of ore, with production of nickel
and copper concentrates for sale to local or overseas smelters
and is expected to be completed in the second quarter of
calendar 2008.
About First Quantum
First Quantum is a mining and metals company whose principal
activities include mineral exploration, development and
mining. First Quantum produces LME grade "A" copper cathode,
copper in concentrate, gold and sulphuric acid. First Quantum's
operations in Zambia include the 100% owned Bwana Mkubwa
SX/EW facility and sulphuric acid plants and the 80% owned
Kansanshi open pit copper-gold deposit. In the Democratic
Republic of Congo, First Quantum operates both the 100%
owned Lonshi open pit copper mine, which provides oxide
copper ore for processing at Bwana Mkubwa, and the 95% owned
Frontier copper mine. In addition, First Quantum holds a
65% interest in the Kolwezi copper-cobalt tailings project
currently under development. In Mauritania, First Quantum
operates the 80% Guelb Moghrein copper-gold mine.
About Finland
Finland is a republic which became a member of the European
Union in 1995. Its population is 5.3 million, of which approximately
560,000 live in the capital Helsinki and two-thirds live
in urban areas. Finland is situated in northern Europe between
latitudes 60 degrees and 70 degrees North with approximately
a quarter of its total area north of the Arctic Circle.
However, due to the Gulf Stream, its climate is relatively
mild and temperate. Finland has an advanced industrial economy,
with the metal, engineering and electronics industries accounting
for approximately 60% of export revenues. First Quantum
believes that Finland is a mining-friendly country, with:
- a long history of minerals exploration and metals production;
- a well-developed mining act; and
- excellent mining industry infrastructure, with major processing
and refining facilities for copper and nickel plus zinc,
cobalt and stainless steel.
In addition, Finland has in recent years ranked consistently
in the top six of the world's national economies for competitiveness
and productivity, according to the Global Competitiveness
Index published by the Geneva-based World Economic Forum.
Since 1995, Transparency International organization, an
international organization combating corruption, has regularly
ranked Finland at or near the top of its list of least corrupt
countries in the world.
On Behalf of the Board of Directors of First Quantum Minerals
Ltd.
G. Clive Newall, President
Certain information contained in this news release constitutes
"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 proposed transaction,
the development of the Kevitsa project, the prices of nickel,
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 ability of each of First
Quantum and Scandinavian Minerals to satisfy all of the
closing conditions to complete the transaction, the possibility
that the shareholders of Scandinavian Minerals will not
approve the transaction, the actual prices of copper, nickel,
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.
12g3-2b-82-4461
Listed in Standard and Poor's