News Bulletin

First Quantum to acquire mothballed Ravensthorpe Mine in Western Australia

Tuesday, 15 Dec 2009

First Quantum Minerals has announced that it has entered into a binding agreement with BHP Billiton to acquire the Ravensthorpe Nickel Operation in Western Australia for US$340 million.

The agreement is subject to relevant approvals from the Australian Foreign Investment Review Board and the West Australian Minister for Mines and Petroleum. Subject to those approvals, the acquisition is expected to be finalized during the first quarter of 2010.

“The acquisition of the Ravensthorpe Nickel Operation is a major step towards First Quantum achieving its goal of becoming a globally diversified mining company,” said Philip Pascall, Chairman and CEO of First Quantum. “This project together with the recently announced commitment to build the Kevitsa project in Finland has the potential to make the Company one of the world’s leading nickel producers.

We are committed to re-starting Ravensthorpe which we believe we can successfully achieve within a realistic timeframe. We are confident that our experience from many years of successfully developing and operating complex projects will be invaluable in making this a reality. Our exceptional balance sheet, strong cash flow from the Company’s existing operations and the realistic capital cost base for Ravensthorpe provide us the time and flexibility to address the commissioning and operational issues previously encountered in order to realize the full potential of this exceptional project.”

“As with all of our operations and projects around the world, we fully recognize our responsibility to the Ravensthorpe community and all other stakeholders in this project and they should be aware that the success we have achieved in the resources industry to date has been built on having safe, healthy workplaces, sound environmental practices, support of the communities in which we operate and sustained strong financial performance.”

“First Quantum’s successful growth to this point has been built on identifying projects with high potential and applying our comprehensive skills to realize that potential. We embark upon this diversification and expansion of the Company’s asset base with confidence,” Mr. Pascall concluded.

Ravensthorpe Background

The project is located in Ravensthorpe, Western Australia, approximately 550 kilometres south-east of Perth. It is an open cut mine and hydrometallurgical process plant that uses proven technology to recover nickel and cobalt to produce a mixed nickel cobalt hydroxide intermediate product. The Company expects the project’s average annual production of nickel metal will be approximately 39,000 tonnes for the first five years after recommencement of operations and an average annual production of 28,000 tonnes of nickel metal over the expected life of mine of 32 years. Ravensthorpe’s development was completed in 2007 however; operations were suspended in January 2009 after the LME nickel price dropped to as low as $8,810.00 per tonne in late 2008.

Source: First Quantum Website Dec 2009

     

     

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