First Quantum Minerals and Scandinavian Minerals 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. The implied value of the purchase price is C$9.89 per Scandinavian Minerals share (based on the closing price of First Quantum shares on the TSE of C$89.36 on April 18, 2008), representing a 41.3% premium to the closing price of Scandinavian Minerals shares on the TSE of C$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 TSE of C$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.
Commenting on the transaction, Peter Walker, President and CEO of Scandinavian Minerals said, “We believe that the transaction creates a compelling opportunity for the shareholders of Scandinavian Minerals to realise 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.”
Philip Pascall, Chairman and CEO 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.”
Scandinavian Minerals’ current focus is the development of its 100%-owned Kevitsa nickel-copper-PGE project in northern Finland. Kevitsa 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 co-ordinated by St Barbara LLP of London. 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. The study is based on an open pit operation mining approximately 5 Mt/y 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. www.scandinavianminerals.com; www.first-quantum.com
