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Gold/Mining/Energy : first quantum minerals FM on TSE
FM 27.190.0%Jan 8 4:00 PM EST
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To: Bohdan who wrote (176)9/5/1997 2:34:00 PM
From: DRT   of 385
 
The reasons for this accummulation/U.S. investors are clearly spelled out in FM's last press release:

1. "...First Quantum would like to take this opportunity to inform shareholders that negotiations are continuing with the Zambian authorities for the acquisition of the Chambishi Copper Mine (``DCo''), the Luanshya Mining Division (``BCo'') and the
Ndola Precious Metals Plant (``HCo''). The Company remains optimistic that its involvement in the privatization of ZCCM (Zambia Consolidated Copper Mines Limited) will produce significant results for its
shareholders."

i.e. The Binani acquisition of BCo may not close due to a lack of financing/other reasons why FM should be awarded the project as originally announced by ZCCM.

2. "Elsewhere in the famous Copperbelt, First Quantum is investigating the acquisition of an additional nine assets. The successful acquisition of any one of these assets would add significantly to the value of the Company. Management continues to be aggressive in seeking out new projects, in addition to those already being pursued, in order to build on the Company's present asset base."

i.e. News on acquisitions is pending/Wood Gundy is playing a key role in terms of project identification and subsequent financing. I believe Gundy has a report on Canadian companies involved in the Zambian-Congo copperbelt coming out next week.

The likely scenario still has considerable upside (not yet reflected in the share price):

1. The short-term (copperbelt acquisitions + ZCCM privatization + production at Bwana Mkuba) and

2. The longer term (additional acquisitions/takeovers + the likely increase in reserve estimates of ZCCM acquired assets + significant $$$ cashflow).

DRT
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