First Quantum Mandates Key Players In Kansanshi Copper Project
2002-11-28 12:00 (New York)
Financing
Business Editors
VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 28, 2002--First
Quantum Minerals Ltd. (OTCBB:FQVLF)(TSX:FM)(LSE:FQM) is pleased to
announce the signing of a mandate and indicative term sheet with
Standard Bank Group and WestLB AG as "Co-Lead Arrangers and
Underwriters" for a limited recourse Export Credit and Commercial debt
loan facility of a minimum of US $120 million ("The Loan Facility")
for the development of the Kansanshi Copper Project ("Kansanshi")
located near Solwezi in Zambia. Standard Bank and WestLB were mandated
after a highly competitive bidding and selection process, which
clearly indicated the willingness of the project finance banking
community to be involved in the debt financing of Kansanshi.
It is intended that the loan facility be structured 50% as a
commercial debt facility ("Commercial Facility") and 50% as an export
credit facility ("Export Credit Facility") through the Export Credit
Insurance Corporation of South Africa.
In addition to this mandate, First Quantum is in advanced
discussions with the European Investment Bank (EIB), the financing
institution of the European Union, who have expressed a strong
interest in participating in financing of the Kansanshi project. The
EIB has proposed several alternatives for their participation in
Kansanshi which include providing tier one project financing pari
passu with the Lead Arrangers; subordinate debt and quasi-equity
project participation.
Furthermore, First Quantum has received expressions of interest
from a number of multi-lateral development banks, national development
banks, specialized equity funds and metal off takers who are willing
to provide funding, subordinated to the Loan Facility for the
development of the Kansanshi project.
"WestLB was a lender for First Quantum's original Bwana Mkubwa
development almost 5 years ago. Their continued confidence in our
group is particularly gratifying. We are very pleased to have the
Standard Bank Group together with WestLB responsible for the financing
of our Kansanshi Project, as they are committed long term investors
with a mandate to foster development of projects in Sub-Sahara Africa.
We view their participation as an overwhelming vote of confidence for
the Kansanshi deposit and the country of Zambia. First Quantum is
committed to maintaining the current momentum in bringing the
Kansanshi Project into production in 2004. The confidence of these
Banks is integral to achieving this timetable. In addition, the
Zambian government and our partners, ZCCM, have been highly
supportive, to date, in taking the necessary steps to enhance the
project's economics."
"As well, we recently retained the Royal Bank of Canada Capital
Markets investment division to lead a US $10 million equity issue
which will be used for the ongoing development of the Kansanshi
project. It is our strategy to provide maximum benefit from the
Kansanshi project for existing shareholders by structuring a project
finance package that minimizes dilution without compromising financial
prudence. The team that has already been established will ensure that
the least dilutive and most efficient financing structure will be put
in place for both the construction of Kansanshi and its operation
after commissioning." commented Philip Pascall, Chairman, First
Quantum Minerals.
About the Kansanshi Project
The Kansanshi project is located approximately 15 kilometres north
of Solwezi, in the Northwest Province of Zambia. First Quantum holds
an 80% interest in the project with Zambian Consolidated Copper Mines
("ZCCM") holding the remaining 20% interest. Kansanshi hosts an
independently calculated open pit mineral resource of 302 million
tonnes grading 1.17% copper and 0.17 grams per tonne gold containing
3.5 million tonnes (7.8 billion pounds) copper and 1.6 million ounces
of gold.
An independent engineering study, completed by GRD MinProc of
Australia, envisions that the Kansanshi project will be developed in
two phases. Phase One (years 1-11) will focus predominantly on shallow
copper oxide and mixed ores. Annual production will average 94,000
tonnes (207 million pounds) of copper and 42,000 ounces of gold. Phase
One cash costs have been estimated at $0.35 per pound of copper, net
of gold credits. The mineable resource for Phase One is 73 million
tonnes grading 1.74% copper and 0.27 gram per tonne gold contained
within the global resource of 302 million tonnes grading 1.17% copper
and 0.17 gram per tonne gold.
A Definitive Feasibility Study is scheduled to be completed in the
fourth quarter of 2002, which will consider all aspects of the
development of a new, large scale open pit mine at Kansanshi. First
Quantum's objective is to develop an operation that recognizes the
changing physical nature of the Kansanshi ore body with depth, and
consequently minimize capital expenditures and maximize profitability.
About Standard Bank Group
Through an expanding international network the Standard Bank Group
offers a range of specialist banking services and promotes trade,
investment and business flows with an emerging market focus on a
worldwide basis. The bank is a leading participant in trade finance
and project finance with a strong mining capability based in London.
Utilizing its strengths in Africa, North and South America, the Far
East and Eastern Europe, the bank offers flexible pre and post export
financing for commodities and capital goods. In addition, Standard
Bank London trades in precious and base metals, provides a full range
of Treasury products, and is active in mining finance and advisory
services. The bank is involved in the sovereign debt market and in
corporate debt trading on an international basis. The Banker magazine
awarded "Bank of the Year 2002 - Africa" to the Standard Bank Group.
About WestLB AG
WestLB AG is a focused European wholesale bank operating on an
international scale. With Group total assets of approximately C 405
billion, WestLB is Germanys 4th largest banking group. The bank offers
a wide range of products tailored specifically to the needs of major
corporate clients. WestLB has been recognized by Treasury Management
International magazine as "Best Bank" in the Project Finance Category
while Infrastructure Journal voted them "Arranger of the Year" in
Europe, the Middle East and Africa.
About European Investment Bank ("EIB")
EIB's chief remit is the balanced development of the European
Union ("EU"). On average, therefore, more than two thirds of EIB's
individual loans help to finance a wide range of projects in regions
lagging behind in their development or contending with structural
problems. Since the 1960's, the EIB has been an active participant in
the cooperation policies pursued by the EU in some 150 countries
outside the EU, in particular in Africa in the framework of successive
EU/ACP Lome Conventions and under the Cotonou Agreement which will
enter into force in early 2003. The EIB is the leading non-sovereign
AAA issuer worldwide. The EIB works in close cooperation with the
banking sector, both with respect to its capital market operations and
lending activity. In the Zambian mining sector, EIB has already signed
a EUR 14 million, 6 year facility, for Bwana Mkubwa Mining Limited,
First Quantum wholly owned Zambian subsidiary company.
On Behalf of the Board of Directors of First Quantum Minerals Ltd.
G. Clive Newall, President |
