First Quantum Minerals Provides Update on BVI Legal Proceedings
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/19/11 -- (All figures expressed in US dollars, unless otherwise noted)
First Quantum Minerals Ltd. ('First Quantum' or the 'Company') (TSX: FM)(LSE: FQM) today announced that the British Virgin Islands Commercial Court has rejected an application by HIGHWIND PROPERTIES LIMITED, PAREAS LIMITED, INTERIM HOLDINGS LIMITED, and BLUE NARCISSUS LIMITED (the 'Highwinds Group' or 'Highwinds'), all subsidiaries of Eurasian Natural Resources Corporation PLC ('ENRC'), to summarily dismiss First Quantum's legal claim in relation to the cancellation of First Quantum's Kolwezi tailings project ('the Kolwezi Project') in the Democratic Republic of Congo ('DRC').
The Court's decision to reject Highwinds' application means that the case brought by First Quantum's subsidiary, Congo Mineral Developments Ltd. ('CMD'), should now proceed to trial, at which Highwinds will need to explain its involvement in the unlawful cancellation of First Quantum's interest in the Kolwezi Project. In particular, it will need to explain how it came about that it signed a contract to acquire the Kolwezi permit the very same day First Quantum's contract was cancelled and why, as a term of that contract, Highwinds agreed to pay for the DRC's legal costs to defend the DRC's conduct in arbitration. Highwinds was also ordered to pay CMD's legal costs and has indicated its intention to appeal the decision.
Background to the proceedings
In September 2010, CMD filed a claim in the BVI against the Highwinds Group, which claims to hold an interest in the Kolwezi Project tailings permit. First Quantum took this action as part of its efforts to pursue its rights in relation to the unlawful cancellation of its legal title to the Kolwezi Project. The legal action includes claims for inducement of breach of contract and interference with contractual relations and property rights. First Quantum's damages are estimated to exceed $2 billion. The Highwinds Group applied to have the case dismissed and the matter was argued in a two day contested hearing before the BVI Commercial Court in July.
When the Kolwezi Project was cancelled First Quantum had already invested over $400 million in a plant on site, which was 75% completed, and prior to the DRC's cancellation, was scheduled for commissioning by no later than May of 2010. As a result of the cancellation, over 700 Congolese have been out of work since August 2009, and the social programs instituted by First Quantum, including an almost completed hospital, and HIV-Aids and Malaria treatment programs were as a result cancelled.
ENRC announced on August 20, 2010 that it had purchased 50.5% of the outstanding common shares of Camrose Resources Limited ('Camrose'), which through its ownership of the Highwinds Group has a 70% interest in the Kolwezi Project.
In addition to legal proceedings against the Highwinds Group, First Quantum is continuing to advance its rights against the DRC through the ICC international arbitration has announced that the British Virgin Islands Commercial Court has rejected an application by HIGHWIND PROPERTIES LIMITED, PAREAS LIMITED, INTERIM HOLDINGS LIMITED, and BLUE NARCISSUS LIMITED (the 'Highwinds Group' or 'Highwinds'), all subsidiaries of Eurasian Natural Resources Corporation PLC ('ENRC'), to summarily dismiss First Quantum's legal claim in relation to the cancellation of First Quantum's Kolwezi tailings project ('the Kolwezi Project') in the Democratic Republic of Congo ('DRC').
The Court's decision to reject Highwinds' application means that the case brought by First Quantum's subsidiary, Congo Mineral Developments Ltd. ('CMD'), should now proceed to trial, at which Highwinds will need to explain its involvement in the unlawful cancellation of First Quantum's interest in the Kolwezi Project. In particular, it will need to explain how it came about that it signed a contract to acquire the Kolwezi permit the very same day First Quantum's contract was cancelled and why, as a term of that contract, Highwinds agreed to pay for the DRC's legal costs to defend the DRC's conduct in arbitration. Highwinds was also ordered to pay CMD's legal costs and has indicated its intention to appeal the decision.
Background to the proceedings
In September 2010, CMD filed a claim in the BVI against the Highwinds Group, which claims to hold an interest in the Kolwezi Project tailings permit. First Quantum took this action as part of its efforts to pursue its rights in relation to the unlawful cancellation of its legal title to the Kolwezi Project. The legal action includes claims for inducement of breach of contract and interference with contractual relations and property rights. First Quantum's damages are estimated to exceed $2 billion. The Highwinds Group applied to have the case dismissed and the matter was argued in a two day contested hearing before the BVI Commercial Court in July.
When the Kolwezi Project was cancelled First Quantum had already invested over $400 million in a plant on site, which was 75% completed, and prior to the DRC's cancellation, was scheduled for commissioning by no later than May of 2010. As a result of the cancellation, over 700 Congolese have been out of work since August 2009, and the social programs instituted by First Quantum, including an almost completed hospital, and HIV-Aids and Malaria treatment programs were as a result cancelled.
ENRC announced on August 20, 2010 that it had purchased 50.5% of the outstanding common shares of Camrose Resources Limited ('Camrose'), which through its ownership of the Highwinds Group has a 70% interest in the Kolwezi Project.
In addition to legal proceedings against the Highwinds Group, First Quantum is continuing to advance its rights against the DRC through the ICC international arbitration.
On Behalf of the Board of Directors of First Quantum Minerals Ltd.
G. Clive Newall, President
12g3-2b-82-4461
Listed in Standard and Poor's
For further information visit our web site at www.first-quantum.com
Forward-Looking Statements
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. These forward-looking statements, principally included in the Development activities section, but also disclosed in other sections of the document. The forward looking statements include estimates, forecasts and statements as to the Company's expectations of production and sales volumes, expected timing of completion of project development at Kansanshi, Ravensthorpe, Kevitsa and Sentinel, the impact of ore grades on future production, the potential of production disruptions, capital expenditure and mine production costs, the outcome of mine permitting, the outcome of legal proceedings which involve the Company in the RDC and other countries, information with respect to the future price of copper, gold, cobalt, nickel, PGE, and sulphuric acid, estimated mineral reserves and mineral resources, our exploration and development program, estimated future expenses, exploration and development capital requirements, the Company's hedging policy, and our goals and strategies. Often, but not always, forward-looking statements or information can be identified by the use of words such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate' or 'believes' or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved.
With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, assumptions about the price of copper, gold, nickel, PGE, cobalt and sulphuric acid, anticipated costs and expenditures and our ability to achieve our goals. Although our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, future production volumes and costs, costs for inputs such as oil, power and sulphur, political stability in Zambia, Peru, Mauritania, Finland and Australia, adverse weather conditions in Zambia, Finland and Mauritania labour disruptions, mechanical failures, water supply, procurement and delivery of parts and supplies to the operations, the production of off-spec material.
See our annual information form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of these factors are beyond our control. Accordingly, readers should not place undue reliance on forward-looking statements or information. We undertake no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information made herein are qualified by this cautionary statement.
Contacts:
First Quantum Minerals Ltd. - North American Contact
Sharon Loung
Director, Investor Relations
(647) 346-3934 or Toll Free: 1 (888) 688-6577
(604) 688-3818 (FAX)
sharon.loung@fqml.com
First Quantum Minerals Ltd. - United Kingdom Contact
Clive Newall
President
44 140 327 3484
44 140 327 3494 (FAX)
clive.newall@fqml.com
www.first-quantum.com
Maitland
Brian Cattell
44 207 379 5151
44 20 7379 6161 (FAX)
bcattell@maitland.co.uk
Maitland
James Devas
44 207 379 5151
44 20 7379 6161 (FAX)
jdevas@maitland.co.uk