05 01 12 First Quantum Reaches Agreement With ENRC to Dispose of First Quantum's Residual DRC Assets and to Settle All Claims in Relation to First Quantum's DRC Operations

The company said Thursday it had struck a
deal with sell its mines and assets to Eurasian Natural Resources Corp. PLC –
including the Kolwezi tailings project, and the Frontier and Lonshi mines and
related exploration interests.

All the properties are located in the
Democratic Republic of Congo, a mineral rich country in central Africa. The
Congo government nationalized one of its largest copper mines last year and said
it would investigate the mine’s owner First Quantum for what it called
“suspected wide-scale misconduct”.

First Quantum shut down the Frontier mine –
its only producing mine in Congo – after a government order. The move came after
a Congo supreme court ruling that granted prospecting rights over Frontier – but
not explicit mining rights – to Congo state owned miner Sodimico last
spring.

First Quantum opposed the expropriation and
took the legal dispute to arbitration through an international court in
Paris.

Thursday’s deal is slated to close Feb. 29 and means First Quantum will have no operations left
in the Congo.

The companies as well as the Congo
government are also settling legal claims between them.

Philip Pascall, chairman and CEO of First
Quantum, said the company is “satisfied that we have reached this
agreement.”

“It brings to a close First Quantum’s
current involvement in the DRC and secures substantial compensation for our
shareholders for the loss they have suffered.”

Earlier this week, First Quantum said
production at its Kansanshi copper-gold mine in Zambia has stopped due to a
labour dispute.

The company said the dispute in the
copper-rich southern African nation started on Tuesday.

First Quantum currently produces copper,
gold and sulphuric acid from operations in South America, Europe, Africa and
Australia.

First Quantum and the World Bank spent
US$750-million to develop the Kolwezi copper project.

But the government seized the site in 2009,
citing contract violations, and in early 2010 sold the asset to a company
controlled by Dan Gertler, the Israeli entrepreneur.

Mr. Gertler later sold Kolwezi and other
Congo mining assets to Eurasian Natural Resources, the Kazakh miner.

First Quantum said Thursday the price tag
of the deal consists of $750-million payable on closing and another $500-million
in a three-year promissory note.