First Quantum Minerals to Acquire Antares Minerals Inc.; Cash and Share Transaction Valued at Approximately C$460 Million; Conference Calls and Webcast on Monday, October 18, 2010
Marketwire – Canada “Press Releases – English “
VANCOUVER, BRITISH COLUMBIA –(Marketwire – Oct. 18, 2010 ) – First Quantum Minerals Ltd. (“First Quantum” or the “Company”) (TSX:FM)(LSE:FQM) and Antares Minerals Inc. (“Antares”) (TSX VENTURE:ANM) announced today that they 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 (the “Arrangement”), all of the outstanding securities of Antares. The total consideration for the purchase of 100% of the fully diluted shares of Antares is approximately C$460 million .
Antares’ principal asset is the 100% owned Haquira project located in southern Peru adjacent to Xstrata Copper’s Las Bambas copper-gold project. It is one of the world’s major undeveloped copper deposits with excellent potential for the development of a large scale copper mine with production from both near-surface secondary copper mineralization amenable to SX-EW leaching and from a larger, underlying body of higher grade primary porphyry copper-molybdenum-gold-silver mineralization to be processed by a conventional mill/concentrator operation. Haquira currently has reported measured and indicated resources of 3.7 million tonnes of contained copper equivalent and inferred resources of 2.4 million tonnes of contained copper equivalent.
Under the Arrangement, each common share of Antares will be exchanged for (i) 0.07619 of a common share of First Quantum (the “Share Consideration”) or (ii) a cash payment in the amount of C$6.35 , subject to an aggregate maximum cash consideration of C$250 million . Antares shareholders will have the option to elect to receive cash or shares or any combination of cash and shares, subject to the aggregate cash limitation. Any Antares shareholder who does not elect either option shall be deemed to have elected to receive First Quantum shares in respect of all of its Antares shares. If the Antares shareholders in the aggregate elect to receive more than C$250 million in cash consideration, the aggregate cash consideration will be prorated among the Antares shareholders who elected to receive cash and the balance will be paid in First Quantum shares.
The implied value of the Share Consideration is C$6.35 per Antares share (based on the volume-weighted average trading price of the First Quantum shares on the Toronto Stock Exchange of C$83.34 for the 3 trading days ended October 15, 2010 ), representing a 41% premium to the closing price of Antares shares on the TSX Venture Exchange of C$4.49 on October 15, 2010 and a 46% premium to the volume-weighted average trading price of the Antares shares on the TSX Venture Exchange of C$4.36 for the 20 trading days ended October 15, 2010 .
As part of the transaction, Antares’ 50% interest in the Rio Grande project located in Salta Province , northwestern Argentina , will be spun out into a new exploration company, Regulus Resources Inc. (“Spinco”), together with C$5 million in cash. Antares shareholders will receive their pro-rata share of Spinco, which will be owned 90.1% by existing Antares shareholders in aggregate and 9.9% by First Quantum .
The Board of Directors of Antares has unanimously approved the transaction and resolved to recommend to the holders of Antares securities that they vote in favour of the transaction. In determining to recommend the transaction to the shareholders of Antares, the Board of Directors considered a number of factors and relied, in part, on an opinion from Dundee Securities , financial advisors to Antares, to the effect that, subject to the assumptions and conditions set forth in such opinion, the consideration to be received by the holders of Antares securities pursuant to the transaction is fair, from a financial point of view, to such holders.
In addition, the directors and senior officers of Antares, Farallon Capital Institutional Partners II, L.P. , Farallon Capital Institutional Partners III, L.P. and Kalouga Holdings Limited , holding in aggregate approximately 42% of the fully diluted share capital of Antares have entered into voting agreements with First Quantum , pursuant to which they have agreed to vote their shares (including any shares issuable upon the exercise of options) in favour of the Arrangement subject to certain exceptions.
Commenting on the transaction, Mr. John Black , President and Chief Executive Officer of Antares said, “When we formed Antares in 2004 our objective was to discover a significant mineral deposit and develop it to the stage where it would be of interest to a major mining company. The proposed transaction with First Quantum represents the culmination of our efforts over the past six years and the successful achievement of our goal. As we have stated before, the Haquira deposit represents one of the most attractive undeveloped copper projects in the world owned 100% by a junior explorer. We believe that First Quantum has the experience, track record and financial capacity to develop Haquira into a world-class mine. We have deliberately structured the proposed transaction so that our shareholders can elect to exchange their Antares shares for First Quantum shares, thereby providing the opportunity to continue to share in the success of Haquira through an entity that has far greater capacity to fully develop the Haquira project. The proposed transaction also creates an excellent opportunity for the shareholders of Antares to realize immediate and substantial value for their Antares shares either in cash or in the shares of First Quantum , or a combination thereof. Shareholders will also be able to participate in any future upside from our 50% interest in the Rio Grande project through the distribution of shares in a new company formed to acquire that interest from Antares as part of this transaction. In summary, we are very pleased and proud to be able to offer this value-enhancing opportunity to our shareholders.”
Mr. Philip Pascall , Chairman and Chief Executive Officer of First Quantum said, “The acquisition of Antares is another step in First Quantum’s stated strategy of geographical diversification. Haquira is a project which we consider that, with our experience, we can add material value to during the process of bringing it to commercial production and then subsequently through cost effective operation. Haquira is a world class copper project and has the potential to significantly increase First Quantum’s copper production profile.”
About the Transaction
The transaction will be carried out by way of a statutory plan of arrangement pursuant to the Business Corporations Act ( Alberta ) and must be approved by the Court of Queen’s Bench of Alberta and the affirmative vote of 66 (2)/3% of Antares’ shareholders at a special meeting of shareholders to be called and held to consider the transaction.
The proposed transaction is expected to close in December 2010 , shortly after receipt of shareholder and court approvals.
The completion of the transaction is subject to customary closing conditions, including the receipt of any required regulatory approvals.
In the event that the transaction is not completed, Antares has agreed to pay First Quantum a termination fee of C$13.5 million , under certain circumstances. Antares has also provided First Quantum with certain other customary rights, including a right to match any competing offers.
First Quantum intends to fund the cash portion of the transaction from its existing cash resources. The transaction is not contingent on any financing condition.
Details regarding these and other terms of the transaction are set out in the arrangement agreement, which will be filed by Antares on the Canadian SEDAR website at www.sedar.com.
Further information regarding the transaction will be contained in an information and proxy circular that Antares will prepare and mail to all holders of Antares securities in connection with the special meeting of shareholders to be held to approve the transaction. It is expected that these materials will be mailed in November 2010 for a meeting to be held in December 2010 . Once mailed, the information and proxy circular will also be available on SEDAR at www.sedar.com. All shareholders are urged to read the proxy circular once it becomes available as it will contain additional important information concerning the transaction.
BMO Capital Markets is the financial advisor to First Quantum and its legal advisor is Fasken Martineau DuMoulin LLP . Dundee Securities is the financial advisor to Antares and its legal advisor is Burnet, Duckworth & Palmer LLP .
Conference Call and Webcast Details
First Quantum and Antares will hold the following conference calls and webcast to discuss the transaction:
General conference call and webcast:
Date: Monday October 18, 2010
Time: 8:00 am (EST) ; 1:00 pm (BST)
Dial in: 416-340-2216 / 866-226-1792 / ( North America ) / 800-9559-6849 (International) – note that the international number requires the International access code of the country you are calling from
Date: Monday October 18, 2010
Time: 9:30 am (EST) ; 2:30 pm (BST)
Dial in: 416-340-8527 / 877-240-9772 / ( North America ) / 800-9559-6849 (International) – note that the international number requires the International access code of the country you are calling from