First Quantum powers up Kansanshi copper mine

Vancouver – Commissioning of First Quantum Minerals’ (FM-T) 80% owned Kansanshi copper-gold mine in Zambia has commenced following completion of an electrical grid to the site.

Power requirements at the Kansanshi mine will be met with the new electrical link, constructed by ZESCO (Zambia Electrical Supply Corporation) who built the 330KV transmission line linking the cities of Chingola and Solwezi in the north-central region of the country.

First Quantum has initiated waste stripping and stockpiling of the copper-gold ore at Kansanshi. Full production is anticipated by March-2005 following activation of the mill, flotation, leach and SX-EW facilities. The operation will have both sulphide and oxide copper circuits.

The company began construction at the deposit in mid-2003 and has committed US$180-million to pre-production capital requirements.

Copper exploration and mining at Kansanshi can be traced back to the 4th-century, when the ancient workings were discovered in 1899. There has been intermittent, historical mining of an estimated 80,000 tonnes of copper from the deposit. In 1997 Cyprus Amax, now part of Phelps Dodge (PD-N), acquired a majority interest in the project following the privatization of Zambian Consolidated Copper Mines (ZCCM) who still retain 20% in the project. Phelps Dodge completed over 80,000 metres of drilling and produced a preliminary feasibility study in 2000.

First Quantum acquired Cyprus Amax’s interest in 2001 for payments of US$50,000, a debt to Cyprus Amax of US$25 million and the issuance of 1.4-million shares. Upon production, the US$25-million debt will be repaid less an amount equal to the market value of the shares issued.

The Kansanshi deposit occurs within the Lufilian arc, a large regional tectonic structure that hosts the Central African Copper Belt. Copper mineralization is associated with a quartz-carbonate vein swarm system and stratabound within albite and carbonate altered phyllites. The large, flat-lying orebodies constituting the main portion of the deposit have undergone supergene enrichment through weathering resulting in a near-surface oxide zone overlying a large sulphide copper zone.

A resource of 301.8 million tonnes grading 1.17% copper and 0.17 grams gold per tonne has been calculated at Kansanshi, using a 0.5% copper cut-off grade.

First Quantum plans development of the copper project in two phases. Phase 1 will see open pit mining of the near-surface oxide and mixed-ore is anticipated over 16-years using both SX-EW and sulphide-flotation circuits. Annual production of approximately 60,000 tonnes of cathode copper and up to 70,000 tonnes of copper in concentrate has been outlined.

Phase 2 development will target the deeper, primary sulphide copper from years 17-28 of the project.

First Quantum is a copper producer (with associated gold, cobalt and sulfuric acid) from operations in Zambia and the Democratic Republic of Congo. In 2003, the company’s copper production was almost 30,000 tonnes.

As of the latest figures, the company reports 60.3 million shares outstanding. The issue trades in the $16.50 per share level, leveraged heavily to copper prices, giving a market capitalization of $995-million.