First Quantum powers up Kansanshi

Vancouver — Commissioning of First Quantum Minerals‘ (FM-T) 80%-owned Kansanshi copper-gold mine in Zambia has begun, following completion of an electrical grid.

Waste stripping and stockpiling of ore are under way, and full production is anticipated by March 2005 following activation of the mill, flotation, leach and solvent extraction-electrowinning (SX-EW) facilities. The operation will have sulphide and oxide copper circuits.

Site construction began in mid-2003, and First Quantum has committed to US$180 million in preproduction capital requirements.

Copper mining in the area dates back to the fourth century. The ancient workings were discovered in 1899, since which time about 80,000 tonnes of copper have been mined intermittently.

Cyprus Amax, now part of Phelps Dodge (PD-N), acquired a majority interest in the project in 1997, following the privatization of Zambian Consolidated Copper Mines, which retains a 20% stake. Phelps Dodge performed more than 80,000 metres of drilling and, in 2000, produced a preliminary feasibility study.

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

The Kansanshi deposit occurs in 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 in albite-and carbonate-altered phyllites. The large, flat-lying deposits that constitute 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 gram gold per tonne has been calculated, using on a cutoff grade of 0.5% copper.

First Quantum intends to mine the deposit in two phases. The first phase (years 1-16) will entail open-pit mining of the near-surface oxide ore using both SX-EW and sulphide-flotation circuits. Annual production is pegged at 60,000 tonnes of cathode copper and up to 70,000 tonnes of copper in concentrate. The second phase (years 17-28) will target the deeper, primary sulphide copper.

First Quantum produces copper (with associated gold, cobalt and sulfuric acid) in Zambia and the Democratic Republic of Congo. In 2003, the company produced almost 30,000 tonnes of the red metal.

First Quantum has 60.3 million shares outstanding and trades at $16.50.