First Quantum Minerals Ltd. - London Stock Exchange · First Quantum Minerals Ltd. (continued into the province of British Columbia, Canada under the Business Corporation Act (British

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OFFERING CIRCULAR DATED 15 JUNE 2009

First Quantum Minerals Ltd.(continued into the province of British Columbia, Canada under the Business Corporation Act (British

Columbia) with incorporation no: C0726351)

U.S.$500,000,000

6.0 per cent. Convertible Bonds due 2014

convertible into Common Shares of

First Quantum Minerals Ltd.

___________________________________________________________________________________

Issue Price 100 per cent.___________________________________________________________________________________

Global Coordinator

NOMURA INTERNATIONAL

Joint Bookrunners and Joint Lead Managers

NOMURA INTERNATIONAL MORGAN STANLEY

Co-Manager

RBC CAPITAL MARKETS

This Offering Circular (the "Offering Circular") comprises listing particulars given in compliance with the listing rules made under Section 73A of the Financial Services and Markets Act 2000 (the "FSMA") by the UK Listing Authority (the "UKLA") for the purpose of giving information with regard to First Quantum Minerals Ltd. (the "Issuer" or the "Company"), and the Issuer and itssubsidiaries taken as a whole (the "Group") and the U.S.$500,000,000 6.0 per cent. convertible bonds due 2014 (the "Bonds"). Applications have been made for the Bonds to be admitted to the Official List of the UKLA and to be admitted to trading on the Professional Securities Market of the London Stock Exchange plc (the "LSE"). References in this Offering Circular to the Bonds being "listed" (and all related references) shall mean that the Bonds have been admitted to the Official List and have been admitted to trading on the Professional Securities Market. The Professional Securities Market is an unregulated market for the purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive). This Offering Circular is to be read in conjunction with all the documents which are incorporated by reference herein (see "Documents Incorporated by Reference").

The Issuer accepts responsibility for all the information contained in this document. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Managers (as defined in "Subscription and Sale") to subscribe or purchase, any of the Bonds or the common shares of the Issuer (the "Common Shares"). The distribution of this Offering Circular and the offering of the Bonds or the Common Shares in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer and the Managers to inform themselves about and to observe any such restrictions. For a description of certain further restrictions on offers and sales of Bonds or the Common Shares and on distribution of this Offering Circular, see "Subscription and Sale".

No person is authorised in connection with the issue, offering or sale of the Bonds to give any information or to make any representation not contained in this Offering Circular and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of the Issuer or the Managers. Neither the delivery of this Offering Circular nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof or the date upon which this Offering Circular has been most recently amended or supplemented or that there has been no adverse change in the financial position of the Issuer since the date hereof or the date upon which this Offering Circular has been most recently amended or supplemented or that the information contained in it or any other information supplied in connection with the Bonds is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.

The Bonds and the Common Shares to be issued upon conversion of the Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended, (the "Securities Act"), and the Bonds are subject to U.S. tax law requirements. Subject to certain exceptions, the Bonds andthe Common Shares to be issued upon conversion of the Bonds may not be offered, sold or delivered within the United States or to U.S. persons. For a description of certain further restrictions on the offering and sale of Bonds and on the distribution of this document see "Subscription and Sale".

The Bonds will initially be represented by a temporary global bond (the "Temporary Global Bond"), which will be deposited with a common depositary on behalf of Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") on or about 18 June 2009. Interests in the Temporary Global Bond will be exchangeable for interests in a permanent global bond (the "Global Bond") without interest coupons on or after a date which is expected to be 29 July 2009 upon certification as to non-US. beneficial ownership. The Global Bond will be exchangeable for definitive Bonds in bearer form in the denomination of U.S.$100,000 only in the limited circumstances set out in the Global Bond.

None of the Issuer or the Managers is providing any advice or recommendation in this Offering Circular on the merits of the purchase, subscription for, or investment in, the Bonds or the Common Shares or the exercise of any rights conferred by the Bonds or the Common Shares.

The Bonds are securities which, because of their nature, are normally bought and traded by a limited number of investors who are particularly knowledgeable in investment matters. This Offering Circular has been prepared on the basis that any purchaser of Bonds is a person or entity having sufficient knowledge and experience of financial matters as to be capable of evaluating the merits and risks of the purchase. Before making any investment decision with respect to the Bonds, prospective investors should consult their own counsel, accountants or other advisers and carefully review and consider their investment decision in the light of the foregoing. An investment in the Bonds is only suitable for financially sophisticated investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses which may result therefrom.

No representation or warranty, express or implied, is made by any of the Managers as to the accuracy, completeness or sufficiency of the information set out or incorporated in this Offering Circular, and nothing set out or incorporated in this Offering Circular is, or shall be relied upon as, a promise, representation or warranty by any of the Managers.

This Offering Circular (including the information incorporated by reference herein) is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, or any of the Managers that any recipient of this Offering Circular should purchase the Bonds. Each potential purchaser of Bonds should determine for itself the relevance of the information set out or incorporated by reference in this Offering Circular and its purchase of Bonds should be based upon such investigations as it deems necessary.

The Issuer's Common Shares are listed for trading on the Toronto Stock Exchange ("TSX") under the symbol "FM" and on the LSE's market for listed securities under the symbol "FQM".

LaSalle Global Trust Services Limited (the "Trustee") may rely without liability to Bondholders or Couponholders on a report, confirmation or certificate of any financial advisers or investment bank, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee shall be obliged to accept and entitled to rely on any such report, confirmation or certificate where the Issuer procures delivery of the same pursuant to its obligation to do so under the Terms and Conditions and such report, confirmation or certificate shall be binding on the Issuer, the Trustee, the Bondholders and the Couponholders (as defined herein) in the absence of manifest or proven error.

In connection with this issue, each of the Managers and any of their respective affiliates acting as an investor for its own account may take up Bonds and in that capacity may retain, purchase or sell for its own account such securities and any securities of the Issuer or related investments and may offer or sell such securities or other investments otherwise than in connection with this issue. Accordingly, references in this document to the Bonds being issued, offered or placed should be read as including any issue, offering or placement of securities to the Managers and any of their affiliates acting in such capacity. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

The Issuer confirms that where the information in this Offering Circular has been reproduced from third party sources it has been accurately reproduced and that as far as the Issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate and misleading.

In connection with the issue of the Bonds, Nomura International plc (the "Stabilising Manager") (or persons acting on behalf of the Stabilising Manager) may over-allot Bonds or effect transactions with a view to supporting the market price of the Bonds and/or the Common Shares at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager (or any persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Such stabilisation action, if begun, may be ended at any time, and must be brought to an end after a limited period. Any stabilisation action or over-allotment must be conducted by the Stabilising Manager (or any persons acting on behalf of the Stabilising Manager) in accordance with all applicable law and rules.

All references in this document to "Canadian dollars" or "C$" are to the lawful currency of Canada, to "dollars", "US dollars" and "U.S.$" are to the lawful currency of the United States. All references to

"euro", "Euro" and "€" are to the lawful currency introduced on 1 January 1999 at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Communities, as amended from time to time. All references in this document to "pounds sterling", "pounds", "£", "p" or "pence" are to the lawful currency of the United Kingdom. All references in this document to "Australian dollars" or "A$" are to the lawful currency of Australia, references to "South African Rand" are to the lawful currency of South Africa, references to "Zambian Kwacha" to the lawful currency of Zambia, references to "Congolese Franc" to the lawful currency of the Democratic Republic of the Congo and references to "Mauritanian Ouguiya" to the lawful currency of Mauritania. The Company prepares its consolidated financial information in US dollars.

TABLE OF CONTENTS

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PRESENTATION OF INFORMATION ..............................................................................................1OVERVIEW........................................................................................................................................3RISK FACTORS .................................................................................................................................7USE OF PROCEEDS.........................................................................................................................20FIRST QUANTUM MINERALS LTD...............................................................................................21MANAGEMENT ..............................................................................................................................43PRINCIPAL SHAREHOLDERS .......................................................................................................45DESCRIPTION OF THE COMMON SHARES .................................................................................46TERMS AND CONDITIONS OF THE BONDS ................................................................................53SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE IN GLOBAL FORM ...........88TAXATION ......................................................................................................................................91SUBSCRIPTION AND SALE ...........................................................................................................94GENERAL INFORMATION.............................................................................................................96GLOSSARY AND ABBREVIATIONS ...........................................................................................106

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PRESENTATION OF INFORMATION

Forward – looking Statements

This Offering Circular includes statements that are, or may be deemed to be "forward-looking statements". Such forward-looking statements and information include statements regarding: targets for copper production; cash operating costs and certain significant expenses; percentage increases and decreases in production from the Issuer’s principal mines; schedules for completion of detailed feasibility studies and initial feasibility studies; potential increases in reserves and production; the timing and scope of future commencement of mining or production; anticipated grades and recovery rates; asset retirement obligation estimates; the ability to secure financing; and potential acquisitions or increases in property interests. 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 (including grammatical 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, the Issuer has madenumerous assumptions including, among other things, the price of copper and other metals, economic and political conditions, continuity of operations and production levels. Although the Issuer believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information referenced 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 the actual results, performance or achievements of the Issuer to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These risks, uncertainties or other factors include, but are not limited to, the actual prices of copper, gold and sulphuric acid, unanticipated grade, geological, metallurgical, processing, access, transportation of supply or other problems, political, economic and operational risks of foreign operations, availability of materials and equipment, the timing of receipt of governmental permits, force majeure events, the failure of plant, equipment or processes to operate in accordance with specific expectations, accidents, labour relations and risks in start-up date delays, environmental costs and risks, the outcome of acquisition negotiations, general domestic and international economic and political conditions, the factual results of current exploration, development and mining activities, results of pending and future feasibility studies, changes in project parameters as plans continue to be evaluated, and those factors disclosed in documents filed by the Issuer from time to time with the securities commissions or regulatory authorities of each of the Provinces of Canada including, without limitation, those risks, uncertainties and other factors set out under "Risk Factors" and in "First Quantum Minerals Ltd." herein. Although the Issuer has 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 actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of the Issuer. Accordingly, investors should not place undue reliance on forward-looking statements or information. All forward-looking statements and information herein are qualified by this cautionary statement.

Documents Incorporated by Reference

This Offering Circular should be read and construed in conjunction with:

(a) the Issuer's Annual Reports for the years ended 31 December 2007 and 31 December 2008(each an "Annual Report" and, together, the "Annual Reports"), which contain the annual audited consolidated financial statements of the Issuer as at and for the financial years ended 31 December 2007, and 31 December 2008, together with the notes thereto and the auditors' report thereon; and

(b) the Issuer's unaudited consolidated financial statements for the three months ended 31 March 2009; and

(c) the Issuer's Revised Annual Information Form dated 30 March 2009 for the year ended 31 December 2008 (the "2009 AIF").

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Such documents shall be incorporated in, and form part of this Offering Circular, save that any statement contained in a document which is incorporated by reference herein shall be modified or superseded for the purpose of this Offering Circular to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Offering Circular.

The above documents incorporated by reference in this Offering Circular have been filed with the applicable securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained electronically at www.sedar.com.

Where documents incorporated by reference themselves incorporate information by reference, such information does not form part of this Offering Circular.

Copies of documents incorporated by reference in this Offering Circular may be obtained (without charge) from the registered office of the Issuer.

Ore Reserve and Mineral Resource Reporting –- Basis of Preparation

The Issuer uses two different standards in determining its mineral resources and reserves: the Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australian Institute of Mining and Metallurgy Institute (the "JORC Code") or the Canadian Institute of Mining, Metallurgy and Petroleum on Mineral Resources and Reserve Definitions and Guidelines (the "CIM Standards").

For a discussion of the differences in resource and reserve reporting standards see "Caution With Respect to Forward-Looking Statements and Information - Presentation of Mineral Reserve and Resource Estimates" in the 2009 AIF incorporated by reference into this Offering Circular.

Resources, Reserves and Production

In this Offering Circular, unless expressly stated otherwise, references to resources and reserves are to total resources and total reserves. Total resources and total reserves means that part of the resources and reserves from a mine in which subsidiaries of the Group have an economic interest. The Group does not wholly own certain of its subsidiaries and therefore total resources and total reserves include resources and reserves attributable to third party interests in controlled subsidiaries.

In this Offering Circular, unless expressly stated otherwise, references to production are to total production. Total production means that part of production at mines and operations in which subsidiaries of the Group have an economic interest. The Group does not wholly own certain of its subsidiaries and therefore total production includes production attributable to third party interests in controlled subsidiaries.

www.sedar.com.

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OVERVIEW

The following is a summary of the principal features of the Bonds and is qualified in its entirety by the detailed information appearing elsewhere in this Offering Circular and, in particular, "Terms and Conditions of the Bonds". Potential purchasers of the Bonds are urged to read this Offering Circular in its entirety. Terms used in this overview and not otherwise defined shall have the meanings given to them in "Terms and Conditions of the Bonds".

Issuer First Quantum Minerals Ltd.

Bonds U.S.$500,000,000 6.0 per cent. Convertible Bonds due 2014.

The Offering The Bonds are being offered by the Managers outside the United States to non-US persons in accordance with Regulation S.

Closing Date The Bonds will be issued on 18 June 2009 (the "Closing Date").

Issue Price 100 per cent. of the principal amount of the Bonds.

Final Maturity Date 19 June 2014 (the "Final Maturity Date").

Final Redemption Unless previously purchased and cancelled, redeemed or converted, the Bonds will be redeemed on the Final Maturity Date at their principal amount.

Redemption at the Option of the Issuer On giving not less than 30 nor more than 60 days' notice (an "Optional Redemption Notice"), in accordance with the Conditions, the Issuer may redeem all, but not some only, of the Bonds for the time being outstanding at their principal amount, together with interest accrued (if any) to but excluding the date fixed for redemption as specified in the Optional Redemption Notice served by the Issuer (i) at any time on or after 3 July 2012, if the Parity Value on each of at least 20 dealing days in any period of 30 consecutive dealing days ending not earlier than 15 days prior to the giving of the Optional Redemption Notice, shall have exceeded 140 per cent. of the principal amount of a Bond on each relevant dealing day; or (ii) at any time if prior to the date the relevant Optional Redemption Notice is given, 85 per cent. or more in principal amount of the Bonds originally issued shall have been previously purchased and cancelled or converted or redeemed. See "Terms and Conditions of the Bonds - Redemption and Purchase - Redemption at the Option of the Issuer".

Bond Repurchase Offer following a Change of Control or Licence Event

Following the occurrence of a Change of Control or a Licence Event, the Issuer shall make an offer (a "Bond Repurchase Offer") to the Bondholders to purchase all of the Bonds then outstanding at the Repurchase Price (which in the case of a Licence Event is par) together with accrued and unpaid interest to but excluding the date fixed for redemption. See "Terms and Conditions of the

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Bonds - Redemption and Purchase - Bond Repurchase Offer".

Interest The Bonds will bear interest from and including the Closing Date at the rate of 6.0 per cent. per annum calculated by reference to the principal amount thereof and payable semi-annually in equal instalments in arrear on 19 June, and19 December, in each year, save that the first payment of interest will be made on 19 December 2009 in respect of the period from (and including) the Closing Date to (but excluding) 19 December 2009 and the amount of interest payable in respect of each U.S.$.100,000 principal amount of Bonds on such date will be U.S.$3,016.67.

Form and Denomination The Bonds will be in bearer form in the denomination of U.S.$100,000 with Coupons attached. The Bonds will initially be represented by the Temporary Global Bond which will be deposited with a common depositary for Euroclear and Clearstream, Luxembourg.

Interests in the Temporary Global Bond will be exchangeable for interests in the Global Bond on or after a date which is expected to be 29 July 2009 upon certification as to non-U.S. beneficial ownership.

The Global Bond will be exchangeable in whole, but not in part, in certain limited circumstances described therein, for definitive Bonds in bearer form, serially numbered, in denominations of U.S.$100,000 each, with Coupons attached.

Ownership of beneficial interests in the Temporary Global Bond and the Global Bond will be limited to persons that have accounts with Euroclear or Clearstream, Luxembourg or persons that may hold interests through such accountholders. Beneficial interests in the Global Bond will be shown on, and transfers thereof will be effected through, records maintained in book-entry form by Euroclear or Clearstream, Luxembourg and their respective accountholders.

Ranking of the Bonds The Bonds and Coupons will constitute (subject to the provisions of the negative pledge as described below) direct, unconditional, unsubordinated and unsecured obligations of the Issuer ranking pari passu and rateably without any preference among themselves with all other existing and future unsecured and unsubordinated indebtedness of the Issuer, save for such obligations as may be preferred by law. See "Terms and Conditions of the Bonds – Form, Denomination, Title and Status - Status".

Negative Pledge The Bonds will have the benefit of a negative pledge, as described in "Terms and Conditions of

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the Bonds - Negative Pledge".

Cross Acceleration The Bonds will have the benefit of a cross acceleration, as described in "Terms and Conditions of the Bonds - Events of Default".

Conversion Each Bond shall entitle the holder (such right a "Conversion Right") to convert such Bond into Common Shares. See "Terms and Conditions ofthe Bonds - Conversion of Bonds".

Conversion Rights may be exercised at any time from 19 October 2009 (provided that in the event of a Change of Control prior to such date, the Conversion Commencement Date shall begin on the later of 29 July 2009 and the date of the Change of Control) to the close of business on the date falling seven Toronto business days prior to the Final Maturity Date (both dates inclusive) or if such Bonds are called for redemption prior to the Final Maturity Date, up to the close of business on the seventh Toronto business day prior to the relevant date fixed for redemption.

The initial Conversion Price is U.S.$56.39 per Common Share.

The Conversion Price is subject to adjustment as provided in "Terms and Conditions of the Bonds - Conversion of Bonds – Adjustment of Conversion Price", including in respect of any Dividend or distribution made by the Issuer. In the event of a Change of Control, the Conversion Price will be adjusted for a specified period as described in "Terms and Conditions of the Bonds -Conversion of Bonds - Adjustment of Conversion Price".

The Conversion Price shall not be reduced below the level permitted by applicable laws and regulations from time to time (if any) (the "Minimum Conversion Price"). The Issuer is subject to the regulations of the TSX and pursuant to these regulations the initial Minimum Conversion Price is C$41.24, being the volume weighted average price of the Common Shares for the five dealing days prior to 27 May 2009 (the date on which the Issuer notified the TSX of the issue of the Bonds), less a discount of 15 per cent.. On 27 May 2009, the U.S. dollar equivalent of the Minimum Conversion price was U.S.$36.84. See "Terms and Conditions of the Bonds - Conversion of Bonds - Minimum Conversion Price".

Withholding Taxes All payments in respect of the Bonds and Coupons shall be made without deduction of or withholding for or on account of any present or future taxes imposed or levied by or on behalf of Canada unless such deduction or withholding is required by law. In the event that any such

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deduction or withholding is required, the Issuer shall pay additional amounts in respect thereof, subject to certain customary exceptions. See "Terms and Conditions of the Bonds - Taxation".

Tax Redemption In the event of certain changes affecting taxes of Canada, the Issuer may, subject to certain conditions being satisfied, give notice to redeem the Bonds in whole, but not in part, at any time at their principal amount, together with accrued but unpaid interest to but excluding such date fixed for redemption.

Upon such notice being given, a Bondholder may elect not to have such Bond redeemed, in which case such holder will not be entitled to receive payment of such additional amounts as are referred to in "Withholding Taxes" above in respect of any payments on the Bonds.

See "Terms and Conditions of the Bonds -Redemption and Purchase - Redemption for Taxation Reasons".

Lock up The Issuer has, subject to certain exceptions, agreed not to issue Common Shares or certain related securities for a period of 90 days after the Closing Date. See "Subscription and Sale".

Governing Law The Bonds and the Trust Deed constituting the Bonds will be governed by English law.

Trustee LaSalle Global Trust Services Limited

Listing and Trading The Issuer has applied for the Bonds to be admitted to the Official List of the UK Listing Authority and application has been made to the LSE for the Bonds to be admitted to trading on the Professional Securities Market of the LSE.

The Common Shares trade on the TSX under the symbol "FM" and on the LSE's market for listed securities under the symbol "FQM".

ISIN: XS0431324663

Common Code: 043132466

Use of Proceeds The net cash proceeds of the issue of the Bonds are expected to amount to approximately U.S.$487.7 million and will be used to provide the Company with longer-term debt capital which will strengthen its financial position by providing additional liquidity and giving it the option to repay or renegotiate short-term debt, additional financial resources to enable it to continue to undertake organic growth initiatives and funding flexibility if suitable acquisition opportunities are identified.

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RISK FACTORS

Prospective investors should consider carefully the risks set forth below and the other information contained in this Offering Circular prior to making any investment decision with respect to the Bonds. Each of the risks highlighted below could have a material adverse effect on the business, operations, financial condition or prospects of the Issuer which, in turn, could affect its ability to fulfil its obligations under the Bonds. In addition, each of the risks highlighted below could adversely affect the trading price of the Bonds or the Common Shares or the rights of investors under the Bonds or the Common Shares and, as a result, investors could lose some or all of their investment.

Prospective investors should note that the risks described below are not the only risks the Issuer faces. The Issuer has only described those risks to its operations that it considers to be material. There may be additional risks that the Issuer currently considers not to be material or of which it is not currently aware, and any of these risks could have the effects set forth above.

Prospective investors should read the entire Offering Circular, together with the documents incorporated by reference herein. Words and expressions defined in the Conditions below or elsewhere in this Offering Circular have the same meanings in this section.

Investing in the Bonds involves certain risks. Prospective investors should consider, among other things, the following:

Risks Related to the Issuer’s Business and its Industry

Revisitation of the Kolwezi Contract

In early 2007, the Democratic Republic of the Congo ("DRC") Government commenced a compliance review of over 60 mining agreements entered into over the last decade with foreign companies, including a contract of association entered into by the DRC Government, La Générale Des Carrières et Des Mines (a state-owned mining company of the DRC) ("Gécamines") and Congo Mineral Developments Limited ("CMD"), which governs the ownership and management of Kingamyambo Musonoi Tailings SARL ("KMT") (the "Kolwezi Contract"). The Issuer understands that the review process has been completed on over 50 of the 60 mining agreements. Public announcements by other companies involved in the review process indicate that outcomes have ranged from the full cancellation of agreements to changes in contract terms (including one or more of increased up-front payments, increased royalties or management fees, transfers of part ownership to government agencies, conduct of social programs in the DRC and increased management involvement by government bodies or representatives). In February 2008, the Issuer received a letter from the DRC Minister of Mines setting out the DRC Government’s position with respect to suggested changes to the Kolwezi Contract, as described below under "First Quantum Minerals Ltd. – Recent Developments".

The Issuer has negotiated in good faith with Gécamines and the DRC Government with respect to the review of the Kolwezi Contract but no binding variation agreement has yet been reached. Any new arrangements will be subject to initial approval by various government ministers and also to the finalisation and execution of a written variation to the Kolwezi Contract and certain other related documents. There can be no assurance as to when, or if, the parties will enter into a written variation agreement and/or whether the final terms of a written variation agreement will reflect the arrangements proposed by the Issuer. Therefore, there is no guarantee that the final terms of a written variation of the Kolwezi Contract, in respect of which the Issuer has already expended over US$250 million, will not have an adverse impact on the Issuer’s future cash flows, earnings, results of operations and financial condition. If the Issuer and its contributing partners, the International Finance Corporation ("IFC") and the Industrial Development Corporation of South Africa ("IDC") are unable to conclude a written variation to the Kolwezi Contract with the Government of the DRC and Gécamines, the Issuer may curtail or cease development of the Kolwezi cobalt – copper tailings project located in the DRC (the "Kolwezi Project") and this could have an adverse impact on the Issuer’s future cash flows, earnings, results of operations and financial condition. See "Risk Factors – Risks Related to the Issuer’s Business and its Industry - Political Unrest and Risk of Operating in the DRC" for a more general discussion.

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Current Global Financial Conditions

Recent events in global financial markets have had a significant impact on the global economy, which is now generally acknowledged to be in recession. Many industries, including the copper and gold mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations, high volatility in global equity, commodity and foreign exchange markets, and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect the Issuer’s growth and profitability, specifically:

• the global credit/liquidity crisis could impact the cost and availability of financing and the Issuer’s overall liquidity;

• the volatility of copper and gold prices could impact the Issuer’s revenues, profits, losses and cash flow;

• continued recessionary pressures could adversely impact demand for the Issuer’s products;

• volatile energy, commodity and consumable prices and currency exchange rates could impact the Issuer’s production costs; and

• the devaluation and volatility of global stock markets could impact the valuation of the Common Share capital of the Issuer.

Governmental and Environmental Regulation

The Issuer’s mining operations and exploration activities are subject to foreign laws and regulations, which include laws and regulations governing, among other things: exploration, development, production, exports, taxes, labour standards, mining royalties, price controls, waste disposal, protection and remediation of the environment, reclamation, historic and cultural resource preservation, mine safety and occupational health, handling, storage and transportation of hazardous substances, and other matters. The costs of discovering, evaluating, planning, designing, developing, constructing, operating and closing the Issuer’s mines and other facilities in compliance with such laws and regulations are significant. It is possible that the costs and delays associated with compliance with such laws and regulations could become such that the Issuer would not proceed with the development of, or continue to operate, a mine.

As part of its normal operating and development activities, the Issuer has expended significant resources, both financial and managerial, to comply with governmental and environmental regulations and permitting requirements, and will continue to do so in the future. Moreover, it is possible that future regulatory developments, such as increasingly strict environmental protection laws, regulations and enforcement policies thereunder, and claims for damages to property and persons resulting from the Issuer’s operations or from operations of previous mine owners and operators for which the Issuermay be held liable, could result in additional substantial costs and liabilities, restrictions on or suspension of the Issuer’s activities and delays in the exploration of and development of its properties.

The Issuer is required to obtain governmental permits to develop its reserves and for expansion or advanced exploration activities at its operating and exploration properties. Obtaining the necessary governmental permits is a complex and time-consuming process involving numerous foreign agencies. There can be no certainty that these approvals will be granted to the Issuer in a timely manner or at all, and if granted that they will be free of conditions or restrictions. The duration and success of each permitting effort are contingent upon many variables not within the Issuer’s control. Foreign operations, governmental approvals, licenses and permits are, as a practical matter, subject to the discretion of the applicable governments or governmental officials. In the context of environmental protection permitting, including the approval of reclamation plans, the Issuer must comply with known standards, existing laws and regulations that may entail greater or lesser costs and be subject to delays depending on the nature of the activity to be permitted and the interpretation of the laws and regulations implemented by a permitting authority. The failure to obtain or renew certain permits, or

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the imposition of extensive conditions upon certain permits, could have a material adverse effect on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

Failure to comply with applicable environmental, health and safety laws can result in injunctions, damages, suspension or revocation of permits and the imposition of penalties. There can be no assurance that the Issuer has been or will be at all times in complete compliance with such laws or permits, that compliance will not be challenged or that the costs of complying with current and future environmental, health and safety laws and permits will not materially or adversely affect the Issuer’s future cash flow, results of operations and financial condition.

International Operations

Many of the mineral rights and interests of the Issuer are subject to government approvals, licenses and permits. Such approvals, licenses and permits are, as a practical matter, subject to the discretion of applicable governments or governmental officials. No assurance can be given that the Issuer will be successful in obtaining or maintaining any or all of the various approvals, licenses and permits required to operate its businesses in full force and effect or without modification or revocation.

The Issuer’s business is subject to the risks normally associated with conducting business in foreign countries. Some of these risks are more prevalent in countries that are less developed or have emerging economies. In certain countries in which the Issuer has assets and operations, such assets and operations are subject to various political, economic and other uncertainties and changes arising therefrom, including, among other things: the risks of war and civil unrest or other risks that may limit or disrupt a project, restrict the movement of funds or product, or result in the deprivation of contract rights or the taking of property by nationalisation or appropriation without fair compensation; expropriation; nationalisation; renegotiation, nullification, termination or rescission of existing concessions or of licenses, permits, approvals and contracts; taxation policies; foreign exchange and repatriation restrictions; changing political conditions; changing fiscal regimes and uncertain regulatory environments; international monetary and market securities fluctuations; and currency controls and foreign governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. For example, in 2008 the Government of Zambia (the "GRZ") introduced changes to its tax regime relating to mining companies, including an increase in the income tax rate, an increase in the royalty rate, windfall tax and an export levy, which are contrary to the tax stability guarantees set out in the Issuer’s development agreements with the GRZ. Some of these measures were reversed in March 2009 when, for example, the GRZ discarded the windfall tax previously instituted in 2008. While the Issuerhas recorded a liability in its accounts for these taxes, it also has recognised as a receivable an amount (which was US$136.7 million as at 31 March 2009) in respect of excess taxes recoverable from the GRZ in accordance with the development agreements, and any impairment of the receivable, as it may from time to time be increased, may be material. In addition, in 2007 the Governor of the Katanga Province closed the DRC border to the export of ore from the Lonshi copper mine ("Lonshi"), which has resulted in the Issuer being unable to process approximately 536,000 tonnes of stockpiled oxide ore, which equates to approximately 15,000 tonnes of copper metal. The border remained closed at the end of May 2009. For further country or operations specific information see "First Quantum Minerals Ltd.". The occurrence of any of the foregoing could have a material and adverse impact on the Issuerand its business, prospects, financial position, financial condition and/or results of operations.

The Issuer may also face import and export regulations, including restrictions on the export of metals, disadvantages of competing against companies from countries that are not subject to Canadian and US laws, including the Foreign Corrupt Practices Act of 1997, as amended, restrictions on the ability to pay dividends offshore, and risk of loss due to disease and other potential endemic health issues.

In addition, in the event of a dispute arising from foreign operations, the Issuer may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreigners to the jurisdiction of courts in the United States or Canada. The Issuer also may be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. It is not possible for the Issuer to accurately predict such developments or changes in law or policy or to what extent any such developments or changes may have a material adverse effect on the Issuer’s operations.

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Political Unrest and Risk of Operating in the DRC

The DRC is a developing nation, with poor physical and institutional infrastructure, and a history of political instability, significant and unpredictable changes in government policies and laws, war and civil conflict, illegal mining activities, lack of law enforcement and labour unrest. As a result, the Issuer’s operations in the DRC are subject to various economic, political and other risks, including the impact of war and civil unrest, as well as nationalisation, expropriation, changing legal and fiscal regimes and uncertain regulatory environments, and changing tax and royalty regimes. From time to time, previous governments of the DRC also intervened in the export of mineral concentrates in response to concerns about the validity of export rights and payment of duties. For example, the operations at the Bwana Mkubwa solvent extraction and electro winning ("SX/EW") facility and acid plant ("Bwana") have been suspended due to the closure of the DRC border since November 2007. Similar or other actions could result in new or modified taxes or other government levies, or expropriation, nationalisation or the curtailment or cessation of the Issuer’s activities in the DRC, any of which could materially and adversely affect the Issuer’s results of operations or financial condition.

The DRC Government may also challenge the Issuer’s legal and contractual rights, including those under the Kolwezi Contract and the Issuer’s ability to enforce its rights against the DRC Government under that contract. Although the Issuer has recourse to international arbitration under the Kolwezi Contract, there are risks associated with any arbitration proceeding, including the status of the Issuer’s current and future mining titles, as well as possible inability to recover damages awards.

The northeast region of the DRC is experiencing serious civil unrest and instability which could have an impact on political, social or economic conditions in the DRC. Although Lonshi, the Frontier copper mine ("Frontier") and the Kolwezi Project are located in the southeast portion of the DRC, the effect of unrest and instability on political, social or economic conditions in the DRC could result in the impairment or cessation of (i) the mining operations at Frontier, (ii) the reinstatement of mining operations at Lonshi or (iii) the development of the Kolwezi Project, which could materially and adversely affect the Issuer’s results of operations or financial condition.

Mining and Processing

The Issuer’s business operations are subject to risks and hazards inherent in the mining industry that may result in damage to the Issuer’s property, delays in its business and possible legal liability. These risks and hazards include but are not limited to:

• environmental hazard and weather conditions;

• discharge of pollutants or hazardous chemicals;

• industrial accidents;

• failure of processing and mechanical equipment and other performance problems;

• labour force disruptions;

• the unavailability of materials and equipment;

• unanticipated transportation costs;

• changes in the regulatory environment;

• unanticipated variations in grade and other geological problems, water conditions, surface or underground conditions;

• unanticipated changes in metallurgical and other processing problems;

• encountering unanticipated ground or water conditions;

• cave-ins, pit wall failures, flooding, rock bursts and fire;

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• periodic interruptions due to inclement or hazardous weather conditions, including flood or excessive rainfall; and

• force majeure factors, other acts of God or unfavourable operating conditions and bullion losses.

Any of these risks and hazards can materially and adversely affect, among other things, the development of properties, production quantities and rates, costs and expenditures, and production commencement dates. Such risks could also result in damage to, or destruction of, mineral properties or processing facilities, personal injury or death, loss of key employees, environmental damage, delays in mining, monetary losses and possible legal liability. Satisfying such liabilities may be very costly and could have a material adverse effect on future cash flows, results of operations and financial conditionof the Issuer.

Certain of the Issuer’s projects, including Frontier and the Kansanshi copper mine ("Kansanshi"), are located in areas of high rainfall, which may be exacerbated by climate change. At Frontier and Kansanshi, the Issuer attempts to mitigate risks associated with excessive rainfall and/or flooding by taking measures aimed at groundwater drainage and pit dewatering. Additionally, at the Guelb Moghrein copper and gold mine ("Guelb Moghrein"), the Issuer requires substantial amounts of water for its operations and is dependent on water pumps and pipes to enable this process. Should any of the drainage or dewatering measures fail to perform, or to perform as planned and expected, or in the case of Guelb Moghrein should the Issuer’s pumping capabilities be affected or should the Issuer be unable to source the water needed for operations, it could result in a significant interruption in operations and production, damage to equipment and infrastructure, or a material increase in costs and/or capital expenditures while water management remediation measures are undertaken. A flood may also result in a loss of mineral reserves and/or resources if it is necessary to redesign or dewater a mine. Should any of the foregoing occur, it could have a material adverse affect on the business, prospects, financial position, financial condition, liquidity and/or results of operations of the Issuer. In addition, water inflows and floods are generally not insurable.

The Issuer’s processing facilities are dependent on continuous mine feed to remain in operation. Insofar as the Issuer’s mines may not maintain material stockpiles of ore or material in process, any significant disruption in either mine feed or processing throughput, whether due to equipment failures, adverse weather conditions, supply interruptions, export or import restrictions (such as the case at Bwana due to the closure of the DRC border), labour force disruptions or other causes, may have an immediate adverse effect on the results from the operations of the Issuer. A significant reduction in mine feed or processing throughput at a particular mine could cause the unit cost of production to increase to a point where the Issuer could determine that some or all of the Issuer’s reserves are or could be uneconomic to exploit. The loss of processing facilities in close proximity to the Issuer's mines could result in additional freight or transporting costs due to larger quantities of unprocessed ore having to be exported, which could decrease the profitability of one or more of the Issuer's affected operations.

The Issuer periodically reviews mining schedules, production levels and asset lives when planning the life of a mine for all of its operating and development properties. Significant changes in the plans regarding the life of a mine can occur as a result of mining experience, new ore discoveries, changes in mining methods and rates, process changes, investment in new equipment and technology, precious metals price assumptions, and other factors. Based on this analysis, the Issuer reviews its accounting estimates and, in the event of impairment, may be required to write-down the carrying value of one or more mines. This complex process continues for the life of every mine.

As a result of the foregoing risks and, in particular, where a project is in a development stage, expenditures on any and all projects, actual production quantities and rates, and cash costs may be materially and adversely affected and may differ materially from anticipated expenditures, productionquantities and rates, and costs. In addition, estimated production dates may be delayed materially, in each case especially to the extent development projects are involved. Any such events can materially and adversely affect the Issuer’s business, financial condition, results of operations and cash flows.

Mine Development

The Issuer’s ability to maintain or increase its annual production of copper will be dependent in a significant part on its ability to bring new mines into production and to expand existing mines.

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Although the Issuer utilises the operating history of its existing mines to derive estimates of future operating costs and capital requirements, such estimates may differ materially from actual operating results at new mines or at expansions of existing mines. The economic feasibility analysis with respect to any individual project is based upon, among other things: the interpretation of geological data obtained from drill holes and other sampling techniques; feasibility studies (which derive estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed); precious and base metals price assumptions; the configuration of the ore body; expected recovery rates of metals from the ore; comparable facility and equipment costs; anticipated climatic conditions; and estimates of labour, productivity, royalty, tax rates, or other ownership burdens and other factors.

The Issuer’s development projects are also subject to the successful completion of final feasibility studies, the issuance of necessary permits and the receipt of adequate financing. Although the Issuer’s feasibility studies are completed with the Issuer’s knowledge of the operating history of similar ore bodies in the region, actual operating results of its development projects may differ materially from those anticipated.

As noted earlier, uncertainties relating to operations are even greater in the case of development projects. Any of the following events, among others, could affect the profitability or economic feasibility of a project:

• unanticipated changes in grade and tonnage of ore to be mined and processed;

• unanticipated adverse geotechnical conditions;

• incorrect data on which engineering assumptions are made;

• costs of constructing and operating a mine in a specific environment;

• availability and costs of processing and refining facilities;

• availability of economic sources of power;

• adequacy of water supply;

• adequate access to the site, including competing land uses (such as agriculture and illegal mining);

• unanticipated transportation costs;

• government regulations (including regulations to prices, royalties, duties, taxes, permitting, restrictions on production, quotas on exportation of minerals, as well as the costs of protection of the environment and agricultural lands);

• fluctuations in commodity prices and exchange rates; and

• accidents, labour actions and force majeure events.

It is not unusual in new mining operations to experience unexpected problems during the start-up phase, and delays can often occur at the start of production. In the past, the Issuer has adjusted estimates based on changes to assumptions and actual results.

Copper and Other Metals Prices

The profitability of the Issuer’s current operations is directly related and sensitive to the market price of copper and, to a lesser extent, that of gold. Copper, gold and other metal prices fluctuate widely and are affected by numerous factors beyond the Issuer’s control, including but not limited to global supply and demand, expectations with respect to the rate of inflation, the exchange rates of the US dollar to other currencies, interest rates, forward selling by producers, central bank sales and purchasers, production and cost levels in major producing regions, global or regional political, economic or financial situations and a number of other factors.

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The financial results and exploration, development and mining activities of the Issuer may in the future be significantly and adversely affected by declines in the price of copper or other minerals. The price of copper and other minerals fluctuates widely and is affected by numerous factors beyond the control of the Issuer, such as the sale or purchase of commodities by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the US dollar and foreign currencies, global and regional supply and demand, the political and economic conditions and production costs of major mineral producing countries throughout the world, and the cost of substitutes, inventory levels and carrying charges. Future production from the Issuer’s mining properties is dependent upon the prices of copper and other minerals being adequate to make these properties economically viable.

Mineral Reserve and Resource Estimates

The Issuer’s reported mineral reserves and resources are only estimates. No assurance can be given that the estimated mineral reserves and resources will be recovered, or that they will be recovered at the rates estimated or that they can be mined or processed profitably. Mineral reserve and resource estimates are based on limited sampling and, consequently, are uncertain because the samples may not be representative. Mineral reserve and resource estimates may require revision (either up or down) based on actual production experience. Market fluctuations in the price of metals, as well as increased production costs or reduced recovery rates, changes in the mine plan or pit design, or increasing capital costs may render certain mineral reserves and resources uneconomic and may ultimately result in a restatement of reserves and/or resources. Moreover, short-term operating factors relating to the mineral reserves and resources, such as the need for sequential development of ore bodies and the processing of new or different ore grades, may adversely affect the Issuer’s profitability in any particular accounting period.

The Issuer uses two different standards in determining its mineral resources and reserves: the Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australian Institute of Mining and Metallurgy Institute (the "JORC Code") or the Canadian Institute of Mining, Metallurgy and Petroleum on Mineral Resources and Reserve Definitions and Guidelines (the "CIM Standards").

For a discussion of the differences in resource and reserve reporting standards see "Caution With Respect to Forward-Looking Statements and Information - Presentation of Mineral Reserve and Resource Estimates" in the 2009 AIF incorporated by reference into this Offering Circular.

Any material reductions in estimates of mineral reserves and/or resources, or the Issuer’s ability to extract those resources, could have a material adverse effect on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

No Assurance of Titles or Boundaries

Title to the Issuer’s properties may be challenged or impugned, and title insurance is generally not available. The Issuer’s mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, the Issuermay be unable to operate its properties as permitted or to enforce its rights with respect to its properties.

Estimation of Asset Carrying Values

The Issuer annually undertakes a detailed review of life of mine plans for its operating properties and an evaluation of the Issuer’s portfolio of development projects, exploration projects and other assets. The recoverability of the Issuer’s carrying values of its operating and development properties are assessed by comparing carrying values to estimated future net cash flows from each property.

Factors which may affect carrying values include, but are not limited to: copper, gold, cobalt and sulphuric acid prices; capital cost estimates; mining, processing and other operating costs; grade and metallurgical characteristics of ore; and mine design and timing of production. In the event of a prolonged period of depressed copper prices, the Issuer may be required to take additional material write-downs of its operating and development properties.

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Power supply

The Group's operations depend upon the reliable and continuous delivery of sufficient quantities of power to its mines and processing facilities. While the Group currently has adequate power supply to its existing facilities, the Group's long-term operations, when taken together with other proposed developments in the region could, if all fully operational, have a total power requirement in excess of power currently available. Failure to secure sufficient power in the future could have a material adverse effect on the Group's business, operating results and financial position.

Exploration

Since mines have limited lives based on proven and probable mineral reserves, the Issuer continually seeks to replace and expand its reserves. Mineral exploration, at both newly acquired properties and existing mining operations, is highly speculative in nature, involves many risks and frequently does not result in the discovery of mineable reserves. There can be no assurance that the Issuer’s exploration efforts will result in the discovery of significant copper mineralisation or that any mineralisation discovered will result in an increase of the Issuer’s proven or probable reserves. If proven or probable reserves are developed, it may take a number of years and substantial expenditures from the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. No assurance can be given that the Issuer’s exploration programmes will result in the replacement of current production with new reserves or that the Issuer’s development programme will be able to extend the life of the Issuer’s existing mines. In the event that new reserves are not developed, the Issuer will not be able to sustain any mine’s current level of copper beyond the life of its existing reserve estimates.

Insurance

The business of mining and mineral exploration is generally subject to a number of risks and hazards including: adverse environmental conditions; industrial accidents; contaminations; labour disputes; unusual or unexpected geological conditions; ground or slope failures; cave-ins; changes in the regulatory environment; and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage to the Issuer’s properties or the properties of others, delays in mining, monetary losses and possible legal liability. The Issuer maintains insurance against certain risks that are typical in the mining industry and in amounts that the Issuerbelieves to be reasonable, but which may not provide adequate coverage in certain circumstances. In addition, insurance against certain risks (including certain liabilities for environmental pollution or other hazards as a result of exploration and production) is not generally available to the Issuer or to other companies in the industry on acceptable terms. Losses resulting from such failure to obtain insurance may result in cost increases and decreased profitability.

Health

HIV, malaria and other diseases are perceived as a serious threat to maintaining a skilled workforce in the Zambian Copperbelt. The per capita incidence of HIV in Zambia is amongst the highest in the world. As such, HIV remains a major healthcare challenge faced by the Issuer’s Zambian and DRC operations. There can be no assurance that the Issuer will not lose members of its workforce or lose workforce man-hours, which may have a material adverse effect on the Issuer’s operations.

Currency

The Issuer’s revenue from operations is received in US dollars while a significant portion of its operating expenses and capital costs are incurred in Australian dollars, South African Rand, euro, Zambian Kwacha, Congolese Franc, and Mauritanian Ouguiya. Accordingly, foreign currency fluctuations may adversely affect the Issuer’s financial position and operating results. The Issuercurrently engages in limited foreign currency hedging activities to mitigate this risk.

Effects of Inflation on Results of Operations

A significant portion of the Issuer’s operations are located in Zambia and the DRC which have historically experienced relatively high rates of inflation. Since the Issuer is unable to control the market price at which it sells the minerals it produces (except to the extent that it enters into forward

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sales contracts), it is possible that significantly higher inflation in the future in Zambia or the DRC, without a concurrent devaluation of the local currency against the US dollar or an increase in the price of such minerals, could have a material adverse effect upon the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

Key Personnel

The Issuer is dependent on a relatively small number of key employees, the loss of any of whom could have an adverse effect on the Issuer. The Issuer currently does not have key person insurance on these individuals.

Labour Relations

Current union agreements at the Issuer’s operations in Zambia are typically one year in duration and are subject to expiration at various times in the future. If the Issuer is unable to renew union agreements as they become subject to renegotiations from time to time, it could result in work stoppages and other labour disturbances that could have a material adverse effect on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

If unionised employees were to engage in a concerted strike or other work stoppage, or if other employees were to become unionised, the Issuer could experience a disruption of operations, higher labour costs or both. A lengthy strike or other labour disruption could have a material adverse effect on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

Financing

The Issuer has been successful at financing its projects and operations over the years. However, the Issuer’s ability to continue its exploration, assessment, development and operational activities will depend on the resource industry generally, which is cyclical in nature, and which may, in turn, affect the Issuer’s ability to attract financing, including joint venture financing, debt or bank financing, equityfinancing or production financing arrangements. Failure to obtain, or difficulty or delay in obtaining, requisite financing could result in delay of certain projects or postponement of further exploration, assessment or development of certain properties or projects. Financing through the issuance of equity will result in dilution of existing shareholders.

Acquisition Strategy

The Issuer is actively pursuing the acquisition of advanced exploration, development and production assets consistent with its acquisition and growth strategy. From time to time, the Issuer may also acquire securities of, or other interests in, companies with respect to which the Issuer may enter into acquisitions or other transactions. Acquisition transactions involve inherent risks, including:

• accurately assessing the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates;

• ability to achieve identified and anticipated operating and financial synergies;

• unanticipated costs;

• diversion of management attention from existing business;

• potential loss of the Issuer’s key employees or the key employees of any business that the Issuer acquires;

• unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying the acquisition; and

• decline in the value of acquired properties, companies or securities.

Any one or more of these factors or other risks could cause the Issuer not to realise the benefits anticipated to result from the acquisition of properties or companies, and could have a material adverse

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effect on the Issuer’s ability to grow and on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations.

While the Issuer continues to seek acquisition opportunities consistent with its acquisition and growth strategy, the Issuer cannot be certain that it will be able to identify additional suitable acquisition candidates available for sale at reasonable prices, to consummate any acquisition or to integrate any acquired business into its operations successfully. Acquisitions may involve a number of special risks, circumstances or legal liabilities. These and other risks related to acquiring and to operating acquired properties and companies could have a material adverse effect on the Issuer’s business, prospects, financial position, financial condition, liquidity and/or results of operations. In addition, to acquire properties and companies, the Issuer would use available cash, incur debt, issue common shares of the Issuer or other securities, or a combination of any one or more of these. This could limit the Issuer’s flexibility to raise capital, to operate, explore and develop the Issuer’s properties and to make additional acquisitions, and could further dilute, and decrease the trading price of, the Common Shares of the Issuer. When evaluating an acquisition opportunity, the Issuer cannot be certain that it will have correctly identified and managed the risks and costs inherent in the business that it is acquiring.

From time to time, the Issuer engages in discussions and activities with respect to possible acquisitions. At any given time, discussions and activities can be in process on a number of initiatives, each at a different stage of development. While at the present time the Issuer has no binding agreement, the Issuer is actively pursuing potential acquisitions. The Issuer can provide no assurance that any potential transaction will be successfully completed, and, if completed, that the business acquired will be successfully integrated into its operations. If the Issuer fails to manage its acquisition and growth strategy successfully, it could have a material adverse effect on its business, prospects, financial position, financial condition, liquidity and/or results of operations.

Risks Related to the Bonds

Bonds May Not Be a Suitable Investment for All Investors

Each potential investor in the Bonds must determine the suitability of the investment in light of its own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained or incorporated by reference in this Offering Circular or any applicable supplement;

(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and the impact such investment will have on its overall investment portfolio;

(iii) understand thoroughly the terms of the Bonds and be familiar with the behaviour of financial markets in which they participate; and

(iv) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

There is No Established Trading Market for the Bonds

The Bonds are new securities which may not be widely distributed and for which there is currently no established trading market. If the Bonds are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions, the Issuer's results of operations and the market price of the Common Shares. Although applications have been made to the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "UKLA") for the Bonds to be admitted to the official list of the UKLA (the "Official List") and to trading on the Professional Securities Market (the "PSM") of the London Stock Exchange (the "LSE"), there is no assurance that such applications will be accepted or that an active trading market for the Bonds will develop. Accordingly, there is no assurance as to the development or liquidity of any trading market for the Bonds.

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Bondholders Will Bear the Risk of Fluctuation in the Price of the Common Shares

In recent years, the securities markets have experienced a high level of price and volume volatility and the market price of securities of many companies have experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values of prospects of such companies. The market price of the Bonds is expected to be affected by fluctuations in the market price of the Common Shares and it is impossible to predict whether the price of the Common Shares will rise or fall. Trading prices of the Common Shares will be influenced by, among other things, the financial position of the Issuer, the results of operations and political, economic, financial and other factors. Any decline in the market price of the Common Shares may have an adverse effect on the market price of the Bonds.

Future issues of, or disposals of the Common Shares by substantial shareholders may significantly affect the trading price of the Bonds or the Common Shares. Even the expectation that such issues or disposals may occur may significantly affect the trading price of the Bonds and the Common Shares. The Issuer has agreed to certain restrictions on its ability to issue or dispose of Common Shares or related securities for 90 days after the issue of the Bonds. Except for such restrictions and the undertakings of the Issuer described in Condition 10 below (see "Terms and Conditions of the Bonds -Undertakings"), there is no restriction on the Issuer's ability to issue Common Shares, and there can be no assurance that the Issuer will not issue Common Shares or that any substantial shareholder will not dispose of, encumber, or pledge its Common Shares or related securities.

The Global Bond is Held by or on Behalf of Euroclear and Clearstream, Luxembourg

The Bonds will be represented by the global bond ("Global Bond"). The Global Bond will be deposited with a common depositary for Euroclear S.A/ N.V ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Except in certain limited circumstances described in the Global Bond, investors will not be entitled to receive Bonds in definitive form. Euroclear and Clearstream, Luxembourg will maintain records of the beneficial interests in the Global Bond. While the Bonds are represented by the Global Bond, investors will be able to trade their beneficial interests only through Euroclear and Clearstream, Luxembourg.

The Issuer will discharge its payment obligations under the Bonds by making payments to the common depositary for Euroclear and Clearstream, Luxembourg for distribution to their accountholders. A holder of a beneficial interest in a Global Bond must rely on the procedures of Euroclear and Clearstream, Luxembourg to receive payments under the Bonds. The Issuer has no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Bond.

Modification, Waivers and Substitution

The Conditions contain provisions for calling meetings of Bondholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders including Bondholders who did not attend and vote at the relevant meeting and Bondholders who voted in a manner contrary to the majority.

The Terms and Conditions of the Bonds also provide that the Trustee may, without the consent of Bondholders, agree to (i) any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Bonds or (ii) determine without the consent of the Bondholders that any Event of Default or Potential Event of Default shall not be treated as such or (iii) the substitution of any Subsidiary of the Issuer as principal debtor under the Bonds in place of the Issuer, in the circumstances described in Condition 13 see "Terms and Conditions of the Bonds –Meetings of Bondholders, Modification and Waiver, Substitution".

EU Savings Directive

Under EC Council Directive 2003/48/EC on the taxation of savings income (the "Savings Directive"), Member States of the European Union are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident, or to certain limited types of entities established, in another Member State. However, for a transitional period, Belgium, Luxembourg and Austria may instead (unless during that period they elect otherwise) operate a withholding system in relation to such payments (subject to a

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procedure whereby, on meeting certain conditions, the beneficial owner of the interest or other income may request that no interest be withheld) (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland).

On 15 September 2008, the European Commission issued a report to the Council of the European Union on the operation of the Savings Directive, which included the European Commission's advice on the need for changes to the Savings Directive. On 13 November 2008, the European Commission published a more detailed proposal for amendments to the Savings Directive, which included a number of suggested changes. The European Parliament approved an amended version of this proposal on 24 April 2009. If any of those proposed changes are made in relation to the Savings Directive, they would amend or broaden the scope of the requirements described above.

If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to the Bonds as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying and Conversion Agent in a Member State that will not be obliged to withhold or deduct tax pursuant to the Savings Directive.

Bondholders Have Limited Anti-Dilution Protection

The Conversion Price at which the Bonds may be converted into Common Shares will be adjusted in the event that there is a consolidation, reclassification or subdivision of the Common Shares, capitalisation of profits, the payment of any dividend or the making of a distribution by the Issuer, rights issue or grant of other subscription rights or other adjustment, including a spin-off event, which affects the Common Shares, but only in the situations and only to the extent provided under "Conditions of the Bonds – Conversion of Bonds". There is no requirement that there should be an adjustment for every corporate or other event that may affect the value of the Common Shares. Events in respect of which no adjustment is made may adversely affect the value of the Common Shares and, therefore, adversely affect the value of the Bonds.

It May Not be Possible to Effect Service of Process Upon the Issuer or the Directors or Enforce Court Judgments Against the Issuer or the Directors

The Issuer is a company incorporated in Canada. The Issuer's assets are located in various jurisdictions and the majority of the Issuer's assets are located in jurisdictions outside England, Canada or the United States. The Directors are citizens of various countries. Some of the Directors are not citizens of the United Kingdom or Canada, and none of them are citizens of the United States. It may not be possible to effect service of process outside England, Wales or Canada against the Issuer or the Directors or to enforce the judgement of a court outside England, Wales or Canada against the Issuer or the Directors. There is doubt as to the enforceability in England, Wales or Canada, in original actions or in actions for enforcement, of judgements of US Courts or civil liabilities predicated upon US federal securities laws. There is also doubt as to the enforceability of judgements of this nature in many of the other jurisdictions in which the Issuer operates and in which its assets are situated and in the countries of which most of the Directors are citizens.

Risks Attached to the Exercise of Conversion Rights

At any point when the Bonds are outstanding, depending on the performance of the Common Shares, the value of the Common Shares may be substantially lower than when the Bonds were initially purchased. In addition, because there will be a delay between when Conversion Rights are exercised and when Common Shares are delivered, the value of the Common Shares to be delivered may vary substantially between the date on which Conversion Rights are exercised and the date on which such Common Shares are delivered.

Minimum Conversion Price

Under the rules of the TSX, the minimum allowable conversion price of certain convertible securities that are convertible into securities which are listed on the TSX, such as the Bonds, must be no lower than the market price at the time of issuance of the convertible securities less an applicable discount, as

19

provided by the rules of the TSX. In circumstances where one or more adjustments to the conversion price of a convertible security could result in underlying securities being issued at a conversion price that is lower than the minimum allowable conversion price, shareholder approval is required under the rules of the TSX. In the case of the Bonds, the Conversion Price is C$56.39, which currently is set above the Minimum Conversion Price. However, if one or more adjustments were to reduce the Conversion Price below the Minimum Conversion Price, unless shareholder and TSX approval were obtained, the Issuer would only be able to issue underlying common shares based on the Minimum Conversion Price notwithstanding that the Conversion Price is lower, thereby resulting in a Bondholder converting Bonds into a lower number of underlying common shares than would otherwise be issuable based on the Conversion Price then in effect.

20

USE OF PROCEEDS

The net proceeds of the Offering will provide the Issuer with longer-term debt capital which will strengthen its financial position by providing additional liquidity and giving it the option to repay or renegotiate short-term debt, additional financial resources to enable it to continue to undertake organic growth initiatives and funding flexibility if suitable acquisition opportunities are identified.

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FIRST QUANTUM MINERALS LTD.

First Quantum Minerals Ltd.

First Quantum Minerals Ltd. (for the purposes of this section "First Quantum Minerals Ltd." the "Company" or "First Quantum Minerals") was incorporated under the Company Act (British Columbia) on 21 December 1983 under the name of Xenium Resources Ltd. The Company changed its name to Xenium Resources Inc. on 25 January 1984, to Zeal Capital Ltd. on 29 November 1989 and to First Quantum Ventures Ltd. on 16 June 1993. In 1996 the Company's current Chairman and CEO, Philip Pascall and its current Executive Director, Martin Rowley, joined its current President, Clive Newall who was already a Director of the Company. On 18 July 1996, the Company changed its name to its current name, First Quantum Minerals Ltd., and continued its incorporation into the Yukon, pursuant to the provisions of the Business Corporations Act (Yukon). On 7 June 2002, the Company amalgamated with its wholly-owned subsidiary, First Quantum Minerals (Yukon) Ltd. pursuant to the provisions of the Business Corporations Act (Yukon). On 11 August 2003 the Company’s jurisdiction of incorporation was continued from the Yukon to the federal jurisdiction under the Canada Business Corporations Act. The Company was continued to the Province of British Columbia under the Business Corporations Act (British Columbia) on 3 June 2005 and registered with incorporation number C0726351.

The address of the registered office of the Company is 8th Floor, 543 Granville Street, Vancouver, British Columbia, V6C 1X8, Canada (telephone number +1 604 688 6577). The Company also has representative offices located in Perth, Australia Horsham, England and Johannesburg, South Africa.

On 18 May 2007, the Company’s shares were accepted for trading on the main market of the London Stock Exchange ("LSE"). As a result, the Company cancelled its listing on the Alternative Investment Market ("AIM") of the LSE. The Company now trades on the ("TSX") and LSE, respectively, with the TSX remaining as the Company’s primary market.

The Company and its consolidated subsidiary undertakings and, where the context requires, its associated undertakings are referred to in this Offering Circular as the Group (the "Group").

Overview

The Company and its subsidiaries are an international mining group which has grown through a combination of exploration, development, operation and acquisition of mining projects or companies with interests in mining projects and production of London Metal Exchange ("LME") grade "A"copper cathode, copper in concentrate, gold and sulphuric acid.

The Company’s principal activities include mineral exploration, development and mining of copper, gold and the production of sulphuric acid. At present, its operations are located in Africa, including Zambia, the Democratic Republic of Congo ("DRC") and Mauritania. In June 2008, the Company acquired a development property in Finland. The Company also considers investments in other geographic regions or commodities as part of its growth strategy.

Revenues of the Company have increased 59 per cent. over the last three financial years, from US$1,095 million for the year ended 31 December 2006 to US$1,740 million for the year ended 31 December 2008. The unaudited revenues of the Company for the three months ended 31 March 2009 were US$268.2 million, compared to US$511.5 million for the three months ended 31 March 2008. Profits of the Company over the last three financial years, were US$399.4 million for the year ended 31 December 2006, US$520.3 million for the year ended 31 December 2007 and US$45.9 million for the year ended 31 December 2008. The unaudited profits of the Company for the three months ended 31 March 2009 were US$10.9 million compared to US$182 million for the three months ended 31 March 2008. The lower revenue and profits for the three months ended 31 March 2009 in comparison to the three months ended 31 March 2008 were due, in part, to the realised copper price being 56 per cent. lower. As at the date of this Offering Circular the Company employed approximately 6,500 people.

Group Strategy

The Company aims to continue its rapid growth as an international mining company by implementing the following strategies:

22

• continued focused exploration on greenfield and brownfield targets in Mauritania and the Copperbelt;

• continued development of existing projects in a cost-effective and timely manner;

• to exploit the Group's ownership of, and access to, smelting, refining and other production infrastructure;

• to improve operating efficiencies via capacity improvements, the use of technology and cost reduction and rationalisation; and

• to seek out value-orientated acquisition opportunities worldwide, primarily focusing on base metals (from time to time the Company takes minority stakes in other companies (including publicly listed companies)).

In particular, the specific focus of management in 2009 will be to:

• increase gold production at the Guelb Moghrein copper and gold mine ("Guelb Moghrein") and Kansanshi copper and gold mine ("Kansanshi");

• complete the expansion of and improve production and operational efficiencies at Guelb Moghrein;

• secure alternate oxide ore feed for the Bwana Mkubwa solvent extraction and electro winning ("SX/EW") facility, acid plant and copper mine ("Bwana") which is currently undergoing maintenance work;

• further investigate the underground sulphide resource at Lonshi copper mine ("Lonshi");

• continue construction at the copper-cobalt tailings retreatment project Kolwezi ("Kolwezi") in the DRC, with the target of commissioning in the third quarter of 2010;

• finalise an updated resource for the nickel-copper-PGE development project at the Kevitsa nickel and copper mine ("Kevitsa"); and

• pursue growth via exploration and acquisition.

Key Strengths

The Directors believe that Company has a number of key strengths that are important to the continued success of the business, as set out below:

Management

The executive management team of Philip Pascall, Clive Newall and Martin Rowley has 70 years of international mining experience, together with 30 years practical experience of project development and operating in the Copperbelt.

In an industry that has few specialists, the Company has successfully established a strong team under its senior management with key skills in exploration, development, operation and finance.

Operational Expertise

The Company has successfully identified, developed and operated copper mines in the Copperbelt. Lonshi and the Frontier copper mine ("Frontier"), two of the first new mines in the DRC since the 1960s, demonstrate the Company's ability to find new mines and rapidly develop them. The Company believes that the development of Kansanshi and Frontier demonstrates its ability to develop projects within a shorter timeframe and at a lower capital cost than the industry standard.

23

Strategic Location

The Company was one of the first companies to invest in the Copperbelt since the mines were nationalised in the 1960s, enabling the Company to acquire (i) approximately 17,000km² of scarcely explored land, with excellent potential for discovering mineral resources, and (ii) associated exploration rights. Similarly, the Company has established operations in Mauritania, a region with unexplored land and high potential for the discovery of mineral resources. These strategic positions, together with the Company's proven operational expertise and existing operations, means that the Company can take advantage of new opportunities that may arise in both of these areas.

Rapid Production Growth

The Company has developed its operations to produce substantial amounts of copper having, in the seven years from 2001 to 2008, reported a 28 fold increase in annual copper production to 334,000 tonnes. Annual copper production is forecast to increase to approximately 380,000 tonnes in 2009 and approximately 500,000 tonnes in 2011, due to the completion of Kolwezi and Kevitsa and the expansion of the Company's existing mines, Kansanshi and Guelb Moghrein.

Ability to Deliver Finished Copper

As at the end of 2008, approximately 50 per cent. of the Company's copper production was in the form of finished cathodes from its SX/EW facilities with the other 50 per cent. being in the form of sulphide concentrates which require further processing. The directors of the Company consider the Company's direct access to smelting and refining facilities at Mufulira and other Copperbelt smelters, to be a significant commercial advantage. In addition the recently completed high-pressure concentrate leach facility ("HPL") at Kansanshi has provided further downstream processing capacity.

Financial Strength

The Company has a track record of successfully obtaining financing for its development projects. The Company has the financial resources and expertise to continue its strong growth both organically and through strategic acquisitions as shown by: a strong balance sheet; cash and cash equivalents of US$185 million as at 30 April 2009; net working capital of US$233 million; total debt of US$283 million; an undrawn US$250 million credit facility and substantial positive cash flow from the Company's operations.

Track Record of Successful Acquisitions

The acquisitions of Kansanshi, Adastra Minerals Inc. ("Adastra"), Guelb Moghrein and Kevitsa demonstrate the Company's ability to identify and successfully complete corporate and asset acquisitions in Africa and Europe. The Company is actively seeking other potential, value-enhancing acquisition opportunities around the Copperbelt, as well as internationally, to complement the Company's already strong project pipeline.

Development of the Group

The last three financial years ended 31 December 2008, have seen significant growth of the Group through a number of projects. The Company's mining interests as at the date of this Offering Circular are summarised below:

Zambia:

In Zambia the Company owns:

• 80 per cent. of Kansanshi;

• 100 per cent. of Bwana;

• 16.9 per cent. of Mopani Copper Mines Plc ("Mopani"), which operates the Nkana underground copper mine and cobalt refinery ("Nkana") and Mufulira underground copper mine and cobalt refinery ("Mufulira"); and

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• 16.32 per cent. of Equinox Minerals Limited ("Equinox"), which owns 100 per cent. of the Lumwana copper mine ("Lumwana").

DRC:

In the DRC the Company owns:

• 95 per cent. of Frontier;

• 100 per cent. of Lonshi; and

• a 65 per cent. interest in Kolwezi.

Mauritania:

In Mauritania the Company owns 80 per cent. of Guelb Moghrein.

Finland:

In Finland the Company owns a 100 per cent. interest in Kevitsa.

For further information on the Group's interests please see "Description of the Business – Operations".

Revenue

The following table sets out a summary of the Company's unaudited revenues for the two years ended 31 December 2008 and for each quarter in the two years ended 31 March 2009:

Unaudited revenues for the two years ended 31 December 2008 and for each quarter in the two years ended 31 March 2009

For the yearended

31 December(unaudited)

For the three months ended

31 March(unaudited)

For the three months ended

30 June(unaudited)

For the three months ended30 September(unaudited)

For the three months ended31 December(unaudited)

(millions of US$) 2008 2007 2009 2008 2008 2007 2008 2007 2008 2007

Kansanshi

Copper cathodes....................... 1,047.6 1000.0 139.1 305.5 338.1 249.0 286.2 307.1 117.8 268.0

Copper in concentrates ............ 132.8 102.7 23.8 67.9 28.9 6.9 72.6 16.0 (36.6) 37.2

Gold .......................................... 44.1 26.0 8.0 8.8 13.0 4.7 12.2 6.3 10.1 10.2

Guelb Moghrein

Copper in concentrates ............ 137.7 183.4 20.5 67.2 51.1 41.2 32.4 74.1 (13.0) 55.3

Gold .......................................... 53.4 44.1 19.7 16.4 13.3 7.6 12.6 14.1 11.1 19.3

Frontier

Copper in concentrates ............ 287.8 16.1 55.2 32.6 192.0 - 137.1 - (73.9) 16.1

Bwana/Lonshi

Copper cathodes....................... 35.4 166.5 0.4 13.1 15.4 41.2 10.0 66.1 (3.1) 37.1

Revenues in any quarter are impacted by a number of factors including, but not limited to: (i) the price of copper which has fluctuated widely during the two years ended 31 December 2008, (ii) the related impact of provisional pricing adjustments which had a material negative impact for the three months

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ended 31 December 2008 and (ii) the summer months in the Copperbelt region, from November to April, which are characterised by high levels of rainfall that can reduce mining capability in that period.

Current Group Structure

The following diagram illustrates the corporate structure of the Group as at the date of this Offering Circular and, except where a subsidiary is wholly-owned by the Company, sets out the percentage of the shares owned, controlled or directed, directly or indirectly, by the Company.

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First Quantum Minerals (Canada)

Afro American Finance

(Barbados)

Oryx(Barbados)

IQR(BVI)

FQM Finance

(BVI)

Adastra Minerals(Canada)

FQMA(Australia)

FQM SA(South Africa)

Skyblue Enterprises

(BVI)

Black Bark Investment

s(BVI)

Mauritan Holdings

(BVI)

FQMZ (Zambia)

Sumtech (Zimbabwe)

Cover Investment

s(Ireland)

Comisa(DRC)

Frontier(DRC)95%

Kolwezi Holdings

(BVI)

Congolese Zinc

Investments

(BVI)

Adastra Offshore

(BVI)

Zamgold(BVI)

Catapult Holdings

(BVI)

Carlisa Investment

s(BVI)

18.8%

Mopani Copper Mines

(Zambia)90%

Kansanshi Holdings(Ireland)

Kansanshi Mining PLC

(Zambia)80%

Mauritanian Copper Mines

(Mauritania)80%

Roan Prospecting

& Mining(DRC)

Adastra Minerals Angola(BVI)

Congo Mineral Fields(DRC)

Zamgold(Zambia)

Kolwezi Investment

(BVI)

Zincongo(BVI)

Katanga Prospecting

& Mining(DRC)

Idas Resources(Netherland

Antilles)

Congo Mineral

Develop-ments(BVI)

KMT(DRC)65%

Connemara gold mine

95%(Zimbabwe)

FQMO(Zambia)

Lonshi mine

(DRC)

Frontier mine

(DRC)

Bwana Mkubwa

plant(Zambia)

Kansanshi acid & oxygen plants

(Zambia)

Kolwezi Tailings Project(DRC)

MiningExploration

RoadsHousingServices(Zambia)

Australia

Other

BVI

Ireland

Barbados

Mufulira and Nkana Operations(Zambia)

Kansanshi Mine

(Zambia)

Guelb Moghrein

Mine(Mauritania)

Canada

Zambia

DRC

Mauritania

Prop Holdings

(BVI)

Kafue Transport(Zambia)

Cravtorns(BVI)

FQM Frontier (Zambia)

FQM Scandinavia (Canada)

Scandinavian Minerals (Canada)

Kevitsa Mining

(Sweden)

Kevitsa Mining

(Finland)

Eagle Mining

(Sweden)

FQM Scandinavia Finance (Barbados)

Kevitsa Project

(Finland)

FIRST QUANTUM MINERALS GROUP – CORPORATE STRUCTURE

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Investments

The Company has indirect interests in Mopani through investments in Carlisa Investments Corp. ("Carlisa") and in Lumwana through investments in Equinox as detailed below.

Carlisa Investments Corp.

The Company holds an 18.8 per cent. interest in Carlisa, which holds a 90 per cent. interest in Mopani. Mopani is a privately-held Zambian registered company which operates the mine at Nkana and the smelter at Mufulira. In December 2006 a new advanced Isasmelt™ smelter was commissioned at Mufulira, which replaced the previous smelter. The new smelter was intended to provide treatment capacity for copper concentrate produced at both Kansanshi and Frontier. The carrying value of the investment in Carlisa as at 31 December 2008 was US$9.5 million. As Carlisa and Mopani are private companies, only limited public information about them is or may be made available for dissemination. In 2008, Mopani produced approximately 160,000 tonnes of finished copper and 1,400 tonnes of cobalt and had assets as at 31 December 2008 in excess of US$1 billion.

Equinox Minerals Limited

On 22 April 2009 Equinox issued a total of 102,235,000 common shares at a price of C$1.80. This resulted in the Company's interest in Equinox decreasing from 19.85 per cent. to its current holding of 16.32 per cent. Equinox’s principal asset is Lumwana of which it owns 100 per cent. Lumwana is located in the North Western province of Zambia, approximately 65km west of Kansanshi. The Company acquired the common shares of Equinox for investment purposes and may acquire further common shares or dispose of its holding of common shares as investment conditions warrant.

Description of the Business

Copper

The Company’s primary business is the production of copper. In 2008, the Company produced 334,445 tonnes of copper. Approximately 94 per cent. of the Company's revenue is derived from copper. Copper is widely used in electrical and electronic applications and in piping because of its many useful properties. It is malleable, durable, ductile, strong and corrosion resistant. Copper is also one of the most efficient conductors of electricity and heat.

The price of copper is primarily determined by changes in supply and demand, which are in turn affected and determined by global economic conditions. The increased copper consumption by developing Asian countries has increased demand for the metal and, in the last few years, has led to an increase in prices for copper.

Copper market in 2008 and early 2009

In 2008 the average price of copper remained above the consensus long-term trend price of US$2.00/lb, in spite of declines in the financial and commodity markets. The average LME cash settlement price over 2008 was US$3.16/lb (compared to US$3.23 in 2007).

The LME copper cash price at the beginning of 2008 was US$3.05/lb. The price of copper rose over the first three months of 2008 due, in part, to (i) a deficit of copper in 2007 of 160,000 tonnes and (ii) market concerns that the existing mining operations and new mining projects would be unable to meet the rising demand particularly from China. These factors, combined with US dollar's weakness, helped push the copper price to a new high of US$4.03/lb in March 2008. In early July 2008 the copper price reached its highest price for 2008 at US$4.08/lb.

There was a deficit of 22,000 tonnes of copper for the first eight months of 2008 compared with a deficit of 226,000 tonnes over the corresponding period in 2007. However, in the last three months of 2008 the global economy was particularly affected by poor economic data from United States and Europe, indications that the growth in China's economy was decelerating and a general lack of liquidity as levels of money lending dropped to record low levels.

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Over the last three months of 2008, the price of copper on the LME reduced by over 55 per cent. from its September 2008 closing price of US$2.91. The year end closing price of US$ 1.31/lb was 57 per cent. lower than the price at the start of 2008, which was $3.02.

The copper price on the LME has increased from 31 December 2008 to US$2.08/lb as at 22 May 2009; however, the price may increase or decrease in the future. The Company believes that the long term outlook for copper is stable, as the supply from older mines are affected by declining grades and, in many cases, the development of new mining projects are delayed due to the difficulty in arranging suitable financing in the current difficult financial markets.

(Sources: Barclays Capital Commodity Research, Mitsui Monthly Copper Wrap, ISCG, BNP Paribas Metals Special Report 28 November 2008, theprivateer.com)

The table below sets out the LME Copper prices for (i) the two years ended 31 December 2008, (ii) each quarter in the two years ended 31 December 2008 and (iii) the quarter ended 31 March 2009.

LME Copper prices (US$/Lb) for the two years ended 31 December 2008, each quarter in the two years ended 31 December 2008

and the quarter ended 31 March 2009

2009 2008 2007

Low High Average Low High Average Low High Average

For the year ended 31 December

- - - 1.26 4.08 3.15 2.37 3.77 3.23

For the three months ended 31 March

1.39 1.85 1.56 3.02 4.03 3.52 2.37 3.14 2.69

For the three months ended 30 June

- - - 3.59 4.03 3.83 3.14 3.73 3.47

For the three months ended September 30

- - - 2.91 4.08 3.48 3.15 3.70 3.50

For the three months ended 31 December

- - - 1.26 2.89 1.79 2.84 3.77 3.26

Sales of Copper

The Company produces copper in cathode and concentrate forms at its various operations. Copper cathode produced on site at Kansanshi is sold under off take agreements with two leading international metal trading companies. One agreement accounts for the sale of approximately 85 per cent. of cathode production and the other accounts for the sale of approximately 15 per cent. of cathode production.

Copper concentrate produced at Kansanshi is either toll treated at the Mufulira smelter with the copper cathode returned to Kansanshi for sale to an international metal trading company, sold to other smelters on the Copperbelt or from time to time, due to a lack of capacity at any of the Zambian smelters, Kansanshi copper concentrate is sold to third parties for export sale. Frontier concentrate is either toll treated at Mufulira, sold to other smelters on the copper belt or when there is no smelter capacity on the Copperbelt sold to third parties for export sale. Guelb Moghrein concentrate production is sold to an international metal trading company for delivery principally to Chinese smelter facilities.

Under the industry standard for the structure of copper sales agreements, nearly all of the Company's concentrate sales and some of its cathode sales are provisionally priced based on the prevailing LME average cash price in the month of shipment. The provisional prices are then finalised based on a quotational period (a "Quotational Period" or "QP") which is the average LME official cash price in a different month.

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At 31 March 2009, 10,829 tonnes of copper were provisionally priced at US$1.83/lb (US$4,033 per tonne) and remained subject to final pricing in April and May 2009.

Gold

The Company also produces gold at both Kansanshi and Guelb Moghrein as a by-product of copper production. Approximately five to six per cent. of the Company's revenue is derived from gold.

In addition to its common use in jewellery, gold has many other important uses. Gold plays an important role in modern health applications and research. Gold is used in medicines, lasers, thermometers and genetic research. Gold is the most ductile metal and is a good conductor of heat and electricity. It is used in computers, telecommunications, digital technology, and has important applications for space exploration.

Sales of Gold

The majority of gold production is a by-product from the smelting of the copper concentrate. The Company receives a credit for the gold contained in the concentrate from the smelter or refinery which in the case of Mufulira is offset against the toll treatment charges. The Company also produces gold ore and bullion at Guelb Moghrein and this gold is sold directly to a refinery. At Kansanshi the direct smelting of gold that has been recovered using gravity concentration methods, was initiated in the first quarter of 2009.

Operations

Kansanshi, Zambia

Overview

The Company has an 80 per cent. interest in Kansanshi which it holds through a subsidiary, Kansanshi Mining PLC. The remaining 20 per cent. is owned by a subsidiary of Zambian Consolidated Copper Mines ("ZCCM"). All surface rights necessary to develop and operate Kansanshi have been obtained and include four leases covering in excess of 7,000 hectares, which secure access to the active mining areas. The right to mine is governed by a large scale mining licence (LML 16), granted in March 1997 with a current term of 25 years. It allows for the exploration and mining of copper and various other minerals and applies to an area of approximately 21,593 hectares. As at 31 December 2008, there were 1,346 people employed at Kansanshi. The local labour force is unionised.

History

Kansanshi is the site of one of the oldest copper mines in Zambia and dates back to 300 A.D. It has been mined intermittently since that time by various parties including ZCCM which, in 1969, approved the development of an open pit mine to treat high grade oxide ore. Due to economic conditions, the processing project ceased and only mining was conducted at the site until April 1986, when mining operations also ceased due to economic conditions. In 1988, after a resumption of mining operations, ZCCM constructed a small sulphide notation concentrator to treat ore which was transported offsite for smelting. In 1998, ZCCM formally ceased operations at Kansanshi and initiated closure and reclamation activities.

In 1998 Cyprus Amax Minerals Corporation ("Cyprus Amax") acquired a majority of the ownership of surface leases and selected assets associated with Kansanshi from ZCCM and the Government of Zambia ("GRZ"). After completion of metallurgical testwork and a feasibility study to determine the potential for a 124,000 tpa copper production facility, Cyprus Amax was acquired by Phelps Dodge Corporation in 1999.

The Company purchased its 80 per cent. interest in Kansanshi from Phelps Dodge Corporation in August 2001. Payment by the Company consisted of an initial payment of US$2.5 million in cash, together with the issuance of 1.4 million common shares in the Company. The market value of the 1.4 million common shares was determined 30 days after the beginning of commercial production at Kansanshi and the difference between the value established and US$25 million was paid as an additional cash payment to Cyprus Amax. A further amount of US$2.0 million was paid to a subsidiary

30

of ZCCM, which continues to hold a 20 per cent. interest in Kansanshi. Commercial production at Kansanshi was achieved in April 2005.


Mining is carried out in two open pits, Main and Northwest, using conventional open pit methods and employing hydraulic excavators and a fleet of haul trucks. The ore treatment is flexible to allow for variation in ore type either through an oxide circuit, a sulphide circuit or the HPL circuit. The sulphide ore is treated via crushing, milling and notation to produce copper in concentrate. The oxide ore is treated via crushing, milling and the SX/EW process to produce cathode copper. Additional capital expenditure commencing in early 2006 expanded the sulphide milling circuit which increased production capacity significantly from the fourth quarter of 2008. The HPL is used to treat a portion of the increased copper concentrate by processing the concentrate in the autoclaves by oxidation and leaching. The expansion of the sulphide milling circuit was approved to maintain finished copper production as oxide ore is depleted and sulphide ore grades begin to fall. Kansanshi has also developed a gold circuit to process post HPL circuit solids through cyanide leaching and elution to recover contained gold and produce gold bullion. The direct smelting of gold that had been recovered using gravity concentration methods, was initiated in the first quarter of 2009. The construction of a fourth electro winning facility commenced in 2007 and was commissioned in the early third quarter of 2008. An annualized milling rate of 13 million tonnes was achieved for the first quarter of 2009 through the combined original and upgraded circuits.

Additional flotation cleaner capacity was successfully commissioned by the end of the first quarter of 2009 and is assisting in maintaining the high production rates. The construction of the new in-circuit crushing facility, aimed at further enhancing sulphide milling capacity, was completed towards the end of the first quarter of 2009; the initial commissioning activities were also completed and the final handover to production is expected in the early part of the second quarter.

Mining Review

Certain mining statistics for the two years ended 31 December 2008 are set out in the following table:


2008 2007Waste Mined (tonnes) 28,838,523 25,096,032Ore Mined (tonnes) 19,006,033 15,509,653Ore Grade Mined (%Cu) 1.6 1.7Strip Ratio (waste:ore) 1.5:1 1.6:1

Production Review

Production statistics for the two years ended 31 December 2008 are set out in the following table:


2008 2007Sulphide Ore Processed (tonnes) 9,219,196 6,131,890Oxide Ore Processed (tonnes) 5,972,732 5,765,074Sulphide Copper Grade (%Cu) 1.2 1.1Oxide Copper Grade (%Cu) 1.7 1.7Copper in Concentrate Produced (tonnes) 101,775 67,332Copper Cathode Production (tonnes) 112,882 96,493Total Cost Copper ($/lb) 1.45 1.16Cash Cost Copper(1) ($/lb) 1.09 1.03

(1) Cash cost copper amounts have been arrived at after subtracting gold credits.

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Power and Acid Supply

The power supply at Kansanshi is provided by Zesco Limited, a Zambian state company. Acid is sourced from local smelters and is also produced from four acid plants owned by the Company.

Sales

Sales from Kansanshi derive from the sale of copper cathode produced on site and from the toll treatment of copper concentrate production at Zambian smelters. Total copper cathode production is sold under off take agreements with two leading international metal trading companies, one governing the sale of approximately 85 per cent. of production and the other governing the sale of approximately 15 per cent. of production. Copper concentrate is also treated through the pressure leach facility. From time to time, due to a lack of capacity at Zambian smelters, copper concentrates are sold to third parties for export sale.

A summary of the revenues for the two years ended 31 December 2008 attributable to the Kansanshi division are as follows:


2008 2007Revenues (millions of US$) 1,224.5 1,128.7Percentage of Group revenues (per cent.) 70 73

Mineral Resource and Reserve

For information on the mineral resource and mineral reserve for Kansanshi see "Kansanshi – Mineral Resource" on pages 19 and 20 of the Company's Revised Annual Information Form dated 30th March 2009 (the "2009 AIF") and "Kansanshi – Mineral Reserve" on page 21 of the 2009 AIF, incorporated into this Offering Circular.

Mine Life

As at 31 December 2008, Kansanshi had an estimated mine life of 16 years processing an average of 20mtpa of ore annually.

Taxes and Royalties

The effective rate of corporate income tax paid by the Company under its development agreement with the GRZ in respect of Kansanshi is approximately 25 per cent. of Kansanshi earnings. A mineral royalty of 0.6 per cent. of net sales is payable by Kansanshi on a monthly basis to the GRZ under the development agreement. However, as mentioned in relation to Bwana below, the Company is currently in a dispute with the GRZ with respect to tax legislation first introduced in April 2008 and amended in March 2009. (see "Risk Factors – International Operations" or "Recent Developments" below).

Bwana-Lonshi Division

Bwana Mkubwa, Zambia

Overview

The Bwana facility is 100 per cent. owned by the Company through its wholly-owned subsidiary, First Quantum Mining and Operations Limited. The activity of the Company on the land at Bwana in Zambia is permitted under a large scale mining licence (LML19) that was issued in May 1997 and extended for a subsequent term of ten years, expiring in May 2017. The licence permits copper mining operations and applies to an area of approximately 5,600 hectares, of which approximately 900 hectares are used for operational requirements at present. The Company also holds a number of leasehold interests which secure rights to active processing areas. As at 31 December 2008, there were 237 people employed at Bwana and the local labour force is unionised.

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History

In May 1997, the Bwana was issued a large scale mining licence for copper mining in the Ndola area by the GRZ, replacing the original mining licence granted to the Company in 1996. In 1998, the Company completed construction of a 10,000 tpa copper cathode SX/EW tailings retreatment and sulphuric acid plant.

In 2000, the Company discovered the Lonshi copper deposit in the DRC and, in 2001, began construction and expansion at Bwana to enable the processing of ore from Lonshi. Further expansion in 2002 resulted in an increase in grade "A" copper cathode production capacity by 30,000 tpa. Tailings at Bwana were principally depleted in 2002 and the Company, after completion of a modification programme, began sourcing ore from Lonshi for the production of copper cathode. Further expansion, including the construction of the Bwana-Lonshi division's acid plant in Solwezi, allowed Bwana to increase both its copper cathode and sulphuric acid production. On 26 July 2006, the Company entered into a development agreement with the GRZ. In November 2007, the Governor of the Katanga Province closed the border between the DRC and Zambia, which separates Lonshi and Bwana, to the export of ore from the DRC. Mining continued until the oxide resource was substantially depleted at Lonshi in August 2008. However, the Company continued to source alternate sources of oxide ore in Zambia. In October 2008, the Company announced the temporary suspension of copper cathode production, but continued to operate its acid plant. The border between Lonshi and Bwana remains closed and the Company is unable to process the approximately 536,000 tonnes of stockpiled oxide ore which equates to approximately 15,000 tonnes of copper in metal. The Company continues to explore alternate sources of economically viable oxide ore for the resumption of operations at Bwana (See "Risk Factors – Political Unrest and Risk of Operating in the DRC").

Processing

Oxide ore mined from Lonshi was processed at Bwana to produce copper cathode. Copper cathode is produced through a process of millings, leaching and SX/EW. In October 2008, the Company announced the temporary suspension of copper cathode production. The Company continues to operate its acid plant at Bwana for the production of sulphuric acid. The Company owns four sulphuric acid plants, two of which are located at Kansanshi. Sulphuric acid plants incorporate sulphur burning to produce sulphur dioxide gas, gas cleaning and drying, conversion to sulphur trioxide and absorption, all of which result in the production of sulphuric acid.

Production Review

The copper production statistics for the three years ended 31 December 2008 for Bwana are set out in the following table:


2008 2007 2006

Ore Processed (Oxide) (tonnes) 718,000 1,276,000 1,265,000Copper Grade (%Cu) 0.85 2.3 4.5Copper Production (tonnes) 5,850 25,402 51,068Total Cost Copper ($/lb) 4.03 2.43 1.04Cash Cost Copper(1) ($/lb) 3.26 2.03 0.76

(1) Cash cost copper amounts arrived at after subtracting acid credits.

Sales

Sales from Bwana derive from both the sale of copper cathode and of sulphuric acid. Bwana-Lonshi is treated by the Company as one division in respect of earnings. When operating, the Company sells all of its copper cathodes at the facility gate and has an off take agreement with a leading international metal trading company. The agreement provides that the Company sell to such company all of the production of Bwana. Some of the sulphuric acid produced by Bwana is sold to third party mining companies operating within the Copperbelt. However, in 2008, most of the sulphuric acid was produced for and consumed by the Company's operations at Kansanshi.

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A summary of the revenues for the two years ended 31 December 2008 attributable to the Bwana-Lonshi division are as follows:


2008 2007

Revenues (millions of US$) 37 166.9Percentage of Group revenues (per cent.) 2 11

Taxes

The effective rate of corporate income tax required to be paid by the Company under its development agreement with the GRZ in respect of Bwana is approximately 25 per cent. of Bwana's earnings. However, the Company is currently in a dispute with the GRZ with respect to tax legislation first introduced in April 2008 and amended in March 2009. (see "Risk Factors – International Operations"or "Recent Developments" below).

Lonshi, DRC

Overview

Lonshi is 100 per cent. owned by the Company through its wholly-owned subsidiary, Compagnie Minière de Sakania Sprl. ("COMISA"). Lonshi lies within a 132 square kilometre concession area granted to COMISA in June 2001 under a mining exploitation licence (PE551) with a term of 20 years, expiring in June 2021. The concession allows COMISA to mine and develop the concession area and to extract copper and other minerals from the area. In addition, a number of leaseholds secure access to surface rights to active mining areas. As at 31 December 2008, there were 383 people employed at Lonshi.

History

The area around Lonshi has been explored and drilled since the 1930s. No further activity occurred at the site from the 1930s until the Company discovered the Lonshi deposit in late 2000 during the exploration efforts initiated by the Company to secure oxide ore feed for its processing facility at Bwana. A drilling campaign beginning in 2000 resulted in the identification of a mineral resource and the construction of the mine which was completed in 2001. Mining operations began in August 2001. The oxide resource was substantially depleted by August 2008. Further exploratory work is underway to investigate the feasibility of an underground mine to recover the potential sulphide resource.

Mining

Mining at Lonshi is carried out in a single pit using conventional open pit methods and employing excavators and a fleet of articulated dump trucks. Mined ore is then transported to the border between the DRC and Zambia where, after stockpiling, it is taken by a third party contractor for processing at Bwana. Lonshi is currently closed as the mine resource has been exhausted.

Mining Review

Certain production statistics for the three years ended 31 December 2008 for Lonshi are set out in the following table:


2008 2007 2006

Waste Mined (tonnes) 1,978,239 9,961,098 18,843,000Ore Mined (tonnes) 141,010 351,662 520,000Ore Grade Mined (%Cu) 4.98 6.5 10.3Strip Ratio (waste:ore) 14:1 28.3:1 36.2:1

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Mineral Resources and Mineral Reserves

For information on the mineral resource and mineral reserve for Lonshi see "Lonshi – Mineral Resource" and "Lonshi – Mineral Reserve" on pages 14 and 15 of the 2009 AIF, incorporated into this Offering Circular.

Mine Life

Lonshi has no further mine life with respect to the oxide resource.

Taxes and Royalties

The effective rate of corporate income tax paid by the Company in the DRC in respect of Lonshi is approximately 30 per cent. of Lonshi earnings. A mineral royalty of three per cent. of net sales is payable on a monthly basis by the Company in respect of Lonshi to the DRC Government.

Guelb Moghrein, Mauritania

Overview

The Company controls an 80 per cent. interest in Guelb Moghrein which it holds through a subsidiary, Mauritanian Copper Mines S.A. The remaining 20 per cent. is owned by Guelb Moghrein Mines d'Akjoujt and General Gold Ltd. The right to mine is governed by a large scale mining licence (CM2) which applies to an area of 81 km2 and is valid until December 2042. In addition to the Guelb Moghrein mining concession area, the Company holds six exploration concessions in the area around Guelb Moghrein, totalling 7072km2 of ground. The Company also holds three exploration licences in southern Mauritania covering an extension to the mineralised Mauritanides belt. As at 31 December 2008, there were 863 people employed at Guelb Moghrein.

History

Copper-made tools and arrowheads in the Akjohjt area of Mauritania, where Guelb Moghrein is located, date from approximately 4000 to 6000 BC. Anglo American Corporation developed the deposit at Guelb Moghrein in the early 1970s, but had to close its operation in 1977 as a result of the technical difficulties and high fuel costs it experienced. In 1995, a Mauritanian chartered company attempted to develop Guelb Moghrein, but did not proceed beyond the production of a feasibility study in 1997. In November 2004, the Company signed an asset sale agreement which replaced a heads of agreement entered into in June 2004. The terms of the asset sale agreement included a US$2 million payment on signing, a US$3 million payment 12 months after signing (which was paid in December 2005), and a US$5 million payment 24 months thereafter or upon commercial production (whichever was earlier), provided that if the Company withdrew from the arrangement, it had no obligation to pay the balance of the consideration. Site establishment and construction was commenced in March 2005. Guelb Moghrein achieved commercial production in October 2006. The US$5 million payment was made by the Company in November 2006.


Mining at Guelb Moghrein is carried out in a single open pit using hydraulic excavators and mechanical drive haul trucks. The processing plant at Guelb Moghrein processes sulphide ore by way of a copper circuit and gold circuit to produce a copper-gold concentrate.

Mining commenced in April 2006. The current mining rate is two million tonnes of ore per year at a strip ratio of 3:1 (waste:ore). Sufficient ore is stockpiled to satisfy production feed for the processing plant for a period of one month. Commissioning of the copper flotation plant commenced in July 2006 and commercial production began in October 2006. The plant currently produces approximately 12,000 tonnes of concentrate per month at an average grade of 25 per cent. copper, with credits received for gold contained in the ore in concentrate.

In 2008, the Company commenced the expansion of the processing plant at Guelb Moghrein to increase the production of copper concentrate through higher throughput at lower grades. The expansion is expected to be commissioned in the third quarter of 2009. The gold flotation circuit and

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carbon-in-leach plant was upgraded at Guelb Moghrein during 2008 and was fully operational by December 2008.


Guelb Moghrein has no access to infrastructure (such as power, water and waste disposal areas) for its operations and therefore generates 100% of its power demand through high and low speed generators. Increased power generation is progressing: the Mirrlees No. 5 diesel engine is now operational and Mirrlees No. 6 diesel engine is due on line in June 2009. The construction of the new power station building is in progress and the first two engines arrived on site in May 2009 and power is expected to be available in August 2009.

Sales

A summary of the revenue for the year ended 31 December 2008, attributable to the Guelb Moghrein division is as follows:


2008 2007

Revenues (millions of US$) 191.12 227.5Percentage of Group revenues (per cent.) 11 15

Mineral Resource and Mineral Reserve

For information on the mineral resource and mineral reserve for Guelb Moghrein see "Guelb Moghrein – Mineral Resource" and "Guelb Moghrein – Mineral Reserve" on page 24 of the 2009 AIF, incorporated into this Offering Circular.

Mine Life

As at 31 December 2008, Guelb Moghrein had an estimated mine life of nine years.

Taxes and Royalties

Pursuant to the consent by and confirmation of the Government of Mauritania, the Company currently pays no corporate income tax in respect of its revenue from Guelb Moghrein. The Company will retain its corporate income tax free status until 2012. A mineral royalty of 2.2 per cent. on copper and 2.2 per cent. on gold of net sales is payable on a quarterly basis by the Company to the Government of Mauritania.

Frontier, DRC

Overview

The Company's 95 per cent. interest in Frontier is held by COMISA with the remaining five per cent. being held by the DRC Government. Mining at Frontier is governed by two mining exploitation licences (PE562 and PE646) which were renewed in February 2006. Each licence provides for the exclusive mineral rights to copper and other minerals and is valid for a period of 30 years. A number of leasehold interests secure access to the surface areas for mining. As at 31 December 2008, there were 1,029 people employed at Frontier.

History

The Company's discovery of Frontier resulted from an exploration programme following a data review and soil sampling after the successful discovery and development of Lonshi. The area in which Frontier is located was explored in the 1930s and the 1970s. A copper occurrence at Frontier was first described by Union Minière de Haut Katanga ("Union Minière") in 1932. Companies which have explored this area include Anglo American Limited, Union Minière and a Japanese group in association with le Société de développement industriel et minier du Congo ("Sodimico"). The Company, through its

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subsidiary COMISA, acquired exploration licences in respect of Frontier in January 2001 and July 2002.

In September 2003, the Company announced a new copper discovery at Frontier followed by the results of an independent copper-cobalt resource estimate in May 2004. In May 2005, the Company announced an updated resource statement on the Frontier deposit. In October 2005, a preliminary feasibility study was conducted on behalf of the Company by Intermet Mining. Further supportive and confirmatory analysis was undertaken in 2006 and a formal mineral resource was developed along with an economic analysis of the project, announced by the Company in November 2006. The construction of Frontier began in April 2006 and was completed in September 2007. Commercial production was achieved on 2 November 2007.


Frontier consists of a single open pit mine, a processing plant and associated infrastructure, producing copper concentrate. Mining is undertaken using conventional open pit methods and employing hydraulic face shovels and mechanical drive haul trucks.

The mining fleet includes the normal ancillary equipment such as dozers, graders and water carts. Ore is crushed and stockpiled (Run of mine oxide ore is stockpiled separately). As required, the crushed ore is milled in a SAG/ball circuit and processed through a flotation circuit. The initial treatment is by flotation of sulphide ore. Sulphide concentrates are treated at the Mufulira smelting and refining facility or other Zambian smelter facilities as a priority and commercial arrangements in respect thereof have been agreed upon. The disposal of tailings is to a conventional tailings dam following thickening to recover water. Waste is disposed onto conventional waste dumps. All waste dumps and tailings dams are designed to minimise dust and facilitate future rehabilitation.

The estimated total annual copper production in sulphide flotation concentrate, at eight million tpa throughout, is averaging approximately 84,000 tpa. Minor cobalt exists in some areas of the deposit, although these are unequally distributed throughout the ore body. Cobalt is not considered as part of the current mining plan. However, this is expected to be reviewed as part of future studies and from early operations.


Power is primarily supplied by La Société National d'Eléctrcité ("SNEL"), a DRC state company and with an alternative backup supply available from Zesco in Zambia.

Sales

Sales from Frontier are from the sale of copper concentrates. Copper concentrate is treated through the HPL facility at Kansanshi or through the Mopani smelter at Mufulira with the resulting cathode sold to a leading international metal trading company through an off take agreement. Some of the concentrate produced is sold to other smelters in the Copperbelt region and, when occasionally there is insufficient smelting capacity in the smelters in the Copperbelt region, to third party purchasers for export.

A summary of the revenues for the two years ended 31 December 2008 attributable to the Frontier division are as follows:


2008 2007

Revenues (millions of US$) 287.8 16.1Percentage of Group revenues (per cent.) 17 1

Mineral Resource and Mineral Reserve

For information on the mineral resource and mineral reserve for Frontier see "Frontier – Mineral Resource" and "Frontier – Mineral Reserve" on page 28 of the 2009 AIF, incorporated into this Offering Circular.

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Mine Life

At 31 December 2008, Frontier had an estimated mine life of 19 years.

Development Projects

Kolwezi Project

Overview

On 19 November 2007, the board of Kingamyambo Musonoi Tailings SARL ("KMT") (65 per cent. of its shares owned by the Company and 12.5 per cent. owned by La Générale Des Carrières et Des Mines ("Gécamines") (a state-owned mining company of the DRC), 10 per cent, owned by the Industrial Development Corporation of South Africa ("IDC"), 7.5 per cent. owned by the International Finance Corporation ("IFC") and 5 per cent. owned by the DRC Government) committed to proceed with the development of a cobalt-copper tailings project located in the DRC (the "Kolwezi Project"). The Company, with support from its contributing equity partners of KMT (the IDC and IFC), agreed to finance or procure third party debt project financing totalling up to US$593 million. This satisfied the obligations of the Company under a contract of association with the DRC Government, Gécamines and Congo Mineral Developments Limited ("CMD") which governs the ownership and management of KMT (the "Kolwezi Contract") to complete feasibility studies, carry out an environmental impact assessment, prepare an environmental management plan, and to obtain commitments with respect to the financing of the Kolwezi Project. The Company has commenced the initial stages of development, including building foundations and construction of an access road to Zambia.

The rights to the tailings at the Kolwezi Project are held by KMT through a tailings exploitation permit (PER652), which was transferred to KMT in May 2004. The tailings exploitation permit is valid until May 2022, and renewable for five one year periods until the resource is exhausted. It also gives KMT the exclusive right to exploit the tailings within the area set out in the permit.

Subsurface exploration rights for cobalt and copper underneath the Kolwezi Project area were secured on 24 August 2005 by a subsidiary of Adastra Minerals Inc. ("Adastra"), Roan Prospecting and Mining SPRL ("RPM"), pursuant to a renewable licence having a term of five years and expiring on 12 September 2010, as endorsed by ministerial decree no. 755/cab/min/0l/2005. In addition, on 1 November 2005, Adastra announced that RPM had also secured under licences quarry exploration rights for limestone and aggregates in proximity to the Kolwezi Project. The renewable licences, which had an initial term of one year, were renewed, are in good standing and cover eight concession areas for limestone and two for aggregates.

History

Tailings located at the Kolwezi Project originated from a mineral concentrator at a mine owned by the DRC's state-owned mining company, Gécamines, which commenced operations in 1952. The concentrator processed ore from the western open-pit copper mines of the Katanga copper belt area of the DRC into copper concentrate which was then shipped from Kolwezi for smelting. The nature of the oxide ore meant that copper and cobalt recovery in the concentrate was incomplete. The resulting tailings therefore contained significant metal values. The tailings filled the original Kingamyambo dam and were subsequently allowed to fill the Musonoi river valley. Together, these now comprise the Kolwezi Project.

Tailings contained in the Kolwezi Project were owned by Gécamines. In 1998, Adastra, through one of its now wholly-owned subsidiaries, CMD, entered into a joint venture agreement with the DRC Government pursuant to which ownership of the Kolwezi Project was to be transferred to a company, 60 per cent. of which was owned by CMD and 40 per cent. of which was owned by Gécamines, subject to government approval and financing. However, introduction of the new mining code "Law 007/2002 of 11 July 2002" (the "Mining Code") in the DRC delayed the process.

In 2002, CMS received from the DRC government acknowledgment of both its rights and those of Gécamines in respect of the Kolwezi Project. In 2003, terms for the redevelopment of the Kolwezi Project were successfully renegotiated to reflect the Mining Code and associated fiscal regime in the DRC. In November 2003, Adastra entered into a heads of agreement with the IFC and IDC, under which each would have an option to acquire up to 10 per cent. of the Kolwezi Project from Adastra on

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a farm-in basis at a price related to the accumulated expenditures of Adastra and its affiliates as at the time of exercise of its option. In March 2004, KMT was incorporated as a joint venture company to hold ownership of the Kolwezi Project. The shares of KMT were originally 82.5 per cent. owned by Adastra through CMD, with the remainder owned by Gécamines and the DRC. In November 2005, IDC and IFC provided notice to Adastra that they would be exercising their respective options to acquire 10 per cent. and 7.5 per cent., respectively, of KMT. This transaction was completed in March 2006. At present, the Company's indirect interest in the Kolwezi Project is 65 per cent.

Under the Kolwezi Contract, KMT was required to pay US$15 million to Gécamines for the transfer to CMD of the rights to the Kolwezi Project. The Kolwezi Contract also provides that Gécamines is to receive an annual dividend of the greater of its ordinary dividend and 2.5 per cent. of free cash flow for each year from start-up until senior debt and subordinated loans have been fully reimbursed. Thereafter, Gécamines will be entitled to an annual dividend based on 10 per cent. of the average price realised for cobalt sold in a year in excess of US$10.00/lb (adjusted for inflation) in addition to any ordinary dividend received by Gécamines provided that ordinary dividends are paid in such year.

In 2008, the Company commenced development of the Kolwezi Project and approximately US$365 million of the Kolwezi Project budget was committed with approximately US$228 million having been spent as at the end of the first quarter of 2009. At the end of March 2009, the overall project was 56 per cent. complete. The commissioning of the project is planned for the third quarter of 2010.

In 2007, the DRC Government announced a review of over 60 mining agreements, and, among other things alleged that it was entitled to a larger equity interest in KMT. See "Recent Developments – DRC Revisitation of the Kolwezi Contract" below for further information.


The Kolwezi Project, when successfully developed, is expected to allow large-scale extraction by hydraulic mining, by means of a copper circuit and a cobalt circuit. Slurry is expected to be thickened and filtered prior to entering the copper circuit for leaching and the SX/EW process to produce copper cathode. Leach residue is expected to be further treated by way of cobalt SX/EW to produce cobalt. The two tailings deposits at the Kolwezi Project are located on the surface.

Mineral Resource

For information on the mineral resource for Kolwezi see "Kolwezi – Mineral Resources" on page 31 of the 2009 AIF, incorporated into this Offering Circular.

Kevitsa, Finland

Overview

The mineral rights at Kevitsa are held by the Company's wholly-owned subsidiary, Kevitsa Mining AB ("KMAB"). The Company acquired KMAB through its acquisition of Scandinavian Minerals Limited ("SML") in June 2008.

The Company's interest in the Kevitsa property consists of 24 exploration licences ("claims") totalling approximately 24 km2, nine of which were issued in November 2000, the balance being issued in March 2006. In December 2006, the Company applied for the mining concession which, under Finnish law, once granted, will replace the claims. At 31 December 2008, there were 17 people employed at Kevitsa.

History

The Kevitsa mineral property is a large nickel-copper-PGE (platinum group elements) deposit situated in northern Finland.

The deposit was discovered by the Geological Survey of Finland ("GTK") in 1987. GTK carried out diamond drilling consisting of 563 holes with a total length of 48,474 metres. Of these, 278 holes totalling 32,845 metres outlined the deposit.

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The Finnish government auctioned the deposit in 1995, and the project was taken over by Outokumpu Mining Oy ("Outokumpu"). Outokumpu drilled 15 holes for a total length of 2,220 metres, partly for collection of material for metallurgical testing. Following (comprehensive) metallurgical testing, Outokumpu failed to discover nickel and copper at recoveries which warranted development of the project and it therefore returned the project to the Finnish Ministry of Trade and Industry in 1998.

In July 2000, SML (then called Scandinavian Gold Limited) engaged SRK Consulting ("SRK") to compile all data and evaluate the potential for a large scale open pit mining operation on the Kevitsa property with hydrometallurgical treatment of a bulk concentrate using the PlatSol™ process. The technical report prepared by SRK was originally published in April 2001, updated in September 2003 and amended in December 2003. SRK identified mineral resources to a depth of 500 metres and mineral reserves for an open pit mining scenario to a depth of 450 metres.

SML concentrated on developing the project using conventional flotation technology to produce separate nickel and copper concentrates for sale to smelters. In March 2004, SML commenced a programme of metallurgical development work designed to produce such concentrates. Extensive bench-scale testing has been followed by mini-pilot and pilot plant tests which demonstrated that separate, smelter-grade copper and nickel concentrates can be produced at reasonable levels of recovery.

Following this metallurgical success, in October 2005, SML engaged St. Barbara LLP to undertake a new study based on open pit mining with production of smelter-grade concentrates for sale to Finnish or overseas smelters. The study was completed in July 2006 and showed good financial prospects for an open pit operation mining 4.5 million tons of ore per year, as discussed further above.

Further pilot plant tests were followed at the GTK in the laboratory in Outokumpu in 2006-2008. A break-through in producing a bulk concentrate with good recoveries was followed by successful selective processing of copper and nickel concentrates.

The Company acquired SML in June 2008 and has commenced a further drilling programme to investigate the potential for upgrading currently inferred resources, to investigate mineralisation beyond the currently defined pit limits and to provide additional geotechnical information to aid in pit design. Development drilling has shown that the Kevitsa ore system is more extensive than originally estimated. A recent review of geophysics and geology at Kevitsa has established good potential for copper-nickel-PGE massive sulphides and a drill rig is currently testing these targets.


Mining is scheduled to start with an open pit. The ore reserves are being updated during 2009 as a result of additional delineation drilling and the Company expects that the mineral reserves are likely to increase from earlier estimates (66 million tonnes in the pre-feasibility study). The planned stripping ratio will be in the order of 2.0-2.5. At the commencement of operations the annual ore production is expected to be approximately five million tonnes.

In terms of processing, mined ore will be crushed in a primary crusher. The primary crusher product will be screened to send to the AG (Autogenous Grinding) mill media to stockpile, the mid product is then sent for secondary crushing and pebble storage for the pebble mill media; finally the crushed ore will be ground in a combination of AG mills and a pebble mill. Two different concentrates will be produced:

1) 76,000 tonnes of nickel-cobalt-PGE-concentrate grading of close to 12 per cent. nickel. The nickel content in the concentrate is expected to be approximately 9,000 tonnes per annum. The annual content of PGE’s is expected to be approximately 34,000 oz; and

2) 51,000 tonnes of copper-PGE-gold concentrate grading approximately 28 per cent. copper, some PGEs, and approximately 5,000 oz of gold.

The amount of produced copper in both concentrates is expected to be approximately 17,000 tonnes per annum. Copper and nickel ore will be recovered in separate flotation circuits with each product being thickened and filtered to produce concentrates stored separately for transport.

Exploration

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Following the rationalisation of greenfield exploration activities, the Company's efforts have been re-focused on near-term targets, principally around operational mine or development sites. Emphasis has been placed on better understanding of the geology and potential of current ore systems being mined with a view to improved mining practice and exploration targeting. In the last few months this has included detailed mapping of the open pits at Kansanshi, Frontier and Guelb Moghrein and integration with re-logging of historical drilling. This process has identified near mine drill targets at both Frontier and Guelb Moghrein and drilling will commence on these targets in the next quarter. At Kansanshi, a more extensive drilling programme of near pit and satellite targets will commence immediately to fully define the potential of the ore system which remains open in various directions.

Recent Developments

DRC Revisitation of the Kolwezi Contract

In 2007, the DRC Government announced a review of over 60 mining agreements entered into over the last decade with foreign companies, with the Kolwezi Contract being included in this review. In February 2008, the Company received a letter from the DRC Minister of Mines in which the DRC Government, among other things, alleged that (i) KMT had been improperly incorporated under the laws of the DRC, (ii) additional amounts may be payable to the DRC Government and/or Gécamines in connection with the transfer of certain mineral rights associated with the Kolwezi Project, and (iii) the DRC Government and/or Gécamines may be entitled to a larger equity interest in KMT and KMT may be required to make additional payments towards social programmes in the DRC, in order to maintain the Kolwezi Contract.

The Company, and its contributing partners, the IFC and the IDC, have legal advice that (i) that KMT was properly incorporated, (ii) the Kolwezi Contract is valid and binding, and (iii) that KMT has complied with all the terms of the Kolwezi Contract.

Notwithstanding the Company’s position that the Kolwezi Contract is valid and binding, over the past several months, the Company and its contributing partners, IFC and IDC have attended several meetings with Gécamines and DRC government representatives to discuss the DRC Government’s review of the Kolwezi Contract. The Company has agreed in principle to some concessions to the DRC Government and Gécamines which the Company believes address all the issues raised during the revisitation process. The Company expects that the proposed concessions will be reviewed by the Council of Ministers of the DRC Government in the near future. If the Council of Ministers approve the proposed concessions, the Company, KMT and Gécamines will proceed to document these in a variation to the Kolwezi Contract and certain other related documents. Of the 60 mining agreementsunder review, the Kolwezi Contract is one of six contracts yet to be reaffirmed. Although the Company is encouraged that the process appears to be nearing conclusion, no binding agreement on the proposed arrangements has been reached between the DRC Government and the Company, and the Company has not received any binding assurances from the DRC Government that such an agreement will be reached. See "Risk Factors – Risks Related to the Company’s Business and its Industry - DRC Revisitation of the Kolwezi Contract" for a discussion of the risks related to this process.

Border Closure between Lonshi and Bwana

As stated above, open pit mining operations at Lonshi were completed in August 2008 and in October 2008, the Company announced the temporary suspension of copper cathode production, but continued to operate its acid plant. In November 2007 the border between the DRC and Zambia, which separates Lonshi and Bwana, was closed by the Governor of the Katanga Province and remained closed throughout 2008 and early 2009 (as at May 2009 the border remained closed). As a result of this border closure, Bwana, which processed oxide ore mined from Lonshi to produce copper cathode, has been unable to process approximately 536,000 tonnes of stockpiled oxide ore at Lonshi. The Company continues to explore for and to source alternate sources of economically viable oxide ore to enable the resumption of operations at Bwana.

Taxation in Zambia

The GRZ announced in January 2008 a number of proposed changes to the tax regime in the country in relation to mining companies. These changes included a new windfall tax on copper sales revenue; a new variable profit tax; a concentrate export levy of 15 per cent.; an increase in the royalty rate to 3 per

41

cent.; an increase in the income tax rate to 30 per cent.; and other changes including changes in the timing of deductibility of capital allowances and streaming of hedging losses and gains. These changes were passed by Parliament of Zambia ("Parliament") in March 2008 and the majority of changes took effect from 1 April 2008.

Under Zambia's President, Rupiah Banda, elected into government in October 2008, the GRZ reviewed these tax changes and proposed that the new windfall tax be removed, the deductibility of capital allowances be increased back to 100 per cent. in the period of expenditure and to allow hedging income to be part of mining income for tax purposes. These changes were passed by Parliament in March 2009 and the majority of changes took effect from 1 April 2009. These enacted changes are not retroactive to 1 April 2008.

The Company, through its Zambian subsidiaries, is party to development agreements with GRZ for its existing operations which provide an express right to full and fair compensation for any loss, damages or costs (including interest) incurred by the Company by reason of the government's failure to comply with the tax stability guarantees set out in the development agreements, and rights of international arbitration in the event of any dispute. Following consultation with external legal counsel, the Company assessed there to be a high probability of recovery from the GRZ of certain payments made in respect of these taxes. Accordingly, the Company has recorded a full liability for these taxes in its accounts over the relevant period, as well as recognising a receivable from the GRZ for an amount in respect of the expected ultimate repayment of taxes in excess of the taxes permitted under the development agreements. As required by the financial instruments accounting standards, this receivable has been classified as 'loans and receivables' and initially recorded at fair value based on management's best estimate of the timing of receipt and amounts due. The receivable will be assessed for impairment in future periods based on changes in facts and circumstances; any impairment amounts required in future may be material. As at 31 March 2009, this receivable amounts to $136.7 million.

Representatives of the Company met with Zambia's President in April 2009 and the Company is seeking to hold further discussions with the GRZ to find an alternative solution to arbitration or litigation to fully resolve all outstanding matters in relation to the tax changes introduced in conflict with the development agreements. The outcome of these discussions is uncertain.

Litigation

Except for as provided above under "Recent Developments - Taxation in Zambia" and "Recent Developments – DRC Revisitation of the Kolwezi Contract", neither the Company nor any member of the Group is or has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had during the 12 months prior to the date of this document, a significant effect on the Company and/or the financial position or profitability of the Group.

Competition

General

The Company competes with other mining companies to acquire mineral claims, permits, concessions and other mineral interests as well as in the recruitment and retention of qualified employees.

Zambia

The Company is one of the largest mining companies in Zambia. The other principal mining companies in Zambia are (i) Mopani, which is controlled by Glencore International, (ii) Equinox, and (iii) Koncola Copper Mines Plc, which is controlled by the Vedanta Resources plc group.

DRC

In the DRC the Company competes with Freeport McMoran Copper and Gold Inc, which operates the Tenke copper-cobalt deposit.

Mauritania

The Company's principal competitor in Mauritania is Red Back Mining Inc., which produces gold.

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Environment

For information about the Company relating to environmental regulations see "Environmental" on page 37 to page 40 of the 2009 AIF incorporated by reference into this Offering Circular.

Social Responsibility

For information about the Company relating to social responsibility see "Social Responsibility" on page 40 to page 42 of the 2009 AIF incorporated by reference into this Offering Circular.

Health and Safety

For information about the Company relating to health and safety see "Occupational Health and Safety"on page 42 of the 2009 AIF, incorporated by reference into this Offering Circular.

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MANAGEMENT

Name Title Principal activities outside the Group

Philip Pascall Chairman and Chief Executive Officer

Not Applicable.

Clive Newall President Non-Executive Director of Gemfields Resources plc.

Martin Rowley Executive Director of Business Development

Non-Executive Chairman and Director of Forsys Metals Corp.

Rupert Pennant-Rea Non-Executive Director Non-Executive Director of Acuity VCT Plc., Acuity VCT 2 Plc, Go-Ahead Group Plc, Gold Fields Ltd and PGI Plc.

Non-Executive Chairman of Henderson Group Plc.

Andrew Adams Non-Executive Director Non-Executive Director of Uranium One Inc.

Paul Brunner Non-Executive Director Not Applicable.

Peter St. George Non-Executive Director Non-Executive Director of Boart Longyear Limited and Dexus Property Group.

Michael Martineau Non-Executive Director Non-Executive Deputy Chairman and Director of Axmin Inc. Chairman of Eurasia Mining Plc.

Director of Golden Star Resources Ltd.

Chris Lemon General Counsel and Corporate Secretary

Not Applicable.

Troy Hayden Chief Financial Officer Not Applicable.

Aggregate Ownership of Securities

As at the date of this Offering Circular, and to the best of the knowledge of the Company, the current directors and officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 2,157,441 common shares constituting 2.76 per cent. of the issued and outstanding common shares of the Company. None of the directors or executive officers of the Company held shares of the Company’s subsidiaries except shares required for qualification as a director of a subsidiary or where otherwise required under local law.

Conflicts of Interest

Although there are no direct conflicts of interest, certain directors and officers of the Company are directors of other companies, which could potentially compete with the Company, as follows: (i) Rupert Pennant-Rea is a Non-Executive Director of Gold Fields Limited, which produces gold in South Africa, Ghana, Australia and Peru; and (ii) Michael Martineau is a Director of Axmin Inc., which is a gold exploration company in Africa, and a Director of Golden Star Resources Limited, a company that explores for and produces gold in Ghana. While there is potential for conflicts to arise, to the extent

44

that such other companies may participate in or be affected by ventures involving the Company, the Board has not received notice from any director or officer of the Company indicating that any material conflict currently exists.

Conflicts of interest affecting the directors and officers of the Company will be governed by the Business Corporations Act (British Columbia) and other applicable laws. In the event that such a conflict of interest arises at a meeting of the Board, a director who has such a conflict must disclose the nature and extent of his interest and abstain from voting for or against matters concerning the venture. At the date of this Offering Circular, no other director or executive officer has a potential conflict of interest between any duties to the Company and his private interests and/or other duties.

Business Address

The business address for the directors and senior management is 8th Floor, 543 Granville Street, Vancouver, British Columbia, Canada, V6C 1X8.

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PRINCIPAL SHAREHOLDERS

The Issuer is not aware of any person who, at the date of this Offering Circular, exercises, or could exercise, directly or indirectly, jointly or severally, control over the Issuer. As at the date of this Offering Circular, no shareholder holds more than ten per cent. of the share capital in the Issuer.

None of the major shareholders of the Issuer has different voting rights from any other holder of Common Shares in respect of any Common Share held by them.

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DESCRIPTION OF THE COMMON SHARES

The following summarises certain provisions of the Issuer's Articles of Association (the "Articles").This summary does not purport to be complete and is subject to and is qualified in its entirety by reference to the Articles.

Share capital

The authorised capital of the Issuer is an unlimited number of Common Shares with no par value. As at9 June 2009 there were 78,223,823 Common Shares issued and outstanding.

If all Bonds are converted into the Issuer's Common Shares in accordance with the Conditions, the share capital of the Issuer will increase by approximately 11.3 per cent.

(a) Votes of Shareholders

Shareholders shall have the right to receive notice of, to attend and to vote at all meetings of shareholders. Save as otherwise provided in the Articles, on a show of hands each holder of shares present in person and entitled to vote shall have one vote and upon a poll each such holder who is present in person or by proxy and entitled to vote shall have one vote in respect of every share held by him.

If the Issuer retains a share redeemed, purchased or otherwise acquired by it, the Issuer may sell, gift or otherwise dispose of the share, but, while such share is held by the Issuer, it:

(i) is not entitled to vote the share at a meeting of its shareholders;

(ii) must not pay a dividend in respect of the share; and

(iii) must not make any other distribution in respect of the share.

(b) Restrictions on Shares and Variation of Class Rights

(i) The Issuer may by ordinary resolution create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares. Subject to the Business Corporations Act (British Columbia) (the "Act"), the Issuer may by ordinary resolution:

(A) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(B) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

(ii) Except when and for so long as the Company is a public company or a pre-existing reporting company which has the statutory reporting company provisions provided for under the Act (the "Statutory Reporting Company Provisions") as part of its Articles or to which Statutory Reporting Company Provisions apply, no share or designated security may be sold, transferred or otherwise be disposed of without the consent of the directors of the Issuer (the "Directors") and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

(iii) Except as provided for by the Act, no share may be issued until it is fully paid. A share is fully paid when:

(A) consideration is provided to the Issuer for the issue of the share by one or more of the following:

(1) past services performed for the Issuer;

(2) property;

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(3) money; and

(B) the value of the consideration received by the Issuer equals or exceeds the issue price set for the share.

(c) Alteration of capital

Subject to and in addition to paragraph (b), the Issuer may by ordinary resolution:

(i) create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(ii) increase, reduce or eliminate the maximum number of shares that the Issuer is authorised to issue out of any class or series of shares or establish a maximum number of shares that the Issuer is authorised to issue out of any class or series of shares for which no maximum is established;

(iii) subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(iv) if the Issuer is authorised to issue shares of a class of shares with par value:

(A) decrease the par value of those shares; or

(B) if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(v) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(vi) alter the identifying name of any of its shares; or

(vii) otherwise alter its shares or authorised share structure when required or permitted to do so by the Act.

(d) Transfer of Shares

(i) A transfer of a share of the Issuer must not be registered unless:

(A) a duly signed instrument of transfer in respect of the share has been received by the Issuer;

(B) if a share certificate has been issued by the Issuer in respect of the share to be transferred, that share certificate has been surrendered to the Issuer; and

(C) if a non-transferable written acknowledgement of the shareholder's right to obtain a share certificate has been issued by the Issuer in respect of the share to be transferred, that acknowledgement has been surrendered to the Issuer.

(ii) The instrument of transfer in respect of any share of the Issuer must be either in the form, if any, on the back of the Issuer's share certificates or in any other form that may be approved by the directors from time to time. Except to the extent that the Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Issuer in respect of the transfer.

(iii) If a shareholder, or his or her duly authorised attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Issuer and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgements deposited with the instrument of transfer:

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(A) in the name of the person named as transferee in that instrument of transfer; or

(B) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

(iv) Neither the Issuer nor any director, officer or agent of the Issuer is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgement of a right to obtain a share certificate for such shares.

(v) There must be paid to the Issuer, in relation to the registration of any transfer, the amount, if any, determined by the directors.

(e) Shareholder Meetings

(i) The Issuer must hold an annual general meeting at least once each calendar year and not more than 15 months after the last annual reference date at such time and place as the directors may determine.

(ii) If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article, select as the Issuer's annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

(iii) The directors may, whenever they think fit, call a meeting of shareholders. The Issuermust send notice of the date, time and location of any meeting of shareholders, in the manner provided in the Articles of Association, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Issuer, unless the Articles otherwise provide, at least the following number of days before the meeting:

(A) if and for so long as the Issuer is a public company, 21 days;

(B) otherwise, 10 days.

(iv) The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(A) if and for so long as the Issuer is a public company, 21 days;

(B) otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

(v) The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the people entitled to notice does not invalidate any proceedings at

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that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

(vi) If a meeting of shareholders is to consider special business, the notice of meeting must:

(A) state the general nature of the special business; and

(B) if the special business includes considering, approving, ratifying, adopting or authorising any document or the signing of, or giving effect to, any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(1) at the Issuer's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

(2) during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

(vii) At a meeting of shareholders, the following business is special business:

(A) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(B) at an annual general meeting, all business is special business except for the following:

(1) business relating to the conduct of or voting at the meeting;

(2) consideration of any financial statements of the Issuer presented to the meeting;

(3) consideration of any reports of the directors or auditor;

(4) the setting or changing of the number of directors;

(5) the election or appointment of directors;

(6) the appointment of an auditor;

(7) the setting of the remuneration of an auditor;

(8) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(9) any other business which, under the Articles or the Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

(viii) A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

(ix) If there are joint shareholders registered in respect of any share:

(A) any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(B) if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only

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the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

(x) If a corporation, that is not a subsidiary of the Issuer, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Issuer, and:

(A) for that purpose, the instrument appointing a representative must:

(1) be received at the registered office of the Issuer or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2) be provided, at the meeting, to the chair of the meeting or to person designated by the chair of the meeting;

(B) if a representative is appointed under this provision in the Articles:

(1) the representative is entitled to exercise at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(2) the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Issuer by written instrument, fax or any other method of transmitting legibly recorded messages.

(xi) The majority of votes required for the Issuer to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

(xii) Subject to the special rights and restrictions attached to the rights of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two shareholders entitled to vote at the meeting whether in person or by proxy.

(f) Dividends and Distributions on Liquidation to Shareholders

(i) Subject to the Act, the directors may from time to time declare and authorise payment of such dividends as they may deem advisable. The Directors need not give notice to any shareholder of any such declaration.

(ii) The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5.00 p.m. on the date on which the directors pass the resolution declaring the dividend.

(iii) A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Issuer, or in any one or more of those ways.

(iv) If any difficulty arises in regard to a distribution, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(A) set the value for distribution of specific assets;

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(B) determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(C) vest any such specific assets in trustees for the people entitled to the dividend.

(v) Any dividend may be made payable on such date as is fixed by the directors.

(vi) All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

(vii) If several persons are joint shareholders of any share, any one of them may given an effective receipt for any dividend, bonus or other money payable in respect of the share.

(viii) No dividend bears interest against the Issuer.

(ix) If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

(x) Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

(xi) Notwithstanding anything contained in these Articles, the directors may from time to time capitalise any surplus of the Issuer and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Issuer as a dividend representing the surplus or any part of the surplus.

(g) Non-United Kingdom Shareholders

There are no limitations in the Articles on the rights of non-United Kingdom shareholders to hold, or to exercise voting rights attached to, the Common Shares.

Dividend Policy

The Issuer implemented its dividend policy in 2005. Under this policy, the Issuer expects to pay two dividends per year, the first an "interim" dividend declared after the release of second quarter results; the second, a "final" dividend based on year end results. Interim dividends are set at one-third of the total dividends (interim and final) declared on a per Common Share basis applicable in respect of the previous financial year. Final dividends are determined based on the financial performance of the Issuer during the previous applicable financial year. The Issuer currently intends to follow its policy on interim dividends, however, the Issuer's board of directors will review the interim payment for 2009 in light of prevailing market conditions and outlook following the second quarter results.

On 13 March 2006, the Issuer announced that it would pay a final dividend of C$0.265 per common share of the Issuer to shareholders of record on 19 April 2006. The dividend was paid to shareholders on 10 May 2006. On 9 August 2006, the Issuer announced that it would pay an interim dividend of C$0.095 per common share of the Issuer to shareholders of record on 22 August 2006. The dividend was paid to shareholders on 5 September 2006.

On 14 March 2007, the Issuer announced that it would pay, on 10 May 2007, a final dividend in the amount of C$0.625 per common share of the Issuer to shareholders of record of the Issuer as of 19 April 2007. On 9 August 2007, the Issuer announced that it would pay an interim dividend of

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C$0.24 per common share of the Issuer to shareholders of record as of 29 August 2007. The dividend was paid to shareholders on 19 September 2007.

On 21 February 2008, the Issuer announced that it would pay a final dividend of C$0.54 per common share of the Issuer to shareholders of record on 11 April 2008. The dividend was paid to shareholders on 2 May 2008. On 12 August 2008, the Issuer announced that it would pay an interim dividend of C$0.26 per common share of the Issuer to shareholders of record on 22 August 2008. The dividend was paid to shareholders on 15 September 2008.

Share Price Movements

The Common Shares of the Company are listed and admitted to trading on the TSX under the symbol "FM". The TSX is the principal exchange on which the Common Shares of the Company are traded. On 9 April 2001, the Common Shares were listed for trading on AIM under the symbol "FQM". On 19 May 2007, the Company’s shares were accepted for trading on the LSE. The table shown below presents the high and low sale prices for the Common Shares and the average trading volumes, on a monthly basis, on the TSX from January 2008 to June 2009.

High C$ Low C$ Volume2008January……………………………………………… 86.60 65.82 567,968February…………………………………………….. 96.53 74.29 639,480March……………………………………………….. 92.25 76.66 585,640April…………………………………………………. 95.39 79.02 509,361May………………………………………………….. 94.00 75.35 531,847June…………………………………………………. 79.75 65.55 487,743July………………………………………………….. 72.91 65.65 424,159August………………………………………………. 75.95 53.16 455,690September…………………………………………... 67.00 30.00 637,614October……………………………………………… 39.99 16.38 898,018November…………………………………………… 29.00 12.75 563,410December…………………………………………… 19.28 13.01 411,210

2009January…………………………………………….. 27.01 17.59 521,205February…………………………………………… 35.97 21.15 620,579March………………………………………………. 43.47 29.19 873,546April………………………………………………… 47.39 34.02 839,224May ………………………………………………… 57.24 44.50 817,435June (as up to 11 June 2009)……………………… 59.21 50.01 869,000

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TERMS AND CONDITIONS OF THE BONDS

The following, subject to completion and amendment, and save for the paragraphs in italics, is the text of the Terms and Conditions of the Bonds which will be endorsed on the Bonds in definitive form (if issued).

The issue of the U.S.$500,000,000 6.0 per cent. Convertible Bonds due 2014 (the "Bonds", which expression shall, unless otherwise indicated, include any Further Bonds) was (save in respect of any Further Bonds) authorised by a resolution of the board of directors of First Quantum Minerals Ltd. (the "Issuer") passed on 27 May 2009. The Bonds are constituted by a trust deed dated 18 June 2009 (the "Trust Deed") between the Issuer and LaSalle Global Trust Services Limited (the "Trustee", which expression shall include all persons for the time being appointed as the trustee under the Trust Deed) as trustee for the holders (as defined below) of the Bonds. The statements set out in these Terms and Conditions (the "Conditions") are summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the forms of the Bonds and the interest coupons relating to them (the "Coupons"). The Bondholders and the Couponholders (each as defined below) are entitled to the benefit of, and are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and those provisions applicable to them which are contained in the Paying and Conversion Agency Agreement dated 18 June 2009 (the "Agency Agreement") relating to the Bonds between the Issuer, the Trustee and Bank of America National Association (the "Principal Paying and Conversion Agent", which expression shall include any successor as principal paying and conversion agent under the Agency Agreement) and the paying and conversion agents for the time being (such persons, together with the Principal Paying and Conversion Agent, being referred to below as the "Paying and Conversion Agents", which expression shall include their successors as paying and conversion agents under the Agency Agreement). Copies of the Trust Deed and the Agency Agreement are available for inspection at the office of the Trustee at Level 10, 5 Canada Square, London E14 5AQ and at the specified offices of the Paying and Conversion Agents.

Capitalised terms used but not defined in these Conditions shall have the meanings attributed to them in the Trust Deed unless the context otherwise requires or unless otherwise stated.

1. Form, Denomination, Title and Status

(a) Form and Denomination

The Bonds are in bearer form, serially numbered, in the principal amount of U.S.$100,000 each with Coupons attached on issue.

The Bonds will initially be represented by a single Temporary Global Bond, without Coupons or Conversion Rights (as defined in Condition 5(a)), which is expected to be deposited on or about 18 June 2009 with, or on behalf of, a common depositary for Euroclear Bank S.A./ N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Interests in the Temporary Global Bond will be exchangeable for interests in a Global Bond on or after a date which is expected to be 29 July 2009, upon certification that the beneficial owners are not U.S. persons or persons who have acquired interests in such Bonds for resale to any U.S. person. Unless upon due presentation of the Temporary Global Bond for exchange, delivery of interests in the Global Bond is improperly refused, a beneficial owner must exchange its interest in the Temporary Global Bond before payments of principal and interest on the Bonds can be collected and before the Conversion Right can be exercised. Beneficial interests in the Temporary Global Bond and the Global Bond will be shown on, and transfers thereof will be effected only through, records maintained in book-entry form by Euroclear and Clearstream, Luxembourg in accordance with the applicable procedures of Euroclear and Clearstream, Luxembourg. Ownership of beneficial interests in the Temporary Global Bond and the Global Bond will be limited to persons who maintain accounts with Euroclear and Clearstream,Luxembourg or persons who hold interests through such persons.

Interests in the Global Bond will be exchangeable in whole but not in part (free of charge to the holder) for individual definitive Bonds (which will be in bearer form), with Coupons attached, in certain limited circumstances only as described in the Global Bond.

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Bonds and Coupons will bear the following legend: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the United States Internal Revenue Code."

(b) Title

Title to the Bonds and Coupons will pass by delivery. The holder (as defined below) of any Bond or Coupon will (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or its theft or loss or anything written on it) and no person will be liable for so treating the holder.

(c) Status

The Bonds and Coupons constitute direct, unconditional, unsubordinated and (subject to Condition 2) unsecured obligations of the Issuer ranking pari passu and rateably, without any preference among themselves, with all its other existing and future unsecured and unsubordinated obligations, save for such obligations that may be preferred by law.

2. Negative Pledge

So long as any of the Bonds remain outstanding (as defined in the Trust Deed), the Issuer will not, and will procure that none of its Principal Subsidiaries (as defined in Condition 3) will, create or permit to subsist any mortgage, charge, lien, pledge or other form of encumbrance or security interest (each a "Security Interest") upon the whole or any part of its present or future property or assets to secure any Relevant Indebtedness or any guarantee or indemnity in respect of any Relevant Indebtedness unless, before or at the same time as the creation of the Security Interest, any and all action necessary shall have been taken to the satisfaction of the Trustee to ensure that:

(a) all amounts payable by the Issuer under the Bonds and the Trust Deed are secured equally and rateably with such indebtedness or guarantee or indemnity, as the case may be, to the satisfaction of the Trustee; or

(b) such other Security Interest or guarantee or other arrangement (whether or not including the giving of a Security Interest) is provided in respect of all amounts payable by the Issuer under the Bonds and the Trust Deed either (i) as the Trustee shall in its absolute discretion deem not materially less beneficial to the interests of the Bondholders or (ii) as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Bondholders.

"Relevant Indebtedness" means any present or future indebtedness (whether being principal, interest or other amounts), in the form of or evidenced by notes, bonds, debentures, loan stock or other similar debt instruments, whether issued for cash or in whole or in part for a consideration other than cash, and which are, or are capable of being, quoted, listed or ordinarily dealt in or traded on any stock exchange, over-the-counter or other securities market.

3. Definitions

In these Conditions, unless otherwise provided:

"Additional Common Shares" has the meaning provided in Condition 5(c).

"Bondholder" and, in relation to a Bond, "holder" mean the holder of any Bond.

"business day" means, in relation to any place, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets are open for business in that place.

"C$" and "Canadian dollars" means Canadian dollars.

"Change of Control" has the meaning provided in Condition 5(b)(x).

"Change of Control Period" has the meaning provided in Condition 5(b)(x).

"Closing Date" means 18 June 2009.

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"Common Shares" means common shares of no par value in the share capital of the Issuer.

"Conversion Date" has the meaning provided in Condition 5(h).

"Conversion Notice" has the meaning provided in Condition 5(h).

"Conversion Period" has the meaning provided in Condition 5(a).

"Conversion Price" has the meaning provided in Condition 5(a).

"Conversion Right" has the meaning provided in Condition 5(a).

"Couponholder" means the holder of any Coupon.

"Current Market Price" means, in respect of a Common Share at a particular date, the average of the Volume Weighted Average Prices of a Common Share for the five consecutive dealing days ending on (and including) the dealing day immediately preceding such date; provided that if at any time during the said five-dealing-day period the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex- any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum- any other entitlement), then:

(a) if the Common Shares to be issued or transferred and delivered do not rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Common Shares shall have been based on a price cum-Dividend (or cum- any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such Dividend or entitlement per Common Share as at the date of first public announcement of such Dividend (or entitlement); or

(b) if the Common Shares to be issued or transferred and delivered do rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Common Shares shall have been based on a price ex-Dividend (or ex- any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof increased by an amount equal to the Fair Market Value of any such Dividend or entitlement per Common Share as at the date of first public announcement of such Dividend (or entitlement),

and provided further that if on each of the said five dealing days the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum- any other entitlement) in respect of a Dividend (or other entitlement) which has been declared or announced but the Common Shares to be issued or transferred and delivered do not rank for that Dividend (or other entitlement) the Volume Weighted Average Price on each of such dates shall for the purposes of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such Dividend or other entitlement per Common Share as at the date of the first public announcement of such Dividend or entitlement,

and provided further that, if the Volume Weighted Average Price of a Common Share is not available on one or more of the said five dealing days, then the average of such Volume Weighted Average Prices which are available in that five-dealing-day period shall be used (subject to a minimum of two such prices) and if only one, or no, such Volume Weighted Average Price is available in the relevant period the Current Market Price shall be determined in good faith by a Financial Adviser.

"dealing day" means a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is open for business, and on which Common Shares, Securities or Spin-Off Securities (as the case may be) may be dealt in (other than a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is scheduled to or does close prior to its regular weekday closing time).

"Dividend" means any dividend or distribution to Shareholders (including a Spin-Off) whether of money, shares or property, (including without limitation an issue of Common Shares or other Securities), provided that:

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(a) where a Dividend in cash is announced which is to be, or may at the election of a Shareholder or Shareholders be, satisfied by the issue or delivery of Common Shares or other property, then for the purposes of this definition the Dividend in question shall be treated as a Dividend in cash of the greater of (i) such cash amount and (ii) the Current Market Price of such Common Shares or the Fair Market Value of such other property (as at the date of the first public announcement of such Dividend or if later, the date on which the number of Common Shares (or amount of property, as the case may be) which may be issued or transferred and delivered is determined);

(b) a purchase or redemption or buy back of shares of the Issuer by the Issuer or any Subsidiary of the Issuer shall not constitute a Dividend unless, in the case of a purchase or redemption or buy back of Common Shares by or on behalf of the Issuer or any of its Subsidiaries, the weighted average price per Common Share (before expenses) on any one day (a "Specified Share Day") in respect of such purchases or redemptions or buy backs (translated, if not in the Relevant Currency, into the Relevant Currency at the Prevailing Rate on such day) exceeds by more than 5 per cent. the average of the closing prices of the Common Shares on the Relevant Stock Exchange (as published by or derived from the Relevant Stock Exchange) on the five dealing days immediately preceding the Specified Share Day or, where an announcement (excluding, for the avoidance of doubt for these purposes, any general authority for such purchases, redemptions or buy backs approved by a general meeting of Shareholders or any notice convening such a meeting of Shareholders) has been made of the intention to purchase, redeem or buy back Common Shares at some future date at a specified price, on the five dealing days immediately preceding the date of such announcement, in which case such purchase, redemption or buy back shall be deemed to constitute a Dividend in cash in the Relevant Currency to the extent that the aggregate price paid (before expenses) in respect of such Common Shares purchased, redeemed or bought back by the Issuer or, as the case may be, any of its Subsidiaries (translated where appropriate into the Relevant Currency as provided above) exceeds the product of (i) 105 per cent. of the average closing price of the Common Shares determined as aforesaid and (ii) the number of Common Shares so purchased, redeemed or bought back; and

(c) if the Issuer or any of its Subsidiaries shall purchase, redeem or buy back any depositary or other receipts or certificates representing Common Shares, the provisions of paragraph (b) shall be applied in respect thereof in such manner and with such modifications (if any) as shall be determined in good faith by a Financial Adviser.

"equity share capital" means, in relation to a company, its issued share capital excluding any part of that capital which, neither as regards dividends nor as regards capital, carries any right to participate beyond a specified amount in the remaining assets of the company upon liquidation or on a distribution of assets.

"Exempt Newco Scheme" means a Newco Scheme (as defined below) where immediately after completion of the relevant Plan of Arrangement (as defined below) the common shares of Newco (as defined below) are (1) admitted to trading on the Relevant Stock Exchange or (2) admitted to listing on such other regulated, regularly operating, recognised stock exchange or securities market as the Issuer or Newco may determine.

"Fair Market Value" means, with respect to any property on any date, the fair market value of that property as determined in good faith and absent manifest error by a Financial Adviser provided that (i) the Fair Market Value of a Dividend in cash shall be the amount of such Dividend; (ii) the Fair Market Value of any other cash amount shall be the amount of such cash; (iii) where Spin-Off Securities, Securities, options, warrants or other rights are publicly traded in a market of adequate liquidity (as reasonably determined by a Financial Adviser), the Fair Market Value (a) of such Spin-Off Securities or Securities shall equal the arithmetic mean of the daily Volume Weighted Average Prices of such Spin-Off Securities or Securities and (b) of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights, in the case of both (a) and (b) during the period of five dealing days on the relevant market commencing on such date (or, if later, the first such dealing day such Spin-Off Securities, Securities, options, warrants or other rights are publicly traded); (iv) where Spin-Off Securities, Securities, options, warrants or other rights are not publicly traded (as aforesaid), the Fair Market Value of such Spin-Off Securities, Securities, options, warrants or other rights shall be determined in good faith by a Financial Adviser, on the basis of a

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commonly accepted market valuation method and taking account of such factors as it considers appropriate, including the market price per Common Share, the dividend yield of a Common Share, the volatility of such market price, prevailing interest rates and the terms of such Spin-Off Securities, Securities, options, warrants or other rights, including as to the expiry date and exercise price (if any) thereof; (v) in the case of the amount referred to in (i) above translated into the Relevant Currency (if declared or paid or payable in a currency other than the Relevant Currency) at the rate of exchange used to determine the amount payable to Shareholders who were paid or are to be paid or are entitled to be paid the Dividend in the Relevant Currency; and in any other case, translated into the Relevant Currency (if expressed in a currency other than the Relevant Currency) at the Prevailing Rate on that date and (vi) in the case of amounts referred to in (i) and (ii) above disregarding any withholding or deduction required to be made on account of tax and any associated tax credit.

"Final Maturity Date" means 19 June 2014.

"Financial Adviser" means a financial institution of international repute appointed by the Issuer and approved in writing by the Trustee or, if the Issuer fails to make such appointment and such failure continues for a reasonable period (as determined by the Trustee in its sole discretion), appointed by the Trustee in its sole discretion (without liability for doing so) following notification by the Trustee to the Issuer provided that the Trustee has no obligation to make such appointment unless it has been indemnified and/or provided with security and/or is pre-funded to its satisfaction in respect of the costs, fees and expenses of such adviser and otherwise in connection with such appointment.

"Further Bonds" means any further Bonds issued pursuant to Condition 17 and consolidated and forming a single series with the then outstanding Bonds.

"indebtedness for borrowed money" means any present or future indebtedness (whether being principal, interest or other amounts) for or in respect of (i) money borrowed or raised (ii) liabilities under or in respect of any acceptance or acceptance credit or (iii) any notes, bonds, debentures, debenture stock, loan stock or other debt securities offered, issued or distributed whether by way of public offer, private placing, acquisition consideration or otherwise and whether issued for cash or in whole or in part for a consideration other than cash.

"Interest Payment Date" has the meaning provided in Condition 4(a).

"Licensing Authority" means each governmental, regional or state authority, or any similar body, which has granted, or has regulatory, supervisory or other responsibility for, any Relevant Licence or any successor or successors thereto or other authority or authorities performing substantially the functions thereof.

"Licence Event" means the occurrence of any one or more of the following events (which for the avoidance of doubt, shall not constitute an Event of Default, unless they would otherwise fall within the provisions of Condition 9):

(i) the Licensing Authority unconditionally terminates or revokes, in writing, any Relevant Licence; or

(ii) the Issuer or any Subsidiary of the Issuer agrees in writing with the Licensing Authority to any revocation or surrender of any Relevant Licence unless such revocation or surrender is made in contemplation of, and is followed promptly by a substitution or replacement of such Relevant Licence with a further licence, permit, permission, certificate, consent or approval or other authorisation on terms that, in the opinion of the Trustee, are not materially prejudicial to the interests of the Bondholders or as shall be approved by an Extraordinary Resolution of the Bondholders; or

(iii) the Issuer or any Subsidiary of the Issuer sells, donates, transfers or otherwise disposes of any Relevant Licence (whether or not on a voluntary basis and whether or not for any consideration) to any other person unless such sale, donation, transfer or other disposal is made in contemplation of, and is followed promptly by, a substitution or replacement of such Relevant Licence with a further licence, permit, permission, certificate, consent or approval or other authorisation on terms that in the opinion of the Trustee are not materially prejudicial to the interests of Bondholders or as shall be approved by an Extraordinary Resolution of Bondholders and provided further that nothing contained in these Conditions shall prevent a

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transfer of a Relevant Licence from any Subsidiary to the Issuer or to another Subsidiary or any other undertaking of the Issuer; or

(iv) any legislation (whether primary or subordinate) is enacted terminating or revoking any Relevant Licence unless the enactment of such legislation is made in contemplation of a substitution or replacement of such Relevant Licence with a further permit, permission, certificate, consent or approval or other authorisation on terms that in the opinion of the Trustee are not materially prejudicial to the interests of Bondholders or as shall be approved by an Extraordinary Resolution of Bondholders; or

(v) any modification is made to the terms and conditions of any Relevant Licence which is in the opinion of the Trustee, materially prejudicial to the interests of the Bondholders unless such modification is approved by an Extraordinary Resolution of Bondholders,

in each case (other than in the case of paragraph (v)) unless (a), in the opinion of the Trustee, such revocation, termination, surrender, disposition or enactment is not materially prejudicial to the interests of Bondholders or (b) such revocation, termination, surrender, disposition or enactment is approved in writing by Bondholders holding at least one-quarter in principal amount of the outstanding Bonds or by an Extraordinary Resolution of Bondholders, which shall be conclusive and binding on the Bondholders and all parties.

For the avoidance of doubt, in the event that one or more of the events or circumstances above occur in relation to different mineral extraction licences or similar mining licences, permits, permissions, certificates, consents, approvals or other authorisations which individually do not constitute a Relevant Licence but which together constitute a Relevant Licence, this shall constitute a Licence Event for the purpose of these Conditions (regardless of whether the same event or circumstance applies to each)unless (a) in the opinion of the Trustee such event or circumstance is not materially prejudicial to the interests of Bondholders or (b) such event or circumstance is approved in writing by Bondholders holding at least one-quarter in principal amount of the outstanding Bonds or by an Extraordinary Resolution of Bondholders, which will be conclusive and binding on the Bondholders and all parties.

In determining whether any event or circumstance as mentioned above is materially prejudicial to the interests of Bondholders, the Trustee shall be entitled, but is not obliged, to rely on, as sufficient evidence of the matters contained therein, the advice of a Financial Adviser and/or the opinion of independent counsel and/or any other advisers the Trustee deems appropriate or any other evidence the Trustee deems appropriate or necessary to assist it in making such determination and the Trustee shall not be held liable for so doing.

"Licence Event Period" has the meaning provided in Condition 6(e).

"Newco Scheme" means a plan of arrangement or analogous proceeding (a "Plan of Arrangement") which effects the interposition of a company ("Newco") between the Shareholders of the Issuer immediately prior to the Plan of Arrangement (the "Existing Shareholders") and the Issuer; provided that only common shares of Newco are issued to Existing Shareholders and that immediately after completion of the Plan of Arrangement the only shareholders of Newco are the Existing Shareholders and that all Subsidiaries of the Issuer immediately prior to the Plan of Arrangement (other than Newco, if Newco is then a Subsidiary of the Issuer) are Subsidiaries of the Issuer (or of Newco) immediately after the Plan of Arrangement and that the Issuer (or Newco) holds, directly or indirectly, the same percentage of the common shares and Voting Rights of or in respect of those Subsidiaries as was held by the Issuer immediately prior to the Plan of Arrangement.

"Optional Redemption Date" has the meaning provided in Condition 6(b).

"Optional Redemption Notice" has the meaning provided in Condition 6(b).

"Parity Value" means, in respect of any dealing day, the U.S. dollar amount calculated as follows:

PV = N x VWAP

where:

PV = the Parity Value

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N = the number of Common Shares determined by dividing U.S.$100,000 by the Conversion Price in effect on such dealing day rounded down, if necessary, to the nearest whole number of Common Shares

VWAP = the Volume Weighted Average Price of a Common Share on such dealing day translated into U.S. dollars at the Prevailing Rate on such dealing day, provided that if on any such dealing day the Common Shares shall have been quoted cum-Dividend or cum-any other entitlement, the Volume Weighted Average Price of a Common Share on such dealing day shall be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such Dividend or entitlement per Common Share as at the date of first public announcement of such Dividend or entitlement (or, if that is not a dealing day, the immediately preceding dealing day) translated, if not in U.S. dollars, into U.S. dollars at the Prevailing Rate on such dealing day

a "person" includes any individual, company, corporation, firm, partnership, joint venture, undertaking, association, organisation, trust, state or agency of a state (in each case whether or not being a separate legal entity).

"Presentation Date" means a day which:

(a) is or falls after the relevant due date for payment, but, if the due date for payment is not or was not a business day in London, is or falls after the next following such business day; and

(b) is a business day in the place of the specified office of the Paying and Conversion Agent at which the Bond or Coupon is presented for payment.

"Prevailing Rate" means, in respect of any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12 noon (London time) on that date as appearing on or derived from the Relevant Page or if such rate cannot be determined at such time, the rate prevailing as at or about 12 noon (London time) on the immediately preceding day on which such rate can be so determined.

"Principal Subsidiary" of the Issuer at any time shall mean any Subsidiary of the Issuer:

(i) whose (a) earnings before tax and minority interests or (b) total assets represent 12.5 per cent. or more of the consolidated earnings before tax and minority interests of the Issuer and its Subsidiaries or, as the case may be, consolidated total assets of the Issuer and its Subsidiaries, in each case as calculated by reference to the then latest audited financial statements of such Subsidiary and the then latest audited consolidated financial statements of the Issuer provided that (i) in the case of a Subsidiary acquired or an entity which becomes a Subsidiary after the end of the financial period to which the then latest audited consolidated financial statements of the Issuer relate, the reference to the then latest audited consolidated financial statements of the Issuer for the purposes of the calculation of the above shall until the consolidated audited financial statements of the Issuer are published for the financial period in which the acquisition is made or, as the case may be, in which such entity becomes a Subsidiary, be deemed to be a reference to the then latest consolidated financial statements of the Issuer adjusted in such manner as may be appropriate to consolidate the latest audited financial statements (consolidated or, as the case may be, unconsolidated) of such Subsidiary in such financial statements, (ii) if, in the case of any Subsidiary, no audited financial statements are prepared, then the determination of whether or not such Subsidiary is a Principal Subsidiary shall be determined by reference to its unaudited annual financial statements (if any) or on the basis of pro forma financial statements, (iii) if the financial statements of any Subsidiary (not being a Subsidiary referred to in (i) above) are not consolidated with those of the Issuer, then the determination of whether or not such Subsidiary is a Principal Subsidiary shall be based on a pro forma consolidation of its financial statements (consolidated, if appropriate) with the consolidated financial statements of the Issuer and (iv) if the latest financial statements of any Subsidiary of the Issuer are not prepared on the basis of the same accounting principles, policies and practices of the latest consolidated audited financial statements of the Issuer, then the determination of whether or not such Subsidiary is a Principal Subsidiary shall be based on pro forma financial statements or, as the case may be, consolidated financial statements of

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such Subsidiary prepared on the same accounting principles, policies and practices as adopted in the latest consolidated audited financial statements of the Issuer, or an appropriate restatement or adjustment to the relevant financial statements of such Subsidiary; or

(ii) to which is transferred all or substantially all of the business, undertaking and assets of a Subsidiary of the Issuer which immediately prior to such transfer is a Principal Subsidiary of the Issuer, whereupon the transferor Subsidiary shall immediately cease to be a Principal Subsidiary of the Issuer and the transferee Subsidiary shall cease to be a Principal Subsidiary of the Issuer under the provisions of this sub-paragraph (ii) upon publication of its next audited financial statements but so that such transferor Subsidiary or such transferee Subsidiary may be a Principal Subsidiary of the Issuer on or at any time after the date on which such audited financial statements have been published by virtue of the provisions of sub-paragraph (i) above or (as a result of another transfer to which this sub-paragraph (ii) applies) before, on or at any time after such date by virtue of the provisions of this sub-paragraph (ii); or

(iii) which holds a Relevant Licence (provided that a Subsidiary which holds a licence or licences to which is or are attributable (or relating to mine(s) or operation(s) to which is or are attributable), singularly or in the aggregate, less than 30 per cent. of the consolidated sales revenues of the Issuer and its Subsidiaries will not be a Principal Subsidiary solely by virtue of holding such a licence or licences).

A certificate of two Directors of the Issuer that, in their opinion, a Subsidiary is or is not, or was or was not, at any particular time or during any particular period, a Principal Subsidiary may be relied upon by the Trustee and, if so relied upon, shall, in the absence of manifest or proven error, be conclusive and binding on all concerned.

"Reference Date" has the meaning provided in Condition 5(a).

"Relevant Currency" means Canadian dollars or, if at the relevant time or for the purposes of the relevant calculation or determination, the Toronto Stock Exchange is not the Relevant Stock Exchange, the currency in which the Common Shares are quoted or traded on the Relevant Stock Exchange at such time.

"Relevant Date" means, in respect of any Bond or Coupon, whichever is the later of (i) the date on which payment in respect of such Bond or Coupon first becomes due and (ii) if any amount of the money payable is improperly withheld or refused the date on which payment in full of the amount outstanding is made or (if earlier) the date on which notice is duly given by the Issuer or to the Bondholders in accordance with Condition 16 that, upon further presentation of the Bond or Coupon, where required pursuant to these Conditions, being made, such payment will be made, provided that such payment is in fact made as provided in these Conditions.

"Relevant Event" has the meaning provided in Condition 5(k).

"Relevant Notice" has the meaning provided in Condition 5(g).

"Relevant Licence" means (a) any mineral extraction licence or similar mining licence, permit, permission, certificate, consent, approval or other authorisation to which is attributable (or relating to a mine or operation to which is attributable), singularly or in the aggregate, 30 per cent. or more of the consolidated sales revenues of the Issuer and its Subsidiaries, as calculated by reference to the then latest audited consolidated financial statements of the Issuer, or (b) any licences, permits, permissions, certificates, consents, orders, approvals or other authorisations extending, supplementing, amending or replacing the above.

"Relevant Page" means the relevant page on Bloomberg or such other information service provider that displays the relevant information.

"Relevant Stock Exchange" means the Toronto Stock Exchange or if at the relevant time the Common Shares are not at that time listed and admitted to trading on the Toronto Stock Exchange, the principal stock exchange or securities market on which the Common Shares are then listed, admitted to trading or quoted or dealt in.

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"Repurchase Acceptance Notice" has the meaning provided in Condition 6(e).

"Repurchase Date" has the meaning provided in Condition 6(e).

"Repurchase Price" has the meaning provided in Condition 6(e).

"Retroactive Adjustment" has the meaning provided in Condition 5(c).

"Securities" means any securities including, without limitation, Common Shares, or options, warrants or other rights to subscribe for or purchase or acquire Common Shares.

"Shareholders" means the holders of Common Shares.

"Specified Date" has the meaning provided in Condition 5(b)(vii) and (viii).

"Spin-Off" means:

(a) a distribution of Spin-Off Securities by the Issuer to Shareholders as a class; or

(b) any issue, transfer or delivery of any property or assets (including cash or shares or securities of or in or issued or allotted by any entity) by any entity (other than the Issuer) to Shareholders as a class or, in the case of or in connection with a Newco Scheme, Existing Shareholders as a class (but excluding the issue and allotment of common shares by Newco to Existing Shareholders as a class), pursuant in each case to any arrangements with the Issuer or any of its Subsidiaries.

"Spin-Off Securities" means equity share capital of an entity other than the Issuer or options, warrants or other rights to subscribe for or purchase equity share capital of an entity other than the Issuer.

"Subsidiary" means in relation to any company or corporation, a company or corporation:

(a) which is controlled, directly or indirectly, by the first mentioned company or corporation;

(b) more than half of the outstanding voting shares in the share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or

(c) which is a subsidiary of another Subsidiary of the first mentioned company or corporation,

and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board or directors or equivalent body whether or not such company or corporation beneficially owns, directly or indirectly, more than half of the outstanding voting shares in the share capital.

"Tax Redemption Date" has the meaning provided in Condition 6(c).

"Tax Redemption Notice" has the meaning provided in Condition 6(c).

"U.S. dollars" and "U.S.$" means US dollars.

"Volume Weighted Average Price" means, in respect of a Common Share, Security or, as the case may be, a Spin-Off Security, on any dealing day, the volume-weighted average price of a Common Share, Security or, as the case may be, a Spin-Off Security published by or derived (in the case of a Common Share) from Bloomberg page VAP (or such other page as may replace page VAP on Bloomberg) or (in the case of a Security (other than a Common Share) or Spin-Off Security) from the principal stock exchange or securities market on which such Securities or Spin-Off Securities are then listed or quoted or dealt in, if any, or, in any such case, such other source as shall be determined to be appropriate by a Financial Adviser on such dealing day, provided that if on any such dealing day such price is not available or cannot otherwise be determined as provided above, the Volume Weighted Average Price of a Common Share, Security or a Spin-Off Security, as the case may be, in respect of such dealing day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding dealing day on which the same can be so determined.

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"Voting Security" means any security of the Issuer (other than a debt security) carrying a right to vote at a general meeting of Shareholders either in all circumstances or in some circumstances that have occurred and are continuing.

References to any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment.

References to any issue or offer or grant to Shareholders or Existing Shareholders "as a class" or "by way of rights" shall be taken to be references to an issue or offer or grant to all or substantially all Shareholders or Existing Shareholders, as the case may be, other than Shareholders or Existing Shareholders, as the case may be, to whom, by reason of the laws of any territory or requirements of any recognised regulatory body or any other stock exchange or securities market in any territory or in connection with fractional entitlements, it is determined not to make such issue or offer or grant.

In making any calculation or determination of Current Market Price or Volume Weighted Average Price, such adjustments (if any) shall, absent manifest error, be made as a Financial Adviser considers appropriate to reflect any consolidation or sub-division of the Common Shares or any issue of Common Shares by way of Dividend.

For the purposes of Conditions 5(b), (c), (h) and (i) and Condition 10 only, (a) references to the "issue"of Common Shares shall include the transfer and/or delivery of Common Shares, whether newly issued and allotted or previously existing or held by or on behalf of the Issuer or any of its Subsidiaries, and (b) Common Shares held by or on behalf of the Issuer or any of its respective Subsidiaries (and which, in the case of Condition 5(b)(iv) and (vi), do not rank for the relevant right or other entitlement) shall not be considered as or treated as "in issue".

4. Interest

(a) Interest Rate

The Bonds bear interest from and including the Closing Date at the rate (the "Interest Rate") of 6.0 per cent. per annum calculated by reference to the principal amount thereof and payable semi-annually in equal instalments in arrear on 19 June and 19 December in each year, commencing 19 December 2009 (each an "Interest Payment Date"), save that the first payment of interest will be made on 19 December 2009 in respect of the period from (and including) the Closing Date to (but excluding) 19 December 2009 and the amount of interest payable in respect of each U.S.$100,000 principal amount of Bonds on such date will be U.S.$3,016.67.

If interest is required to be calculated for a period other than an Interest Period it will be calculated on the basis of a 360 day year consisting of 12 months of 30 days each, and in the case of an incomplete month, the number of days elapsed.

"Interest Period" means the payment period beginning on (and including) the Closing Date and ending on (but excluding) 19 December 2009, being the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.

(b) Accrual of Interest

Each Bond will cease to bear interest (i) where the Conversion Right shall have been exercised by a Bondholder, from the Interest Payment Date immediately preceding the relevant Conversion Date or, if none, the Closing Date (subject in any such case as provided in Condition 5(j)) or (ii) where such Bond is redeemed, repurchased or repaid pursuant to Condition 6 or Condition 9, from the due date for redemption, repurchase or repayment thereof unless, upon due presentation thereof, payment of principal is improperly withheld or refused, in which event interest will continue to accrue at the rate specified in Condition 4(a) (both before and after judgment) until whichever is the earlier of (a) the day on which all sums due in respect of such Bond up to that day are received by or on behalf of the relevant holder, and (b) the day seven days after the Trustee or the Principal Paying and Conversion Agent has notified Bondholders of receipt of all sums due in respect of all the Bonds up to that seventh day (except to the extent that there is failure in the subsequent payment to the relevant holders under these Conditions).

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5. Conversion of Bonds

(a) Conversion Period and Conversion Price

Subject to and as provided in these Conditions, each Bond shall entitle the holder to convert such Bond into Common Shares (a "Conversion Right").

The number of Common Shares to be issued or transferred and delivered on exercise of Conversion Rights shall be determined by dividing the principal amount of the Bonds to be converted by the conversion price (the "Conversion Price") in effect on the relevant Conversion Date.

The initial Conversion Price is U.S.$56.39per Common Share (which reflects the reference price of a Common Share of C$46.75, which was translated into U.S. dollars on 27 May 2009 at the rate of U.S.$ 1.00 = C$1.1193 and the initial conversion premium of 35 per cent.). The Conversion Price is subject to adjustment in the circumstances described in Condition 5(b).

A Bondholder may exercise the Conversion Right in respect of a Bond by delivering such Bond to the specified office of any Paying and Conversion Agent in accordance with Condition 5(h) whereupon the Issuer shall (subject as provided in these Conditions) procure the delivery to or as directed by the relevant Bondholder of Common Shares issued as fully paid as provided in this Condition 5.

Subject to, and as provided in, these Conditions, the Conversion Right in respect of a Bond may be exercised, at the option of the holder thereof, at any time (subject to any applicable fiscal or other laws or regulations and as hereinafter provided) from 19 October 2009 (the "Conversion Commencement Date") (provided that in the event of a Change of Control prior to such date, the Conversion Commencement Date shall begin on the later of 29 July 2009 and the date of the Change of Control) to the close of business on the date falling seven Toronto business days prior to the Final Maturity Date (both dates inclusive) or, if such Bond is to be redeemed pursuant to Condition 6(b) or 6(c) prior to the Final Maturity Date, then up to the close of business on the seventh Toronto business day before the date fixed for redemption thereof pursuant to Condition 6(b) or 6(c), unless there shall be default in making payment in respect of such Bond on such date fixed for redemption, in which event the Conversion Right shall extend up to the close of business (at the place where the relevant Bond is delivered for conversion) on the date on which the full amount of such payment becomes available for payment and notice of such availability has been duly given in accordance with Condition 16 or, if earlier, the Final Maturity Date or if the Final Maturity Date is not a Toronto business day, the immediately preceding Toronto business day; provided that, if the final such date for the exercise of Conversion Rights is not a business day at the place where the relevant Bond is delivered for conversion, then the period for exercise of the Conversion Right by Bondholders at such place shall end on the immediately preceding business day at such place.

Conversion Rights in respect of a Bond may not be exercised (i) following the acceptance of a Bond Repurchase Offer by the holder thereof pursuant to Condition 6(e), or (ii) following the giving of notice by the Trustee pursuant to Condition 9.

Conversion Rights may only be exercised in respect of the whole of the principal amount of a Bond. The period during which Conversion Rights may (subject as provided below) be exercised by a Bondholder is referred to as the "Conversion Period".

Fractions of Common Shares will not be delivered on exercise of Conversion Rights or pursuant to Condition 5(c) and no cash payment or other adjustment will be made in lieu thereof. However, if the Conversion Right in respect of more than one Bond is exercised at any one time such that Common Shares to be delivered on conversion or pursuant to Condition 5(c) are to be registered in the same name, the number of such Common Shares to be delivered in respect thereof shall be calculated on the basis of the aggregate principal amount of such Bonds being so converted and rounded down to the nearest whole number of Common Shares.

The Issuer will procure that Common Shares to be issued or transferred and delivered on conversion will be issued or transferred and delivered to the holder of the Bonds completing the relevant Conversion Notice or the holder’s nominee. Such Common Shares will be deemed to be issued or transferred and delivered as of the relevant Conversion Date. Any Additional Common Shares to be issued or transferred and delivered pursuant to Condition 5(c) will be deemed to be issued or transferred and delivered as of the date the relevant Retroactive Adjustment takes effect or as at the

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date of issue or transfer and delivery of Common Shares if the adjustment results from the issue or transfer and delivery of Common Shares (each such date, the "Reference Date").

(b) Adjustment of Conversion Price

Upon the happening of any of the events described below, the Conversion Price shall be adjusted as follows:

(i) If and whenever there shall be a consolidation, reclassification or subdivision of the Common Shares, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such consolidation, reclassification or subdivision by the following fraction:

BA

where:

A is the aggregate number of Common Shares in issue immediately before such consolidation, reclassification or subdivision, as the case may be; and

B is the aggregate number of Common Shares in issue immediately after, and as a result of, such consolidation, reclassification or subdivision, as the case may be.

Such adjustment shall become effective on the date the consolidation, reclassification or subdivision, as the case may be, takes effect.

(ii) If and whenever the Issuer shall issue any Common Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve) other than (1) where any such Common Shares are or are to be issued instead of the whole or part of a Dividend in cash which the Shareholders would or could otherwise have elected to receive or (2) where the Shareholders may elect to receive a Dividend in cash in lieu of such Common Shares, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following fraction:

BA

where:

A is the aggregate number of Common Shares in issue immediately before such issue; and

B is the aggregate number of Common Shares in issue immediately after such issue.

Such adjustment shall become effective on the date of issue of such Common Shares.

(iii)

(A) If and whenever the Issuer shall pay or make any Dividend to Shareholders, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such Dividend being paid or made by the following fraction:

ABA −

where:

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A is the Current Market Price of one Common Share on the dealing day immediately preceding the date of the first public announcement of the relevant Dividend or, in the case of a purchase of Common Shares, on the dealing day immediately preceding the date on which such Common Shares are purchased or, in the case of a Spin-Off, is the mean of the Volume Weighted Average Prices of a Common Share for the five consecutive dealing days ending on the dealing day immediately preceding the first date on which the Common Shares are traded ex- the relevant Spin-Off; and

B is the portion of the Fair Market Value of the aggregate Dividend attributable to one Common Share, with such portion being determined by dividing the Fair Market Value of the aggregate Dividend by the number of Common Shares entitled to receive the relevant Dividend (or, in the case of a purchase, redemption or buy back of Common Shares or any depositary or other receipts or certificates representing Common Shares by or on behalf of the Issuer or any Subsidiary of the Issuer, by the number of Common Shares in issue immediately following such purchase, redemption or buy back, and treating as not being in issue any Common Shares, or any Common Shares represented by depositary or other receipts or certificates, purchased, redeemed or bought back).

Such adjustment shall become effective on the Effective Date or, if later, the first date upon which the Fair Market Value of the relevant Dividend is capable of being determined as provided herein.

"Effective Date" means the first date on which the Common Shares are traded ex-the relevant Dividend on the Relevant Stock Exchange or, in the case of a purchase, redemption or buy back of Common Shares or any depositary or other receipts or certificates representing Common Shares, the date on which such purchase, redemption or buy back is made or, in the case of a Spin-Off, on the first date on which the Common Shares are traded ex-the relevant Spin-Off on the Relevant Stock Exchange.

(B) For the purposes of the above, Fair Market Value shall (subject as provided in paragraph (a) of the definition of "Dividend" and in the definition of "Fair Market Value") be determined as at the Effective Date.

(iv) If and whenever the Issuer shall issue Common Shares to Shareholders as a class by way of rights, or issue or grant to Shareholders as a class by way of rights, options, warrants or other rights to subscribe for or purchase any Common Shares, in each case at a price per Common Share which is less than 95 per cent. of the Current Market Price per Common Share on the date of the first public announcement of the terms of the issue or grant of such Common Shares, options, warrants or other rights (or, if that is not a dealing day, on the immediately preceding dealing day), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

CABA

+−

where:

A is the number of Common Shares in issue on the Effective Date;

B is the number of Common Shares which the aggregate consideration (if any) receivable for the Common Shares issued by way of rights, or for the options or warrants or other rights issued by way of rights and for the total number of Common Shares deliverable on the exercise thereof, would purchase at such Current Market Price per Common Share; and

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C is the number of Common Shares issued or, as the case may be, the maximum number of Common Shares which may be issued upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means the first date on which the Common Shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

(v) If any Securities (other than Common Shares or options, warrants or other rights to subscribe for or purchase any Common Shares) shall be issued by the Issuer to Shareholders as a class by way of rights or there shall be granted to Shareholders as a class by way of rights any options, warrants or other rights to subscribe for or purchase any Securities (other than Common Shares or options, warrants or other rights to subscribe for or purchase Common Shares), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue or grant by the following fraction:

ABA −

where:

A is the Current Market Price of one Common Share on the Effective Date; and

B is the Fair Market Value on the Effective Date of the rights attributable to one Common Share.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means the first date on which the Common Shares are traded ex- the relevant Securities or ex-rights, ex-option or ex-warrants on the Relevant Stock Exchange.

(vi) If and whenever the Issuer shall issue (otherwise than as mentioned in sub-paragraph (b)(iv) above) wholly for cash or for no consideration any Common Shares (other than Common Shares issued on conversion of the Bonds or on the exercise of any rights of conversion into, or exchange or subscription for or purchase of, Common Shares) or issue or grant (otherwise than as mentioned in sub-paragraph (b)(iv) above) wholly for cash or for no consideration any options, warrants or other rights to subscribe for or purchase any Common Shares (other than the Bonds, which term shall for this purpose include any Further Bonds), in each case at a price per Common Share which is less than 95 per cent. of the Current Market Price per Common Share on (or, if that is not a dealing day, the immediately preceding dealing day) the date of the first public announcement of the terms of such issue or grant, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue or grant by the following fraction:

CABA

+−

where:

A is the number of Common Shares in issue immediately before the issue of such Common Shares or the grant of such options, warrants or rights;

B is the number of Common Shares which the aggregate consideration (if any) receivable for the issue of such Common Shares or, as the case may be, for the Common Shares to be issued or otherwise made available upon the

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exercise of any such options, warrants or rights, would purchase at such Current Market Price per Common Share; and

C is the number of Common Shares to be issued pursuant to such issue of such Common Shares or, as the case may be, the maximum number of Common Shares which may be issued upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights.

Such adjustment shall become effective on the date of issue of such Common Shares or, as the case may be, the grant of such options, warrants or rights.

(vii) If and whenever the Issuer or any Subsidiary of the Issuer or (at the direction or request of or pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) any other company, person or entity (otherwise than as mentioned in sub-paragraphs (b)(iv), (b)(v) or (b)(vi) above) shall issue wholly for cash or for no consideration any Securities (other than the Bonds, which term shall for this purpose exclude any Further Bonds) which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for, Common Shares (or shall grant any such rights in respect of existing Securities so issued) or Securities which by their terms might be redesignated as Common Shares, and the consideration per Common Share receivable upon conversion, exchange, subscription or redesignation is less than 95 per cent. of the Current Market Price per Common Share on the date of the first public announcement of the terms of issue of such Securities (or the terms of such grant) (or, if that is not a dealing day, the immediately preceding dealing day), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue (or grant) by the following fraction:

CABA

+−

where:

A is the number of Common Shares in issue immediately before such issue or grant (but where the relevant Securities carry rights of conversion into or rights of exchange or subscription for Common Shares which have been issued, purchased or acquired by the Issuer or any Subsidiary of the Issuer (or at the direction or request or pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) for the purposes of or in connection with such issue, less the number of such Common Shares so issued, purchased or acquired);

B is the number of Common Shares which the aggregate consideration (if any)receivable for the Common Shares to be issued or otherwise made available upon conversion or exchange or upon exercise of the right of subscription attached to such Securities or, as the case may be, for the Common Shares to be issued or to arise from any such redesignation would purchase at such Current Market Price per Common Share; and

C is the maximum number of Common Shares to be issued or otherwise made available upon conversion or exchange of such Securities or upon the exercise of such right of subscription attached thereto at the initial conversion, exchange or subscription price or rate or, as the case may be, the maximum number of Common Shares which may be issued or arise from any such redesignation,

provided that if at the time of issue of the relevant Securities or date of grant of such rights (as used in this sub-paragraph (b)(vii) the "Specified Date") such number of Common Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time (which may be when such Securities are converted or exchanged or rights of subscription are exercised or, as the case may be, such Securities are redesignated or at such other time

68

as may be provided) then for the purposes of this sub-paragraph (b)(vii), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such conversion, exchange, subscription, purchase or acquisition or, as the case may be, redesignation had taken place on the Specified Date.

Such adjustment shall become effective on the date of issue of such Securities or, as the case may be, the grant of such rights.

(viii) If and whenever there shall be any modification of the rights of conversion, exchange, subscription, purchase or acquisition attaching to any such Securities (other than the Bonds, which term shall for this purpose include any Further Bonds) as are mentioned in sub-paragraph (b)(vii) above (other than in accordance with the terms (including terms as to adjustment) applicable to such Securities upon issue) so that following such modification the consideration per Common Share receivable has been reduced and is less than 95 per cent. of the Current Market Price per Common Share on the date of the first public announcement of the proposals for such modification (or, if that is not a dealing day, the immediately preceding dealing day), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such modification by the following fraction:

CABA

++

where:

A is the number of Common Shares in issue immediately before such modification (but where the relevant Securities carry rights of conversion into or rights of exchange or subscription for Common Shares which have been issued, purchased or acquired by the Issuer or any Subsidiary of the Issuer (or at the direction or request or pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) for the purposes of or in connection with such issue, less the number of such Common Shares so issued, purchased or acquired);

B is the number of Common Shares which the aggregate consideration (if any) receivable for the Common Shares to be issued or otherwise made available upon conversion or exchange or upon exercise of the right of subscription attached to the Securities so modified would purchase at such Current Market Price per Common Share or, if lower, the existing conversion, exchange or subscription price of such Securities; and

C is the maximum number of Common Shares which may be issued or otherwise made available upon conversion or exchange of such Securities or upon the exercise of such rights of subscription attached thereto at the modified conversion, exchange or subscription price or rate but giving credit in such manner as a Financial Adviser shall consider in good faith to be appropriate for any previous adjustment under this sub-paragraph or sub-paragraph (b)(vii) above;

provided that if at the time of such modification (as used in this sub-paragraph (b)(viii) the "Specified Date") such number of Common Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time (which may be when such Securities are converted or exchanged or rights of subscription are exercised or at such other time as may be provided) then for the purposes of this paragraph (b)(viii), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such conversion, exchange or subscription had taken place on the Specified Date.

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Such adjustment shall become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such Securities.

(ix) If and whenever the Issuer or any Subsidiary of the Issuer or (at the direction or request of or pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) any other company, person or entity shall offer any Securities in connection with which Shareholders as a class are entitled to participate in arrangements whereby such Securities may be acquired by them (except where the Conversion Price falls to be adjusted under sub-paragraphs (b)(ii), (iii), (iv), (vi) or (vii) above or (x) below (or would fall to be so adjusted if the relevant issue or grant was at less than 95 per cent. of the Current Market Price per Common Share on the relevant dealing day) or under sub-paragraph (b)(v) above) the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before the making of such offer by the following fraction:

ABA −

where:

A is the Current Market Price of one Common Share on the date on which the terms of such offer are first publicly announced (or, if such date is not a dealing day, the immediately preceding dealing day); and

B is the Fair Market Value on the date of such announcement (or, if that is not a dealing day, the immediately preceding dealing day) of the portion of the relevant offer attributable to one Common Share.

Such adjustment shall become effective on the first date on which the Common Shares are traded ex-rights on the Relevant Stock Exchange.

(x) If:

(i) an offer is made to all (or as nearly as may be practicable all) Shareholders to acquire the whole or any part of the issued Voting Securities of the Issuer (an "Offer"); or

(ii) any person proposes a Plan of Arrangement with regard to such acquisition (other than an Exempt Newco Scheme) (a "Plan");

and (such Offer having become or been declared unconditional in all respects, or in the case of a Plan, having become effective) more than 50 per cent. of the issued Voting Securities of the Issuer have or will become beneficially owned by any person or persons acting together, or an event occurs which has a like or similar effect or any person or persons acting together acquires more than 50 per cent. of the Voting Securities of the Issuer (a "Change of Control"), then upon any exercise of Conversion Rights where the Conversion Date falls during the period (the "Change of Control Period") commencing on the occurrence of the Change of Control and ending 60 calendar days following the Change of Control or, if later, 60 calendar days following the date on which a Relevant Notice as required by Condition 5(g) is given, the Conversion Price (the "Change of Control Conversion Price") shall be adjusted by dividing the Conversion Price in force immediately prior to such Change of Control by a figure calculated in accordance with the formula and subsequent proviso set out below:

BC

xA

where:

A is the average of the historical prices of a Bond at market close on each dealing day, expressed as a percentage of the principal amount thereof,

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during the Calculation Period as quoted by two financial institutions of international repute appointed by the Issuer for such purpose and approved by the Trustee;

B is the average of the daily highest and lowest quoted prices of a Common Share during the Calculation Period as derived from the Relevant Exchange, translated into U.S. dollars on the Prevailing Rate on each dealing day in the Calculation Period; and

C is the average Conversion Price (as adjusted from time to time) during the Calculation Period,

provided that no increase of the Conversion Price shall be made pursuant to this Condition 5(b)(x).

"Calculation Period" means a period of 15 consecutive dealing days ending on (and including) the fifth dealing day prior to the Commencement Date; and

"Commencement Date" means the date on which an Offer is made or on which a Plan is first publicly announced.

(xi) If the Issuer (after consultation with the Trustee) determines that an adjustment should be made to the Conversion Price as a result of one or more circumstances not referred to above in this Condition 5(b) (even if the relevant circumstance is specifically excluded from the operation of sub-paragraphs (b)(i) to (x) above), the Issuer shall, at its own expense and acting reasonably, request a Financial Adviser to determine as soon as practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take account thereof and the date on which such adjustment should take effect and upon such determination such adjustment (if any) shall be made and shall take effect in accordance with such determination, provided that an adjustment shall only be made pursuant to this sub-paragraph (b)(xi) if such Financial Adviser is so requested to make such a determination not more than 21 days after the date on which the relevant circumstance arises and if the adjustment would result in a reduction to the Conversion Price.

Notwithstanding the foregoing provisions, where the events or circumstances giving rise to any adjustment pursuant to this Condition 5(b) have already resulted or will result in an adjustment to the Conversion Price or where the events or circumstances giving rise to any adjustment arise by virtue of any other events or circumstances which have already given or will give rise to an adjustment to the Conversion Price or where more than one event which gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the opinion of the Issuer, a modification to the operation of the adjustment provisions is required to give the intended result, such modification shall be made to the operation of the adjustment provisions as may be advised by a Financial Adviser to be in its reasonable opinion appropriate to give the intended result and provided further that, for the avoidance of doubt, the issue of Common Shares pursuant to the exercise of Conversion Rights shall not result in an adjustment to the Conversion Price.

For the purpose of any calculation of the consideration receivable or price pursuant to sub-paragraphs (iv), (vi), (vii) and (viii), the following provisions shall apply:

(a) the aggregate consideration receivable or price for Common Shares issued for cash shall be the amount of such cash;

(b) (x) the aggregate consideration receivable or price for Common Shares to be issued or otherwise made available upon the conversion or exchange of any Securities shall be deemed to be the consideration or price received or receivable for any such Securities and (y) the aggregate consideration receivable or price for Common Shares to be issued or otherwise made available upon the exercise of rights of subscription attached to any Securities or upon the exercise of any options, warrants or rights shall be deemed to be that part (which may be the whole) of the consideration or price received or receivable for such Securities or, as the case may be, for such options, warrants or rights which are

71

attributed by the Issuer to such rights of subscription or, as the case may be, such options, warrants or rights or, if no part of such consideration or price is so attributed, the Fair Market Value of such rights of subscription or, as the case may be, such options, warrants or rights as at the date of the first public announcement of the terms of issue of such Securities or, as the case may be, such options, warrants or rights, plus in the case of each of (x) and (y) above, the additional minimum consideration receivable or price (if any) upon the conversion or exchange of such Securities, or upon the exercise of such rights of subscription attached thereto or, as the case may be, upon exercise of such options, warrants or rights and (z) the consideration receivable or price per Common Share upon the conversion or exchange of, or upon the exercise of such rights of subscription attached to, such Securities or, as the case may be, upon the exercise of such options, warrants or rights shall be the aggregate consideration or price referred to in (x) or (y) above (as the case may be) divided by the number of Common Shares to be issued upon such conversion or exchange or exercise at the initial conversion, exchange or subscription price or rate;

(c) if the consideration or price determined pursuant to (a) or (b) above (or any component thereof) shall be expressed in a currency other than the Relevant Currency it shall be converted into the Relevant Currency at the Prevailing Rate on the date of the first public announcement of the terms of issue of such Common Shares or, as the case may be, Securities; and

(d) in determining consideration or price pursuant to the above, no deduction shall be made for any commissions or fees (howsoever described) or any expenses paid or incurred for any underwriting, placing or management of the issue of the relevant Common Shares or Securities or options, warrants or rights, or otherwise in connection therewith.

(c) Retroactive Adjustments

If the Conversion Date in relation to the conversion of any Bond shall be after the record date or other due date for the establishment of entitlement for any consolidation, reclassification or sub-division as is mentioned in Condition 5(b)(i), or any such issue, distribution, grant or offer (as the case may be) as is mentioned in Condition 5(b)(ii), (iii), (iv), (v) or (ix), or after any such issue or grant as is mentioned in Condition 5(b)(vi) and (vii) but falls before the relevant adjustment becomes effective under Condition 5(b) (such adjustment, a "Retroactive Adjustment"), then the Issuer shall (conditional upon the relevant adjustment becoming effective) procure that there shall be issued or transferred and delivered to the converting Bondholder, in accordance with the instructions contained in the Conversion Notice, such additional number of Common Shares (if any) (the "Additional Common Shares") as, together with the Common Shares issued or to be transferred and delivered on conversion of the relevant Bond (together with any fraction of a Common Share not so issued), is equal to the number of Common Shares which would have been required to be issued or delivered on conversion of such Bond if the relevant adjustment (more particularly referred to in the said provisions of Condition 5(b)) to the Conversion Price had in fact been made and become effective immediately prior to the relevant Conversion Date.

(d) Decision of a Financial Adviser

If any doubt shall arise as to whether an adjustment falls to be made to the Conversion Price or as to the appropriate adjustment to the Conversion Price, the Issuer shall consult a Financial Adviser and the written opinion of such Financial Adviser in respect of such adjustment to the Conversion Price shall be conclusive and binding on all parties, save in the case of manifest error.

(e) Share Option Plans

No adjustment will be made to the Conversion Price where Common Shares or other Securities (including rights, warrants and options) are issued, transferred, offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of, consultants, employees or former employees, officers or former officers, directors or former directors (including directors holding or formerly holding executive office or the personal service company of any such person), in each case, of the Issuer or any of its Subsidiaries or any associated company or to trustees to be held for the benefit of

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any such person, in any such case pursuant to any security based compensation arrangement (as defined under the rules of the Toronto Stock Exchange) that has been approved by Shareholders in a general and/or special meeting or as may otherwise be permitted by the rules of the Toronto Stock Exchange.

(f) Rounding Down and Notice of Adjustment to the Conversion Price

On any adjustment, the resultant Conversion Price, if not an integral multiple of U.S.$0.01, shall be rounded down to the nearest whole multiple of U.S.$0.01. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than one per cent. of the Conversion Price then in effect. Any adjustment not required to be made, and/or any amount by which the Conversion Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment, and such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time.

Notice of any adjustments to the Conversion Price shall be given by the Issuer to Bondholders in accordance with Condition 16 and the Trustee promptly after the determination thereof.

(g) Change of Control/Licence Event

No later than 15 calendar days following the first public announcement of an Offer or a Plan and within 15 days of the date of such Offer or Plan resulting in a Change of Control or, as the case may be, no later than 15 calendar days following the occurrence of a Licence Event, the Issuer shall give notice thereof to the Trustee and to the Bondholders in accordance with Condition 16 (a "Relevant Notice"). Such notice shall contain a statement informing Bondholders of their entitlement to exercise their Conversion Rights as provided in these Conditions and their entitlement to accept a Bond Repurchase Offer (following a Change of Control or Licence Event, as the case may be) from the Issuer as provided in Condition 6(e).

The Relevant Notice shall also specify:

(i) the nature of the proposed Change of Control (or actual Change of Control, as the case may be) or the nature of the Licence Event;

(ii) in the case of a Change of Control, the Conversion Price immediately prior to the occurrence of the Change of Control and the Change of Control Conversion Price (on the basis of such Conversion Price) applicable pursuant to Condition 5(b)(x) during the Change of Control Period and, if different, the Conversion Price for the purposes of determining the Repurchase Price pursuant to Condition 6(e);

(iii) the closing price of the Common Shares as derived from the Relevant Stock Exchange as at the latest practicable date prior to the publication of such notice;

(iv) in the case of a Relevant Notice given within 15 days of such Offer or Plan resulting in a Change of Control or given in respect of a Licence Event, the terms of the Bond Repurchase Offer, including the Repurchase Date and the last day of the Change of Control Period or Licence Event Period, as the case may be; and

(v) such other information relating to the proposed Change of Control (or actual Change of Control, as the case may be) or Licence Event as the Trustee may reasonably require.

The Trustee shall not be required to monitor or take any steps to ascertain whether a Change of Control or Licence Event or any event which could lead to a Change of Control or Licence Event has occurred or may occur and will not be responsible to Bondholders or any other person for any loss arising from any failure by it to do so.

(h) Procedure for exercise of Conversion Rights

The Conversion Right may be exercised by a Bondholder during the Conversion Period by delivering the relevant Bond to the specified office of any Paying and Conversion Agent, during its usual business hours, accompanied by a duly completed and signed notice of conversion (a "Conversion Notice") in the form (for the time being current) obtainable from any Paying and Conversion Agent. Conversion

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Rights shall be exercised subject in each case to any applicable fiscal or other laws or regulations applicable in the jurisdiction in which the specified office of the Paying and Conversion Agent to whom the relevant Conversion Notice is delivered is located. If such delivery is made after the end of normal business hours or on a day which is not a business day in the place of the specified office of the relevant Paying and Conversion Agent, such delivery shall be deemed for all purposes of these Conditions to have been made on the next following such business day.

A Conversion Notice, once delivered, shall be irrevocable.

The conversion date in respect of a Bond (the "Conversion Date") shall be the second Toronto business day following the later of the date of the delivery of the Bonds and the Conversion Notice and, if applicable, the making of any payment to be made as provided below.

Conversion Rights may only be exercised in respect of the whole of the principal amount of a Bond. Each Bond should be delivered upon exercise of Conversion Rights together with all Coupons relating to it which mature on or after the relevant Conversion Date, failing which the relevant holder will be required to pay the full amount of any such missing Coupon. Each amount so paid will be repaid in the manner specified in Condition 7 against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant missing Coupon at any time after the relevant Conversion Date and before the expiry of 10 years after the Relevant Date in respect of the relevant Bond (whether or not a Coupon would otherwise have become void pursuant to Condition 11), but not thereafter.

A Bondholder exercising a Conversion Right shall be responsible for paying directly to the relevant authorities any taxes and capital, stamp, issue and registration and transfer taxes and duties arising on conversion (other than any taxes or capital, stamp, issue and registration and transfer taxes and duties payable in Canada (or any province or territory thereof) in respect of the allotment and issue of any Common Shares on such conversion or in respect of the delivery of any Common Shares on such conversion (including any Additional Common Shares), which shall be paid by the Issuer) and such Bondholder shall be responsible for paying all, if any, taxes arising by reference to any disposal or deemed disposal of a Bond or interest therein in connection with such conversion. For the avoidance of doubt, the Trustee shall not be responsible for determining whether such taxes or capital, stamp, issue and registration and transfer taxes and duties are payable or the amount thereof and it shall not be responsible or liable for any failure by the Issuer to pay such taxes or capital, stamp, issue and registration and transfer taxes and duties.

Common Shares to be issued on exercise of Conversion Rights will be issued, at the option of the Bondholder exercising its Conversion Right as specified in the Conversion Notice, either:

(a) in "book-entry" form eligible for deposit at CDS Clearing and Depositary Services Inc. ("CDS") of 85 Richmond Street West, Toronto, Ontario, M5H 2C9, Canada (or any successor licensed clearance and settlement facility applicable to the Common Shares); or

(b) in certificated form registered in the name of or as directed by the Bondholder in the relevant Conversion Notice;

and in the case of (a) the Common Shares will be credited to the CDS participant account specified in the Conversion Notice or if a Bondholder does not specify a valid CDS Participant account in the Conversion Notice, a certificate for the Common Shares will be mailed to the relevant Bondholder (at the risk of such Bondholder) to the address specified in the Conversion Notice, or in the case of (b) the certificate for the Common Shares will be mailed to the relevant Bondholder (at the risk of such Bondholder) to the address specified in the Conversion Notice, in each case by a date which is generally expected to be not later than three Toronto business days after the relevant Conversion Date. If at any time the Relevant Exchange is not the Toronto Stock Exchange, Common Shares to be issued on conversion of the Bonds (including any Additional Common Shares) will be delivered in such manner as is customary for shares traded on the Relevant Stock Exchange, or if not admitted or listed for trading on a stock exchange at such time, may be delivered in registered, certificated form.

(i) Common Shares

(i) Common Shares issued or transferred and delivered upon conversion of the Bonds will be fully paid and will in all respects rank pari passu with the fully paid Common Shares in issue on the relevant Conversion Date or, in the case of Additional Common

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Shares, on the relevant Reference Date, except in any such case for any right excluded by mandatory provisions of applicable law and except that such Common Shares or, as the case may be, Additional Common Shares will not rank for (or, as the case may be, the relevant holder shall not be entitled to receive) any rights, distributions or payments the record date or other due date for the establishment of entitlement for which falls prior to the relevant Conversion Date or, as the case may be, the relevant Reference Date.

(ii) Save as provided in Condition 5(j), no payment or adjustment shall be made on conversion of the Bonds pursuant to Condition 5(a) for any interest which otherwise would have accrued on the relevant Bonds since the last Interest Payment Date preceding the Conversion Date relating to such Bonds (or, if such Conversion Date falls before the first Interest Payment Date, since the Closing Date).

(j) Interest on Conversion

If any notice requiring the redemption of any Bonds is given pursuant to Condition 6(b) or 6(c) on or after the fifteenth calendar day prior to a record date in respect of any Dividend or distribution payable in respect of the Common Shares which has occurred since the last Interest Payment Date (or in the case of the first Interest Period, since the Closing Date) and where such notice specifies a date for redemption falling on or prior to the date which is 14 days after the Interest Payment Date next following such record date, interest shall accrue at the applicable Interest Rate on Bonds in respect of which Conversion Rights shall have been exercised pursuant to Condition 5(a) and in respect of which the Conversion Date falls after such record date and on or prior to the Interest Payment Date next following such record date in respect of such Dividend or distribution, in each case from and including the preceding Interest Payment Date (or, if such Conversion Date falls before the first Interest Payment Date, from the Closing Date) to but excluding such Conversion Date. The Issuer shall pay any such interest by not later than 14 days after the relevant Conversion Date by transfer to a U.S. dollar account with a bank in London in accordance with instructions given by the relevant Bondholder in the relevant Conversion Notice.

(k) Consolidation, Amalgamation or Merger

Without prejudice to any other provision of these Conditions, in the case of any consolidation, amalgamation or merger of the Issuer with any other corporation (other than a consolidation, amalgamation or merger in which the Issuer is the continuing entity), or any sale or transfer of all, or substantially all, of the assets of the Issuer (any such event, a "Relevant Event"), the Issuer will forthwith notify the Trustee and the Bondholders of such event in accordance with Condition 16 and will cause the corporation resulting from such consolidation, amalgamation or merger of the corporation which shall have acquired such assets, as the case may be, to take such action (if any) as may, in the opinion of the Trustee, be required, including, if so required by the Trustee, executing a trust deed supplemental to the Trust Deed to ensure that the holder of each Bond then outstanding will have the right (during the period in which such Bond shall be convertible) to convert such Bond, on such terms as a Financial Adviser shall determine to be fair and reasonable (taking into account, if such is the case, that the Conversion Price may not be able to be fully adjusted in connection with the Relevant Event pursuant to these Conditions as a result of applicable laws and regulations from time to time (if any), including the rules of the Toronto Stock Exchange), into the class and the amount of shares and other securities and property receivable upon such consolidation, amalgamation, merger, sale or transfer by a holder of the number of Common Shares which would have become liable to be issued upon conversion of such Bond immediately prior to such consolidation, amalgamation, merger, sale or transfer provided, however, that the consideration into which the Bonds will be convertible will be limited to common shares or other prescribed securities (as defined by Regulation 6208 to the Income Tax Act (Canada)) of the resulting corporation as specified by the board of directors of the Issuer. The Issuer will take all steps necessary to ensure that, on a Relevant Event, the Bondholders will receive the aggregate number and value of shares, other securities or other property to which they are entitled as a result of the Relevant Event and that such shares or securities will be prescribed securities as defined in Regulation 6208 of the Income Tax Act (Canada), which includes shares or securities not redeemable by the holder thereof within 5 years from the issue date of the Bonds. Such supplemental trust deed will provide for adjustments which will be as nearly equivalent as may be practicable to the adjustments provided for in this Condition 5. The above provisions of this paragraph

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(k) will apply, mutatis mutandis, to any subsequent consolidations, amalgamations, mergers, sales or transfers.

(l) Purchase or Redemption of Common Shares

The Issuer may exercise such rights as it may from time to time enjoy to purchase or redeem or buy back its own shares (including Common Shares) or any depositary or other receipts or certificates representing the same without the consent of the Bondholders.

(m) No duty to Monitor

The Trustee shall not be under any duty to monitor whether any event or circumstance has happened or exists which may require an adjustment to be made to the Conversion Price and will not be responsible or liable to the Bondholders for any loss arising from any failure by it to do so.

(n) Minimum Conversion Price

Without prejudice to Condition 6(e), the Conversion Price shall not be reduced below the level permitted by applicable laws and regulations from time to time (if any), including the rules of the Toronto Stock Exchange (the "Minimum Conversion Price"), and the Issuer undertakes not to take and agrees to procure that no Subsidiary shall take or approve or consent to any action that would or could reasonably be expected to give rise to an adjustment of the Conversion Price pursuant to Condition 5(b)(i) to (ix) or (xi) to below the Minimum Conversion Price (unless, where applicable, exempted or otherwise permitted by the Toronto Stock Exchange or under the rules of the Toronto Stock Exchange, and so that such adjustment may be made in full pursuant to these Conditions).

The Issuer undertakes to take reasonable steps to obtain any exemption, permission or consent to make any adjustment to the Conversion Price pursuant to these Conditions.

As at the Closing Date, the Issuer was subject to the rules of the Toronto Stock Exchange and pursuant to these rules the initial Minimum Conversion Price is C$41.24, being the volume weighted average price of the Common Shares for the five dealing days prior to 27 May 2009 (the date on which the Issuer notified the Toronto Stock Exchange of the issue of the Bonds), less a discount of 15 per cent.. On 27 May 2009, the U.S. dollar equivalent of the Minimum Conversion price was U.S.$36.84.

(o) Legend on Conversion

Unless the distribution of the Common Shares issuable upon the exercise of Conversion Rights has been, prior to such exercise of Conversion Rights, qualified by a prospectus in accordance with Canadian securities laws (the "Qualification Event"), where Conversion Rights are exercised prior to 19 October 2009, then the certificate that is issued representing the Common Shares will bear the following legend:

"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE 19 OCTOBER 2009"

If the holder of the Bond or any beneficial purchaser wishes to resell in any province or territory in Canada any Common Shares acquired on exercise of Conversion Rights at any time prior to 19 October 2009, they must contact the Issuer, unless such Common Shares were qualified pursuant to a Qualification Event.

6. Redemption and Purchase

(a) Final Redemption

Unless previously purchased and cancelled, redeemed or converted as herein provided, the Bonds will be redeemed at their principal amount on the Final Maturity Date. The Bonds may only be redeemed at the option of the Issuer prior to the Final Maturity Date in accordance with Condition 6(b) or 6(c).

(b) Redemption at the Option of the Issuer

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On giving not less than 30 nor more than 60 days’ notice (an "Optional Redemption Notice") to the Bondholders in accordance with Condition 16, the Issuer may redeem all but not some only of the Bonds on the date (the "Optional Redemption Date") specified in the Optional Redemption Notice at their principal amount together with accrued interest up to but excluding the Optional Redemption Date:

(i) at any time on or after 3 July 2012, if the Parity Value on each of at least 20 dealing days in any period of 30 consecutive dealing days ending not earlier than 15 days prior to the giving of the Optional Redemption Notice, shall have exceeded 140 per cent. of the principal amount of a Bond on each relevant dealing day; or

(ii) at any time if prior to the date the relevant Optional Redemption Notice is given, Conversion Rights shall have been exercised and/or purchases (and correspondingcancellations) and/or redemptions effected in respect of 85 per cent. or more in principal amount of the Bonds originally issued (which shall for this purpose include any Further Bonds).

(c) Redemption for Taxation Reasons

At any time the Issuer may, having given not less than 30 nor more than 60 days’ notice (a "Tax Redemption Notice") to the Bondholders (which notice shall be irrevocable) redeem (subject to the second following paragraph) all, and not some only, of the Bonds on the date (the "Tax Redemption Date") specified in the Tax Redemption Notice at their principal amount, together with accrued but unpaid interest to but excluding such date, if (i) the Issuer certifies to the Trustee immediately prior to the giving of such notice that the Issuer has or will become obliged to pay additional amounts in respect of payments on Bonds pursuant to Condition 8 as a result of any change in, or amendment to, the laws or regulations of Canada or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 27 May 2009, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Bonds then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee (a) a certificate signed by two Directors of the Issuer stating that the obligation referred to in (i) above cannot be avoided by the Issuer taking reasonable measures available to it and (b) an opinion of independent legal or tax advisers of recognised standing in Canada or internationally to the effect that such change or amendment has occurred and that the Issuer has or will be obliged to pay such additional amounts as a result thereof (irrespective of whether such amendment or change is then effective) and the Trustee shall accept without any liability for so doing, and subject to being indemnified to its satisfaction, such certificate and opinion as sufficient evidence of the matters set out in (i) and (ii) above which shall be conclusive and binding on the Bondholders.

On the Tax Redemption Date, the Issuer shall (subject to the next following paragraph) redeem the Bonds at their principal amount, together with accrued interest to but excluding such date.

If the Issuer gives a notice of redemption pursuant to this Condition 6(c), each Bondholder will have the right to elect that the holder’s Bond(s) shall not be redeemed and that the provisions of Condition 8 shall not apply in respect of any payment of interest to be made in respect of such Bond(s) which falls due after the relevant Tax Redemption Date whereupon no additional amounts shall be payable in respect thereof pursuant to Condition 8 and payment of all amounts of interest in respect of such Bonds shall be made subject to the deduction or withholding of the taxation required to be withheld or deducted by Canada or any political subdivision or any authority thereof or therein having power to tax. To exercise such right, the holder of the relevant Bond must complete, sign and deposit at the specified office of any Paying and Conversion Agent a duly completed and signed notice of election, in the form for the time being current, obtainable from the specified office of any Paying and Conversion Agent together with the relevant Bonds on or before the day falling 15 days prior to the Tax Redemption Date.

(d) Optional and Tax Redemption Notices

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Any Optional Redemption Notice or Tax Redemption Notice shall be irrevocable. Any such notice shall specify (i) the Optional Redemption Date or, as the case may be, the Tax Redemption Date, (ii) the Conversion Price, the aggregate principal amount of the Bonds outstanding and the closing price of the Common Shares as derived from the Relevant Stock Exchange, in each case as at the latest practicable date prior to the publication of the Optional Redemption Notice or, as the case may be, the Tax Redemption Notice and (iii) the last day on which Conversion Rights may be exercised by Bondholders.

(e) Bond Repurchase Offer

Following the occurrence of a Change of Control or a Licence Event, the Issuer shall in the Relevant Notice make an offer (a "Bond Repurchase Offer") to the Bondholders to purchase all of the Bonds then outstanding at the Repurchase Price together with accrued interest to but excluding the Repurchase Date.

To accept such Bond Repurchase Offer, the holder of a Bond must deliver such Bond, together with all Coupons relating to it which mature after the Repurchase Date and a duly competed and signed notice of acceptance, in the form for the time being current, obtainable from the specified office of the Principal Paying and Conversion Agent (a "Repurchase Acceptance Notice") at any time in the Change of Control Period or, as the case may be, the Licence Event Period. The "Repurchase Date" shall be the 30th calendar day after the expiry of the Change of Control Period or, as the case may be, the Licence Event Period.

Payment in respect of any such Bond shall be made by transfer to a U.S. dollar account with a bank in London specified by the relevant Bondholder in the Repurchase Acceptance Notice.

A Repurchase Acceptance Notice, once delivered, shall be irrevocable and the Issuer shall redeem all Bonds the subject of the Repurchase Acceptance Notices delivered as aforesaid on the Repurchase Date.

"Licence Event Period" means the period commencing on the occurrence of a Licence Event and ending 60 calendar days following the Licence Event or, if later, 60 calendar days following the date on which the Licence Event Notice is given.

"Repurchase Price" means, in respect of a Bond:

(i) if the Conversion Price is not able to be fully adjusted pursuant to Condition 5(b)(x) in relation to a Change of Control as a result of applicable laws and regulations from time to time (if any), including the rules of the Toronto Stock Exchange, the higher of:

(A) the principal amount of such Bond; and

(B) the amount (the "adjusted principal amount") determined in accordance with the following formula:

VWAPSN

n NAPA ××

== ∑

1

1

where:

APA is the adjusted principal amount.

N is 15, being the number of dealing days in the Repurchase Price Calculation Period (or such lesser number of dealing days as results from the proviso in the definition of Repurchase Price Calculation Period).

VWAP is the Volume Weighted Average Price of a Common Share on the nth dealing day in the Repurchase Price Calculation Period, translated into U.S. dollars at the Prevailing Rate on such dealing day.

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S is the number of Common Shares (rounded down, if necessary, to the nearest whole number) determined by dividing the principal amount of such Bond by the Conversion Price in effect on the last day of the Change of Control Period, with the Conversion Price for this purpose being determined in accordance with the provisions of Condition 5(b)(x) notwithstanding that this would otherwise be at a level below that permitted by applicable laws and regulations (if any) and/or the rules of the TSX for the purposes of determining the number of Common Shares deliverable upon exercise of Conversion Rights pursuant to Condition 5(a); or

(ii) if the Conversion Price is able to be fully adjusted pursuant to Condition 5(b)(x) in relation to the Change of Control or in the case of a Licence Event, the principal amount of such Bond.

"Repurchase Price Calculation Period" means the period of 15 consecutive dealing days commencing on the dealing day following the date which falls five days after the first day of the Change of Control Period provided that, in the event that the Common Shares are delisted from the Relevant Exchange as a result of such Change of Control prior to the expiration of such 15 dealing day period, the Repurchase Price Calculation Period shall end on the dealing day falling immediately prior to the date of such delisting. In the event that the Repurchase Price Calculation Period comprises less than five dealing days as a result of the operation of these Conditions, the Repurchase Price shall be determined by a Financial Adviser.

(f) Purchase

Subject to the requirements (if any) of any stock exchange on which the Bonds may be admitted to listing and trading at the relevant time and subject to compliance with applicable laws and regulations, the Issuer or any Subsidiary of the Issuer may at any time purchase Bonds in the open market or otherwise at any price (provided that all unmatured Coupons relating to them are purchased therewith or attached thereto).

(g) Cancellation

All Bonds which are redeemed or in respect of which Conversion Rights are exercised will be cancelled (together with all relative unmatured Coupons attached to the Bonds or surrendered with the Bonds) and may not be reissued or resold. Bonds purchased by the Issuer or any of its Subsidiaries shall be surrendered to the Principal Paying and Conversion Agent for cancellation and may not be reissued or re-sold.

(h) Multiple Notices

If more than one notice of redemption is given pursuant to this Condition 6, the first of such notices to be given shall prevail, save that a notice of acceptance of a Bond Repurchase Offer given by a Bondholder pursuant to Condition 6(e) shall prevail over any other notice of redemption given pursuant to this Condition 6, whether given before, after or at the same time as any notice of acceptance of a Bond Repurchase Offer under Condition 6(e), and the Issuer shall make a Bond Repurchase Offer notwithstanding that it may have given a notice of redemption pursuant to Condition 6(b) or (c) and in such case, the Optional Redemption Date or Tax Redemption Date shall be postponed to the 14th calendar day after the expiry of the Change of Control Period or, as the case may be, the Licence Event Period.

7. Payments

(a) Principal

Payment of principal in respect of the Bonds and accrued interest payable on a redemption of the Bonds other than on an Interest Payment Date will be made against presentation and surrender (or, in the case of partial payment only, endorsement) of the Bond at the specified office of any Paying and Conversion Agent.

(b) Interest and other Amounts

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(i) Payments of interest due on an Interest Payment Date will be made against presentation and surrender (or, in the case of partial payment only, endorsement) of the relevant Coupons at the specified office of any Paying and Conversion Agent.

(ii) Payments of all amounts other than as provided in Condition 7(a) and (b)(i) will be made as provided in these Conditions.

(c) Coupons

Each Bond should be presented for payment together with all relative unmatured Coupons, failing which the full amount of any relative missing unmatured Coupon (or, in the case of payment not being made in full, the proportion of the full amount of the missing unmatured Coupon which the amount so paid bears to the total amount due) will be deducted from the amount due for payment. Each amount so deducted will be paid in the manner mentioned above against presentation and surrender (or, in the case of part payment only, endorsement) of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date in respect of the relevant Bond (whether or not the Coupon would otherwise have become void pursuant to Condition 11) or, if later, five years after the date on which the Coupon would have become void pursuant to Condition 11, but not thereafter.

(d) Payments

Each payment in respect of the Bonds pursuant to Condition 7(a) and (b)(i) will be made by transfer to a U.S. dollar account with a bank in London.

(e) Payments subject to fiscal laws

All payments in respect of the Bonds are subject in all cases to any applicable fiscal or other laws and regulations, but without prejudice to Condition 8.

(f) Presentation Date

A holder shall be entitled to present a Bond or Coupon for payment only on a Presentation Date and shall not be entitled to any further interest or other payment if the due date for payment is not a Presentation Date or if the relevant Bond or Coupon is presented for payment after the due date.

(g) Paying and Conversion Agents, etc.

The initial Paying and Conversion Agents and their initial specified offices are listed below. The Issuer reserves the right under the Agency Agreement at any time, with the prior written approval of the Trustee, to vary or terminate the appointment of any Paying and Conversion Agent and appoint additional or other Paying and Conversion Agents, provided that it will (i) maintain a Principal Paying and Conversion Agent, (ii) maintain Paying and Conversion Agents having specified offices in at least two major European cities, one of which shall be London and (iii) maintain a Paying and ConversionAgent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any other European Union Directive implementing the conclusions of the ECOFIN council meeting of 26-27 November 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive. Notice of any change in the Paying and Conversion Agents or their specified offices will promptly be given by the Issuer to the Bondholders in accordance with Condition 16.

(h) Fractions

When making payments to Bondholders, if the relevant payment is not of an amount which is a whole multiple of the smallest unit of the relevant currency in which such payment is to be made, such payment will be rounded down to the nearest unit.

(i) No Charges

None of the Paying and Conversion Agents shall make or impose on a Bondholder any charge or commission in relation to any payment or conversion in respect of the Bonds.

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8. Taxation

All payments made by on or behalf the Issuer in respect of the Bonds and Coupons will be made without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Canada or any political subdivision or any authority thereof or therein having power to tax, unless deduction or withholding of such taxes, duties, assessments or governmental charges is required to be made by law.

If any such withholding or deduction is required to be made, the Issuer will pay such additional amounts as will result in the receipt by the Bondholders of the amounts which would otherwise have been receivable had no such withholding or deduction been required, except that no such additional amount shall be payable in respect of any Bond or Coupon:

(a) to a holder (or to a third party on behalf of a holder) who is subject to such taxes, duties, assessments or governmental charges in respect of such Bond or Coupon by reason of the holder having some connection with Canada otherwise than merely by holding the Bond or Coupon; or

(b) (in the case of a payment on redemption) if the Bond or Coupon is surrendered more than 30 days after the Relevant Date except to the extent that the holder would have been entitled to such additional amount on surrendering the relevant Bond or Coupon for payment on the last day of the period of 30 days following the Relevant Date; or

(c) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of savings income or any law (whether or not of a Member State of the European Union) implementing or complying with, or introduced in order to conform to, such Directive; or

(d) presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Bond or Coupon to another Paying and Conversion Agent.

References in these Conditions and the Trust Deed to principal, Repurchase Price and/or interest shall be deemed also to refer to any additional amounts which may be payable under this Condition or any undertaking or covenant given in addition thereto or in substitution therefor pursuant to the Trust Deed.

This Condition 8 shall not apply in respect of payments of interest on any Bonds which are the subject of an election by the relevant Bondholder pursuant to Condition 6(c).

9. Events of Default

The Trustee at its discretion may, and if so requested in writing by the holders of at least one-quarter in principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution of the Bondholders shall (subject in each case to being indemnified and/or secured and/or prefunded to its satisfaction and provided that in the case of paragraphs (b) and (e) and paragraph (k) insofar as it relates to an event analogous to the event referred to in paragraph (e) (in each case, in relation to both the Issuer and a Principal Subsidiary) and, in relation to a Principal Subsidiary only, paragraphs (f), (g), (h), (j) and (k), the Trustee shall have certified to the Issuer that in its opinion such event is materially prejudicial to the interests of the Bondholders), give notice to the Issuer that the Bonds are, and they shall accordingly thereby become, due and repayable on the date such notice is given at their principal amount together with accrued interest (if any) to the date of payment if any of the following events (each an "Event of Default") shall have occurred:

(a) default is made and continues for more than 15 days in the payment on the due date of any amount payable in respect of any of the Bonds; or

(b) the Issuer does not perform or comply with any one or more of its other obligations under the Bonds or the Trust Deed (including a failure to make a Bond Repurchase Offer) and (unless inthe opinion of the Trustee, the default is incapable of remedy) is not remedied within 30 days (or such longer period as the Trustee may permit) after the Issuer shall have received from the

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Trustee written notice specifying such default, stating that the notice is a "notice of default" under the Bonds requiring such default to be remedied; or

(c)

(i) any other present or future indebtedness for borrowed money of the Issuer or any Principal Subsidiary of the Issuer becomes due and payable prior to its stated maturity by reason of an event of default (however described); or

(ii) any such indebtedness is not paid when due or, as the case may be, within any originally applicable grace period; or

(iii) the Issuer or any Principal Subsidiary of the Issuer fails to pay when due or within any originally applicable grace period, as the case may be, any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness for borrowed money,

provided that the aggregate amount of the indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in this paragraph (c) has or have occurred and is continuing equals or exceeds U.S.$25,000,000 (or its equivalent in other currencies); or

(d) a distress, attachment, execution or other legal process is levied or enforced on or against all or, in the opinion of the Trustee, any substantial part of the property, assets or revenues of the Issuer or any Principal Subsidiary of the Issuer which is not discharged, removed, stayed or paid within 30 days; or

(e) any mortgage, charge, pledge, lien or other encumbrance or security interest, present or future, created or assumed by the Issuer or any Principal Subsidiary of the Issuer over all or, in the opinion of the Trustee, any material part of its property becomes enforceable and steps are taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, administrator or other similar person) unless such enforcement is halted or such security discharged within 30 days; or

(f) the Issuer or any Principal Subsidiary of the Issuer (i) is or states that it is insolvent or unable to pay its debts, (ii) stops, suspends or threatens to stop or suspend payment of all or substantially all of its indebtedness, or (iii) makes or enters into a general assignment or an arrangement, reorganisation or composition or compromise with or for the benefit of its creditors (other than in connection with a reconstruction, amalgamation, reorganisation, merger or consolidation permitted under paragraph (i)); or

(g) an order is made by any competent court or an effective resolution is passed for the winding-up or dissolution of the Issuer or any Principal Subsidiary of the Issuer; or

(h) the Issuer or any Principal Subsidiary of the Issuer ceases or threatens to cease to carry on the whole or, in the opinion of the Trustee, substantially the whole of its business (other than in the case of a Principal Subsidiary, as a result of a bona fide disposal of such business or its assets) except for the purposes of and in connection with a Newco Scheme and except for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation (i) on terms approved by the Trustee or by an Extraordinary Resolution of the Bondholders, or (ii) in the case of a Principal Subsidiary of the Issuer, where that Principal Subsidiary is solvent or its undertaking and assets are transferred to or otherwise vested in the Issuer or another Subsidiary of the Issuer or a transferee which immediately upon, and in consideration for, such transfer becomes a Subsidiary of the Issuer; or

(i) a final judgment or judgments of a court or courts of competent jurisdiction for the payment of money aggregating in excess of U.S.$25,000,000 (or its equivalent in the relevant currency of payment) are rendered against the Issuer or any Principal Subsidiary of the Issuer and which judgments are not bonded, discharged or stayed pending appeal within 60 days (or such longer period as the Trustee may permit) after the Latest Date, or are not discharged within 60 days (or such longer period as the Trustee may permit) after the later of the expiration of such stay and the Latest Date; or

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(j) any step is taken by any person with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or, in the opinion of the Trustee, any substantial part of the assets of the Issuer or any Principal Subsidiary of the Issuer; or

(k) any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in paragraphs (d) to (h) above.

"Latest Date" means the latest of (i) the entry of such judgment; (ii) if such judgment specifies a date by which it must be satisfied, the date so specified; and (iii) the time allowed or specified under applicable law for such judgment to be bonded, discharged or stayed pending appeal.

10. Undertakings

Whilst any Conversion Right remains exercisable, the Issuer will, save with the approval of an Extraordinary Resolution or with the prior written approval of the Trustee where, in its opinion, it is not materially prejudicial to the interests of the Bondholders to give such approval:

(a) not modify the rights attaching to the Common Shares with respect to voting, dividends or liquidation nor issue any other class of equity share capital carrying any rights which are more favourable than the rights attaching to the Common Shares but so that nothing in this Condition 10(a) shall prevent:

(i) any consolidation, reclassification or subdivision of the Common Shares; or

(ii) any modification of such rights which is not, in the opinion of a Financial Adviser, materially prejudicial to the interests of the holders of the Bonds; or

(iii) any issue of equity share capital where the issue of such equity share capital results, or would, but for the provisions of Condition 5(f) relating to the carry forward of adjustments or the fact that the consideration per Common Share receivable therefore is at least 95 per cent. of the Current Market Price per Common Share, otherwise result, in an adjustment to the Conversion Price; or

(iv) any issue of equity share capital or modification of rights attaching to the Common Shares, where prior thereto the Issuer shall have instructed a Financial Adviser to determine what (if any) adjustments should be made to the Conversion Price as being fair and reasonable to take account thereof and such Financial Adviser shall have determined either that no adjustment is required or that an adjustment resulting in a decrease in the Conversion Price is required and, if so, the new Conversion Price as a result thereof and the basis upon which such adjustment is to be made and, in any such case, the date on which the adjustment shall take effect (and so that the adjustment shall be made and shall take effect accordingly);

(b) procure that no Securities (whether issued by the Issuer or any Subsidiary of the Issuer or procured by the Issuer or any Subsidiary of the Issuer to be issued or issued by any other person pursuant to any arrangement with the Issuer or any Subsidiary of the Issuer) issued without rights to convert into, or exchange or subscribe for, Common Shares shall subsequently be granted such rights exercisable at a consideration per Common Share which is less than 95 per cent. of the Current Market Price per Common Share at the close of business on the last dealing day preceding the date of the first public announcement of the proposed inclusion of such rights unless the same gives rise (or would, but for the provisions of Condition 5(f) relating to the carry forward of adjustments, give rise) to an adjustment to the Conversion Price and that at no time shall there be in issue Common Shares of differing nominal values, save where such Common Shares have the same economic rights;

(c) not reduce its issued share capital, except:

(i) pursuant to the terms of issue of the relevant share capital; or

(ii) by means of a purchase or redemption of share capital of the Issuer to the extent permitted by applicable law; or

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(iii) where the reduction does not involve any distribution of assets; or

(iv) pursuant to a Newco Scheme or a Spin-off; or

(v) where the reduction is permitted by applicable law and the Trustee is advised by a Financial Adviser or any other professional or other adviser the Trustee may deem appropriate to appoint, in each case, acting as an expert, that the interests of the Bondholders will not be materially prejudiced by such reduction; or

(vi) where the reduction is permitted by applicable law and results in (or would, but for the provisions of Condition 5(f) relating to the carry forward of adjustments, result in) an adjustment to the Conversion Price,

provided that, without prejudice to the other provisions of these Conditions, the Issuer may exercise such rights as they may from time to time enjoy pursuant to applicable law to purchase its Common Shares and any depositary or other receipts or certificates representing Common Shares without the consent of Bondholders;

(d) if any Offer is made or if any Plan is proposed, give notice of such Offer or Plan to the Bondholders at the same time as any notice thereof is sent to the Shareholders (or as soon as practicable thereafter) that provides that details concerning such Offer or Plan may be obtained from the specified offices of the Paying and Conversion Agents and, where such an Offer or Plan has been recommended by the board of directors of the Issuer, or where such an Offer has become or been declared unconditional in all respects or has become effective or such Plan has become effective, use all reasonable endeavours to procure that a like Offer or Plan is extended to the holders of any Common Shares issued during the period of the Offer or Plan arising out of the exercise of the Conversion Rights by the Bondholders;

(e) in the event of a Newco Scheme the Issuer shall take (or shall procure that there is taken) all necessary action to ensure that (subject to the satisfaction of the Trustee) immediately after completion of the Plan of Arrangement (i) such amendments are made to these Conditions and the Trust Deed as are necessary, in the opinion of the Trustee, to ensure that the Bonds may be converted into or exchanged for common shares in Newco mutatis mutandis in accordance with and subject to these Conditions and the Trust Deed and (ii) the common shares of Newco are:

(A) admitted to listing on the Relevant Stock Exchange; or

(B) admitted to listing on another regulated, regularly operating, recognised stock exchange or securities market;

(f) use all reasonable endeavours to ensure that the Common Shares issued upon exercise of Conversion Rights will, as soon as is practicable, be admitted to listing and to trading on the Relevant Stock Exchange and will be listed, quoted or dealt in, as soon as is practicable, on any other stock exchange or securities market on which the Common Shares may then be listed or quoted or dealt in;

(g) not change the jurisdiction in which it is domiciled or resident or to whose taxing authority it is subject generally unless it would not thereafter be required pursuant to then current laws and regulations to withhold or deduct for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of such jurisdiction or any political subdivision thereof or therein having power to tax in respect of any payment on or in respect of the Bonds;

(h) if there is a change in the Relevant Stock Exchange, notify the Trustee and the Bondholders in accordance with Condition 16 by not later than 7 days after such change;

(i) for so long as any Bond remains outstanding and subject to the occurrence of a Change of Control, use its reasonable endeavours to ensure that (i) its issued and outstanding Common Shares shall be admitted to listing and to trading on the Toronto Stock Exchange or such other regulated stock exchange located in a major financial centre on which the Common Shares are primarily listed and (ii) it remains a "reporting issuer" or the like for purposes of applicable

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Canadian securities laws of at least one province where it has that designation on the Closing Date; and

(j) issue, allot and deliver Common Shares on exercise of Conversion Rights in accordance with these Conditions and at all times keep allotted, reserved and available for issue free from pre-emptive or other similar rights out of its common share capital such number of fully paid and non-assessable Common Shares as would enable it to issue in full such number of Common Shares as are required to be issued by it upon exercise of Conversion Rights and all other rights of subscription and exchange for and conversion into Common Shares.

The Issuer has undertaken in the Trust Deed to deliver to the Trustee annually, and also at any time upon request by the Trustee, a certificate of two Authorised Signatories (as defined in the Trust Deed) or directors of the Issuer (i) as to there not having occurred an Event of Default or Potential Event of Default (each as defined in the Trust Deed) or Licence Event since the date of the last such certificate or if such event has occurred as to the details of such event and (ii) confirming which of its mineral extraction licences or similar licences, permits, permissions, certificates, consents, orders, approvals or authorisations are Relevant Licences. The Trustee will be entitled to rely on such certificate and shall not be obliged to independently monitor compliance by the Issuer with the undertakings set forth in this Condition 10, nor be liable to any person for not so doing.

11. Prescription

Claims against the Issuer for payment in respect of the Bonds or Coupons shall be prescribed and become void unless made within 10 years (in the case of principal or Repurchase Price) or five years (in the case of interest) from the appropriate Relevant Date in respect of such payment.

Claims in respect of any other amounts payable in respect of the Bonds shall be prescribed and become void unless made within 10 years following the due date for payment thereof.

12. Replacement of Bonds

If any Bond or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of any Paying and Conversion Agent subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence and indemnity as the Issuer may require. Mutilated or defaced Bonds or Coupons must be surrendered before replacements will be issued.

13. Meetings of Bondholders, Modification and Waiver, Substitution

(a) Meetings of Bondholders

The Trust Deed contains provisions for convening meetings of Bondholders to consider matters affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by the Issuer or the Trustee and shall be convened by the Issuer if requested in writing by Bondholders holding not less than 10 per cent. in principal amount of the Bonds for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution will be one or more persons holding or representing a clear majority in principal amount of the Bonds for the time being outstanding, or at any adjourned meeting one or more persons being or representing Bondholders whatever the principal amount of the Bonds so held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to modify the maturity of the Bonds (other than deferring the earliest date on which the Bonds may be redeemed pursuant to Condition 6(b)(i)) or the dates on which interest is payable in respect of the Bonds, (ii) to modify the circumstances in which the Issuer is entitled to redeem the Bonds pursuant to Condition 6(b) or (c); (iii) to reduce or cancel the principal amount, or interest on, the Bonds or to reduce the amount payable on redemption of the Bonds, (iii) to modify or cancel the Conversion Rights, other than pursuant to or as a result of any amendments to these Conditions and the Trust Deed made pursuant to and in accordance with the provisions of Condition 10(e) ("Newco Scheme Modification"), (v) to modify the provisions concerning the making of a Bond Repurchase Offer; (vi) to increase the Conversion Price other than in accordance with these Conditions, (vii) to change the currency of any payment in respect of the Bonds, (viii) to change the governing law

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of the Bonds, the Trust Deed or the Agency Agreement, or (ix) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass an Extraordinary Resolution, in which case the necessary quorum will be one or more persons holding or representing not less than two-thirds, or at any adjourned meeting not less than one-third, in principal amount of the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on all Bondholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders. An Extraordinary Resolution is a resolution in respect of which not less than three-quarters of the votes cast shall have been in favour at a meeting of Bondholders duly convened and held in accordance with the Trust Deed.

The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 90 per cent. of the aggregate principal amount of Bonds outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Bondholders duly convened and held.

No consent or approval of Bondholders shall be required in connection with any Newco Scheme Modification.

(b) Modification and Waiver

The Trustee may agree, without the consent of the Bondholders or the Couponholders, to (i) any modification of any of the provisions of the Trust Deed, any trust deed supplemental to the Trust Deed, the Agency Agreement, any agreement supplemental to the Agency Agreement, the Bonds, the Coupons or these Conditions which in the Trustee’s opinion is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of law, and (ii) any other modification to the Trust Deed, any trust deed supplemental to the Trust Deed, the Agency Agreement, any agreement supplemental to the Agency Agreement, the Bonds, the Coupons or these Conditions (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed, any trust deed supplemental to the Trust Deed, the Agency Agreement, any agreement supplemental to the Agency Agreement, the Bonds, the Coupons or these Conditions which is, in the opinion of the Trustee, not materially prejudicial to the interests of the Bondholders and the Couponholders. The Trustee may, without the consent of the Bondholders and the Couponholders, determine that any Event of Default or a Potential Event of Default should not be treated as such, provided that in the opinion of the Trustee, the interests of Bondholders and the Couponholders will not be materially prejudiced thereby. Any such modification, authorisation or waiver shall be binding on the Bondholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Bondholders promptly by the Issuer in accordance with Condition 16.

(c) Substitution

The Trustee may, without the consent of the Bondholders, agree with the Issuer to the substitution in place of the Issuer (or any previous substitute or substitutes under this Condition) as the principal debtor under the Bonds, the Coupons and the Trust Deed of any Subsidiary of the Issuer subject to (a) the Bonds being unconditionally and irrevocably guaranteed by the Issuer and (b) the Bonds continuing to be convertible or exchangeable into Common Shares mutatis mutandis as provided in these Conditions, with such amendments as the Trustee shall consider appropriate provided that, in any such case, (x) the Trustee is satisfied that the interests of the Bondholders will not be materially prejudiced by the substitution, and (y) certain other conditions set out in the Trust Deed being complied with. In the case of such a substitution the Trustee may agree, without the consent of the Bondholders, to a change of the law governing the Bonds and/or the Trust Deed provided that such change would not in the opinion of the Trustee be materially prejudicial to the interests of the Bondholders. Any such substitution shall be binding on the Bondholders and shall be notified promptly to the Bondholders in accordance with Condition 16.

(d) Entitlement of the Trustee

In connection with the exercise of their functions (including but not limited to those referred to in this Condition) the Trustee shall have regard to the interests of the Bondholders as a class and, in particular but without limitation, shall not have regard to the consequences of the exercise of their trusts, powers or discretions for individual Bondholders resulting from their being for any purpose domiciled or

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resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory, and the Trustee shall not be entitled to require, nor shall any Bondholder be entitled to claim, from the Issuer or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Bondholders.

14. Enforcement

The Trustee may at any time, at its discretion and without notice, take such proceedings against the Issuer as it may think fit to enforce the provisions of the Trust Deed, the Bonds and the Coupons, but it shall not be bound to take any such proceedings or any other action in relation to the Trust Deed, the Bonds or the Coupons unless (i) it shall have been so directed by an Extraordinary Resolution of the Bondholders or so requested in writing by the holders of at least one-quarter in principal amount of the Bonds then outstanding, and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction. No Bondholder or Couponholder shall be entitled to proceed directly against the Issuer unless the Trustee, having become bound so to proceed, fails so to do within a reasonable period and the failure shall be continuing.

15. The Trustee

The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including relieving it from taking proceedings unless indemnified and/or secured and/or prefunded to its satisfaction. The Trustee is entitled to enter into business transactions with the Issuer and any entity related to the Issuer without accounting for any profit. The Trustee may rely without liability to Bondholders on a report, confirmation, certificate, opinion or any advice of any, financial advisers, investment bank, legal advisers or other professional advisers, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise and such report, confirmation certificate, opinion or advice shall be conclusive and binding on the Issuer, the Trustee and the Bondholders in the absence of manifest error.

16. Notices

All notices regarding the Bonds will be valid if published in a leading daily newspaper having circulation in London (which is expected to be the Financial Times). The Issuer shall also ensure that all notices are duly published in a manner which complies with the rules and regulations of any stock exchange or other relevant authority on which the Bonds are for the time being listed. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once, on the date of such first publication or, if required to be published in more than one newspaper or in more than one manner, on the date of the first such publication in all the required newspapers or in each required manner. If publication as provided above is not practicable, notice will be given in such other manner, and shall be deemed to have been given on such date, as the Trustee may approve.

Couponholders will be deemed for all purposes to have notice of the contents of any notice given to Bondholders in accordance with this Condition.

17. Further Issues

The Issuer may from time to time without the consent of the Bondholders and the Couponholders create and issue further notes, bonds or debentures either having the same terms and conditions in all respects as the outstanding notes, bonds or debentures of any series (including the Bonds) or in all respects except for the first payment of interest on them and so that such further issue shall be consolidated and form a single series with the outstanding notes, bonds or debentures of any series (including the Bonds) or upon such terms as to interest, conversion, premium, redemption and otherwise as the Issuer may determine at the time of their issue. Any further notes, bonds or debentures consolidated and forming a single series with the outstanding notes, bonds or debentures of any series (including the Bonds) constituted by the Trust Deed or any deed supplemental to it shall, and any other notes, bonds or debentures may, with the consent of the Trustee, be constituted by a deed supplemental to the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Bondholders and the holders of notes, bonds or debentures of other series in certain circumstances where the Trustee so decides.

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18. Contracts (Rights of Third Parties) Act 1999

No person shall have any right to enforce any term or condition of the Bonds under the Contracts (Rights of Third Parties) Act 1999 (United Kingdom).

19. Governing Law and Jurisdiction

(a) Governing Law

The Trust Deed, the Agency Agreement, the Bonds and the Coupons, and any non-contractual obligations arising out of or in connection with them, are governed by, and shall be construed in accordance with, English law.

(b) Jurisdiction

The courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with the Trust Deed, the Bonds or the Coupons and accordingly any legal action or proceedings arising out of or in connection with the Trust Deed, the Bonds or the Coupons ("Proceedings") may be brought in such courts. The Issuer has in the Trust Deed irrevocably submitted to the jurisdiction of such courts and has waived any objection to Proceedings in such courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. This submission is made for the benefit of the Trustee and each of the Bondholders and Couponholders and shall not limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

(c) Agent for Service of Process

The Issuer has irrevocably appointed Ashurst LLP at its registered office for the time being, currently at Broadwalk House, 5 Appold Street, London EC2A 2HA, as its agent in England to receive service of process in any Proceedings in England. Nothing herein or in the Trust Deed shall affect the right to serve process in any other manner permitted by law.

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SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE IN GLOBAL FORM

The Temporary Global Bond and the Global Bond contain provisions which apply to the Bonds while they are in global form, some of which modify the effect of the terms and conditions of the Bonds set out in this document. The following is a summary of certain of those provisions. References to the Conditions are to a Condition of the relevant Bonds.

1. Exchange

The Temporary Global Bond is exchangeable in whole or in part (free of charge to the holder) for interests in the Global Bond on or after a date which is expected to be 29 July 2009 upon certification as to non-U.S. beneficial ownership in the form set out in the Temporary Global Bond. The Global Bond is exchangeable in whole but not in part (free of charge to the holder) for the Definitive Bonds described below (i) if the Global Bond is held on behalf of a clearing system and such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so, or (ii) if the Issuer would suffer a material disadvantage in respect of the Bonds as a result of a change in the laws or regulations (taxation or otherwise) of any jurisdiction in which the Issuer is for the time being incorporated which would not be suffered were the Bonds represented by such Global Bond in definitive form and a certificate to such effect signed by two Directors of the Issuer is delivered to the Trustee. Thereupon (in the case of (i) above) the holder may give notice to the Principal Paying and Conversion Agent, and (in the case of (ii) above) the Issuer may give notice to the Principal Paying and Conversion Agent and the Bondholders, of its intention to exchange the Global Bond for Definitive Bonds (as defined below) on or after the Exchange Date (as defined below) specified in the notice.

On or after the Exchange Date (as defined below) the holder of the Global Bond may (or, in the case of (ii) above, shall) surrender the Global Bond to or to the order of the Principal Paying and Conversion Agent. In exchange for the Global Bond the Issuer shall deliver, or procure the delivery of, an equal aggregate principal amount of duly executed and authenticated definitive Bonds (the "Definitive Bonds") (having attached to them all Coupons in respect of interest which has not already been paid on the Global Bond), security printed in accordance with applicable legal and stock exchange requirements substantially in the form set out in Schedule 1 to the Trust Deed. On exchange in full of the Global Bond, the Issuer will procure that it is cancelled.

"Exchange Date" means a day falling not less than 60 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying and Conversion Agent is located and, except in the case of exchange pursuant to (i) above, in the cities in which the relevant clearing system is located.

2. Payments

No person shall be entitled to receive any payment on the Temporary Global Bond unless exchange for the relevant interest in the Global Bond is improperly withheld or refused. Payments of principal and interest in respect of the Global Bond will be made against presentation for endorsement and, if no further payment falls to be made on it, surrender of the Global Bond to or to the order of the Principal Paying and Conversion Agent or such other Paying and Conversion Agent as shall have been notified to the Bondholders for this purpose. A record of each payment so made will be endorsed in the appropriate schedule to the Global Bond, which endorsement will be prima facie evidence that such payment has been made.

3. Notices

So long as the Bonds are represented by the Global Bond and the Global Bond is held on behalf of a clearing system approved by the Trustee, notices required to be given to Bondholders may be given by delivery to that clearing system rather then by publication as required by the Conditions provided that, so long as the Bonds are admitted to the Official List and admitted to trading on the Professional Securities Market, the notice requirements of the

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UKLA and the London Stock Exchange plc have been complied with. Any such notice shall be deemed to have been given to the Bondholders on the day following the day on which notice is delivered to such clearing system.

4. Prescription

Claims against the Issuer in respect of principal and interest on the Bonds represented by the Global Bond will become void unless it is presented for payment within a period of ten years (in the case of principal) and five years (in the case of interest) from the appropriate Relevant Date (as defined in the Conditions).

5. Meetings

The holder of the Global Bond will be treated at any meeting of Bondholders as having one vote in respect of each U.S.$100,000 in principal amount of Bonds.

6. Purchase and Cancellation

Cancellation of any Bond represented by the Global Bond required by the Conditions to be cancelled following its purchase will be effected by reduction in the principal amount of the Global Bond.

7. Accountholders

For so long as any Bonds are represented by the Global Bond and the Global Bond is held by or on behalf of the common depositary for Euroclear and/or Clearstream, Luxembourg, each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of Bonds (each an "Accountholder") (in which regard any book entry certificate or other document issued by the clearing system as to the principal amount of Bonds standing to the account of any person shall be conclusive and binding for all purposes) shall be treated as the holder of such principal amount of such Bonds for all purposes (including for the purposes of any quorum requirements of, or the right to demand a poll at, meetings of the Bondholders) other than with respect to the payment of principal and interest on such principal amount of such Bonds, the right to which shall be vested, as against the Issuer and the Trustee, solely in the bearer of the Global Bond in accordance with and subject to its terms and the Trust Deed. Each Accountholder must look solely to its relevant clearing system for its share of each payment made to the bearer of the Global Bond.

8. Conversion Rights

The Conversion Rights in respect of the Bonds may be exercised at any time during the Conversion Period by the relevant Accountholder giving notice to the Principal Paying and Conversion Agent in accordance with the standard procedures for Euroclear and/or Clearstream, Luxembourg (which may include notice being given on such Accountholder's instructions by Euroclear and/or Clearstream, Luxembourg or any common depositary for them to the Principal Paying and Conversion Agent by electronic means) and in a form acceptable to Euroclear and/or Clearstream, Luxembourg, of the principal amount of Bonds in respect of which Conversion Rights are exercised and at the same time presenting or procuring the presentation of the Global Bond to the Principal Paying and Conversion Agent for endorsement of exercise within the time limits specified in Condition 5.

9. Bond Repurchase Offer

The Bond Repurchase Offer in Condition 6(e) may be exercised by an accountholder giving notice of acceptance, in the form for the time being current, obtainable from the specified office of the Principal Paying and Conversion Agent at any time in the Change of Control Period or, as the case may be, the Licence Event Period, in accordance with the standard procedures of Euroclear and/or Clearstream, Luxembourg (which may include notice being given on such Bondholder's instructions by Euroclear and/or Clearstream, Luxembourg or any common depository for them to the Principal Paying and Conversion Agent by electronic means) of the principal amount of Bonds in respect of which the acceptance is exercised and at

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the same time presenting, or procuring the presentation of the Global Bond to the Principal Paying Agent for endorsement of exercise within the time limits specified in Condition 6(e).

10. Euroclear and Clearstream, Luxembourg

References in the Global Bond and this summary to Euroclear and Clearstream, Luxembourg shall be deemed to be references to any other clearing system approved by the Trustee.

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TAXATION

The discussion below is a general description of the Canadian federal income tax considerations generally applicable to an investment in the Bonds. It does not take into account the individual circumstances of any particular investor. Therefore, prospective investors are urged to consult their own tax advisers with respect to the tax consequences of an investment in the Bonds.

The following is, as of the date hereof, a general summary of the principal Canadian federal income tax considerations generally applicable to a holder of Bonds (a "Holder") who acquires Bonds described in these Listing Particulars. The summary only applies to a Holder who, at all relevant times, for purposes of the Income Tax Act (Canada) (the "Tax Act"), is neither resident nor deemed to be resident in Canada and does not and is not deemed to use or hold Bonds or a Share acquired under the terms thereof in carrying on business in Canada (a "Non-Resident Holder"). Special rules, which are not discussed below, may apply to a Non- Resident Holder who is an insurer that carries on business in Canada and elsewhere.

This summary further assumes that the Non-Resident Holder holds the Bonds, and will hold any Shares acquired under the terms of the Bonds, as capital property, is not affiliated with the Issuer and deals with the Issuer at arm's length for purposes of the Tax Act. Generally, Bonds or Shares will be considered to be capital property to a Non-Resident Holder provided that the Non-Resident Holder does not hold the Bonds or Shares in the course of carrying on a business and has not acquired Bonds or Shares in one or more transactions considered to be an adventure or concern in the nature of trade.

This summary is based on the current provisions of the Tax Act and the regulations thereunder, and counsels' understanding of the current published administrative polices and assessing practices of the Canada Revenue Agency ("CRA") publicly available prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act (the "Tax Proposals") publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof.

This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Tax Proposals, does not otherwise take into account or anticipate any changes in law or the administrative practices of the CRA, whether by judicial, governmental or legislative decision or action, nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ significantly from those discussed herein.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular investor and no representation with respect to the income tax consequences to any particular investor is made. Each investor should consult with such investor's own tax advisor with respect to the Canadian federal income tax consequences set forth below as applicable in the investor's particular circumstances and any other federal, provincial, state, local or foreign tax consequences to it of holding and disposing of Bonds and Shares.

Taxation of Interest on Bonds

Based in part on counsels' understanding of the current administrative practices of the CRA, a Non-Resident Holder will not be subject to Canadian withholding tax in respect of amounts paid or credited by the Issuer as, on account or in lieu of payment of, or in satisfaction of, interest, or principal on the Bonds.

Exercise of Conversion Rights

The conversion of Bonds into Shares on the exercise of a conversion right by a Holder will generally be deemed not to constitute a disposition of the Bonds and, accordingly, a Non-Resident Holder will not realize a gain or loss on such conversion.

Disposition of Bonds and Shares

A Non-Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a disposition of Bonds or a Share acquired under the terms of the Bonds, as the case may be, unless (i) the Bonds or Share constitutes "taxable Canadian property"(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition, and (ii) the Holder is not entitled to relief under an applicable income tax treaty or convention.

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As long as the Shares are then listed on a designated stock exchange (which currently includes the TSX and the LSE), the Bonds and the Shares generally will not constitute taxable Canadian property of a Non-Resident Holder, unless at any time during the 60-month period immediately preceding thedisposition the Non-Resident Holder, persons with whom the Non-Resident Holder did not deal at arm's length, or the Non-Resident Holder together with all such persons, owned 25 per cent. or more of the issued shares of any class or series of shares of the capital stock of the Issuer.

Taxation of dividends

Under the Tax Act, dividends on Shares paid or credited to a Non-Resident will be subject to Canadian withholding tax at the rate of 25 per cent. of the gross amount of the dividends. This withholding taxmay be reduced pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the Non-Resident. For example, under the Canada – United Kingdom Tax Convention, a Non-Resident Holder who is a resident of the United Kingdom for purposes of the convention and who is the beneficial owner of the dividend will be subject to a withholding tax at a reduced rate of 15 per cent.

United Kingdom Taxation

The following summary is based upon UK law and what is understood to be HM Revenue and Customs' practice as at the date of this document. Both law and practice may change, possibly with retrospective effect. The summary is intended as a general guide and may not apply to certain categories of Bondholder, such as Bondholders who hold their Bonds for the purposes of a trade, and deals with only some of the UK tax consequences of acquiring, holding and disposing of Bonds and Common Shares.

Bondholders who are in any doubt as to their tax position, whether resident in the UK or elsewhere and whether subject to tax in the UK or under the laws of any other jurisdiction, should consult their professional advisers.

Withholding Tax

The Issuer will not be required to withhold or deduct any amount for or on account of UK income tax from payments of interest on the Bonds unless the interest in question has a UK source. Interest on the Bonds may be deemed to have a UK source where, for example, the Bonds are issued by the Issuer acting through a branch or permanent establishment in the UK, the Bonds are secured on assets situated in the UK or the interest is paid out of funds maintained in the UK.

If the interest payable on the Bonds is deemed to have a UK source, the Bonds should constitute "quoted Eurobonds" within the meaning of section 987 of the Income Tax Act 2007 for so long as they carry a right to interest and continue to be listed on a recognised stock exchange within the meaning of section 1005 of that Act. The London Stock Exchange is a recognised stock exchange for these purposes and the Bonds will be treated as listed if they are included in the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange. HMRC have confirmed that securities that are admitted to trading on the Professional Securities Market satisfy the condition of being admitted to the London Stock Exchange. While the Bonds are and continue to be Quoted Eurobonds, payments of interest on the Bonds may be made without withholding or deduction for or on account of UK income tax.

If the Bonds cease to be listed on a recognised stock exchange and the interest payable on the Bonds is deemed to have a UK source, interest on the Bonds will fall to be paid under deduction of UK income tax at the basic rate (currently 20 per cent.) subject to such relief as may be available under the provisions of any applicable double taxation treaty or to any other exemption which may apply.

The Issuer will not be required to withhold or deduct any amount for or on account of UK tax from dividend payments on the Common Shares.

Provision of Information

Bondholders should note that where any interest on the Bonds is paid to them (or to any person acting on their behalf) by any person in the UK acting on behalf of the Issuer (a "Paying Agent") or is received by any person in the UK acting on behalf of the relevant Bondholder (other than solely by

93

clearing or arranging the clearing of a cheque) (a "Collecting Agent"), then the Paying Agent or the Collecting Agent (as the case may be) may, in certain circumstances, be required to supply to HM Revenue and Customs details of the payment and certain details relating to the Bondholder (including the Bondholder's name and address). These provisions will apply whether or not the interest has been paid subject to withholding or deduction for or on account of UK income tax and whether or not the Bondholder is resident in the UK for UK tax purposes. Where the Bondholder is not so resident, the details provided to HM Revenue and Customs may, in certain circumstances, be passed by HM Revenue and Customs to the tax authorities of the jurisdiction in which the Bondholder is resident for tax purposes.

EU Savings Directive

Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to an individual or certain other residual entities resident in that other Member State. For a transitional period, however, Austria, Belgium and Luxembourg may instead apply withholdings in relation to such payments, deducting tax at rates rising over time to 35 per cent., unless during such period they elect otherwise. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.

A number of non-EU countries, and certain dependant or associated territories of certain member states, have agreed to adopt similar measures (either provision of information or transitional withholding) in relation to payments made by a person within its jurisdiction to an individual resident in a Member State. In addition, the Member States have entered into reciprocal provision of information or transitional withholding arrangements with certain of those dependant or associated territories in relation to payments made by a person in a Member State to an individual or certain other residual entities resident in one of those territories.

UK Stamp Duty and Stamp Duty Reserve Tax ("SDRT")

No SDRT should be payable on the issue, transfer or conversion of a Bond nor on the issue or transfer of a Common Share so long as there is no register of Common Shares kept in the UK and, in the case of the Common Shares, provided that they are not paired with shares issued by a body corporate incorporated in the UK.

No stamp duty should be payable on the issue or conversion of a Bond or Common Share or on the transfer of a Bond or Common Share, provided that (i) any transfer documents are executed and retained outside the UK and (ii) there is no register of Common Shares kept in the UK.

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SUBSCRIPTION AND SALE

Pursuant to an Underwriting Agreement dated 28 May 2009 (the "Underwriting Agreement") among the Issuer, Nomura International plc, Morgan Stanley & Co. International plc " (together, the "Joint Lead Managers"), and RBC Dominion Securities Inc. (together with the Joint Lead Managers the "Managers"), the Issuer has agreed to issue the Bonds to the Managers at a price equal to 100 per cent. of their principal amount and the Managers have agreed severally but not jointly to subscribe for the aggregate principal amount of the Bonds set opposite their respective names in the table below.

Principal Amount of Bonds (U.S.$)

Nomura International plc………………………………….. 237,500,000Morgan Stanley & Co. International plc………………….. 237,500,000RBC Dominion Securities Inc.……..….…………………… 25,000,000

Total…………………………………………………………. 500,000,000

The Issuer has agreed to pay to the Managers a commission in consideration of the agreement to act as Managers. The Issuer has also agreed to reimburse the Managers for certain of their expenses in connection with the issue of the Bonds.

The Issuer has agreed to indemnify the Managers in respect of certain matters pursuant to the Underwriting Agreement. The Underwriting Agreement contains provisions entitling the Joint Lead Managers on behalf of the Managers to terminate the Underwriting Agreement in certain circumstances prior to the closing of the issue of the Bonds.

The Issuer has agreed that for a period of 90 days from the Closing Date it will not without the prior written consent of the Joint Lead Managers on behalf of the Managers (not to be unreasonably withheld or delayed), (i) directly or indirectly, issue, offer, pledge, sell, contract to issue or sell, issue or sell any option or contract to purchase, purchase any option or contract to issue or sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly (or publicly announce any intention of doing so), any Common Shares or any securities exercisable, exchangeable for or convertible into, or substantially similar to, Common Shares or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Common Shares, whether any such swap or transaction described in paragraph (i) or (ii) above is to be settled by delivery of Common Shares or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (a) the issue of the Bonds or to the issue of Common Shares upon conversion of the Bonds or (b) the issue of Common shares pursuant to existing options, including directors' and employee share schemes.

United States

The Bonds and Common Shares to be issued upon conversion of the Bonds have not been and will not be registered under the Securities Act and the Bonds are subject to U.S. tax law requirements.

Subject to certain exceptions, the Bonds and Common Shares to be issued upon conversation of the Bonds may not be offered, sold or delivered within the United States or to U.S. person.

Each Manager has agreed, that except as permitted by the Underwriting Agreement, it will not offer, sell or deliver any Bonds or the Common Shares to be issued upon conversion of the Bonds, within the United States or to U.S. persons.

In addition, until 40 days after the commencement of the offering, an offer or sale of Bonds within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

Canada

Each Manager has acknowledged and agreed that the Bonds have not been, and will not be, qualified for sale under the securities laws of Canada or any province or territory thereof and may not be offered

95

or sold, directly or indirectly, in Canada or to, or for the benefit of, any resident thereof in contravention of the securities laws of Canada or any province or territory thereof. Each Manager has confirmed and agreed that neither it, its affiliates, nor any persons acting on its or their behalf havedistributed, and shall not, distribute any offering material relating to the Bonds in Canada or offer, sell or deliver the Bonds in Canada or to residents of Canada (except in compliance with applicable Canadian securities laws). Accordingly, the Bonds and Common Shares issued on conversion thereof must not be offered, sold, resold or traded in Canada unless (i) an exemption from the prospectus requirements of applicable Canadian securities laws is available in connection therewith, or (ii) such offer, sale, resale or trade occurs at least four months and one day following the date of issuance of the Bonds and:

(a) the Bonds and, if applicable, Common Shares issued upon a conversion thereof, bear the appropriate legend required by applicable Canadian securities laws;

(b) the trade is not a "control distribution" as defined in applicable Canadian securities laws;

(c) no unusual effort is made to prepare the market or to create a demand for the Bonds or the Common Shares issued upon a conversion thereof (as the case may be) that are the subject of such offer, sale, resale or trade;

(d) no extraordinary commission or consideration is paid to a person or company in respect of such offer, sale, resale or trade of the Bonds or Common Shares issued upon a conversion thereof (as the case may be); and

(e) if the selling Shareholder or Bondholder is an insider or officer of the Issuer, he or she has no reasonable grounds to believe that the Issuer is in default of applicable Canadian securities laws.

Additionally, any offer, sale, resale or trade in Canada of the Bonds and the Common Shares issued upon a conversion thereof must be made either through a duly and appropriately registered dealer under applicable Canadian securities laws or pursuant to an exemption from the dealer registration requirements of applicable Canadian securities laws. Purchasers of Bonds are advised to seek legal advice prior to any offer, sale, resale or trade in Canada of the Bonds or Common Shares issued upon a conversion thereof.

United Kingdom

Each of the Managers has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) in connection with the issue or sale of any Bonds in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom.

General

No action has been or will be taken in any jurisdiction by the Issuer or any Manager that would permit a public offering of the Bonds, or possession or distribution of the Offering Circular or any other offering material, in any country or jurisdiction where action for that purpose is required. Accordingly, each Manager has undertaken that it will comply, to the best of its knowledge and belief, with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Bonds or has in its possession or distributes the Offering Circular or any such other material.

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GENERAL INFORMATION

1. Listing

Application has been made to the Financial Services Authority ("FSA") in its capacity as competent authority under the Financial Services and Markets Act 2000 ("FSMA") for the Bonds to be admitted to the official list of the UK Listing Authority (the "UKLA") (the "Official List"). Application has been made to the London Stock Exchange ("LSE") for the Bonds to be admitted to trading on the Professional Securities Market (the "PSM"). It is expected that admission of the Bonds to the Official List and admission to trading of the Bonds on the PSM will be granted on or around 18 June 2009, subject to the issue of the Bonds. It is expected that dealings in the Bonds will commence on 19 June2009.

The Issuer has undertaken to apply to have the Common Shares issuable upon conversion of the Bonds listed for trading on the TSX.

2. Stock Exchange

The listing of the Bonds on the LSE will be expressed in US dollars as a percentage of their principal amount (exclusive of accrued interest). Transactions will normally be effected for settlement in US dollars for delivery on the third business day in London after the date of the transaction.

3. Authorisation

The Issuer has obtained all necessary consents, approvals and authorisations in connection with the issue and performance of its obligations under the Bonds. The creation and issue of the Bonds has been authorised by a resolution of the Board of Directors of the Issuer dated 27 May 2009.

4. Expenses

The Issuer estimates that the total expenses related to the issue of the Bonds will be approximately U.S.$12.3 million.

5. Clearing

The Bonds have been accepted for clearance through Clearstream, Luxembourg and Euroclear. The Common Code for the Bonds is 043132466. The International Securities Identification Number for the Bonds is XS0431324663. The address of Euroclear is 1 Boulevard du Roi Albert I, B-1210 Brussels, Belgium, and the address of Clearstream, Luxembourg is 42 Avenue JF Kennedy, L-1855, Luxembourg.

6. Financial and Trading Position

There has been no material adverse change in the prospects of the Issuer since 31 December 2008, nor has there been any significant change in the financial or trading position of the Issuer since 30 March 2009.

7. Financial Information

The consolidated financial statements of the Issuer have been audited without qualification for the two financial years ended 31 December 2008 by PricewaterhouseCoopers LLP, PricewaterhouseCoopers Place, 250 Howe Street, Suite 700, Vancouver, British Columbia Canada V6C 3S7 ("PwC") the partners of which are members of the Institute of Chartered Accountants of British Columbia. (Please see "Auditor's Consent" below).

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8. Auditor's Consent

The Auditor has given the following consent:

"In accordance with Canadian Generally Accepted Audit Standards, CICA 7110 Auditor Involvement with Offering Documents of Public and Private Entities, we consent to the use of our report dated 5 March 2009 to the Shareholders of First Quantum Minerals Ltd. incorporated by reference in the Offering Circular relating to U.S. $500,000,000, 6.0 per cent. Convertible Bonds due 2014 convertible into Common Shares of First Quantum Minerals Ltd.

PricewaterhouseCoopers LLPChartered AccountantsVancouver, British Columbia, Canada15 June 2009"

9. Material Contracts

(a) Contracts relating to the Bonds

The following contracts directly concerning the issue of the Bonds have been entered into by a member of the Group immediately preceding the publication of this Offering Circular or will, shortly after the date of this Offering Circular, be entered into by a member of the Group and are, or may be, material:

(i) the Trust Deed dated 18 June 2009 between the Issuer and LaSalle Global Trust Services Limited as Trustee, inter alia, constituting the Bonds and appointing the Trustee to act on that capacity and under which such commission in respect of the service of the Trustee as shall be agreed between the Issuer and the Trustee are to be paid:

(ii) the Paying and Conversion Agency Agreement dated 18 June 2009 between, inter alios, the Issuer and LaSalle Global Trust Services Limited as Trustee setting out, inter alia, the terms of the appointment and duties of Bank of America National Association in its capacity as Principal Paying and Conversion Agent and under which such commissions in respect of the services of the agents as shall be agreed between them and the Issuer are to be paid; and

(iii) the Underwriting Agreement.

(b) Other Contracts

In 2008 the Issuer entered into a plan of arrangement and related agreements pursuant to its acquisition of SML. On 18 June 2008, the transaction closed and the Issuer acquired 27,005,199 SML shares representing all of the issued and outstanding SML shares on an undiluted basis. Under the plan of arrangement, SML shareholders have up to six years from 18 June 2008 within which to deposit certificates representing their SML shares. Any certificate not validly deposited within that period will cease to represent a security holder claim or interest of any kind against SML, the holder will receive no consideration from the Issuer and the certificate will be cancelled. As at 31 December 2008, the Issuer has paid an aggregate of approximately 283,862 in common shares of the Issuer and $214.3 million in cash for SML. As at 6 March 2009, substantially all of the issued and outstanding SML shares had been deposited.

All other contracts entered into by the Issuer during the course 2008 were in the ordinary course of business for the Issuer. Such contracts are not material when considered in the context of the Issuer’s business and the industry within which it operates. Certain contracts which have been entered into in the ordinary course of business and which relate to the operations of the Issuer are described earlier under "First Quantum Minerals Limited."

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10. Documents on Display

Copies of the following documents may be inspected during normal business hours at the offices of the Paying and Conversion Agent during the 12 months starting on the date on which this Offering Circular is made available to the public as required by the prospectus rules made by the Financial Services Authority:

(a) the Memorandum and Articles of Association of the Issuer;

(b) the Issuer's Annual Reports for the years ended 31 December 2007 and 31 December 2008, which contain the annual audited consolidated financial statements of the Issuer as at and for the financial years ended 31 December 2007, and 31 December 2008, together with the notes thereto and the auditors' report thereon;

(c) the Paying and Conversion Agency Agreement; and

(d) the Trust Deed.

In addition, this Offering Circular is also available at the website of the Regulatory News Service operated by the LSE at www.londonstockexchange.com/gbpricenews/marketnews.

www.londonstockexchange.com/gbpricenews/marketnews.

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INDEX OF DEFINED TERMS

Page

£........................................................................................................................................................iv

€........................................................................................................................................................iv

2009 AIF ......................................................................................................................................1, 31

A$ .....................................................................................................................................................iv

Accountholder ..................................................................................................................................89

Act ...................................................................................................................................................46

Adastra .......................................................................................................................................23, 37

Additional Common Shares.........................................................................................................54, 71

adjusted principal amount .................................................................................................................77

Agency Agreement ...........................................................................................................................53

AIM .................................................................................................................................................21

Annual Report ....................................................................................................................................1

Annual Reports...................................................................................................................................1

Articles.............................................................................................................................................46

Australian dollars...............................................................................................................................iv

Bond Repurchase Offer .................................................................................................................3, 77

Bondholder.......................................................................................................................................54

Bonds ...........................................................................................................................................ii, 53

business day......................................................................................................................................54

Bwana ........................................................................................................................................10, 22

C$ ...............................................................................................................................................iii, 54

Calculation Period.............................................................................................................................70

Canadian dollars ..........................................................................................................................iii, 54

Carlisa ..............................................................................................................................................27

CDS .................................................................................................................................................73

Change of Control.......................................................................................................................54, 69

Change of Control Conversion Price .................................................................................................69

Change of Control Period............................................................................................................54, 69

CIM Standards..................................................................................................................................13

Clearstream, Luxembourg ....................................................................................................... ii, 17, 53

100

Closing Date.................................................................................................................................3, 54

CMD ............................................................................................................................................7, 37

Collecting Agent...............................................................................................................................93

COMISA ..........................................................................................................................................33

Commencement Date........................................................................................................................70

Common Shares............................................................................................................................ii, 55

Company ..........................................................................................................................................21

Conditions ........................................................................................................................................53

Congolese Franc ................................................................................................................................iv

Conversion Commencement Date .....................................................................................................63

Conversion Date .........................................................................................................................55, 73

Conversion Notice ......................................................................................................................55, 72

Conversion Period.......................................................................................................................55, 63

Conversion Price.........................................................................................................................55, 63

Conversion Right .................................................................................................................... 5, 55, 63

Couponholder ...................................................................................................................................55

Coupons ...........................................................................................................................................53

CRA .................................................................................................................................................91

Current Market Price.........................................................................................................................55

Cyprus Amax....................................................................................................................................29

dealing day .......................................................................................................................................55

Definitive Bonds...............................................................................................................................88

Dividend...........................................................................................................................................55

dollars............................................................................................................................................... iii

DRC .............................................................................................................................................7, 21

Effective Date.............................................................................................................................65, 66

Equinox............................................................................................................................................24

equity share capital ...........................................................................................................................56

euro ...................................................................................................................................................iv

Euro ..................................................................................................................................................iv

Euroclear ................................................................................................................................ ii, 17, 53

Event of Default................................................................................................................................80

101

Exchange Date..................................................................................................................................88

Exempt Newco Scheme ....................................................................................................................56

Existing Shareholders .......................................................................................................................58

Fair Market Value.............................................................................................................................56

Final Maturity Date.......................................................................................................................3, 57

Financial Adviser..............................................................................................................................57

First Quantum Minerals ....................................................................................................................21

Frontier.......................................................................................................................................10, 22

FSMA...........................................................................................................................................ii, 95

Further Bonds ...................................................................................................................................57

Gécamines ....................................................................................................................................7, 37

Global Bond .................................................................................................................................ii, 17

Group ..........................................................................................................................................ii, 21

GRZ .............................................................................................................................................9, 29

GTK.................................................................................................................................................38

Guelb Moghrein..........................................................................................................................11, 22

holder ...............................................................................................................................................54

Holder ..............................................................................................................................................91

HPL..................................................................................................................................................23

IDC ..............................................................................................................................................7, 37

IFC...............................................................................................................................................7, 37

indebtedness for borrowed money .....................................................................................................57

Interest Payment Date .................................................................................................................57, 62

Interest Period...................................................................................................................................62

Interest Rate......................................................................................................................................62

Issuer................................................................................................................................................53

Joint Lead Managers .........................................................................................................................94

JORC Code.......................................................................................................................................13

Kansanshi ...................................................................................................................................11, 22

Kevitsa .............................................................................................................................................22

KMAB .............................................................................................................................................38

KMT ............................................................................................................................................7, 37

102

Kolwezi ............................................................................................................................................22

Kolwezi Contract ..........................................................................................................................7, 37

Kolwezi Project ............................................................................................................................7, 37

Latest Date .......................................................................................................................................82

Licence Event ...................................................................................................................................57

Licence Event Period ..................................................................................................................58, 77

Licensing Authority ..........................................................................................................................57

LME.................................................................................................................................................21

Lonshi ..........................................................................................................................................9, 22

LSE ........................................................................................................................................ ii, 16, 21

Lumwana..........................................................................................................................................24

Managers..........................................................................................................................................94

Mauritanian Ouguiya .........................................................................................................................iv

Minimum Conversion Price.................................................................................................................5

Mining Code.....................................................................................................................................37

Mopani .............................................................................................................................................23

Mufulira ...........................................................................................................................................23

Newco ..............................................................................................................................................58

Newco Scheme .................................................................................................................................58

Newco Scheme Modification ............................................................................................................84

Nkana...............................................................................................................................................23

Non-Resident Holder ........................................................................................................................91

Offer.................................................................................................................................................69

Offering Circular ............................................................................................................................... ii

Official List ................................................................................................................................16, 96

Optional Redemption Date ..........................................................................................................58, 76

Optional Redemption Notice ................................................................................................... 3, 58, 76

p........................................................................................................................................................iv

Parity Value......................................................................................................................................58

Parliament ........................................................................................................................................41

Paying Agent ....................................................................................................................................92

Paying and Conversion Agents..........................................................................................................53

103

pence.................................................................................................................................................iv

person...............................................................................................................................................59

Plan ..................................................................................................................................................69

Plan of Arrangement .........................................................................................................................58

pounds...............................................................................................................................................iv

pounds sterling...................................................................................................................................iv

Presentation Date..............................................................................................................................59

Prevailing Rate .................................................................................................................................59

Principal Paying and Conversion Agent.............................................................................................53

Principal Subsidiary..........................................................................................................................59

Proceedings ......................................................................................................................................87

PSM .................................................................................................................................................16

PwC .................................................................................................................................................96

QP....................................................................................................................................................28

Qualification Event ...........................................................................................................................75

Quotational Period ............................................................................................................................28

Reference Date ...........................................................................................................................60, 64

Relevant Currency ............................................................................................................................60

Relevant Date ...................................................................................................................................60

Relevant Event............................................................................................................................60, 74

Relevant Indebtedness.......................................................................................................................54

Relevant Licence ..............................................................................................................................60

Relevant Notice ..........................................................................................................................60, 72

Relevant Page...................................................................................................................................60

Relevant Stock Exchange..................................................................................................................60

Repurchase Acceptance Notice....................................................................................................61, 77

Repurchase Date .........................................................................................................................61, 77

Repurchase Price ........................................................................................................................61, 77

Repurchase Price Calculation Period .................................................................................................78

Retroactive Adjustment...............................................................................................................61, 71

RPM.................................................................................................................................................37

Savings Directive..............................................................................................................................17

104

Securities..........................................................................................................................................61

Securities Act .................................................................................................................................... ii

Security Interest................................................................................................................................54

Shareholders .....................................................................................................................................61

SML .................................................................................................................................................38

SNEL ...............................................................................................................................................36

Sodimico ..........................................................................................................................................35

South African Rand............................................................................................................................iv

Specified Date ...................................................................................................................... 61, 67, 68

Specified Share Day..........................................................................................................................56

Spin-Off ...........................................................................................................................................61

Spin-Off Securities ...........................................................................................................................61

SRK .................................................................................................................................................39

Stabilising Manager ........................................................................................................................ iii

Subsidiary.........................................................................................................................................61

SX/EW.......................................................................................................................................10, 22

Tax Act.............................................................................................................................................91

Tax Proposals ...................................................................................................................................91

Tax Redemption Date .................................................................................................................61, 76

Tax Redemption Notice ..............................................................................................................61, 76

Temporary Global Bond..................................................................................................................... ii

Trust Deed........................................................................................................................................53

Trustee ........................................................................................................................................iii, 53

TSX.............................................................................................................................................iii, 21

U.S. dollars.......................................................................................................................................61

U.S.$ ...........................................................................................................................................iii, 61

UKLA ..........................................................................................................................................ii, 16

Underwriting Agreement...................................................................................................................94

Union Minière ..................................................................................................................................35

US dollars......................................................................................................................................... iii

Volume Weighted Average Price ......................................................................................................61

Voting Security.................................................................................................................................62

105

Zambian Kwacha...............................................................................................................................iv

ZCCM ..............................................................................................................................................29

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GLOSSARY AND ABBREVIATIONS

"acid credit" a credit to the operating costs of the circuit due to acid production

"AG (Autogenous grinding) mill" a mill in which material is ground using hard rocks in the ore, instead of steel balls.

"autoclave" a pressurised, heated vessel used in mineral processing for oxidizing sulphide minerals.

"base metal" a non-precious metal

"brownfield" brownfield refers to any land, which has been previously used for any purpose and is no longer used for such purpose

"carbon-in-leach" a process whereby gold is leached from a slurry of gold ore with cyanide in agitated tanks and absorbed onto carbon granules in the same circuit. The carbon granules are then separated from the slurry and treated in an elution circuit to extract the gold

"cathode" an electrode on which base metals are plated out of solution by application of an electric current.

"concentrate" the concentrated mineral product resulting from preliminary processing (usually milling and flotation)

"circuit" an arrangement of equipment used to process material

"concession" a contractual right to carry on a certain kind of business or activity in a geographical area

"Copperbelt" the copper mining area of Zambia, around the towns of Ndola, Kitwe, Chingola, Luanshya and Mufulira, including the Katanga Copperbelt of the RDC around Lubumbashi, which exploits the same ore body running under the border with Zambia

"Cu" the chemical symbol for copper

"cyanide leaching" a process whereby gold (and silver) is leached from a slurry of gold ore with cyanide in agitated tanks

"dewatering" the process of natural, or mechanical removal of water from slurry

"down hole survey" the measurement of a drill hole that determines inclination, deviation, orientation and down the hole depth

"drill hole collar" the PVC pipe or concrete around the mouth or top of a drill hole at the surface

"ductile" a mechanical property used to describe the extent to which materials can be deformed plastically without fracturing

"electrowinning" recovery of a metal from solution by means of electrochemical processes

"elution" the removal of a substance adsorbed on a solid by means of dissolution. In gold processing this refers to removal of gold from activated carbon, into a small volume of concentrated

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solution suitable for electrowinning to recover gold metal.

"feed" feed is ore from a mine that is to be treated for metal recovery in the processing plant

"flotation circuit" a method of mineral separation in which the valuable minerals are separated from the finely ground ore and recovered into a froth, which is created in the slurry water by a variety of reagents and air

"gold circuit" the arrangement of equipment, piping and instrumentation used for recovery of gold from an ore or concentrate.

"grade "A" copper cathode" copper that meets certain specifications (chemical, physical and appearance) set by the London Metal Exchange (LME) – copper of the highest quality.

"greenfield" greenfield refers to an area of land, which has not been used for any non-agricultural development

"HPL" high pressure leach, a process involving autoclaves at high temperatures and pressures, used to oxidize copper minerals to copper sulphate and sulphuric acid

"HPL circuit" the arrangement of equipment, piping and instrumentation used for oxidation of chalcopyrite to produce copper sulphate in solution.

"HQ core size" the size of recovered drill core. Hole diameter 96mm, core diameter 63.5mm

"km" kilometres

"lb" typically Avoirdupois pounds. There are 2.205 lb in 1 kg.

"leaching" the dissolution of metals into a solution using reagents – it can occur in stirred tanks, autoclaves, etc. In extractive metallurgy, leaching is used for metal separation from ores.

"mineral reserves" the economically recoverable portion of a mineral resource

"mineral resources" a concentration or occurrence of material of intrinsic geological interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for possible value and hence extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral resources are sub-divided, in order of increasing geological confidence, into categories: inferred, indicated and measured.

"notation" quantitative measure to describe a concentration

"NQ core size" the size of recovered drill core. Hole diameter 75.8mm, core diameter 47.6mm

"off take agreement" a formal agreement to sell mineral concentrates to a smelter for toll treatment

"ore" mineral bearing rock that can be economically exploited for metal recovery

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"oxidation" oxidation describes the loss of electrons or increase in oxidation state by a molecule, atom or ion

"oxide circuit" the arrangement of equipment, piping and instrument used to recover metals from an oxide ore

"oxide ore" the economically recoverable portion of a oxide resource

"oxide resource" the portion of a mineral resource that has been subjected to climatic weathering which in terms changes the chemical composition of the contained elements

"oz" in relation to precious metals, the Troy oz – 1 troy oz is 31.1057 grams

"pebble mill" a rotating drum which uses hard pebbles to grind ore particles. A pebble mill is usually the second stage of milling after an AG or SAG mill

"PGE" platinum group elements (usually referred to as ‘PGM’s’ –platinum group metals)

"PlatSolTM process" a process in which small additional amounts of chloride salts are added to the total oxidation autoclave leach to cause the precious metals to dissolve at the same time as the sulphide minerals are oxidised

"reverse circulation" exploration drilling technique that recovers uncontaminated drill chip samples which pass up through the central column of the drill string. Air moves in the opposite or reverse direction compared with traditional air core drilling which utilises air passing down the drill core to blast drill chips up the hole on the outside of the drill string

"Run of mine"" Run of Mine (ROM) ore is ore directly extracted from the mine, prior to processing

"SAG " semi autonomous grinding, a milling process which is similar to an AG mill but uses steel balls as well as coarse rocks to grind the material

"smelting" the partial recovery of metal from processed ore

"slurry" a suspension of solids in a liquid

"strip ratio" the ratio of waste to ore

"sulphide circuit" the processing equipment used to recover metals or concentrates from sulphide ores. Sulphide ores are ores where the economic metal to be recovered is bound up in sulphide minerals, and cannot be recovered by simple leaching techniques.

"sulphide milling circuit" the sulphide milling circuit is the milling section of the sulphide circuit.

"SX/EW" solvent extraction (SX) is a process which extracts and upgrades copper ions from low-grade leach solutions into a concentrated electrolyte which is sent to electrowinning (EW), where pure copper is deposited onto cathodes using an electrolytic procedure

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"t" tonnes – could be short, long or metric tonnes. Typically metric tonnes are used

"tailings" material discarded from the metal recovery circuit after the recoverable valuable minerals have been extracted

"tpa" metric tonnes per annum

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REGISTERED OFFICE OF THE ISSUER

First Quantum Minerals Ltd.8th Floor – 543 Granville Street

Vancouver, BC CanadaV6C 1X8

AUDITORS OF THE ISSUER

PriceWaterhouseCoopers LLPSuite 700 - 250 Howe Street

VancouverV6C 3S7

TRUSTEE

LaSalle Global Trust Services LimitedLevel 10

5 Canada SquareLondon

E14 5AQ

PRINCIPAL PAYING AND CONVERSION AGENT

Bank of America National Association5 Canada Square

LondonE14 5AQ

LEGAL ADVISERS TO THE ISSUER

As to English law As to Canadian law

Ashurst LLPBroadwalk House5 Appold Street

LondonEC2A 2HA

Fasken Martineau DuMoulin LLP66 Wellington Street West

Suite 4200, Toronto Dominion Bank TowerBox 20, Toronto-Dominion Centre

Toronto, ON M5K 1N6

LEGAL ADVISERS TO THE JOINT LEAD MANAGERS AND THE TRUSTEE AS TO ENGLISH LAW

Linklaters LLPOne Silk Street

London EC2Y 8HQ