Markland AGF Precious Metals Corp T.MPM

FNX to buy Dynatec's Sudbury interests

[piltech]

FNX aims to take Dynatec's Sudbury JV, Aurora interest FNX Mining Company Inc (TSX:FNX) Shares Issued 55,275,472 Last Close 10/4/2005 $15.20 Wednesday October 05 2005 - News Release Mr. Terry MacGibbon reports FNX IN DISCUSSIONS TO EXCHANGE EQUITY FOR DYNATEC'S INTEREST IN THE SUDBURY JOINT VENTURE AND AURORA PLATINUM FNX Mining Company Inc. is in discussions with Dynatec Corp. to exchange shares in FNX for Dynatec's 25-per-cent interest in the Sudbury joint venture and Dynatec's 50-per-cent interest in Aurora Platinum Corp. In the potential transaction, FNX would exchange 20.5 million common shares, representing approximately a 26.2-per-cent fully diluted shareholding in FNX, for the Sudbury assets of Dynatec. An announcement will be forthcoming by 5 p.m. ET today, Oct. 5, 2005, when an agreement is either reached between the parties or if negotiations end without an agreement. However, there is no certainty that the transaction will be successfully concluded. FNX has already obtained consent resolutions signed by the holders of 55.7 per cent of its issued and outstanding common shares authorizing the transaction to occur. Transaction The material terms of the transaction currently being negotiated are as follows: FNX acquires Dynatec's 25-per-cent interest in the Sudbury joint venture and 50-per-cent interest in Aurora Platinum; FNX will issue 20.5 million common shares of FNX to Dynatec; FNX and Dynatec will enter into a voting trust agreement with a term of three years pursuant to which votes attached to the common shares held by Dynatec will be voted in line with FNX board recommendations on various fundamental changes and initiatives (including, among other matters, mergers, acquisitions and the nomination of directors to the FNX board), such agreement ceasing to be in effect should Dynatec's ownership stake in FNX decline below 10 per cent on a fully diluted basis; Dynatec will enter into a standstill agreement with FNX having a three-year term that restricts Dynatec's ability to buy additional common shares; Dynatec may only sell its common shares via a broad distribution and FNX will have a right to designate the purchasers of common shares to be sold by Dynatec for a period of 10 business days at a price to be mutually agreed upon by Dynatec, FNX and the investment dealer or syndicate of investment dealers selling such common shares in the event that Dynatec elects to sell any of its common shares; In the event that Dynatec wishes to distribute the common shares that it holds, FNX will take steps, at Dynatec's cost, as are necessary to qualify by prospectus the distribution of such common shares; Dynatec will have FNX board representation proportional to its fully diluted ownership position for a period of three years (such representation being dependent upon Dynatec maintaining an ownership stake in FNX of at least 10 per cent on a fully diluted basis); FNX will purchase, at the option of Dynatec, $10-million of Dynatec common shares in the next Dynatec offering of common shares to the public at the issue price of the offering, provided that the offering is for a minimum of $100-million and is completed within 12 months of the closing of the acquisition; and Dynatec will provide mining services at the Sudbury properties from the closing of this transaction until Dec. 31, 2007, subject to FNX having control and direction over the services provided by Dynatec. Under the mining services agreement to be finalized by the closing of this transaction, Dynatec will be paid a fee on a cost reimbursement basis that includes a fixed and variable component.