All data are collected in the Fiscal Year of 2008-2009.

Mauritania / Energy, Mining, Resources

First Quantum Minerals Ltd., a growing mining and metals company, is engaged in mineral exploration, development and mining in Africa. First Quantum's common shares are listed for trading on the Toronto Stock Exchange in Canada, the London Stock Exchange in the United Kingdom and the company is a member of the S&P/TSX 60 index.

In Mauritania, First Quantum operates the Guelb Moghrein copper-gold mine. In January 2005, the detailed design and engineering contract was awarded with site establishment commencing in March 2005. The first copper concentrate was produced in July. Commercial production (i.e. 65 percent of design capacity) was reached during the third quarter of 2006. It has an estimated 9-year mine life

The Guelb Moghrein deposit is located 250 kilometres northeast of the capital, Nouakchott, near the town of Akjoujt, and is accessible by paved highway.

Ilot D49 Tevrag Zeina, BP 5045, Nouakchott, Mauritania: Telephone: 222.524.4813; Fax: 222.524.4735

The Company produces LME grade "A" copper cathode, copper in concentrate, gold and sulphuric acid.

877 employees

The Company’s revenue from Mauritania in 2007 was US$227,5 million.

In 2007, copper and gold production began in Mauritania. Currently First Quantum is the only copper producer, producing 32,000 tons of copper in 2008. First Quantum produced 100,000 ounces of gold in 2008. In August 2007, Canadian company Red Back Mining Inc. purchased Tasiast Mauritania Ltd., which was operating a joint venture with SNIM to develop the Tasiast gold mine in Akjoujt. TTasiast produced approximately 125,000 ounces of gold in 2008.

Guelb Moghrein Mine is the only previously worked copper-gold deposit in Mauritania.

“Discovering, developing and operating base metal mines efficiently and cost-effectively”

“Following the sharp fall in the copper price in the second half of 2008, we initiated a review of all parts of the business to identify prudent measures to protect the Company’s core activities and financial resources, improve its operating cost profile and position it to emerge stronger when economic conditions improve.

As a result of the review, we have adjusted each mine’s operating plan, renegotiated supply contracts, improved supplier credit terms, tightened working capital management and deferred some exploration and capital expenditure.

We are confident that First Quantum has a sound platform for expansion when global commodities markets recover from the current severe recessionary environment. As a low cost producer with brownfield expansion opportunities at Kansanshi, Frontier and Guelb Moghrein plus new projects under development at Kolwezi and Kevitsa, we are well positioned to bring additional production on stream quickly by bringing forward projects that are currently deferred.

In addition, the Company is on track to become a more meaningful gold producer as the gold recovery circuits at Guelb Moghrein and Kansanshi are enhanced.

Much of the Company's success has come from being opportunistic, focused and conservative in its acquisitions. We intend to continue in this vein as we assess some excellent opportunities that have become available as a result of the economic downturn. These will be carefully weighed against the Company's existing prospects and evaluated on how we can add value through our sound financial position and technical expertise.”

Guelb Moghrein is beneficially owned 80 percent by First Quantum and 20 percent by Mauritania's Guelb Moghrein Mines d'Akjoujt SA.

Mauritanian Act no. 2008-011 (of April 27, 2008) establishes a new framework with respect to the taxation of certain mining activities (i.e., prospecting for, exploration, and exploitation mineral substances).

The new mining tax regime is intended to provide incentives for direct investment and to promote the mining industry in Mauritania. The stated goal of the new Mining Act is to clarify certain provisions that were rather summarily dealt with under the prior law of 1999. Also, the new regime introduces certain tax and customs relief measures, particularly in the form of: a cap on the tax on industrial/commercial earnings (known as BIC); and an exemption from tax and/or duties for certain mining equipment during the research and development phase as well as during the first years of exploitation.

The new mining tax regime has three distinct development phases-each of which is subject to its own specific regime-and has created a classification of goods for purposes of applying customs duties and value added tax (VAT)

Phase I, the “Research Phase”

corresponds to the period of mineral prospecting and research work, which lasts until the finalization of the feasibility study culminating in the decision to open a mine or quarry on the site in question.

Phase II, the “Installation Phase”

covers the period from the end of the research phase to the beginning of the “break-in” work (known as rodage). Under Article 103(2), the break-in work begins on the first day of the second month following the date when the daily production exceeds 10 percent of the production provided for by the feasibility study submitted to the government minister in charge of mines.

Phase III, the “Production Phase”

begins at the same time as the break-in work and is divided into two sub-phases: under one sub-phase, known as “Preliminary Production,” the mining enterprise may benefit from a tax grace period or a tax holiday for a 36-month period that begins with the start of the break-in work; and a second sub-phase, known as “Normal Production,” extends from the end of the tax holiday period until the end of the life of the mine or quarry, as marked by the completion of the site-restoration work.

Direct Taxation Rules That Apply to Mining Activities:

Profits realized from the exploitation of mines or quarries are subject to tax on industrial/commercial earnings (BIC) and the minimum fixed tax (IMF). However, under Articles 113 to 116 of the Mining Act, industrial mining and quarry operators are exempt from BIC and IMF during the 36 months corresponding to the tax holiday phase (described above). Beyond this 36-month period, these mining enterprises are subject to the following taxes: to BIC, at the then-effective rate, but capped at 25percent, and the enterprises are also entitled to deduct research expenses incurred within the Mauritian territory; to IMF at a rate equal to one-half the IMF rate provided for by the general tax code (2.5percent), though this rate may not exceed 1,75 percent.

In addition, the Mining Act states that interest on loans used entirely with respect to mining or quarry operations are fully deductible from the borrower’s taxable income. For purposes of this deduction, the borrower’s debt must not exceed a ratio of three times the amount of its shareholders’ equity. This debt-to-equity ratio must be met throughout the entire fiscal year in question. Any portion of interest exceeding this ratio is non-deductible. Moreover, when interest is paid to non-residents of Mauritania, the interest payment is subject to a withholding tax at the rate in effect at the time of payment, but the withholding tax rate cannot not exceed 10percent.

If in a given fiscal year, a net operating loss (NOL) is reported, the NOL is considered to be an expense for the following fiscal year and is deducted from that year’s profits. If the profits for the following year are not sufficient to allow for full deduction of the prior year’s NOL, the amount of excess NOL can be carried forward successively over the following fiscal years for five years following the loss-making year. A 10percent withholding tax is also imposed on dividends paid to shareholders other than Mauritian parent or affiliated companies.

Salaries paid to expatriate employees of companies that have entered into a mining agreement with the State, as well as their direct contractors or subcontractors, are subject to the tax on wages and salaries. However, the applicable rate of individual income tax that applies to these employees is equal to half the standard rate (which ranges from 15percent to 30percent), though it may not exceed 20percent.

Compensatory Fees and Mining Royalties:

Taxes specific to mining include compensatory fees (droits rémunératoires), annual “surface area” royalties (redevance superficiaire), and exploitation royalties. The compensatory fee must be paid by the owner or holder of a small-scale quarry authorization upon execution of the following actions with respect to the deed: issuance, extension, reduction, renewal, early termination or transfer of a research permit; issuance, extension, reduction, renewal, early termination, transfer or contribution of an exploitation permit; issuance, transfer or renewal of a small-scale mining exploitation permit; issuance, renewal or transfer of a mining exploitation authorization; and issuance, renewal or transfer of an industrial or small-scale exploitation authorization.

The annual surface area royalty is owed by any owner of a quarry or mining title and any holder of a small-scale quarry authorization. The amount of the royalty is set by decree and is not deductible from annual taxable income. The exploitation royalty is an amount owed by the holder of an exploitation permit, a small-scale mining exploitation permit, or an industrial quarry exploitation authorization. It is calculated based on the sales price of the product at its last stage of transformation in Mauritania, or on the product’s FOB value if it is exported prior to sale. The royalty is owed on all sales or exports, except for bulk samplings, and the rate of this royalty varies from 1.5percent to 6percent, depending on the group to which the mineral substances belong. Moreover, for industrial quarries, the rate of the exploitation royalty is adjusted according to the following three subgroups: Subgroup 1, construction material: 1.4percent; Subgroup 2, industrial material: 1.6percent; and Subgroup 3, decorative material: 1.8percent.

Value Added Tax (VAT):

The following imports by those holding an exploitation permit, a small-scale mining exploitation permit, or an industrial quarry exploitation authorization, are subject to VAT: on automobile vehicles during the installation, tax holiday and normal production periods; on industrial inputs, oil products, lubricants and spare parts other than equipment, during the preliminary and normal production phases; and for other imports-including fuel for heavy equipment-the rules applicable to customs duties (exceptional temporary admission or total exemption from customs duties and taxes) are also applicable to VAT.

Exported mineral substances are subject to VAT at the rate of zero percent (0percent). The VAT credit arising from the exportation of mining or quarry production is reimbursed by the State within three months of submission of the related request. The above-described VAT regime also applies to the mining companies’ contractors and direct subcontractors.

Customs Duties:

The imposition of customs duties and taxes depend on the phase of activity. During the research phase, mining companies benefit from the following advantages: an “exceptional temporary admission” regime, under which all customs duties and taxes are suspended for automobiles and equipment; and a total exemption from customs duties and taxes for spare parts for equipment, inputs (raw materials and consumables), fuels and lubricants, and spare parts for light vehicles.

During the installation and production phases (tax holiday and normal production), the entry tax regime is as follows: an “exceptional temporary admission” with a suspension of all entry taxes and duties on equipment; total exemption on spare parts for equipment and light vehicles, inputs, fuels and lubricants; and payment of a single 5percent customs duty on automobiles.

Guelb Moghrein

is subject to a five-year tax holiday agreement with the Mauritanian government. Guelb Moghrein will be subject to Mauritanian income taxes on income earned subsequent to February 2011.

Exploration is now focused on delineating encouraging targets already identified at Guelb Moghrein. A new gold circuit will significantly increasing gold production and plant expansion will improve cost efficiencies. Production targets for end 2009 are: 39 000 tonnes of copper production; and again 100 000 ounces of gold production.