First Quantum/Inmet -- summary under Unsolicited Bids (corporate)

Offer

FQM (Akuba) Inc. (the "Offeror"), which is a CBCA wholly-owned subsidiary of First Quantum (which is a TSX-listed and LSE-admitted BCBCA company), is offering to each shareholder of Inmet (which is a TSX-listed CBCA company) the following consideration for each share of Inmet (conditional inter alia on at least 66 2/3% of the Inmet shares on a fully-diluted basis being deposited):

• $72 in cash;

• 3.2967 common shares of First Quantum; or

• $36 in cash and 1.6484 common shares of First Quantum.

However, the total cash consideration and First Quantum shares to be provided under the offer and a second-stage transaction will not exceed $2,531,212,776 and 115,901,421 shares (and is fixed at these amounts?). An Inmet shareholder is required to deposit one shareholder rights plan right with each deposited Inmet share. (The shareholders' rights plan was adopted by Inmet following the initial First Quantum overture but without the plan being ratified by shareholders or approved by the TSX.) The cash consideration will be reduced for any Inmet dividends, with such dividends otherwise being required to be paid to the Offeror. (Inmet has $1.9B of cash.) The offer represents a 33% premium to the Inmet closing price on November 23, 2012.

Compulsory Acquisition/Subsequent Acquisition Transaction

If 90% acceptance, First Quantum will acquire the balance of the Inmet shares under a Compulsory Acquisition Transaction "on the same terms as…under the Offer – and otherwise under a Subsequent Acquisition Transaction. The Offeror expects that a Subsequent Acquisition Transaction would be a "business combination" under MI 61-101.

"The Offeror currently intends (x) that the consideration offered per Inmet Share under any Subsequent Acquisition Transaction proposed by it would be equal in value to and in the same form as the consideration paid to Shareholders under the Offer, (y) that such Subsequent Acquisition Transaction will be completed no later than 120 days after the Expiry Date and (z) to cause any Inmet Shares acquired under the Offer to be voted in favour of any such transaction and, where permitted by MI 61-101 to be counted as part of any Minority Approval required in connection with any such transaction."

Canadian tax consequences

No rollover for Canadian residents. No specific (but in terrorem) disclosure re a Subsequent Acquisition Transaction. Standard taxable Canadian property disclosure for non-residents.

Robert Willens, "Canadian Rollovers are Hard to Come By"

, Tax Notes International, 8 April 2013, p. 145: After describing the First Quantum bid and noting the absence of a rollover under s. 85.1, he then stated:

[I]f the tender offer and amalgamation — as seems highly likely — are treated as part of an integrated plan, U.S.shareholders of Inmet should be entitled to partake of the benefits of reorganization treatment of that integrated transaction as long as the value of the First Quantum shares conveyed in the transaction is at least 40 percent of the value of the aggregateconsideration conveyed to the Inmet shareholders. An acquisition of stock coupled with an upstream or sideways asset movement will be viewed as a direct acquisition of the target's properties by the issuing corporation (or by a subsidiary thereof) if the steps,when analyzed as a one-step transaction, constitute a reorganization. See Rev. Rul. 2001-46, 2001-1 C.B. 321. Assuming the First Quantum stock represents the requisite proportion of the aggregate consideration conveyed to the Inmet shareholders, the transaction, when viewed as a direct acquisition by First Quantum of the properties of Inmet by means of a merger (the amalgamationis analogized to a merger), constitutes a reorganization within the meaning of section 368(a)(1)(A). For purposes of section 368(a)(1)(A), a statutory merger is a transaction effected under the necessary statutes and in which, as a result of the operationof those statutes, all the assets and liabilities of each member of one or more combining units become the assets and liabilities ofone or more members of one other combining unit and the transferor unit ceases its separate legal existence, which happened here. See reg. section 1.368-2(b)(1)(ii).