Purchase of 100% of Quadra FNX shares

Monday, 05 March, 2012
Report no. 12/2012

The Management Board of KGHM Polska Miedź S.A. („KGHM”) announces that on 5 March 2012 the company 0929260 B.C. Unlimited Liability Company with its registered head office in Vancouver („0929260 B.C. U.L.C.”), as an indirect subsidiary of KGHM, purchased from the former shareholders of Quadra FNX Mining Ltd. with its registered head office in Vancouver ("Quadra FNX") 193 334 154 shares of Quadra FNX („Shares”), for the per-share price of CAD 15.00 (representing the equivalent of PLN 47.31 at the average CAD/PLN exchange rate of the National Bank of Poland from 5 March 2012), and the total price of CAD 2 900 012 310 (representing the equivalent of PLN 9 147 218 828 at the average CAD/PLN exchange rate of the National Bank of Poland from 5 March 2012). 
The shares were purchased in execution of the agreement dated 6 December 2011 entered into between KGHM and Quadra FNX under a Plan of Arrangement recommended by the Board of Directors of Quadra FNX („Agreement”), the signing of which KGHM announced in Current Report no. 40/2011 dated 6 December 2011. The shares purchased by 0929260 B.C.U.L.C. represent 100% of the share capital of Quadra FNX and 100% of the votes at the General Meeting of this company. The shares do not have a nominal value. 
The aforementioned number of Shares includes 1 832 543 shares of Quadra FNX which arose after the date of signing of the Agreement as a result of a conversion of instruments (options and warrants) issued by Quadra FNX, which are convertible to shares. 
The decision was simultaneously taken to de-list the Shares from trade on a regulated Canadian market and to change the company's name to KGHM International Ltd. 
Closure of the transaction took place following fulfilment of the conditions precedent foreseen in the Agreement announced by KGHM in the following Current Reports: no. 1/2012 dated 4 January 2012, no. 8/2012 dated 20 February 2012, no. 9/2012 dated 22 February 2012 and no. 10/2012 dated 29 February 2012. 
Purchase of the Shares was financed by the funds obtained by 0929260 B.C.U.L.C. based on financial agreements entered into within the KGHM Group, as announced by KGHM in Current Report no.11/2012 dated 5 March 2012, deriving from the internal funds of KGHM. 
Purchase of the Shares is of a long-term, equity investment nature. 
The carrying amount of the Shares purchased by 0929260 B.C.U.L.C. will be recognised in the accounts of 0929260 B.C.U.L.C. at the aforementioned purchase price, plus transaction costs. 
There are no relations between KGHM, the managing and supervising personnel of KGHM and the sellers of the assets. 
The Shares purchased represent assets of significant value according to §2 sec. 1 point 45 let. a) of the Decree of the Minister of Finance dated 19 February 2009 regarding current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state (Journal of Laws No. 33, item 259, with subsequent amendments), as their value exceeds 10% of the equity of KGHM. 

Legal basis: § 5 sec. 1 points 1 of the Decree of the Minister of Finance dated 19 February 2009 regarding current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state (Journal of Laws from 2009 No. 33, item 259 with subsequent amendments).