“This is a great offer to be able to recommend to Jubilee shareholders and an important milestone for Jubilee, representing the culmination of 20 years of exploration success, growth and development,” Jubilee Executive Chairman Kerry Harmanis said. “Jubilee is at an important stage and will benefit from the deeper capabilities and balance sheet of a major mining company such as Xstrata to maximize the potential of its resource base.

“Xstrata’s bid offers shareholders a compelling opportunity to realize in cash the substantial growth in value created by their investment at an attractive point in the commodity cycle and equity markets overall, without taking on the risks associated with the next phase of Jubilee’s development.

“We believe Xstrata’s recommended offer is the most attractive option for shareholders and positions our operations and employees as part of a rapidly growing, successful global nickel producer,” said Harmanis.

Ian Pearce, CEO, Xstrata Nickel, said, “Jubilee offers Xstrata Nickel immediate access to additional production, geographic diversification and introduces substantial near term growth potential into its portfolio. In particular, the combination of two of the most successful exploration teams in the nickel industry, together with Jubilee’s highly prospective regional land position, offer excellent prospects for significant additional growth in the region. We look forward to optimizing Jubilee’s growth potential, creating additional employment opportunities and increasing capital and community investment in the region, for the benefit of shareholders, employees and the stakeholders in Jubilee’s current and future operations.”

Jubilee owns the Cosmos nickel project in Western Australia, 40 km north of Leinster, and recently announced formal approval to proceed with the development of its Sinclair nickel project located 100 km to the south. The Cosmos project is located in a nickel sulphide district which hosts deposits such as Mt. Keith, Yakabindie, Honeymoon Well, Perseverance and Rocky’s Reward at Leinster.

To date, Jubilee has discovered eight high-grade massive nickel sulphide deposits within the area—Cosmos, Cosmos Deeps, Alec Mairs (AM) 1, 2 and AM5, Prospero, Tapinos and Sinclair along with the large low-grade Anomaly 1 deposit.

Jubilee claims the Sinclair project is evolving as a substantial new production center, and the company recently announcing formal approval to proceed there with a new A$90-million standalone mine and processing facility.

Jubilee has announced an updated production target from the 2007/08 financial year through until the 2014/15 financial year for both its core high-grade nickel sulphide business and for a potential larger scale development of the AM5 nickel deposit. The targeted objective includes high-grade production of nickel-in-concentrate increasing from 12,000 mt in 2007/08 to approximately 17,000 mt in 2008/09 and 22,000 mt in 2010/11 to around 30,000 mt/y thereafter.