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Sphere Recommended A$2.50 per Share Cash Offer by Xstrata

Highlights: • Premium of 73% to the 30-trading day volume weighted average price and 61% over the closing price of A$1.55 per Sphere share on 23 August 2010 • Unanimously recommended by Sphere’s Board of Directors • Sphere Directors have agreed to sell their shares and options to Xstrata, representing 5.4% of Sphere’s fully diluted share capital • Xstrata’s offer provides Sphere shareholders with an attractive, risk-free, cash premium for their investment • Acquisition gives Xstrata exposure to attractive iron ore market through organic growth projects in Mauritania Perth and Zug 24 August 2010 Xstrata plc (LSE: XTA.L, SWX: XTA.S) and Sphere Minerals Limited ( SPH) ("Sphere") announce that Sidero Pty Limited (ACN 145 740 450) (“Xstrata”), a wholly owned subsidiary of Xstrata plc, and Sphere have entered into an Offer Implementation Agreement for an all-cash offer (the “Offer”) by Xstrata to acquire all of the issued and outstanding shares of Sphere by way of a recommended off-market takeover offer. Xstrata’s Offer is for A$2.50 per share, valuing Sphere at approximately A$428 million (US$383 million). The Offer represents a 61% premium over the closing price of A$1.55 per Sphere share on the Australian Securities Exchange (the “ASX”) on 23 August 2010 and a 73% premium over the volume weighted average price of Sphere shares over the last 30 trading days on the ASX. The Offer will be financed through Xstrata's existing credit facilities and cash on hand. Xstrata’s Offer follows extensive consideration by the Sphere Board of the strategic options for Sphere’s projects, including discussions with other parties. The Sphere Board concluded that Xstrata’s Offer represents the best opportunity for Sphere shareholders to maximise the value of their investment. Each of the Directors of Sphere has agreed to sell all of their Sphere shares and options to Xstrata and no other party, subject to the Offer becoming unconditional, at the Offer price. In total, these agreements represent 5.4% of Sphere's fully diluted shares outstanding. Sphere is a West-Africa focused iron ore company, with interests in three iron ore projects in Mauritania, West Africa: • the large-scale Guelb el Aouj project through a 50/50 joint venture with Société Nationale Industrielle et Minière (SNIM), Mauritania’s state-owned iron ore producer; • the near-term Askaf project, located 35km south of Guelb el Aouj; • the Lebtheinia project, located 90km from the coast. Alexander Burns, Managing Director, Sphere Minerals Limited., commented: “Xstrata’s offer provides our shareholders with an attractive cash premium which recognises the significant achievements of our team in developing the Company’s portfolio of iron ore projects over the past ten years. Sphere’s projects have now reached the stage at which they will benefit from the robust financial capacity and support of a major diversified mining group to ensure they reach their full potential, for the benefit of all our stakeholders in Mauritania. We recommend that, in the absence of a superior proposal, shareholders accept Xstrata’s offer.” Peter Freyberg, Xstrata Coal Chief Executive, said: “Xstrata’s acquisition of Sphere will add a range of organic growth projects in iron ore to our portfolio. This includes potential near-term production from the Askaf project and longer term growth potential from the large-scale Guelb El Aouj project in Mauritania, a country with an established history of iron ore exports. The acquisition brings together Xstrata Coal’s proven bulk mining and project development capabilities and Sphere’s team of experienced iron ore professionals with a successful track record of operating in Mauritania. Xstrata has the financial and technical capabilities to expedite the development of Sphere’s greenfield growth projects and manage the inherent risks involved. We believe our offer provides Sphere shareholders with a full and fair risk-free cash premium for their investment.” Xstrata and Sphere have entered into an Offer Implementation Agreement, which includes customary deal protection including traditional “no shop” and “no talk” clauses, and the payment to Xstrata of a break fee of A$4.4 million in certain circumstances where a deal is not completed. Xstrata expects to dispatch its Bidder’s Statement to all Sphere shareholders containing detailed information relevant to the Offer shortly. Sphere expects to dispatch its Target’s Statement either together with or shortly after dispatch of the Bidder’s Statement. The Offer will be open for acceptance for a period of not less than one month from the date the documents are mailed and will be conditional upon, among other things, valid acceptances of the Offer by Sphere shareholders owning not less than 90% of the Sphere shares. Once the 90% acceptance level is achieved, Xstrata intends to take steps available to it to acquire any outstanding Sphere shares. The Offer will be subject to certain customary conditions, including approval by Australia’s Foreign Investment Review Board and the absence of a material adverse change with respect to Sphere. Xstrata may waive the conditions of the Offer in certain circumstances. Gilbert + Tobin is acting as legal adviser to Sphere in relation to the Xstrata Offer. Mallesons Stephen Jaques is acting as legal counsel to Xstrata and Deutsche Bank is acting as financial adviser.