By Jacob Lorinc
(Bloomberg) — First Quantum Minerals Ltd. has attracted
interest from multiple parties wanting to buy a minority stake
in its Zambian copper operations, as the Canadian miner
continues efforts to shore up its balance sheet.
First Quantum has signed non-disclosure agreements with
several groups interested in the African mines, and expects to
soon provide access to a data room for due diligence, said First
Quantum Chairman Robert Harding.
He didn’t specify details about
the parties or a timeline for signing a potential deal.
Talks to sell a minority stake in the Zambian business are
underway as the company faces pressure to strengthen its balance
sheet and raise cash following the closure of its flagship
copper mine in Panama. The firm sold about $1.15 billion in
stock and raised $1.6 billion from a notes offering last month,
and it has said it may look at selling smaller mining assets.
“We’re busy getting the data room available for people to
be able to look at the data, but there isn’t a specific time
frame,” Harding said in a Monday interview in Toronto. “It’ll
take whatever it takes for those other organizations to go
through the data room and make decisions, and come back to us
with potential proposals.”
Shares of First Quantum rose as much as 7.8% to C$13.90 as
of 3:37 p.m. in Toronto, the highest intraday price in two
months.
First Quantum’s Zambian copper assets are the Sentinel and
Kansanshi mines. The southern African nation accounted for about
half of the company’s copper output and revenue last year, and
delivered more than $450 million in operating profit. First
Quantum is also ramping up a nickel mine in the country, which
entered production in July.
For the Zambian assets, Harding said the company is
specifically looking for a partner that could “perhaps take
interest in that asset, but also be interested in working with
us on a future project.” He said the firm is looking for a party
that is interested in exploring and developing greenfield mining
projects globally.
Last month’s refinancing efforts included an agreement to
amend some terms of its loan facilities with its lenders to
avoid a covenant breach at the end of this year, which Harding
said puts First Quantum in a position where it has no major debt
maturities within the next couple years. The measures also help
on company projects including a major expansion in Kansanshi
known as S3.
“We will have the runway to be able to complete the S3
expansion and focus on other projects going forward,” Harding
said. “And that will give us time to work through whatever that
time frame may be with Panama.”
Credit: Bloomberg
