First Quantum's Cobre Panama project, in Panama
JOHANNESBURG (miningweekly.com) – TSX-listed base metals miner First Quantum Minerals has signed an agreement with LS-Nikko Copper to acquire the Korea-based smelter’s 10% ownership interest and shareholder loans in Minera Panama, First Quantum’s Panamanian subsidiary, for a headline value of $635-million, payable in six installments over a five-year period.
Minera Panama holds the concession for the Cobre Panama openpit copper development project, in Panama.
First Quantum chairperson and CEO Philip Pascall said in a note on Thursday that the acquisition underlines the company’s confidence in Cobre Panama as a “world-class project”, as well as its confidence in the strong fundamentals for copper.
“The Cobre Panama project is now over 60% complete and progressing well towards its commissioning next year, and on track to be one of the major, low-cost copper producers when in operation.
“We are very pleased that this compelling opportunity became available and that we have been able to reach agreement with LS-Nikko Copper on terms that match the development and commissioning timetable for Cobre Panama."
First Quantum intends to finance the first instalment from proceeds of an additional precious metals stream specifically linked to the acquired 10% interest, while maintaining optionality as to how future installments are met.
The base metals miner will acquire LS-Nikko Copper's 50% interest in Korea Panama Mining Corporation, a 50/50 joint venture company with Korea Resources Corporation, which holds a 20% interest in Korea Panama Mining Corporation.
Closing of the deal is conditional on the approval of Korea Resources Corporation’s board of directors, which is expected by the end of September.