TORONTO (miningweekly.com) – Canadian base metals miner First Quantum on Wednesday strongly disputed claims by note holders that it had violated the terms of indentures and defaulted on certain debt it took on after acquiring rival Inmet Mining earlier this year.

The Vancouver-based company said it had received notice from a small group of its shareholders including CI Investments, Barometer Capital and funds managed by Capital Group that it had violated certain indentures and Inmet's 7.5% senior notes due in 2021 and the 8.75% senior notes due in 2020, when Inmet amalgamated with First Quantum subsidiary Akubra.

First Quantum in March succeeded with its C$5.1-billion hostile takeover bid for Inmet.

The company said that it firmly believed – based on the legal advice from two law firms – that even if the transaction resulted in a breach of the indentures, the only remedy available to the noteholder group under the indentures would be to accelerate the debt and repayment at par, which would reflect a significant discount to current trading prices.

First Quantum chairperson and CEO Philip Pascall dismissed the claims as opportunistic.

"First Quantum strongly disputes the claims of the noteholder group in relation to the Inmet indentures. These claims are without legal foundation, highly opportunistic, and run the risk of destroying value for all Inmet noteholders, a large proportion of which are not part of the noteholder group,” he said.

He added that First Quantum remained “very confident” in the strength of its legal position and the company intended to take immediate legal action to enforce it. “We will also remain open to reaching an amicable resolution.”

First Quantum asserted that it retained very strong credit and a robust balance sheet, as was demonstrated by the signed extension commitment with Standard Chartered Bank at the end of last month.

Separately, First Quantum also on Wednesday said that it had agreed to a 25% pay increase for workers at its Kansanshi mine in Zambia.

News agency Reuters quoted Kansanshi mine spokesperson Godfrey Msiska as saying that the mine had reached an agreement with workers covering a three-year period with a 10% increase in 2014, 8% increase in 2015 and 7% increase in 2016.