FIRST Quantum Minerals’ second-largest shareholder will pay $500m for copper shipments in an arrangement that strengthens the mining company’s balance sheet while its flagship asset in Panama remains shuttered.
Bloomberg News said the company is also in talks with lenders to amend and extend its loan facilities, and expects a conclusion “in the near term.” First Quantum also is considering a minority investment from strategic investors in its Zambian business, and is running a sales process for its small Las Cruces mine in Spain.
First Quantum is hoping to bolster its balance sheet after it was ordered to close its Cobré Panama copper mine last year after a Supreme Court ruled the project’s operating contract fell foul of the constitution.
Shutting the mine, which accounted almost 40% of First Quantum’s revenue in 2023, has wiped out more than half of First Quantum’s market value and cast the company’s finances into uncertainty as billions of dollars of its debt mature in the coming years, said Bloomberg News.
There is a risk lender covenants could be breached this year resulting in “material uncertainty” that may cast doubt on the company’s ability to continue, First Quantum said in its fourth-quarter earnings report on Tuesday.
The three-year prepayment agreement will give shareholder Jiangxi Copper 50,000 tons of copper anode per year from First Quantum’s Kansanshi mine in Zambia.
First Quantum reported $1.2bn in revenue in the fourth quarter, down 34% from a year earlier and trailing analysts’ average estimates.
