TRYNESS TEMBO, Lusaka
FIRST Quantum Minerals Limited (FQML) has signed an agreement with LS-Nikko Copper to acquire a 10 percent ownership interest and shareholder loans in Minira Panama SA (MPSA) which holds the concession for the Cobre Panama project at a cost of US$635 million.
The acquisition’s headline value is US$635 million payable in six instalments over a five-year period.
FQML owns Kansanshi mine and Sentinel in Zambia.
FQML intends to finance the entire first instalment from proceeds of an additional precious metals stream specifically linked to the acquired 10 percent interest, while maintaining optionality as to how future instalments are met.
The company will acquire LS-Nikko Copper’s 50 percent interest in Korea Panama Mining Corporation, a 50-50 joint venture company with Korea Resources Corporation (KORES), which holds a 20 percent interest in MPSA.
“Closing is conditional on the approval of the board of directors of KORES which is expected by the end of September 2017,” a statement availed to the Daily Mail by Lusaka Securities Exchange on Tuesday reads.
FQML chairman and chief executive officer Philip Pascall said the acquisition underlines the firm’s confidence in MPSA as a world class project and the strong fundamentals for copper.
“The Cobre Panama project is now over 60 percent complete and progressing well towards its commissioning next year, and on track to be one of the major but 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,” Mr Pascall said.