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The Toronto-based miner on Monday refuted Bloomberg reports last week saying the company was drawing preliminary takeover interest from global miners after losing half its value over the past five years. First Quantum's shares had gained about 20% since Thursday after the Bloomberg report surfaced, and dropped substantially Monday when the miner said there was no takeover proposal on the table.
The Bloomberg report said the company was in discussions with Chinese firm Jiangxi Copper for a potential sale of a minority stake in its Zambia copper assets, or more.
First Quantum has been active in Zambia of late. It said in July it had reached a settlement with the Zambia Revenue Authority on a $7.6 billion bill received in March 2018 for an assessment for import duties. The Zambia Chamber of Mines also recently flagged the high tax burden on mines as unsustainable and uncompetitive, after the jurisdiction increased its sliding scale for royalties of 4%-6% by 1.5% and introduced a new 10% tax when the price of copper exceeds $7,500/t.
Among First Quantum's Zambia assets is the Kansanshi operation, Africa's largest copper mine, which is expected to produce 235,000t copper and 135,000oz gold in 2019, up from 2018 production of 251,522t and 130,019oz, respectively. Second in line is Sentinel which is expected to produce 230,000 tonnes of copper this year, marginally more than the 2018 total of 223,656t.
The company is currently finishing construction of its US$6.7 billion Cobre Panama mine on the Atlantic coast of Panama, which remains on track to produce between 140-175,000t copper in 2019, with more than 80% of production expected in the second half of the year. Production is expected to ramp up to more than 375,000t/y copper under an expanded operation from 2023 onwards.
First Quantum shares, which have ranged from C$17.36-$7.84 over the past year, traded down 13.27% on Monday to $10.59 to capitalise it at $7.35 billion. The stock is trading 37.6% below its year-earlier value and is down 43% over the past five years.
