First Quantum Minerals Ltd. is currently exploring various options to mitigate the financial impact caused by the closure of its Cobre Panama copper mine. The Vancouver-based copper miner has expressed its intention to consider the sale of some of its smaller operations, as well as the potential sale of stakes in its larger mines. The company has already received interest from major players who see an opportunity to capitalize on its struggling stock.
One such interested party is Barrick Gold Corp., who reportedly approached First Quantum last year with an expression of interest in acquiring the company. The closure of the Cobre Panama mine, which was forced by Panama’s Supreme Court ruling that deemed the mining contract unconstitutional, has prompted First Quantum’s shares to plummet by over two thirds since last summer.
Cobre Panama is a significant player in the global copper market, accounting for approximately 1.5 percent of global output. In fact, the mine’s contribution to First Quantum’s revenue in the first three quarters of 2023 stood at 46 percent, with about 80 percent of the company’s operating profit derived from it. However, the construction of the mine left First Quantum burdened with significant debt, with lenders owed approximately US$6.8 billion as of September 30. To address the revenue shortfall, First Quantum has taken measures such as eliminating its dividend and reducing or delaying capital expenditures by US$650 million over the next two years. The miner is also engaging in discussions with lenders in hopes of extending loan terms.
First Quantum Minerals is facing a challenging period as it grapples with the closure of its Panama copper mine. With the exploration of various options and interest from potential buyers, the company is actively seeking ways to alleviate its financial strain.
The source of the article is from the blog papodemusica.com