First Quantum sells Finnish mine for $712m and hints at more deals

First Quantum Minerals has agreed to sell its Kevitsa nickel-copper-platinum group elements mine for $712m.

The sale of the northern Finnish mine, which in 2015 produced approximately 8,800 tonnes of nickel and 17,200 tonnes of copper, is expected to close during May 2016, subject to competition approvals.

"This transaction is one of the initiatives within our plan, announced in October 2015, aimed at strengthening the company's balance sheet and improving its capital structure to better suit the development and start-up timetable of the Cobre Panama project," said chairman and CEO Philip Pascall.

"We are continuing to advance other strategic initiatives, which are expected to be finalized at various times over the next several months, to meet those objectives."

At year end, First Quantum had net debt of approximately $4.7bn, which represented gearing of just below 31%.

The company is currently focused on developing its Cobre Panama project for commissioning in 2018, which is expected to cost around $6bn to produce around 320,000 tpa of copper, 100,000 oz pa of gold, 1.8m oz pa of silver and 3500 tpa of molybdenum by-products over a 34 year mine life.

Analysts at JP Angel said: "The sale of Kevitsa and Mr Pascall’s comments regarding other “initiatives” to strengthen the balance sheet as the development of the Cobre Panama project proceeds will no doubt prompt speculation concerning which of the company’s other assets are available for sale.

"To add SP Angel’s voice to the speculation, perhaps the company’s other Finnish operation, the Pyhasalmi copper zinc mine; the Cayeli copper/zinc mine in Turkey; and the Guelb Moghrein copper/gold mine in Mauritania; and perhaps some of the more advanced exploration projects could all be available – at the right price."

Shares in the company were up 16% to 370p just before 1300 GMT on Thursday.