FQM Shelves Plan to Sell Zambian Copper Stakes After $1B Gold-Streaming Deal

First Quantum Minerals Retains Zambian Copper Assets Following $1 Billion Gold-Streaming Transaction

First Quantum Minerals Ltd. has abandoned plans to sell minority stakes in its Zambian copper mines after a $1 billion gold-streaming deal alleviated balance sheet pressures.

Earlier this year, the company had considered divesting minority interests in its Kansanshi and Sentinel operations in Zambia, following the forced closure of its flagship Cobre Panama mine in late 2023.

Chief Executive Officer Tristan Pascall said the recent agreement to sell part of Kansanshi’s gold output to Royal Gold Inc. has reduced the need for such divestments.

“While we remain open to partnerships, we are not pursuing a transaction in Zambia,” Pascall said in an August 22 interview. “We are not looking at selling the Zambian minority stakes.”

First Quantum had previously been in discussions with several potential buyers, including Japanese trading house Mitsui & Co. and Saudi Arabia’s state-backed Manara Minerals Investment Co., Bloomberg News reported.

The gold-streaming deal is the largest of its kind globally in the past decade, according to RBC Capital Markets, which advised the company.

Combined with debt refinancing and two copper prepayment agreements totaling $1 billion, the transaction has strengthened First Quantum’s balance sheet.

Additionally, the August 19 commissioning of a $1.25 billion expansion at the Kansanshi copper mine means the Zambian operations will once again make a positive contribution to cash flow, Pascall noted.

As the $10 billion Cobre Panama mine remains closed, First Quantum’s Zambian operations accounted for more than 90% of the firm’s output last year and represent over half of production in Africa’s second-largest copper producer.

With net debt reduced to approximately $4.5 billion, First Quantum has more financial flexibility as it engages with the Panamanian government regarding a potential restart of the Cobre Panama mine. The company’s shares have risen more than 50% since an April low.

In June, Panama’s government allowed First Quantum to begin exporting stockpiles of semi-processed copper concentrates from the operation.

Pascall emphasized that any timeline for a possible restart will be determined by the government. He declined to comment on whether formal talks have begun, noting that the matter would be addressed by President Jose Raul Mulino.

“We can be constructive, we can be patient,” Pascall said. “We very much believe the government, led by the president, will guide the timetable as we work through the process.”