First Quantum eyes copper recovery; boosts project spending
TORONTO May 21 (Reuters) - First Quantum Minerals laid out plans on Thursday for C$600 million ($492.05 million) in new spending to speed up project development, a sizeable bet on a copper market recovery it sees in two to three years.
The Vancouver-based miner, which is raising up to C$1.44 billion in a share issue, said it will use the remainder of the money to pay down debt.
"It's better to build at the bottom of the cycle than at the top, but also to try and get as much of that pipeline into production to coincide with the inevitable rise in the copper price in the next two or three years," First Quantum President Clive Newall said on a conference call with analysts.
First Quantum shares were down 4.4 percent on the Toronto Stock Exchange at mid-session.
Scheduled to close around June 4, it is the second-biggest mining industry deal this year, following a $3.7 billion raise from Coal India Ltd in late January, according to Thomson Reuters data.
Some C$300 million to C$400 million will go to expand the Kansanshi copper mine in Zambia, C$150 million will advance permitting for the Haquira project in Peru, while some money is earmarked for the Taca Taca deposit in Argentina, Newall said.
The company, which had C$6.3 billion in debt as of March 31, will spend the C$600 million over the next 18 months. That comes on top of C$1.4 billion budgeted for projects, such as Cobre Panama, this year.
"Now that we have resolved our balance sheet issues, with the relaxation of covenants ... We're now looking to move forward," Newall said.
The three-month price of copper on the London Metal Exchange touched a five-year low of $5,339.50 per tonne in January, but has since recovered and was trading at $6,259 a tonne on Thursday.
($1 = 1.2194 Canadian dollars) (Reporting by Susan Taylor; Editing by Alan Crosby)
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