How First Quantum Minerals Ltd raised $1.44B, the biggest base metals equity offering since 2007 – by Peter Koven (National Post – January 29, 2016)

http://business.financialpost.com/

By any standard, 2015 was a horrendous year for metal prices. Yet First Quantum Minerals Ltd. managed to pull off the biggest base metals equity offering in the world since 2007.

It is hard to overstate how much of an anomaly this transaction was. First Quantum raised $1.44 billion. Canada’s second-largest base metals equity deal of 2015 belonged to Travali Mining Corp. It was worth $30.6 million, or about two per cent of what First Quantum raised.

“This was an exceptional deal,” said Luke Gordon, managing director of investment banking at Goldman Sachs. “It was one our client (First Quantum) was very happy about.”

The deal, which closed in early June, was priced at $16.25 per share. Copper prices subsequently fell off a cliff, and First Quantum’s stock is worth less than $3 today. The timing could not have been any better.

The roots of the financing date back to 2014. First Quantum was pouring vast sums of capital into its US$6.4 billion Cobre Panama project while dealing with volatile commodity prices and a sizable debt load. The company could see a potential funding gap in the future. A giant equity offering was the logical way to address it.

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