First Quantum Minerals Ltd sells Kevitsa mine in Finland for US$712 million to repair balance sheet – by Peter Koven (Financial Post – March 11, 2016)

http://business.financialpost.com/

First Quantum Minerals Ltd. has struck a much-needed deal to sell a nickel mine and bring relief to its debt-laden balance sheet.

The Toronto-based company said on Thursday that it will sell its Kevitsa mine in Finland to Boliden AB for US$712 million in cash. The transaction with the Swedish firm should close in May.

First Quantum wants to cut its debt by US$1 billion in the first quarter of 2016, and this sale gets the company most of the way to its goal. Analysts cheered the deal, as Kevitsa fetched a higher price than most of them expected in a weak nickel market.

“We believe this is a more than fair transaction for (First Quantum),” Dundee Capital Markets analyst Joseph Gallucci said in a note.

Like many other large mining companies, First Quantum has leverage problems because it borrowed and spent too much money during the commodity boom and was vulnerable when metal prices plummeted. In 2013, the base metals miner acquired Inmet Mining Corp. for $4.9 billion of cash and stock.

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