First Quantum raises Kansanshi funds

First Quantum Minerals (FM-T) has inked a financing deal with a private equity fund to raise up to US$35 million.

Subject to the usual conditions, AIG African Infrastructure Fund will purchase 4 million First Quantum shares at $5.60 apiece and may purchase 1.25 million more shares at $8 each.

As part of the deal, AIG has agreed to lend First Quantum US$10 million to help cover the cost of developing the Kansanshi copper-gold project in central Zambia. The fund can treat the loan as subordinate debt or convert it to shares, though that reduces proportionately the number of shares it can buy at the $8-rate.

A recently tabled independent feasibility study pegged Kansanshi’s capital cost at US$163.4 million. Standard Bank Group and WestLB have already agreed to cover at least US$120 million of the price tag.

Leachable reserves are pegged at 46.9 million tonnes grading 1.75% copper and 0.29 gram gold per tonne. Another 95.6 million tonnes at 1.03% copper and 0.19 gram gold can be floated and concentrated for shipment to nearby smelters.

The reserve, which is divided between two deposits, is expected to churn out 1.6 million tonnes copper and 395,479 oz. gold over 16 years. About 44% of the copper output will be in the form of cathode, and some of the gold can be captured in a gravity circuit.Life-of-mine operating costs are projected at US$838 per tonne copper (US38 per lb.), net of gold credits, or US$945 per tonne if contract miners are employed.