First Quantum ups interest in Equinox to 17%

First Quantum Minerals (FM-T, FQM-L) is quietly buying up shares of fellow copper miner Equinox Minerals (EQN-T, EQXMF-O) for “investment purposes,” it says.

First Quantum announced recently that it purchased 41.2 million shares, or 7.31%, of Equinox, on Dec. 5, bringing its total shares in the company to 97.55 million, or 17.27%.

Both companies own copper projects in Zambia. Equinox is developing its 100%-owned Lumwana copper mine in the Northwestern province of the country, about 65 km west of First Quantum’s Kansanshi copper-gold mine. Kansanshi has been in production since April 2005.

The markets applauded the news. On the Toronto Stock Exchange, Equinox shares closed at $5.60, up 85 apiece, or nearly 18%, on a trading volume of 15.6 million. First Quantum’s shares jumped $4.46 each to close at $95.53, with 254,950 shares trading hands.

Equinox anticipates construction will be completed and Lumwana commissioned in the second quarter of next year. The mine is expected to produce an average of 169,000 tonnes copper per year contained in concentrates for the first six years of its 37-year mine life. Equinox forecasts a strip ratio of 4.2:1 over the mine’s lifespan.

The Lumwana property covers 1,355 sq. km and hosts measured and indicated resources of 321 million tonnes averaging 0.73% copper, plus 417 million inferred tonnes of 0.6% copper.

Lumwana’s mill will process 20 million tonnes of ore per year, making it the largest in Africa, Equinox says.

In August, Equinox closed a US$583.8-million project loan, made up of subordinated and senior project financing, giving the company enough capital to complete construction at Lumwana.