First Quantum sells Turkish mine for $340M

First Quantum Minerals (TSX: FM) will sell its Çayeli mine in Turkey to a company controlled by Cengiz Holding as the Canadian miner raises additional capital for its priority assets.

Istanbul-based Cengiz Insaat will buy the copper-zinc underground mine for US$340 million ($462 million) cash, including an advance payment of $50 million, First Quantum said Thursday in a statement. The deal is expected to close during the second or third quarter of the year.

The transaction reflects “the company’s disciplined approach to portfolio management” as it focuses on core strategic priorities such as a restart of the Cobre Panama operation, CEO Tristan Pascall said.

Cengiz Holding, one of Turkey’s largest industrial conglomerates, has been aggressively expanding its mining portfolio. Last week, the group made its biggest move to date with the $1.5 billion acquisition of the Copler gold mine from SSR Mining (TSX, Nasdaq: SSRM).

Situated on the Black Sea coast of northeastern Turkey, Çayeli has been in operation since 1994. It produces copper and zinc concentrates from a volcanic hosted massive sulphide deposit, with a reserve base that is expected to last until 2036.

Çayeli represents the second asset sale that First Quantum has made over the past three months. In December, it sold the past-producing Cobre Las Cruces mine in Spain for $190 million.

First Quantum shares initially rose on the news Thursday before giving up the earlier gains. By early afternoon, the stock was down 0.3% to C$33.40 in Toronto for a market capitalization of about C$28 billion. UBS analyst Myles Allsop nevertheless upgraded the stock to a ‘Buy’ from ‘Neutral’ with a price target of C$50, up from C$38.