First Quantum tackles debt

First Quantum Minerals (FM-T) has filed a preliminary prospectus to issue US$10-15 million worth of new shares.

The financing, which is subject to regulatory and market conditions, will be restricted to Ontario, British Columbia and Europe. Canaccord Capital will act as its underwriter on a best-efforts basis.

Net proceeds will be used to reduce debt. At Dec. 31, 2000, First Quantum had long-term debt of US$29 million and a working capital deficiency of US$5.3 million.

First Quantum recently obtained a secondary listing on the London Stock Exchange’s Alternative Investment Market under the ticker symbol fqm. The company has 31.4 million shares outstanding.

First Quantum operates in Zambia, where it mines, smelts and refines copper and cobalt. In 2000, its share of production topped 32,470 tonnes copper and 367 tonnes cobalt, plus 61,889 tonnes of surplus sulphuric acid.

Combined operating costs averaged US42 per lb. copper, net of byproduct credits and tolling charges. Factoring in other costs left the company with US$7.5 million (or 30 per share) in net earnings on 2000 revenue of US$91.18 million.