Tertiary, First Quantum Minerals team up to boost Zambian exploration

Shares in Tertiary Minerals (LSE: TYM) jumped on Thursday after the junior said it had inked a technical cooperation agreement with First Quantum Minerals (TSX: FM), which would “turbo-charge” its copper exploration projects in Zambia.

The deal covers Tertiary’s Mukai and Mushima North project, in Zambia’s north-western province. It is directly adjacent to First Quantum’s Trident project, which includes the large Sentinel copper mine and the recently opened Enterprise nickel mine.

The Mushima North exploration licence, in the Kasempa district, is also located in an active exploration area for First Quantum.

Tertiary Minerals’ shares took off, rising by almost 90% in the early morning to trade at 21 pence (32¢) each and were exchanging hands last at 19 pence (29¢) each.

Together, Tertiary and First Quantum will set up a technical committee to work collaboratively to advance and develop the two projects.

“This agreement will turbo-charge Tertiary’s Zambian exploration in these two key licence areas,” Executive Chairman Patrick Cheetham said in a statement. “We are set to benefit from FQM’s extensive and in-depth country experience, gained over many years of exploration and mine development in Zambia”.

First Quantum will also advise and assist Tertiary on the project’s technical matters and provide the miner with all of its historical exploration data for the two licence areas.

The London-based miner said the agreement will provide them with expertise of one of the world’s biggest copper producers, without the associated cost. In return, Tertiary added, First Quantum will gain first-hand knowledge of any new discoveries made and will be in a pole position to be a future development partner.

Betting on Zambia

First Quantum produced 435,000 tonnes of copper and 128,000 oz. of gold from its Zambian operations in 2021 and it recently approved a $1.25 billion expansion of its Kansanshi copper mine. The decision, the miner said at the time, was prompted by “renewed confidence” in Zambia’s investment climate. 

It also approved a further $100 million investment in its Enterprise nickel project, also in the African country, where it expects to start producing in 2023. After that, First Quantum will ramp up operations to produce 30,000 tonnes of nickel in concentrate a year.

First Quantum Minerals shares were trading at $23.47 as of noon in Toronto on Thursday. Its equity has traded in a 52-week window of $18.67 and $45.38. It has a market cap of $16 billion.