First Quantum is considering Rio Tinto as a partner for the Haquira deposit, but nothing is set in stone yet.
First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) is on the lookout for new strategic partners to develop its Peruvian copper projects and is considering mining giant Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO), according to First Quantum’s CEO Philip Pascall.
First Quantum, which owns the Haquira porphyry copper deposit in Southern Peru, is looking for strategic partners in order to continue development.
Pascall told Reuters that working with Rio Tinto is one of the options the company is exploring, but it is open to discussion.
“That is what we are going to explore and it just depends on what kind of partner we get,” he said regarding the search for a partner. “There are a number of different potential players, not necessarily mining companies.”
First Quantum has had an interesting year so far. In September, the company dispelled rumors that it was going to be purchased by other companies, stating that First Quantum had not engaged in any discussions regarding a takeover bid.
Later in October, First Quantum posted its Q3 2019 results, including a net loss of US$73 million. But the company also achieved its commercial production goal at Cobre Panama a month early, producing 87,142 metric tons of copper by the end of September.
Meanwhile, Rio Tinto has run into some issues these past two weeks, as a non-governmental organization sued the government of Mongolia over the agreements the company made with the country regarding the Oyu Tolgoi copper mine. Earlier this week, the government of Mongolia gave Rio Tinto the go-ahead to move forward with the project.
The operations that the two companies would hypothetically process together would be the Haquira deposit and the La Granja deposit, owned by First Quantum and Rio Tinto, respectively.
The Haquira deposit is located close to the Las Bambas copper mine and has a resource of 3.7 million metric tons of contained copper equivalent and inferred resources of 2.4 million metric tons of contained copper equivalent.
The La Granja deposit is a porphyry copper deposit in Peru, currently a prospect featuring 17,000,000 metric tons of 0.56 percent grade copper.
Both First Quantum and Rio Tinto’s share prices have made gains this year, posting 17.23 percent and 27.06 percent increases respectively.
On November 28, Rio Tinto opened the market trading for US$54.86, while First Quantum opened for C$12.25.
In London, copper traded for US$5,925 per metric ton on November 27.
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Securities Disclosure: I, Sasha Dhesi, hold no direct investment interest in any company mentioned in this article.