Barrick Gold Corp. is reportedly in discussions with major investors of First Quantum Minerals Ltd., assessing their willingness to support a potential takeover. This move comes in the aftermath of the abrupt closure of First Quantum’s flagship mine, causing significant market upheaval and eroding over half of its market value. Sources familiar with the matter revealed that Barrick’s CEO, Mark Bristow, engaged with some of First Quantum’s largest investors late last year in private talks. It remains uncertain whether Barrick has made a fresh approach to First Quantum, and no formal offer has been guaranteed.
As the world’s largest gold miner, Barrick Gold has been actively seeking expansion opportunities in the copper sector. A potential deal with First Quantum could position Barrick as one of the leading global copper producers. The smaller Canadian miner has found itself vulnerable following the closure of its biggest and most lucrative asset in Panama, presenting an opportunity for Barrick and its seasoned CEO, Mark Bristow, known for managing mining operations in challenging locations.
First Quantum’s stock saw a notable surge, jumping as much as 15% and trading 9.4% higher by mid-morning in Toronto.
Mark Bristow has been closely monitoring First Quantum’s situation since October when the company faced escalating challenges. Bristow expressed confidence in Barrick’s ability to address the issues in Panama and effectively manage First Quantum’s African mines.
The Capital Group holds the largest stake in First Quantum with 22%, followed by China’s Jiangxi Copper Co. with an 18% ownership, both of which have reportedly been approached by Barrick, according to sources.
Official statements from Barrick were not provided in response to requests for comments, while First Quantum declined to comment. Jiangxi Copper did not immediately respond to a request for comment.
First Quantum has long been considered a potential target for major mining companies due to its significant Cobre Panama mine, one of the newest and largest copper operations globally. However, the Panama project has become a vulnerability for First Quantum, leading to widespread protests and operational challenges, ultimately resulting in the closure of the mine.
Barrick’s potential offer adds pressure to First Quantum’s management, which is grappling with the sudden closure of its primary revenue generator. The situation raises concerns about First Quantum’s financial health, with substantial debt maturing in the coming years. First Quantum has indicated plans to release a strategy in the new year outlining how it intends to manage without its flagship mine.
