Swedish mining and smelting company Boliden has reached an agreement with First Quantum Minerals to acquire the Kevitsa nickel-copper-gold-PMG mine in Northern Finland for USD$712 million in cash.
Boliden’s President and CEO, Mr Lennart Evrell, described the acquisition as an “attractive opportunity” with excellent operational and geographical fit with Boliden.
“The acquisition of Kevitsa is consistent with Boliden’s growth strategy. Kevitsa started production in the end of 2012 and is an early stage mine, which we believe can provide good synergies with our existing business in mining, concentrating, smelting and regional exploration. It also establishes a nickel feed base load for our Harjavalta smelter,” Mr Evrell said.
“The timing of the acquisition fits us well. Boliden has executed substantial expansion projects in recent years and is ready to take on a new major project. Together with the Kokkola and Harjavalta smelters and the Kylylahti mine, the acquisition of Kevitsa will expand Boliden’s platform in Finland, an attractive geological region.”
Nickel and copper from the Kevitsa mine accounted for roughly 40% each of net revenue in 2015, with gold, PGM and cobalt accounting for the remainder.
The mine – which has 380 employees and around 200 contractors – produced 8,805 tonnes of nickel, 17,204 tonnes of copper, 12,847 ounces of gold, 31,899 ounces of platinum and 25,196 ounces of palladium in 2015.
Philip Pascall, Chairman and CEO of First Quantum, noted that the sale of the Kevitsa mine was part of the company’s plan aimed at strengthening its balance sheet and improving its capital structure to better suit the development and start-up timetable of the Cobre Panama project.
“We are continuing to advance other strategic initiatives, which are expected to be finalised at various times over the next several months, to meet those objectives,” Mr Pascall said.
The transaction, to be financed with a committed 24 month bank facility provided by Nordea, is subject to customary approval by competition authorities in Finland, Sweden and Germany.