First Quantum Minerals Ltd (TSX:FQM) recently rebuffed an informal takeover approach from Barrick Gold Corp. (TSX:ABX, NYSE:GOLD), the world’s second-largest producer of the precious metal, according to a Bloomberg news report citing people with knowledge of the matter.
The report said Barrick had made overtures to First Quantum in the last few months as part of its search for ways to expand in copper, but First Quantum indicated it was not keen on a combination and declined to enter any substantive talks, according to the sources.
Barrick and First Quantum are not currently in formal discussions, Bloomberg noted, and the sources said it remains unclear whether Barrick will revive its interest.
A deal with First Quantum would transform Barrick into a significant copper miner when the industry’s largest players are all seeking to expand production of the key wiring metal. BHP and Rio Tinto are actively looking to grow their copper exposure, while Glencore is pursuing an unsolicited $23 billion takeover bid for Canada’s Teck Resources Ltd, chiefly to acquire its giant South American copper mines.
First Quantum has long been viewed as a takeover target in the mining industry, primarily for its massive copper mine in Panama. The operation, which accounts for about 1.5% of global copper production, recently emerged from a months-long dispute with the Panamanian government. The company also owns copper, gold and nickel mines in Africa, Australia, Europe and the Middle East.
Shares of First Quantum jumped as much as 12% higher in Canadian trading on Thursday, their biggest intraday gain since November. In pre-market trading Friday, they were up 7.6% at C$33.31, giving the miner a market capitalization of nearly C$23 billion.
Contact the author at jon.hopkins@proactiveinvestors.com