Saturday, December 5, 2009

UPDATE 1-First Quantum to build nickel mine in Finland

To cost about $400 mln, commercial output by 2012

Stocks | Mergers & Acquisitions

* Will be financed through stock and loans (In U.S. dollars, unless noted)

TORONTO, Nov 30 (Reuters) - First Quantum Minerals (FM.TO) said on Monday its board has approved construction of the $400 million Kevitsa nickel and copper project in Finland, with commercial production targeted for mid-2012.

Vancouver-based First Quantum acquired the project when it bought Scandinavian Minerals last year, and it would represent its first operation outside of Africa.

"This development is a major step in our goal of becoming a globally diversified base metals company," First Quantum Chief Executive Philip Pascal said in a statement.

Kevitsa currently has ore reserves of 107 million tonnes grading 0.296 percent nickel, 0.272 nickel in sulphide form, and 0.418 percent copper.

The project is expected to be financed by a combination of stock and loans, including through Nordic institutions, the company said.

First Quantum currently operates mines in Democratic Republic of Congo and Mauritania, and is in the midst of a dispute with DRC over the contract for its Kolwezi copper tailings operation, which is currently suspended.

The company recently agreed to buy Zambian-focused Kiwara Plc (KIWA.L) for about $260 million for its Kalumbila copper project.

First Quantum shares were up 87 Canadian cents at C$82.00 on the Toronto Stock Exchange.

($1=$1.06 Canadian) (Reporting by Cameron French; editing by Rob Wilson) ((cameron.french@thomsonreuters.com; 416-941-8199: Reuters Messaging: cameron.french.reuters.com@reuters.net))

Source:reuters.com/

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