First Quantum Minerals Announces Sale of 30% of Ravensthorpe Nickel for $240 Million to POSCO

First quantum minerals announces sale of 30% of ravensthorpe nickel for $240 million to POSCO.

First Quantum Minerals Ltd. (“First Quantum” or the “Company”) (TSX:FM) announced that it has entered into a binding agreement to sell a 30% equity interest in the Ravensthorpe Nickel Operation (“Ravensthorpe”) in Western Australia for cash consideration of $240 million to POSCO, one of the world’s largest steel producers (the “Transaction”).

First Quantum will retain a 70% interest in Ravensthorpe and continue to be the operator. The proceeds of the transaction will be used to reduce the Company’s debt. In addition to the Transaction, POSCO and First Quantum have also agreed to evaluate a strategic partnership to produce battery precursor materials from production at Ravensthorpe.

TRANSACTION SUMMARY

Under the terms of the Transaction, POSCO will acquire a 30% equity interest in Ravensthorpe for cash consideration of $240 million. POSCO will be provided with a long-term offtake agreement for 7,500 tonnes of nickel in mixed nickel-cobalt hydroxide precipitate (“MHP”) per year produced at Ravensthorpe, beginning in 2024. The balance of Ravensthorpe’s production will continue to be marketed by First Quantum.

The Transaction is subject to certain conditions including approval by the Australian Foreign Investment Review Board (“FIRB”). The transaction is expected to close sometime in the third quarter of 2021. The proceeds of the Transaction will be applied to the outstanding amount on the Company’s revolving credit facility, continuing the Company’s debt reduction.

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STRATEGIC PARTNERSHIP

POSCO is South Korea’s largest, and the world’s fourth largest, steel producer. POSCO is also a leading integrated producer of cathode and anode materials for the electric vehicle (“EV”) battery sector and is undertaking an expansion of its secondary battery material business for which Ravensthorpe will provide a portion of the feed.

As part of the Transaction, First Quantum and POSCO have also entered into a Memorandum of Understanding (“MoU”) to explore a partnership to produce battery cathode precursor materials, likely in the form of nickel sulphate, by utilizing the MHP from Ravensthorpe. First Quantum and POSCO will work together over the coming months to advance this potential partnership.

Philip Pascall, Chairman and CEO said.

We are pleased to welcome POSCO as our new long-term strategic partner in Ravensthorpe.

“Our respective organizations have complementary skillsets which will allow us to maximize the strategic value of Ravensthorpe as a key long-term supplier of nickel to the EV battery sector. We look forward to working closely with POSCO at Ravensthorpe and exploring options to broaden our relationship.”

First Quantum Minerals Announces Sale of 30% of Ravensthorpe Nickel for $240 Million, Toronto, May 19, 2021