First Quantum Minerals Ltd. (FM), a copper and nickel producer, gained the most in more than seven months after Jefferies Group Inc. analysts named it a “top pick” and said expansion plans may make it a takeover target.
First Quantum rose 10 percent to C$18.27 in Toronto, the biggest gain since Nov. 30. The Vancouver-based company is raising capacity at its Kansanshi copper mine in Zambia. It also plans to develop the Sentinel mine in Zambia and build a copper smelter at Kansanshi.
“The company has a significant, low-cost organic growth pipeline, a strong balance sheet, high quality management and is a potential acquisition target in the longer-term,” Jefferies analysts Christopher LaFemina and Seth Rosenfeld said in a note yesterday. They have a buy rating on First Quantum and said it’s their top pick among copper producers trading in the U.K.
First Quantum “is at the beginning of a major growth phase and could triple its copper production capacity over the next 5-6 years,” David Charles, an analyst at Dundee Securities Corp. in Toronto, said in a note today. Charles initiated coverage of the company with a buy recommendation and a price target of C$26.50.
Outside of Africa, First Quantum restarted the Ravensthorpe nickel mine in Western Australia in October, almost two years after agreeing to buy the asset from BHP Billiton Ltd. (BHP) It’s building a nickel and copper mine in Finland and is studying a copper project in Peru.
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