Photo: Xinhua

 Miner First Quantum Minerals is considering selling a minority stake in its flagship Cobre Panama copper mine to reduce debt, two banking sources familiar with the discussions said.

First Quantum's possible move comes as global miners scramble to bolster finances strained by the coronavirus pandemic, which has battered stocks and copper prices CMCUc1. First Quantum shares are down more than 50 percent this year.

Total investment in Cobre Panama, located 120 kilometers west of Panama City, up to 2019 stood at $6.3 billion, according to the company.

With a current market capitalization of $2.4 billion, First Quantum trades around three times its earnings before interest, taxes, depreciation and amortization, compared to an average of eight times for mining companies. Its net debt at the end of 2019 stood at $8.8 billion.

The Canadian miner will have to do more than refinance its debt after talks to sell down its Zambian mines stalled because of the outbreak, said one of the sources.

First Quantum did not respond to a request for comment on Tuesday.

Cobre Panama, with proven copper reserves of 3.18 billion tons and a 40-year mine life, is 90 percent owned by First Quantum.

The company said earlier on Tuesday that it would cut pay for some senior staff and review spending after some workers at the mine contracted the virus. In a statement announcing the moves, it said it had an estimated $1.2 billion in cash and credit on hand.

The miner earlier this year strengthened its takeover defense, weeks after Jiangxi Copper spent $1.1 billion for an 18 percent stake in it.

One of China's biggest copper producers Jiangxi Copper Corporation this month added 3.8 million shares, or 0.8 percent, to its 18 percent stake in First Quantum, a regulatory filing showed.

The Canadian miner is studying options to maintain control, the sources said, even though a standstill agreement prevents Jiangxi Copper from acquiring more than 20 percent of the shares.

Global miners Rio Tinto Plc and BHP are keen to grow their copper businesses and have capacity for deals, analysts said.

But Panama is an unknown jurisdiction, the second source said. Travel restrictions could also make it harder to hold face-to-face discussions and tour mine sites.