African copper miner First Quantum announced a potentially transformational deal on Wednesday, acquiring a nickel mine in Australia from BHP Billiton for $340-million (U.S.)

But the key word in that last sentence is 'potentially." Analysts see a whole lot of execution risk in this deal, even though it does make strategic sense.

First Quantum bought a busted project, as BHP Billiton indefinitely suspended production at the Ravensthorpe mine after dropping $2.2-billion on the project. The decision reflected low nickel prices and weaker-than-expected production.

First Quantum beat out two rival bidders to grab this, umm, prize, and claims it can get Raventhorpe running on economic terms by spending another $145-million.

"If correct, this raises the question: why didn't BHP fix the problems and sell Ravensthorpe for a higher price as a producing nickel operation?" said BMO Nesbitt Burns analyst Tony Robson in a report on BHP Billiton that was published on Wednesday.

A different analyst at the same investment bank had a more positive take on the potential of this acquisition. In a report on First Quantum, BMO Nesbitt Burns analyst David Radclyffe said Ravensthorpe will be a difficult operation to run.

"However if successful Ravensthorpe could be positive in the long term, making First Quantum a significant player in the nickel market," said Mr. Radclyffe. "From a sovereign risk perspective the acquisition appears attractive, transforming First Quantum to an African copper producer and Western (Australia and Finland) nickel producer."