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First Quantum Minerals Ltd. raised its bond issue to as much as $500-million (U.S.) from $400-million Wednesday, and markets speculated the company could use the funds to try to acquire oft-rumoured target Equinox Minerals Ltd.

By midday, shares of Toronto-based Equinox - which like First Quantum mines copper and operates in Africa - were up 6.3 per cent at $2.54 (Canadian), while First Quantum stock was down 4.5 per cent at $46.80.

First Quantum, which has built up a stake of almost 20 per cent in Equinox, started out Wednesday by saying it would issue $350-million (U.S.) in bonds with an overallotment option of $50-million. The Vancouver-based company then raised that to about $450-million, with another $50-million overallotment, which was subsequently exercised.

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It cited "significant investor demand."

I think they'd probably want to wait and see how [the second quarter]comes along

The company said it would use the funds to strengthen its financial position and to give it flexibility to make acquisitions.

"Everybody knows they own almost 20 per cent of Equinox and there are a lot of synergies between the two [of them] so the market's surmising that First Quantum is thinking of making an acquisition of Equinox," said George Topping, an analyst at Blackmont Capital in Toronto.

First Quantum, which raised $345-million (Canadian) in an April equity sale, has long been seen as a logical buyer for Equinox, but Equinox has said it would not welcome a bid, meaning any offer would likely have to be hostile.

Mr. Topping said he doubted there would be an offer in the immediate future.

"I think they'd probably want to wait and see how [the second quarter]comes along," he said.

First Quantum operates in Mauritania, Zambia, and the Democratic Republic of Congo, while Equinox operates the Lumwana mine in Zambia.

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The two companies enjoy obvious geographic synergies, while First Quantum also owns a stake in the Mufulira smelter in Zambia, which has processed Equinox's concentrates.

Equinox has been embroiled in a dispute with the smelter's management, which has refused to process concentrates, saying they do not meet contract specifications. Equinox has said its concentrates do meet the specifications and has redirected shipments to international traders.

The smelter is majority-owned by Swiss commodities trader Glencore International AG.

An Equinox spokesman said the company had no comment.

The closing and settlement of First Quantum's debt offering is expected on or around June 18.

Nomura International is global co-ordinator and joint bookrunner for the offering. Morgan Stanley is joint bookrunner and RBC Dominion Securities is a co-manager for the offering.

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