Freeport McMoran Sells Stake in Copper-Gold Project for $263 Million

This should provide further buoyancy for shareholders of FCX, as the company continues to follow through on promises to sell assets in order to deleverage their debt ridden balance sheet.

Freeport-McMoRan Inc.’s agreed to sell part of its stake in a copper-gold project in Serbia to Lundin Mining Corp. for as much as $263 million, as part of its drive to offload assets to cut its debt by about $5 billion.

The current partners in the Timok project are Freeport, who’s the operator, and an affiliate of Reservoir Minerals Inc., Toronto-based Lundin said Thursday in a statement. The deal is expected to close in the second quarter, if Reservoir Minerals declines to exercise a right of first refusal, Lundin said.

Commodity producers including Glencore Plc and Anglo American Plc are selling operations as weaker growth in China and supply gluts continue to weigh on prices and savage profits. Freeport agreed last month to sell an additional stake in an Arizona mine for $1 billion to Sumitomo Metal Mining Co.

Although the timing of these sales are less than ideal, as any sale during duress is. It is absolutely necessary that management continues to deal with the issue of their over leveraged balance sheet in order to prop up the share price. Just know that this stock is subject to a very onerous and dilutive share offering at any time, especially if the stock continues to rally.

Buyer beware.