First Quantum Minerals Ltd. is seeking $20 billion from Panama in a free trade arbitration case after the Central American nation shut down the company’s flagship copper mine late last year.

The amount represents the “minimum value” sought by the Vancouver-based company in an arbitration process under a Canada-Panama free trade agreement, First Quantum Chief Executive Officer Tristan Pascall said Wednesday in an earnings call. The move comes as the Canadian firm scrambles to shore up its balance sheet and avoid breaching debt agreements after Panama closed the company’s biggest revenue-generating asset.

“Although arbitration isn’t our preferred outcome, we do have a strong case,” Pascall told analysts on the call. The CEO said the $20 billion reflects an estimated fair market value of the company’s initial investment “but in reality, with damages and interest, the award could be very much higher.”

Shares rose 2.8% to C$11.93 at 11:30 a.m. in the biggest intraday increase since the start of the month.

Panamanian President Laurentino Cortizo ordered the closure of First Quantum’s Cobre Panama copper mine in late November after a ruling by the country’s Supreme Court invalidated the project’s operating contract. The shutdown of an operation that generated about 40% of First Quantum’s revenue in 2023 has cast the company’s finances into uncertainty, with billions of dollars of debt maturing in the coming years.

A First Quantum unit also initiated proceedings before the International Court of Arbitration in December — a process alone can drag on for years and cost the company millions of dollars. The concession agreement for the Cobre Panama mine provides for arbitration in Miami.

First Quantum posted a $1.45 billion loss in its fourth quarter and warned in Tuesday’s earnings report that it’s at risk of a covenant breach in the coming year, resulting in “material uncertainty” that may cast doubt on the company’s ability to continue. The Vancouver-based company said it’s in talks with lenders to amend and extend its loan facilities, with a conclusion expected “in the near term.”

The company also said its second-largest shareholder agreed to pay $500 million for copper shipments in an arrangement that strengthens First Quantum’s balance sheet while Cobre Panama remains shuttered. The three-year prepayment agreement with Jiangxi Copper Co. will give the Chinese producer and refiner 50,000 metric tons of copper anode per year from First Quantum’s Kansanshi mine in Zambia.