Pangaea Investment Management Ltd said it had purchased 6 million more shares in First Quantum, bringing its stake in the company to 74.64 million shares, or 10.8%.
The investment company has also entered into a forward contract through which it may choose to buy another 40 million shares.
Jiangxi Copper, one of China's biggest copper producers, is a substantial shareholder in Pangaea.
First Quantum had confirmed in September that it was in talks with Jiangxi Copper for a potential sale of a minority interest in its Zambian copper assets after reports that the company had attracted takeover interest and has hired advisers to explore options.
First Quantum, however, said it had no knowledge of any potential takeover bids.
The company's shares were last up 12% at C$11.18 after touching a session high of C$11.67.
(Reporting by Shanti S Nair in Bengaluru; Editing by Maju Samuel)
