Petaquilla Minerals Ltd. (TSX:PTQ) has rejected as inadequate an unsolicited, a $112-million takeover bid for the company by Inmet Mining Corp. (TSX:IMN), which operates a gold mine adjacent to Petaquilla’s Molejon project in Panama.
The Canadian gold producer said in a statement that its board of directors unanimously rejected Inmet’s offer because they thought it undervalued the company and its potential growth prospects.
“The Inmet offer does not adequately reflect Petaquilla’s current value or the value of Petaquilla’s substantial growth prospects, nor does it take into account the true value of Petaquilla to Inmet and its shareholders,” CEO Richard Fifer said in the statement.
Inmet was offering 48¢ a share in cash or 0.109 Inmet shares for each Petaquilla share, which works out to a 37% premium over the stock’s closing price prior to the launch of the bid in early September.
Last month, the Department of Mineral Resources of Panama rejected a petition filed by Minera Panama, S.A., a subsidiary of Inmet Mining Corporation, in respect to the belt known as the San Juan concession. The area is comprised of 11,145 hectares, which Petaquilla Minerals has the rights to explore as granted by the Department of Mineral Resources in 2007.
Inmet received in August a whopping $1 billion from fellow Canadian Franco-Nevada (TSX & NYSE: FNV) to support the development costs of Inmet's massive Cobre Panama copper project, the country's largest-ever mine development. In exchange Franco-Nevada will get a future steam of precious metals.
Petaquilla's Molejon project neighbours Inmet's $6.2 billion Cobre Panama copper-gold porphyry project, the first large-scale mine in the Latin American country’s history. Cobre contains more than 32 billion pounds of copper, according to Inmet’s estimations, almost nine million ounces of gold and 168 million ounces of silver in measured and indicated resources.
The mine is expected to ship its first consignment of concentrate during the first quarter of 2016, and the life-of-mine is expected to exceed 31 years.
Image: The Panama Canal