Why are Petaquilla Minerals and Inmet Mining fighting in Panama?
Canadian miners Petaquilla Minerals Ltd. (TSX:PTQ) and Inmet Mining Corp. (TSX:IMN) have been on the news in recent weeks as the companies locked horns over land rights near the Cobre Panama copper project, run by Inmet’s subsidiary Minera Panama.
Media has mostly reported on the failed hostile takeover bid of Petaquilla by Inmet, a transaction that was valued in about $140 million.
What hasn’t been widely reported is that behind Inmet’s bid there was an attempt to solve a land rights dispute, which would have smoothed the construction and permitting of Cobre Panama, local sources told MINING.com.
At the heart of the conflict lies the fact that, without an agreement with Petaquilla, Inmet’s Minera Panama may not be able to place a tailings facility within the Rio San Juan and La Esperanza concessions. This is an area comprised of 11,145 hectares, which Petaquilla has the rights to explore since 2007, as granted by the country’s Department of Mineral Resources.
According to our sources, the battle is likely to delay the necessary permits for Inmet to go ahead with Cobre Panama, expected to become the second most important copper mine in the world.
However, in a statement released Thursday Inmet disputed Petaquilla's claim that it has certain rights that are of strategic value to Inmet and that they could impact the Toronto-based firm’s ability to develop the polemic project.
“While Petaquilla has filed applications for mining concessions adjacent to or in close proximity to the MPSA Concession, Petaquilla has not been granted any concessions as a result of these applications,” said the company in the statement.
It added that Petaquilla is only trying to “create legal ambiguity around these rights.”
In response to Inmet’s statement, the Vancouver-based company said Friday that Inmet's release was an attempt “to confuse the shareholders of Petaquilla about Petaquilla's clear rights to the Rio San Juan and La Esperanza concessions on which Inmet finally acknowledges it plans to build a significant portion of its tailings facility for the Cobre Panama Project.”
In August, Inmet received a whopping $1 billion from fellow Canadian Franco-Nevada (TSX & NYSE: FNV) to support the development costs of its massive copper project in exchange for a future precious metals stream.
The company scored a court victory this week, when British Columbia securities regulators rejected a shareholder rights plan at Petaquilla that would have helped it to fend off the hostile takeover offer.
The B.C. Securities Commission said Wednesday it has ordered a ban on any trading related to the plan effective after markets close on Friday.
Inmet’s $6.2 billion copper-gold porphyry project, the first large-scale mine in Panama’s history, contains more than 32 billion pounds of copper. According to company’s estimations, Cobre Panama also has about 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.
Read the official releases here:
- Inmet Mining Corporation Reaffirms Ability of Minera Panama to Develop Cobre Panama >> >>
- Petaquilla responds to Inmet claims regarding Panamanian land rights >> >>