The financial vulnerability 'was the cause that led to Inmet Mining Corporation to present the offer to purchase common shares of Petaquilla Minerals Ltd. (PTQ). This is stated in the official documentation of the purchase proposal submitted last Friday to shareholders and regulatory institutions.
It all began on 17 July when PTQ announced a note issue worth $ 210 million, nearly three times the market capitalization of PTQ. Following the presentation of its financial statements, on August 29, 2012, Inmet concluded that the debt issue would exacerbate the financial vulnerability of PTQ and would trouble to operate the Molejon gold project.
The issue was elevated to board with the proposal to launch a takeover bid. After given the nod, followed talks between senior executives of mining and then between their legal teams.
Along the way there have been announcements and answers and a resolution of 25 September, the Department of Mineral Resources which declared eligible to PTQ to sign a contract with the Panamanian government, which would allow him to perform a new scan. Minera Panama, a subsidiary of Inmet opposed to its competitor took control rights.
The decision seems timely and Mineral Resources gives added value to PTQ, which argues that the value offered per share of C $ 0. 48 is lower than projected, the short-term, $ 1. 70 that would achieve their shares after for increased gold production and Molejón concessions Lomero-Poyatos acquired in Spain. Before the announcement of offering of Inmet common shares of PTQ were not negotiated in significant volumes. ? The only impact it has had the intention to offer Inment is that it has increased the value of the shares, "said Rodrigo Esquivel, CEO of Petaquilla Gold, a subsidiary of PTQ in an interview with this newspaper.
September 5 when the offer was announced, shares of PTQ in Torono Stock Exchange (TSC) were trading at $ 0. 35, following the announcement amounted to $ 0. 62. ? The value of the company and the value of the share is much higher. Remember that not only Petaquilla Minerals tank Molejón. Has rights to a lot of areas of the mining district where there is much potential for finding deposits of gold, silver and even copper ', says Esquivel.
Inmet's offer provides shareholders the opportunity to increase the value and liquidity of the shares. That's one of the arguments with which it seeks to convince investors of Petaquilla on whether to purchase. ?? Believe that the offer is attractive and provides a significantly more viable alternative debt financing proposed by the management of Petaquilla Minerals, given the financial condition of the company, "says Mercedes Morris, spokeswoman for Minera Panama. If the offer was successful and acquires at least 50. 1% of the outstanding common stock, Inmet would adopt a series of measures, including changing the composition of the board of PTQ, then try to align strategy with Petaquilla Copper Panama project.
This week Petaquilla analyze the offer and make a decision soon, said Esquivel.
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