Petaquilla Minerals Ltd. (fka PTQMF)

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First Quantum insists Inmet and Petaquilla goes

14 | 02 | 2013

The multinational seeks to control the two mines operating in Panama, in a transaction that would exceed 5 billion dollars. The company held directly to the shareholders of Inmet, and has made the first contact with a director of Petaquilla Minerals in Canada.
First Quantum insists Inmet and Petaquilla goes Reserving Cobre Panama has an average lifespan of over 30 years. It is considered one of the largest in the world, where the protection of biodiversity is estimated very important. (Archive)
First Quantum insists Inmet and Petaquilla goes Petaquilla is a hill that is located in the district of Donoso, Colon province, where there are deposits of copper, gold and silver. (Archive)
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Zaira Rojas (zaira.rojas @ epasa.com) / PANAMA AMERICA
INFOGRAFIA

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Costs

The cost of the total shares of Inmet is approximately 4000 to $ 800 million.

Petaquilla shares are valued at $ 1.70 each, with a market value of $ 382.5 million.

The total sales of the two companies is estimated at $ 5.182 billion.

The development of two mines approved in Panama, one of gold and one of copper, has attracted a million dance abroad. These two transactions that exceed the 5 billion dollars of concrete reached.

First Quantum, one of the largest mining companies in the world, is determined to be at any cost of Inmet Mining, whose main project is the concession for a copper mine in Panama, which is under development. This project is carried out through its local subsidiary Minera Panama.

Two weeks ago Inmet Board rejected the offer, but First Quantum returned with a hostile bid and submitted directly to the shareholders of the company that seeks to acquire.

The miner think your offer is attractive and that of convincing all shareholders of Inmet, purchase amount to more than 4000 $ 800 million, or $ 70 per share.

Parallel to the offer to purchase Inmet, First Quantum and made the first contacts in Canada to also buy Petaquilla Minerals, a company developing the mine Molejón, from which are extracted 8000 ounces of gold per month at the moment with its subsidiary Petaquilla Gold.

For this company, international analysts as the firm Zacks Investment Research argues that the purchase price would be $ 1.70 per share. This would allow the second transaction to 382.5 million dollars.

This would have a significant economic impact locally, because 30% of Petaquilla Minerals shareholders is held by Panamanians. Unknown Panamanian businessmen participation in Panama or Inmet Mining.

For buying First Quantum Minerals Petaquilla is strategic, given the acquisition of Inmet, as this company has rights to lands that are key to the development of the copper mine in Panama.

Petaquilla Minerals has won all claims submitted Inmet on a plot of land it needs to build its tailings basins and other key components for the mining project.

Sources confirmed yesterday Petaquilla Minerals approaches with First Quantum, but avoided giving further details at this time.

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Although Inmet policy in the first instance rejected the offer to purchase, First Quantum says it can bring significant additional expertise to the project, in order to minimize the risks of project delays and cost overruns, providing a real opportunity cost savings.

According to the company, from the beginning what they have proposed is to combine the best of both companies' human capital. However, he noted that Inmet's board has refused to consider the significant benefits that would result from the combination of First Quantum's experience in the development of these projects with the familiarity and experience Inmet copper project in Panama.

The determination of the company First Quantum is such that after the rejection, despite their arguments, has sought a new alternative to buy Cobre Panama, through the "hostile takeover" mechanism that is to go directly to the shareholders of this company.

First Quantum will host a series of meetings in Toronto which has invited all shareholders of Inmet, to give them the opportunity to talk and listen to their management team.

The company said it intended to Inmet shareholders depth to meet the vision you have of a combined company, arguing that the analysis and recommendation of the board of his company were completely wrong.

According to the company, the offer made to Inmet placed a fair and substantial, and has significant commercial benefits and provides a "better future for all shareholders."

Achilles heel

The research firm Zacks Investment Research noted the offer of First Quantum and highlighted the disadvantages with Inmet copper project in Panama.

"Minera Panama still may be able to develop Cobre Panama, but with inefficiencies that require additional capital costs," noted Steven Ralston, an analyst at Zacks, in its recent report.

He said Minera Panama has the necessary permits to begin construction of the project. However, he said that for the optimum location of landfills requires the acquisition of the assets of Petaquilla Minerals or consent for access to land.

"Most likely it will be necessary to pay a substantial fee or compensation fixed by arbitration," said Ralston.

The direction of Inmet already admitted that land have this problem, although in a different context to announce the acquisition of Petaquilla Minerals eliminate a potential source of disruption to develop copper mine in Panama.

Inmet and Petaquilla Minerals tried to buy last year, but its offer of 40 cents per share was unproductive so unattractive.

"If First Quantum is successful in buying Inmet Mining, need to negotiate or acquire assets in Panama Petaquilla Minerals," said Ralston.

He also noted that the shares of Petaquilla Minerals shall not be accounted for under $ 1.70 each, to be purchase.

Data

The Cobre Panama concession is located 120 kilometers west of Panama City and 20 kilometers from the Caribbean coast, in the district of Donoso, Province of Colon, Panama. The project occupies approximately 900 hectares 5000 of 13 000 600 hectares of the concession.

According to the developers of the project, some of the benefits received by the country through the work are: the investment of $ 6 billion of capital, which can be compared with the expansion of the Canal.

It also promises the creation of 10 000 jobs during the construction of the mine, 2,000 jobs during the operation of the mine. In addition to three billion dollars in government revenue over the life of the mine, among others.
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