Inmet Mining (IMN-T) and Teck Cominco (TEK.SV.B-T, TCKBF-O) would be bought out of their interests in the Petaquilla copper project in central Panama under a financing plan now being worked on by Petaquilla Resources (PTQ-T, PTQMF-O).
Petaquilla announced it had signed a memorandum of understanding with “one of China’s largets integrated metal producers” to take up shares of Petaquilla and fund a buyout of Petaquilla’s joint venutre partners. It did not announce which company was buying in.
Among the Chinese metal producers that have made efforts to pick up overseas projects are China Minmetals, China Non-Ferrous Metal Mining and gold miner Zijin Mining Group.
The investor is also offering financing for the project and an agreement to buy copper concentrate from the mine. Petaquilla, with a resource of 1.1 billion tonnes running 0.50% copper, 0.015% molybdenum and 0.09 gram gold per tonne, has been essentially on hold since a 1998 feasibility study concluded bringing the deposit into production was not economic. The initial capital cost — estimated at the time at US$1.1 billion — was prohibitive.
Petaquilla Resources holds a 52% interest and Inmet the remaining 48%. Teck, which had funded the feasibility study, held an option to earn a 26% interest from Petaquilla by funding the junior company’s share of development costs, but has annually elected to defer its participation.
The project got an approval of its mining plan from the Panamanian government in October.
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