Inmet Mining‘s (IMN-T) dream of taking Petaquilla Copper (PTC-T) out of the picture and thereby clearing its path towards the development of the Petaquilla copper project in Panama, moved closer to reality as it upped its bid for the junior by 10%.
The sweetener proved enough to entice Petaquilla’s board of directors into offering their unanimous support for the deal.
Petaquilla shareholders are now set to get $2.20 in cash for each of their shares.
The two companies are currently joint ventured on the project with Petaquilla claiming a 52% stake to Inmet’s 42% position.
But Petaquilla’s 52% claim is not without contention. Teck Cominco (TCK.A-T, TCK.B-T, TCK-N) says it met its financial obligations on the front-end engineering and design costs side, which entitled it to a 26% stake.
Petaquilla has taken its claim that Teck, in fact, did not complete its obligations to an arbitration court.
The potential for Petaquilla to be awarded the larger stake was part of its initial rejection of the $2 per share offer which it said did not reflect the 52% figure.
Inmet has consistently sided with Teck and on the day of the sweetened offered solidified that position by saying its acquisition of Petaquilla Copper will take it up to a 74% stake in the project — not 100%.
Petaquilla shares rose towards the new offer price in Toronto on Aug. 26, gaining 15% or 29 to $2.18 on roughly 15.5 million shares traded. Inmet shares fell $1.22 to $60.53 on roughly 158,000 shares traded.
The Petaquilla copper project has a reserve of 1.1 billion tonnes grading 0.5% copper while that makes it one of the world’s largest undeveloped copper projects, it has also suffered from rising costs estimates. The most recent estimate put capital expenditures at US$3.5 billion, up significantly from the US$1.7 billion estimated a year earlier.
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