Teck Cominco, Inmet nudge Petaquilla forward

Vancouver — Teck Cominco (TCK. B-T, TCK-n) and Inmet Mining (IMN-T, IEMMF-o) have decided to move forward with planned development of the Petaquilla copper project in north-central Panama.

Teck Cominco was under the gun to make a development decision for the large copper deposit by March 31, 2008, under its agreement to earn a 26% interest of the project from Petaquilla Copper (PTC-T, PTQLF-o), which holds 52%, by committing to fund the junior’s share of costs to production. Inmet has a 48% stake in the property.

Inmet will now fund the next stage of project spending, instead of Teck Cominco — which has borne all the front-end engineering and design costs to date. Once the interim period is over, Teck can elect to either continue participating in the project and resume funding or sell its interest.

“This arrangement with Inmet Mining allows the Petaquilla project to proceed expeditiously, while preserving Teck Cominco’s flexibility to progress other projects in our growth pipeline such as the Quebrada Blanca hypogene project, the Andacollo hypogene project, and several other growth projects in oilsands and gold,” said Don Lindsay, Teck president and CEO, in a statement.

Teck Cominco will transfer its 26% interest into a new, wholly owned subsidiary that will in turn be managed by Inmet, which will become the de facto operator of Petaquilla.

Under the arrangement, Inmet will provide project funding for both Teck’s 26% and Petaquilla Copper’s 26%. Teck Cominco must decide whether it will fund its share of costs by Sept. 30, 2009, or once Inmet has spent US$50 million, and will be responsible to reimburse its partner for all funding.

Should Teck Cominco opt not to fund its share of costs, Inmet will have rights to purchase its interest in the Petaquilla partnership for the amount it funded Teck’s share, plus interest. Teck would also need to reimburse Inmet for project funding provided on its behalf, plus interest.

Earlier this year, revised engineering studies estimated capital costs at US$3.5 billion to develop Petaquilla — versus the US$1.1 bil-

PM40069240 -PAP Registration #09263 lion estimated in 1998. Cash costs of roughly US85 per lb. copper are forecast over the first 10 years of operation.

The initial 1998 bankable feasibility study reviewed three main porphyry deposits on the Petaquilla area for a pre-National Instrument 43-101 minable reserve tally of 1.1 billion tonnes grading 0.5% copper, 0.09 gram gold and 0.015% molybdenum. The report proposed a 120,000- tonne-per-day throughput and a 23-year mine life with a stripping ratio of 0.97.

Once the necessary permits are issued, construction at Petaquilla is expected to take nearly four years. Permitting would follow the submission of a social and environmental impact assessment, anticipated to be completed late this year.

Petaquilla Copper was formed at the end of 2007, a spinout from Petaquilla Minerals (PTQ-T, PTQMF-O), to hold the large copper- gold porphyry projects within the project area. Petaquilla Minerals, which changed its name from Adrian Resources in 2004, is developing its Molejon gold project toward anticipated production later this year.