Inmet Mining and Petaquilla Copper (PTC) have signed a letter agreement pursuant to which PTC’s board of directors has agreed to unanimously support a revised offer by Inmet to acquire all the outstanding common shares of PTC. The Minera Petaquilla Copper Project in Panama has been ranked as one of the top five copper projects in the world by CRU International in its 1996 Next Generation of Copper Mine Projects report. This worldclass copper deposit encompasses most of the mining district of Donoso in the Province of Cocle. The project area covers 795 km2 and contains a massive porphyry deposit, which hosts 1,461 Mt of mineralisation grading 0.493% Cu, 0.015% Mo, and 0.11 g/t Au. The resources occur in three project areas: Botija, Petaquilla, and Valle Grande. The minimum recoverable contained metal reserves (non NI-43-101 compliant) are: 9,400 Mlb of copper, 1.37 Moz of gold, 24.1 Moz of silver, and 131.1 Mlb of molybdenum. Fluor Daniel Wright performed the first of two feasibility studies in 1997-8 before the enactment of NI 43-101.
A copper oxide cap has been discovered in Botija Abajo. The area is characterised by a sulphide-enriched, granodioritic intrusion that appears to be capped by an extensive oxide zone of copper mineralization. The prior, widely spaced, drilling program at Botija Abajo intercepted significant amounts of pyrite and chalcopyrite, with minor gold indicating the outer zone of copper-gold porphyry. Recent drilling, however, intercepted significant chalcocite (oxide copper) beneath epithermal gold mineralization.
Petaquilla Copper controls 52% of the project while Inmet retains the remaining 48%.
The directors and officers of PTC have indicated, and Petaquilla Minerals which owns 20,418,565 common shares of PTC has agreed, that they will enter into lock-up agreements with Inmet pursuant to which they will tender their PTC common shares to the revised offer. A total of 37,836,429 common shares of PTC, or approximately 25.4% of PTC’s outstanding common shares on a fully diluted basis will be subject to lock-up agreements.
Inmet and PTC will work together to settle and execute as soon as practicable a support agreement containing usual and customary terms providing for, among other things, minimum acceptance of the revised offer by PTC shareholders holding at least 66.66% of the outstanding shares of PTC calculated on a fully diluted basis (excluding PTC common shares currently owned by Inmet and its affiliates), a non-solicitation covenant,m customary fiduciary out provisions, a right in favour of Inmet to match a superior proposal and the payment to Inmet of a termination payment in certain circumstances The support agreement will also provide for the immediate cessation of PTC’s activities on or relating to the Petaquilla concession. PTC and Inmet expect the support agreement to be finalised and executed by them by no later than Friday, August 29, 2008.
Inmet also expects to mail to PTC shareholders a notice of extension and variation related to the revised offer of $2.20 in cash per PTC common share subsequent to execution of the support agreement. In the meantime, Inmet will extend the current offer of $2.00 per PTC common share until 11:59 p.m. (Toronto time) on September 8, 2008.