Petaquilla Copper Ltd. Updates its Development Strategy
posted on May 14, 2008 03:47AM
Edit this title from the Fast Facts Section
Petaquilla Copper Ltd. (the "Company") is pleased to provide an update on its corporate strategy for the continuing development of the Petaquilla Mining District, Panama.
The Company welcomes the appointment of Inmet Mining Corporation ("Inmet"), its partner, as manager of the Petaquilla Copper Project, and considers this to be a key step in maintaining the schedule to bring the world-class copper-gold porphyry deposit to production.
On April 28, 2008, the Company commenced arbitration proceedings against Teck Cominco Limited ("Teck"), on the basis that Teck had not fulfilled the preconditions necessary to exercise its option to acquire one half of the Company's interest in the property. If the Company is successful in the proceedings, the Company will regain a 52% interest in the Project.
The arbitration proceedings have inevitably introduced an element of uncertainty with respect to Inmet's proposed work plan for the Project. The Company realized that this would be an unavoidable consequence of making the decision to arbitrate, but the board determined that the potential benefits to the Company's shareholders of regaining a 52% interest in the Project far outweighed the possibility of a temporary scaling down of development operations. The Company intends to approach Inmet with a strategy that will mitigate the risk to Inmet during the currency of the arbitration proceedings, and thus allow the development work to continue. The ultimate decision on the scale of Inmet's proposed work plan, however, is currently out of the Company's control.
At the present time, the Company holds a 26% fully carried interest in the Petaquilla Copper Project. If the arbitration proceedings are resolved in the Company's favour, the Company will hold a 52% participating interest in the Project, and Teck will have a small net profit interest. If the arbitration proceedings are not resolved in the Company's favour, the Company will continue to hold the 26% carried interest, and Teck will have to fund 52% of all costs and will hold a 26% equity interest in the Project.
On March 26, 2008, Inmet and Teck announced an agreement between them which, in effect, extended Teck's deadline for making a commitment to fund the Project. Under that agreement (and ignoring the potential results of the current arbitration), if Teck elects to sell its interest, the Company would have the right to purchase its proportionate share of Teck's interest, and could thereby acquire an additional 9% participating interest.
In summary, the Company's ultimate interest in the Project will almost
certainly be one of the following, based on currently known facts:
1. If the Company prevails in the arbitration proceedings, it will hold a
52% participating interest in the project and Inmet will hold 48%;
2. If the Company fails in the arbitration proceedings, it will hold:
a. A 26% fully carried interest (if Teck does not sell) or
b. A 26% fully carried interest and a 9% participating interest
(if Teck does sell and the Company acquires part of Teck's
The Company recently committed to integrate with Inmet all of its
operations related to Minera Petaquilla, S.A. (MPSA), in order to derive
greater efficiencies and optimize the operating strengths of Inmet and the
At present, the Company continues to pursue all of its alternatives to
assure the effective implementation of its agreed commitments to the
Government of the Republic of Panama. To this end, the Company is in
continuous discussions with major mining entities who have expressed their
interest in being involved in the project either financially or technically
should the opportunity arise.
The Company continues to meet all of its commitments that were
memorialized in a Multiphase Development Plan approved by Ministerial
Resolution in November 2005 by the Ministry of Commerce and Industries of the
Republic of Panama.
This strategic agreement requires that a series of milestones be attained
by January 2009. At present, the Company has ongoing consultations with the
Government of Panama and Inmet Mining so as to assure the fulfillment of these
milestones to the mutual satisfaction of all parties.
As part of these updates, we are pleased to announce National Instrument
43-101 resource numbers carried out by AquAeTer in the Botija Abajo, Botija
Abajo West and Brazos, which are part of the El Real Trend.
The May 13, 2008, news release from the Company summarizes these results.
Petaquilla Copper Ltd. Announces Drilling Results from the
El Real Corridor at the Petaquilla Copper Project in Panama
and Increases Measured and Indicate Resources
Vancouver, BC - May 13, 2008: Petaquilla Copper Ltd. (the "Company")
announces the results of drilling on the El Real corridor at the Petaquilla
Copper Project, Panama. Resources along the El Real corridor were not included
in the mid 1990's, pre National Instrument 43-101 estimates by Fluor Daniel,
and AMEC (formerly H. A. Simons) for the three copper deposits Petaquilla,
Valle Grande, and Botija, all of which are northwest of the El Real corridor.
These new El Real corridor resources represent an addition of approximately
15% in Indicated and Measured resources relative to the Fluor Daniel scoping
study and 23% compared to the H.A. Simons' feasibility study.
The Company will provide a more in-depth technical update of these
resources in the next few weeks.
About Petaquilla Copper Ltd. - Petaquilla Copper Ltd. is a resource
development company headquartered in Vancouver, Canada. Its shares are listed
on the Toronto Stock Exchange under the symbol PTC. Petaquilla Copper Ltd.
also owns 49% of the issued shares of Petaquilla Infrastructure Ltd., a
company incorporated to manage and expedite the development of the power, port
and related infrastructure in support of the Molejon Gold Mine of Petaquilla
On behalf of the Board of Directors of
PETAQUILLA COPPER LTD.
Chief Executive Officer and Director
NO STOCK EXCHANGE HAS APPROVED OR DISAPPROVED
THE INFORMATION CONTAINED HEREIN.
Please visit our website at www.petaquillacopper.com
SOURCE: PETAQUILLA COPPER LTD.
Renmark Financial Communications: Julien Ouimet: [email protected]; Jason Roy: [email protected]; Media - Vanessa Napoli: [email protected], (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.comCopyright (C) 2008 CNW Group. All rights reserved.