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After months of a press-based war that drag them to court, Canadian miners Petaquilla Minerals Ltd. (TSX:PTQ) and Inmet Mining Corp. (TSX:IMN) said they have reached a preliminary $150 million commercial agreement for their projects in Panama.
Under the binding term sheet, which requires a definitive agreement, the two companies have resolved a number of outstanding issues, especially over land rights near the $6.2 billion Cobre Panama copper project, run by Inmet’s subsidiary Minera Panama.
Their deal comes 48 hours ahead of the deadline for Vancouver-based First Quantum (TSX:FM) $5.1 billion hostile takeover bid over Inmet.
Among other items, Minera Panama has agreed to buy from Petaquilla between $75 million and $100 million of aggregates — usually referring to sand, gravel or loose rock — for use in the Cobre project.
Inmet will also lease certain lands from Petaquilla as sites for temporary and permanent worker camps at the project site, at a rate of $1.3 million per year.
Toronto-based Inmet has also agreed to drop certain claims against Vancouver-based Petaquilla.
The copper-gold porphyry Cobre Panama project contains more than 32 billion pounds of copper. Based on Inmet’s estimations, it also has about nine million ounces of gold and 168 million ounces of silver in measured and indicated resources.
Cobre is expected to ship its first consignment of concentrate during the first quarter of 2016, and the life-of-mine is expected to exceed 31 years.
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