TORONTO – Inmet Mining Corp. (TSX:IMN) and Petaquilla Minerals Ltd. (TSX:PTQ) have reached a preliminary US$150-million commercial agreement for the two Canadian companies’ projects in Panama.
Under the binding term sheet announced Monday, which requires a definitive agreement, the two companies have resolved a number of outstanding issues.
Their deal comes as Vancouver-based First Quantum (TSX:FM) attempts to acquire Inmet in a $5.1-billion hostile takeover bid that expires Wednesday.
Among other things, an Inmet subsidiary has agreed to buy from Petaquilla between US$75 million and US$100 million of aggregates — usually referring to sand, gravel or loose rock — for use in the Cobre Panama copper project.
Inmet will also lease certain lands from Petaquilla as sites for temporary and permanent worker camps at Cobre Panama, at a rate of US$1.3 million annually, and drop certain legal claims.
Inmet tried and failed in a hostile takeover of Petaquilla last year in an offer seen as a move to consolidate the area around its Cobre Panama project.
Petaquilla’s Molejon project neighbours the US$6.2-billion Cobre Panama copper-gold porphyry project, Panama’s largest-ever mine development.
The companies held talks about a possible friendly deal, but were unsuccessful.
Inmet has rejected the hostile takeover offer from First Quantum.
Under the proposal, Inmet said First Quantum had offered $72 per share for First Quantum shares, half in cash and half in stock.
Inmet owns 80 per cent of the Cobre Panama project through Minera Panama SA and the remainder is owned by Korea Panama Mining Corp. The total cost of Cobre Panama is estimated at $6.2 billion, including $1.4 billion to be funded by Korea Panama Mining and $4.8 billion through Inmet.