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Thursday, May 23 2019 @ 04:59 PM UTC

Inmet updates on Panama copper project; shares jump

Gold & MiningBANGALORE, March 31 (Reuters) - Inmet Mining said an interim study showed significant increase in the output and size of its copper deposits in Panama and said it will raise about C$500 million ($490.7 million) from an unit of Singapore sovereign wealth fund Temasek, sending its shares up about 9 percent. The Toronto-based base metals miner, which has been seeking partners to develop its Cobre Panama project for an estimated $5 billion, said it was evaluating additional sources of equity and debt capital. Last year, the company entered into an option agreement giving South Korea's LS-Nikko Copper the right to acquire a 20 percent interest in the project. The company said its preliminary agreements with global customers Aurubis AG and LS-Nikko could provide up to $1 billion in debt financing. Inmet said it sees reserves of 20 billion pounds of copper and 5 million ounces of gold at Cobre Panama as the front end engineering and design study expanded the project's output by about 25 percent and more than tripled its measured and indicated resources. "We expect the project will deliver a levered rate of return of 15.1 percent at a copper price of $2.10 per pound, which establishes Cobre Panama as a solid project economically," Chief Executive Jochen Tilk said in a statement.

TEMASEK DEAL: Separately, Inmet said it will sell about 9.3 million subscription receipts, priced at about C$54 per receipt to Ellington Investments Pte, an indirect wholly owned subsidiary of Temasek, and expects the deal to be completed by the end of April. On completion of certain conditions, the subscription receipts will be exchanged for an equal number of Inmet's common shares and the funds, to be held in escrow by CIBC Mellon Trust Co, will be released to Inmet. Following exchange of the receipts, Ellington and Inmet will enter into an investor rights agreement, under which Temasek unit will be entitled to name its nominee to Inmet board, the company said in a statement. Shares of Inmet were up about 8 percent at C$59.77 in midday trade Wednesday on the Toronto Stock Exchange. They hit a high of C$60.44 earlier in the day. ($1=1.019 Canadian Dollar) (Reporting by Ashutosh Joshi in Bangalore; Editing by Unnikrishnan Nair)

Editor's Comment: Good for Panama. Inmet raises the money and then spends it here to develop the mine. Absolutely wonderful news, economically speaking.

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