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Thursday, May 23 2019 @ 11:42 PM UTC

Inmet shares drop as Panama mining law repeal weighs

Gold & MiningTORONTO (Reuters) - Shares of Inmet were among the biggest losers on the Toronto Stock Exchange on Friday, after the government of Panama announced plans to repeal a recent law that allows foreign government investment in mines within the Central American country. The law, passed less than a month ago, is crucial to Inmet Mining, as the company plans to partner with Singapore's state investor Temasek and with Korea Resources Corp to finance and build its $4.3 billion Cobre Panama copper-gold project in the country. Shares of Inmet fell as much as 3.7 percent to C$66.55 in early trade, as the repeal of the law could impact Inmet's plans to finance the project. Toronto-based Inmet, which owns copper mines spread across Turkey, Finland and Spain, is trying to acquire rival Lundin Mining. However a C$4.8 billion counter offer from Equinox Minerals could derail Inmet's friendly deal with Lundin. Many analysts doubt that Inmet will join a bidding war for Lundin, as it needs to build a war chest to finance Cobre Panama. BMO analyst David Cotterell said he views the development of Cobre Panama as a key part of Inmet's future growth. "The funding options for the Cobre Panama Project could potentially place constraints on offering more attractive terms for Lundin," he said, in a note to clients. (Reporting by Euan Rocha; editing by Janet Guttsman)

Editor's Comment: Following along now? Law 8 had nothing to do with the development of Cerro Colorado in the comarca, and everything to do with trying to find a way to help Inmet obtain financing and partners for their Cobre Panama project, the rights to a concession they obtained in the divorce from Petaquilla. I bet there are mechanisms in existing bilateral free trade agreements between Panama and Canada as well as between Panama and South Korea that would allow for much of what needs to happen anyway, with or without Law 8. The whole Law 8 thing came up after South Korean president Lee Myung-bak visited Panama in June 2010. They wanted assurances from the Panamanian government before they committed a couple of billion dollars to help Inmet build their mine. That's why after Law 8 was passed, Vice President Juan Carlos Varela personally called the South Korean president to let him know they had gotten the deal done. I wondered who called him yesterday to tell him "never mind..."

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