Inmet loses key area for its copper mine in Panama
Thursday, September 27 2012 @ 09:31 AM EDT
Contributed by: Don Winner
However, Inmet designed and realized studies which included areas covering 11,145 hectares of land that were never officially assigned to them in their concession. Within this zone, Minera Panama gave use to 1,968 hectares to locate their main tailing basins. On Tuesday, the National Directorate of Mineral Resources issued a final decision in which it does not recognize the request made by Minera Panama (Inmet), and which gives the eligibility over the area located in the area of San Juan, in the district of Donoso, to their rival Petaquilla Minerals SA to conduct exploration work in for gold, silver, copper and other minerals.
According to the official resolution, Petaquilla Minerals SA made the first application on this land in December 2003, no one objected to the request during the required 20-day period. In 2008 Minera Panama claimed rights over these lands, opening a dispute between the two mining companies, which concluded on Tuesday in favor of Petaquilla Minerals SA.
The Panama America newspaper sought to obtain a response from Minera Panama (Inment) yesterday, who had created the design for their project which included the area they lost. However, company representatives did not respond to the questionnaire sent yesterday by the Panama America.
Sources involved in the mining sector indicated that Minera Panama has two solutions to the problem; they can rethink their project, which has been delayed by five years, or they can buy the operations of Petaquilla Minerals SA. Inmet tried to anticipate this situation weeks before this resolution was issued by the National Directorate of Mineral Resources, by launching a hostile takeover bid for 100% of the shares of Petaquilla Minerals Ltd, which includes the operation of the gold mine and all areas required to build their tailing basins in the area of San Juan.
However, their offer did not arouse the interest of the shareholders of Petaquilla Minerals Ltd., because Inmet only offered 48 cents per share for each of the 221 million shares it has outstanding. This would represent $114 million in total.
Yesterday Petaquilla Minerals Ltd. informed their shareholders of the decision of the Government of Panama in its favor, and they announced they will proceed with exploration work in the area of San Juan. "Petaquilla remains committed to the development of all areas with mining potential, so that its subsidiaries are entitled to the Petaquilla mining district," said the company which is headquartered in Canada. (Panama America)
Editor's Comment: OK, this really seems like a shakedown on the surface. Petaquilla has always been the side show, and Inmet has always been the big deal. I mean, high school kids compared to the Super Bowl. Petaquilla was granted their permission to begin mining operations very shortly after Ricardo Martinelli took office, and they have been at it since 2009. One of Martinelli's well known and favorite practices is to become a major shareholder of a company - so that he makes money when the company makes money - then they use their power as the ones running the government to steer business and contracts towards those companies. In fact, it would not surprise me at all to find out that Martinelli is a shareholder in both Petaquilla and Inmet - so he will make money either way. I don't know if that's the case, but it very well could be.
Now Inmet has been sucked in, and they have Petaquilla embedded under their skin like a tick. They will have to buy out Petaquilla eventually, but the 48 cents per share offer was too low - $114 million from a company that's going to be investing a total of $6 billion to build their copper mine is basically an insult. So in order to crank up the heat, the government of (Ricardo Martinelli) Panama issued this resolution from their National Directorate of Mineral Resources, owned and operated by Martinelli as a part of the Executive branch of government. The message is pretty clear to me. Inmet will have to eventually buy Petaquilla to get them out of the way, it's just going to cost more.
Or, I could be completely wrong. Maybe Martinelli does not hold one share of Petaquilla stock. Maybe the National Directorate of Mineral Resources in Panama simply made a plain and clear and fair decision, based on the law of the land. Maybe I'm just seeing conspiracy and corruption where in fact, it does not exist. But this is Panama, the land where pigs can fly.