Minera Panama, S.A. and Petaquilla Minerals Ltd. Sign $60 Million Agreement
Friday, May 09 2014 @ 02:08 AM UTC
Contributed by: Don Winner
MPSA is to pay PTQ up to $60 million for a transfer of a range of assets and property rights. The transaction ensures there will be a complete separation of the current operations of PTQ's Molejon Gold mine and the Cobre Panama copper project currently being developed by First Quantum.
$3.3 million is being paid on execution of the Second Amendment with an additional $46.7 million conditional on PTQ meeting specific deliverables before July 6, 2014. An additional $5 million is payable after one year conditional on certain approvals being granted with a final $5 million payable 30 days after the first ore shipment from the Cobre Panama project, provided PTQ has fulfilled all of the obligations and achieved all milestones as set out in the Second Amendment.
Key aspects of the Second Amendment include:
PTQ to transfer 99,735 hectares of exploration concession applications in the region to MPSA;
PTQ to transfer to MPSA 551.5 hectares at the north end of its Molejon mining concession area to support current planning of the Cobre Panama mine development;
Termination of the Aggregates and Screened Rock Purchase Subcontract dated May 23, 2013, without liability to either party; effective June 30, 2014;
PTQ to transfer to MPSA sole ownership of the Llano Grande Road which is the main access road to the Cobre Panama project area, and ownership of other access roads as well as rights of way along MPSA´s electrical distribution corridor;
PTQ to transfer to MPSA 833.3 hectares of land (both title and possessory rights) which comprises all PTQ land holdings within a 30 kilometre radius of the Cobre Panama project (excluding the Molejon concession);
PTQ to waive any rights to the Botija Abajo, Brazo, Balboa, Colina, Botija, and Valle Grande copper deposits or to any mineral deposits outside PTQ´s residual portion of the Molejon mining concession area; and
PTQ to provide future collaboration, assistance and support in connection with MPSA´s current surface rights applications, Law 9 amendments and any possible future expansions of the Cobre Panama project.
Execution of the Second Amendment ensures complete development and operational flexibility for the Cobre Panama project by providing MPSA with ownership of all concession application areas surrounding the Molejon mining concession and control of surface and access rights outside of the defined Molejon Gold mine area.
PTQ will continue its operations of the Molejon Gold production facility and Panama Desarrollo de Infraestructuras, S.A., PTQ's infrastructure division, will continue to operate its infrastructure within the Molejon Gold Project concession.
Editor's Comment: This was released just four days after the election. In short, the much smaller Petaquilla got paid $60 million dollars to get out of Minera Panama's way. Now the massive open pit copper mine project can move forward smartly, and without any sort of blocking or interference by Petaquilla. Good. And I suspect Minera Panama wants to get as much done as possible - right now - while Ricardo Martinelli is still the president of Panama. They've been able to get a whole lot done on his watch. Now the Varela people will be showing up, with their hands out, of course. That's the way things are done in Panama, unfortunately.
And for the record, because I haven't written about mining in Panama lately. I am generally in favor of the development of the mining industry in Panama. There are massive amounts of mineral deposits in the mountains of Panama that rose up from the ocean as volcanoes millions of years ago. However unfortunately, those deposits are also located under thousands of hectares of land that is now covered in virgin jungle. The mining companies should be held to the standards of acceptable practice by the government of Panama. It is possible to conduct mining operations in a manner that mitigates environmental impact and damage. Now with that having been said, there's no such thing as a "pretty" or attractive open pit copper mine. The mining company and their shareholders will be making billions of dollars from these deposits for decades. They should be forced - forced - to do so in an ethically responsible manner. And also unfortunately, the track record in Panama has been to pay bribes to the government officials, and they look the other way, sign off on things, ignore, don't enforce, etc. I hope that won't be happening with Minera Panama and this huge copper project.