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Sunday, September 23 2018 @ 08:12 AM UTC

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First Quantum closes in on Inmet Mining takeover; extends $5.1B offer

Gold & MiningVANCOUVER - First Quantum Minerals Ltd. is extending its $5.1-billion hostile takeover bid for Inmet Mining Corp. another 10 days until March 21 after coming up just short of acquiring two-thirds of the miner.

The offer had been set to expire Monday night, but was extended as First Quantum said some 61.45 per cent of Inmet's shares had been tendered to its bid.

The Inmet board has rejected the $72 per share offer - half in cash and half in stock - as inadequate.

However, even though the Inmet board urged shareholders to reject the deal, it waived application of a shareholder rights plan that would have thwarted the unsolicited bid after it failed to come up with a rival offer.

Philip Pascall, CEO and chairman of Vancouver, based First Quantum, declared himself "delighted" with the response to the offer.

"We have varied our offer such that the minimum tender condition will now be satisfied if more than 50 per cent of the Inmet shares have been tendered at the revised expiry time of the offer," Pascall added.

"Accordingly, with all regulatory approvals already received, it is our expectation that we will be in a position to complete the offer and begin taking up and paying for shares shortly following the expiry of the offer on March 21, 2013."

If more than two thirds of outstanding shares have been deposited by the new deadline, First Quantum will implement a subsequent transaction to acquire the balance of the Inmet shares, something that could take several months, the company said Tuesday.

On the Toronto Stock Exchange, Inmet shares were up $1.27 at $69.90 in early trading Tuesday, while First Quantum was up a penny at $20.65.

Inmet, with mining operations in Turkey, Spain and Finland, also 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.

Last year, Inmet signed a deal with a joint venture led by SNC-Lavalin Inc. for the first phase of the planning and construction of a process plant at the project.

First Quantum has said the combination of the two companies would create one of the world's fastest growing copper miners with the potential to produce more than 1.3 million tonnes of copper annually by 2018.

The bid by First Quantum follows the sale of its operations in the Democratic Republic of Congo to Kazakhstani miner Eurasian Natural Resources Corp. for $1.25 billion.

First Quantum had written off the value of the assets in 2010 after its operations in Congo were nationalized by the government of the mineral-rich central African country. (The Canadian Press)

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First Quantum wins Investment Canada Act approval for Inmet Mining takeover bid

Gold & MiningVANCOUVER - First Quantum Minerals Ltd. said Friday it has received regulatory approval under the Investment Canada Act for its $5.1-billion hostile takeover offer for Inmet Mining Corp.

Inmet has rejected the offer and recommended shareholders reject the bid, but has waived the application of a shareholder rights plan after a review of strategic alternatives.

The First Quantum stock-and-cash proposal, which is valued at $72 per share, is open until Monday.

Inmet has mining operations in Turkey, Spain and Finland, along with an 80 per cent interest in Cobre Panama, a development property in Panama currently in construction. (thetyee.ca)

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Inmet in talks to sell a minority stake in Panama mine

Gold & MiningBy Pav Jordan - Inmet Mining Corp. said on Friday it is in talks with a strategic investor to sell a minority stake in its mammoth Cobre Panama copper project at premium levels, urging shareholders once again to reject a hostile takeover bid for the whole company that expires on Monday.

“A transaction with a minority partner will further de-risk Cobre Panama. It will provide an upfront cash payment as well as a source of capital to fund the partner’s share of Cobre Panama capital costs going forward,” Inmet Chairman David Beatty said in an open letter to shareholders.

Toronto-based Inmet is trying to fight off a $5.1-billion, hostile takeover bid from First Quantum Minerals Ltd., a Vancouver-based copper miner focused on operations in Africa. The First Quantum bid expires on Monday at midnight.

Inmet did not provide further details about the talks to sell a stake in Cobre Panama. Previously , First Quantum has expressed concern about a potential stake sale diminishing the value of Inmet and viability of the takeover offer. (theglobeandmail.com)

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Petaquilla Minerals Ltd. : Inmet and Petaquilla Announce Commercial Agreement

Gold & MiningToronto, ON and Vancouver, BC - Inmet Mining Corporation ("Inmet") and its wholly owned subsidiary, Minera Panama S.A. ("MPSA"), and Petaquilla Minerals Ltd. with certain of its wholly owned subsidiaries (collectively, "Petaquilla") are pleased to announce the signing of a binding term sheet outlining the agreement of the companies relating to aggregate procurement, land access and use, settlement of certain claims, waiver of royalties to be received by Inmet, and camp site procurement for the mutual benefit of MPSA's and Petaquilla's mining operations in the District of Donoso, Panama.

The agreements reflected in the term sheet will be incorporated into a definitive agreement to be executed by the parties. The total value of the arrangements agreed to by the parties is up to US$150 million. Inmet will guarantee the obligations of MPSA under the term sheet and the definitive agreement to be executed between the parties.

The main commercial terms are as follows:

MPSA will purchase, and Petaquilla´s infrastructure division will supply, up to US$100 million (a minimum of US$75 million) of aggregates over a three year period for use in the Cobre Panama project;

MPSA will lease from Petaquilla´s mining division, for an annual rental of US$1.3 million, certain lands that will be used for temporary and permanent camp space for the Cobre Panama Project; and

Petaquilla has applied for mineral exploration concessions which, if granted, could entitle it to mineral exploration rights on land where Cobre Panama project infrastructure will be built.

If and when such concessions are granted, certain areas on which Cobre Panama infrastructure will be located shall be formally assigned to MPSA. MPSA shall also have an option to receive an assignment of certain areas of such concessions that are not required by MPSA under the current Cobre Panama project plans.

The remaining value of the agreement is comprised of forgiveness of royalties and release of certain monetary claims by Inmet and MPSA.

The term sheet reflects both companies' commitment to "promote the sustainable development of the Donoso mining district in accordance with the highest national and international social and environmental norms," said Petaquilla President Rodrigo Esquivel. Steve Botts, CEO and President of MPSA, commented, "I am very pleased we have reached this agreement, which represents a new chapter of collaboration between our companies and signals the continued development of a model mining industry in Panama."

Petaquilla and Inmet, former joint venture partners, have successfully negotiated other arrangements in the past, namely the 2005 Molejon Gold Project Agreement, which led to Petaquilla's gold mining operations at its Molejon gold deposit. (Press Release)

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Vancouver's Inmet Mining reaches US$150-million deal with Petaquilla Minerals

Gold & MiningTORONTO - Inmet Mining Corp. and Petaquilla Minerals Ltd. 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 attempts to acquire Inmet through 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.

Toronto-based Inmet has also agreed to drop certain claims against Petaquilla, which is headquartered in Vancouver. (Vancouver Sun)

Editor's Comment: That's nice. It made no sense for these two companies to be fighting over the details when there's so much gold and copper in the ground under their feet. Personally I don't care what company is doing what, as long as these mines are developed in Panama, which will bring long term economic growth and jobs. The Inmet mine has a build out of more than $6 billion dollars - more than it cost to expand the Panama Canal. These mines are a very big deal for the Panamanian economy. Huge.

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First Quantum to pitch Inmet hostile takeover deal directly to shareholders

Gold & MiningVANCOUVER — First Quantum Minerals Ltd. will host a series of investor meetings to pitch its hostile takeover bid directly to Inmet shareholders after the mining company’s board rebuffed the $5.1-billion offer.

First Quantum said Inmet’s rejection did not include any compelling alternatives to its proposal and presented only “generic and rehearsed arguments.”

The investor meetings will give Inmet shareholders a chance to speak to and hear from members of First Quantum’s senior management team themselves.

“We hope you will be able join us at these events,” First Quantum chairman and chief executive Philip Pascall wrote in a letter to shareholders, released Thursday.

Inmet owns 80% of the Cobre Panama copper project through Minera Panama SA, with the remainder owned by Korea Panama Mining Corp.

In rejecting the offer, Inmet said the offer of $72 per share, half in cash and half in stock, undervalued the company and its Cobre Panama project.

The company pointed to the risk of swapping Inmet shares for those of First Quantum and the bidder’s relative lack of experience building a mine the size of the project in Panama.

Inmet also said this week it was in talks regarding a range of alternatives as it formally rejected First Quantum’s hostile takeover bid.

First Quantum said Thursday that Inmet should also open talks up with it.

“The Inmet Board has not heard from us about our business and about our plans for the combined entity, even though Inmet shareholders have been offered the opportunity to participate in our future success through ownership of First Quantum shares,” Pascall wrote in his letter.

“This clearly limits the Inmet Board’s ability to provide a sound and reliable recommendation to you on the merits of our offer.”

First Quantum has said the combination of the two companies would create one of the world’s fastest growing copper miners with the potential to produce more than 1.3 million tonnes of copper annually by 2018.

The bid by First Quantum follows the sale of its operations in the Democratic Republic of Congo to Kazakhstani miner Eurasian Natural Resources Corp. for $1.25-billion.

First Quantum had written off the value of the assets in 2010 after its operations in Congo were nationalized by the government of the mineral-rich central African country.

First Quantum increased its offer last month to $72 per Inmet share or about $5.1-billion after an earlier bid of $4.9-billion was also rejected.

Inmet shares were down 27 cents at $70.50 in trading on the Toronto Stock Exchange on Thursday. (The Canadian Press)

Editor's Comment: This is an important Panama story because Inmet is the company developing the massive new copper mine here. The company plans to spend at least $6 billion dollars in Panama over the next five years just to build the mine and bring it on line, more than it cost to expand the Panama Canal.

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Inmet Urges Rejection of First Quantum’s Takeover Bid

Gold & MiningBY MICHAEL J. DE LA MERCED for the NY Times - The Inmet Mining Corporation of Canada said on Tuesday that it had rejected a $5.2 billion takeover bid by a rival, First Quantum Minerals, arguing that the offer was too low.

The response, more than a month after First Quantum announced its latest cash-and-stock offer, may set off a race for Inmet, one of the world’s major copper miners.

Inmet said in its statement that it was considering “strategic alternatives,” usually code for a sale or joint venture. The company said it had approached a number of unnamed third parties about possible transactions.

In the meantime, Inmet is urging shareholders to reject First Quantum’s tender offer, which is scheduled to expire at 5 p.m. on Feb. 14. The bid was valued at about $72.87 last month.

The mining sector is playing host to a round of consolidation, as companies seek greater scale to take advantage of a boom in the production of metals and minerals. Last year, Glencore agreed to buy Xstrata in a $32 billion deal.

By merging with Inmet, First Quantum would be aiming to become one of the world’s biggest copper producers, producing about 1.3 million metric tons of the metal annually by 2018. Inmet Mining’s chairman, David Beatty, said the First Quantum bid undervalued the company. The Inmet board said in its statement on Tuesday that First Quantum’s offer failed to take into account the expected yields at its Cobre Panama site in Latin America. The 13,600-hectare site, located west of Panama City, is one of the biggest untapped copper deposits left in the world, and Inmet expects the site to increase its production by 176 percent in about five years’ time.

The company added that a merger could yield significant risks to its shareholders. In part, Inmet cited First Quantum’s poorer development record and lack of experience in Latin America.

“The Inmet Board has concluded that the First Quantum offer fails to adequately compensate shareholders for Inmet’s low risk asset base and its strong prospects for growth and value creation at Cobre Panama,” David R. Beatty, Inmet’s chairman, said in a statement.

“The board is engaged in a thorough and rigorous process aimed at investigating all potential strategic alternatives to maximize shareholder value,” he added.

Inmet is being advised by the Canadian Imperial Bank of Commerce and the law firm Torys, while a special committee of its board has retained Scotia Capital.

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Canada : First Quantum indicts Inmet of trying to incapacitate deal

Gold & MiningVancouver-based miner First Quantum Minerals Ltd. accused Inmet Mining Corp. of trying to interfere with the 5.1 billion Canadian dollar ($5.17 billion) acquisition offer it has made for its Canadian rival.

First Quantum said that it was concerned that Inmet is trying to sell a minority interest in its Cobre Panama project. According to the firm, the massive mining project in Panama is one of the main reasons it has targeted Inmet.

Philip Pascall, Chairman and CEO of First Quantum said this in a letter to Inmet's Chairman, David R. Beatty. He added, "It is a condition of First Quantum's Offer that Inmet and its subsidiaries not take any action which might have the effect of materially diminishing the economic value to First Quantum of the acquisition of Inmet.

He added, "First Quantum believes that shareholders of Inmet should be given a real opportunity to decide between our offer and any such "strategic alternative.

Mr. Beatty said that the letter underscored the hostile nature of First Quantum's approach. "We note that, while First Quantum says it wishes to engage in friendly discussions, it is simply not," he said.

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First Quantum says Inmet’s efforts at massive Panama mine harmful to investors

Gold & MiningBy Peter Koven - Inmet Mining Corp.’s efforts to develop the massive Cobre Panama project have come at a “real cost” to shareholders, says the chief executive of First Quantum Minerals Ltd. He said that things would be different if First Quantum was in charge.

First Quantum started the clock ticking on its $5.1-billion hostile bid for Inmet on Wednesday by mailing its offer to Inmet shareholders. Toronto-based Inmet has 15 days to respond and the offer is open until Feb. 14, though the timeline could be extended.

Throughout the takeover battle, First Quantum has stated it can build Cobre Panama for significantly less than the US$6.2-billion cost Inmet is targeting. Now, First Quantum has looked at the steps Inmet has taken to de-risk the project and declared they were harmful for investors.

For example, CEO Philip Pascall noted Inmet has raised US$2-billion of high-yield debt, much of which is not needed until at least 2014. While this has reduced the financial risk of Cobre Panama, it adds US$170-million to the project’s costs every year, he wrote in a letter to Inmet shareholders. He also criticized the US$1-billion gold stream financing on Cobre Panama that Inmet announced last summer, which provides immediate capital but removes upside from the project.

On the operations side, Mr. Pascall criticized Inmet for what he called “the unfettered use of costly outside consultants and project sub-contractors.” First Quantum is confident it can save money by using its in-house team.

Inmet is only a $5-billion company, so it had to raise such financing early on to convince investors it could build such a massive mine. But Mr. Pascall said it would not have been necessary for First Quantum given its larger size, strong technical expertise and conservative balance sheet.

“A combination between First Quantum and Inmet will substantially de-risk Cobre Panama for the benefit of all shareholders,” he wrote.

While First Quantum has taken its bid directly to Inmet shareholders, the company has also made clear that it would welcome friendly negotiations. It has avoided the “best and final” language that is often a sign that an offer will not be increased

Inmet and financial advisor CIBC World Markets are studying every potential opportunity to wring more value out of the company. But sources close to the takeover battle believe that finding a friendly bidder will be extremely tough.

Senior mining companies are conserving capital and halting their high-cost projects, while the world’s biggest publicly-traded copper company, Freeport-McMoRan Copper & Gold Inc., is busy trying to break into the oil and gas sector. Teck Resources Ltd. used to be involved in Cobre Panama, but the miner sold its stake in 2008 and maintains a more conservative balance sheet today.

First Quantum president Clive Newall noted in an interview that there are scarcely any rumours of white knight bidders, which is highly unusual in a contest like this. He said First Quantum’s “unique ability” to build Cobre Panama at a reduced cost cannot be matched by any other company.

First Quantum maintains that Inmet’s key shareholders support the proposed merger. While it is not naming names, Inmet has a tight shareholder structure and two investors — Leucadia National Corp. and Temasek Holdings Ltd. — control 27% of the company.

Inmet shares closed Wednesday at $72.26, less than 1% above the takeover offer price of $72.

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Inmet faces hard sell in snubbing First Quantum’s $5.1B hostile bid

Gold & MiningBY PETER KOVEN, FINANCIAL POST - With First Quantum Minerals Ltd. expected to file its takeover circular imminently, the pressure will be on Inmet chief executive Jochen Tilk to explain why the $5.1-billion hostile offer for his company is inadequate. Inmet shares have jumped nearly 40% since news of a bid surfaced in November, and are trading roughly in line with the offer price of $72 a share.

It is understood Inmet hired CIBC World Markets as a financial advisor, and the Toronto-based miner is likely to argue the bid is far below fair value for Cobre Panama, one of the world’s largest copper deposits.

Analysts and investors generally agree the offer is low. However, they said Mr. Tilk could have a tough time fighting off First Quantum.

The central issue boils down to a question: Which company is better suited to build Cobre Panama? First Quantum has an outstanding track record of building large projects at lower cost than competitors, and has claimed it can do the same with this one. Mr. Tilk will try to prove Inmet can build the US$6.2-billion mine just as quickly and efficiently, and with no more of the cost inflation that has plagued this project and many others.

“I think it’s going to be a tough sell for Inmet, given that First Quantum has such a proven history of project development,” said John Hughes, an analyst at Desjardins Securities. John Stephenson, senior vice-president of First Asset Investment Management, praised Inmet’s management, but said it would be “virtually impossible” to argue Inmet’s project team is better than First Quantum’s. (more)

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Why First Quantum’s bid for Inmet likely won’t be its last

Gold & MiningThe cheapest copper mining deal in five years has traders convinced that First Quantum Minerals Ltd.’s latest bid for Inmet Mining Corp. won’t be its last.

The C$5.1 billion ($5.2 billion) offer values Inmet, owner of the second-biggest copper mine under construction, at the lowest multiple of earnings before interest, taxes, depreciation and amortization for a deal of its size in the industry since 2007, according to data compiled by Bloomberg. Inmet shares climbed yesterday 1.2 percent above the C$72-a-share proposal — First Quantum’s third offer for the Toronto-based company since October — indicating arbitrageurs who bet on acquisitions expect another boost, the data show.

After Inmet last week raised estimates for the amount of copper contained at its Cobre Panama mine, Canaccord Financial Inc. said it would take a bid of at least C$80 a share to win over investors, particularly with the top shareholders controlling a majority of the stock. While Inmet could draw other suitors, Vancouver-based First Quantum’s desire for a friendly deal suggests it may be willing to pay more whether or not there are rival bidders, according to Bank of Montreal.

“The market is clearly saying that we are going to need a higher price to push this through,” Barry Schwartz, a Toronto-based fund manager at Baskin Financial Services Inc., which oversees about C$450 million including Inmet shares, said in a telephone interview. Cobre Panama “is going to be one of the greatest mines that’s going to come on stream in the second half of the decade. We’re running out of quality finds of copper, and Inmet has one of them.” (Bloomberg)

(Please click on this link to see the rest of this article.)

Editor's Comment: No matter who ends up being the company responsible for digging the copper out of the ground, the development of this massive mining project will be a good deal economically for Panama. It will generate more than $6 billion in new Foreign Direct Investment just to build the mine. The mining operation, once built, will employ hundreds if not thousands of people both directly and indirectly. And, the government of Panama will receive a percentage of every dollar earned for copper and gold sales. The downside is environmental concerns, which can be managed and mitigated. If the company violates standards then the government of Panama can apply fines to force them to come into compliance. Strip mines are never "pretty" but neither are copper wires. Like modern technology? If so, then don't bitch about a new copper mine. Also, the development company will be required to plant ten new trees for every one it cuts down. To do this thousands of acres of land that was clear cut decades ago for cattle ranching will be reforested with a natural mix of jungle species. Anyway - in the meantime the two sides will be negotiating a price acceptable to both. Or not. And as long as it gets built, who cares...

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Inmet lifts Panama project reserves by 27%

Gold & MiningBy: Henry Lazenby - TORONTO (miningweekly.com) – Base-metals miner Inmet Mining on Thursday announced it has increased the proven and probable reserves at its 80%-owned Cobre Panama project, in Panama by 27%.

The additional mineral reserves from the Balboa, Brazo and Botija Abajo deposits increase Cobre Panama's total estimated contained copper to about 26-billion pounds.

The estimated contained gold increases has also increased by 41% to about 7.3-million ounces.

The company said the added mineral reserves have been integrated into a revised mine plan that extends the estimated mine life from 31 to 40 years.

Editor's Comment: Inmet recently made an effort to buy Petaquilla. Others then made a bid to buy Inmet. Now Inmet (surprise!) amazingly discovered 27% more copper and 41% more gold. Do you think there's any chance they knew about this all along, but then suddenly "discovered" these additional deposits in order to get more money out of the people who want to buy them? Listen, these guys are jockeying for position and trying to figure out how to get the most money out of the ground in Panama. But at the same time these are individuals who are trying to get as much money as possible in their individual bank accounts.

How much is that copper worth? Multiply 26 billion pounds of copper by today's price of $3.63 per pound = $94.38 billion. Then add 7.3 million ounces of gold by today's price of $1,696.70 per ounce = $12.38 billion. So between the two the value in the ground is more than $106.76 billion. And there are other minerals that will be coming out of the ground as well. All of a sudden the $6 billion dollars they will spend to build this mine doesn't seem like that much money anymore. A significant investment for tiny Panama, but the return on investment is huge.

So yes, Panama has been sitting on mineral deposits worth more than $100 billion dollars, without exploiting them, while some people still suffer in poverty. Meanwhile, environmentalists are trying to stop the mining companies from building this industry. Mining in Panama will be one of the most significant motors that will drive the economy of this country for decades. It's a big story, in every sense of the word.

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Inmet rejects First Quantum takeover bid

Gold & MiningTORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world.

The move puts Inmet’s immediate future into question, as the company is now in play and senior copper miners are certain to take a closer look at Cobre Panama.

Toronto-based Inmet owns 80% of Cobre Panama, and it is a monster. The project holds 32 billion pounds of copper reserves and nine million ounces of gold reserves (along with huge inferred resources), and has a likely mine life of more than 30 years. It also comes with enormous risk: The current cost estimate is US$6.2-billion, and Panama has no history of large-scale mining.

Construction of Cobre Panama has just started, and analysts suggested that if First Quantum has its own development plan for the mine, it needs to get in quickly. First Quantum is recognized for having a strong technical team.

“I see a fit in the sense that [First Quantum] management has been very experienced in building four grassroots projects on time and within reasonable budgets, and also operating in what I would call politically sensitive areas in Central Africa,” said John Hughes, an analyst at Desjardins Securities. “I think they would certainly bring to the table the management wherewithal to progress Cobre Panama.”

First Quantum has already made two private pitches to Inmet. On Oct. 28, it made an offer of $62.50 a share. Inmet quickly rejected it, and First Quantum returned on Nov. 25 with a cash-and-stock bid of $70 a share, or $4.9-billion. Inmet turned that one down as well, saying it is “highly conditional.”

The fact that Inmet finally decided to make the bids public — while also adopting a shareholder rights plan — suggests it thinks a formal offer could be coming soon, analysts said.

Inmet has been looking to bring an additional partner into Cobre Panama to share the risk and the costs. First Quantum’s offer indicates it has no interest in being a minority partner, and would rather run the project itself.

If First Quantum does follow through with a hostile bid, experts are not convinced there will be an intense bidding war. This has been a very slow year for M&A in the copper space, as companies have cut spending and focused on preserving their balance sheets. The short list of potential suitors for Inmet includes Teck Resources Ltd., Freeport-McMoRan Copper & Gold Inc., and state-controlled firms from Asia.

But even though there has been little M&A this year, the rationale is as strong as ever. Major copper projects such as Cobre Panama are getting larger, more expensive and more complex, and bigger companies with more scale are in a stronger position to bring them into production. A First Quantum-Inmet deal would bring the combined company firmly into the big leagues in the copper sector.

Investors appear to be skeptical about a deal as well. Inmet shares closed Wednesday at $62, up 17% on the day but well below the $70 offer price from First Quantum.

Both companies have plenty of M&A experience. First Quantum has a history of acquiring projects at an early stage and creating value by building and operating them extremely well. And Inmet was in the middle of a wild takeover battle last year that involved five different companies. Inmet tried to complete a friendly merger with Lundin Mining Corp., but the deal fell apart when Equinox Minerals Ltd. made a hostile bid for Lundin. Barrick Gold Corp. eventually bought Equinox for $7.3-billion.

Equinox was advised by Goldman Sachs. According to a report, Goldman is also advising First Quantum. (Financial Post)

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Inmet Mining Announces Purchase of Mine Mobile Equipment Fleet for Cobre Panama

Gold & MiningTORONTO, CANADA - Inmet Mining Corporation is pleased to announce that its subsidiary, Minera Panama S.A., has completed the selection of mine mobile equipment vendors and has awarded contracts for the supply of:

  • rope shovels to P&H Mining Equipment Inc.;
  • hydraulic shovels/excavators and trucks to Komatsu Holding South America;
  • ancillary and support equipment to IIASA Panama S.A. (Caterpillar); and
  • rotary drills to Atlas Copco Drilling Solutions LLC.

    The total order consists of 84 pieces of equipment that will be progressively delivered to site starting in 2013 in time for commencement of pre-stripping operations in Q4 2014 and ahead of the commissioning of the mineral process plant and first shipment of concentrate in Q1 2016. The total amount of the award for all 84 pieces of equipment is US$349 million.

    Individual contracts have been negotiated with each one of the vendors for both the supply of the equipment and the maintenance and service of their fleet for the first 5 years of operation.

    Capital commitments for Cobre Panama are currently in excess of US$2.9 billion. (Press Release)

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    Inmet’s hostile bid for Petaquilla Minerals fails

    Gold & MiningBy Peter Koven - Inmet Mining Corp. has allowed its hostile bid for Petaquilla Minerals Ltd. to expire after it failed to win support from enough Petaquilla shareholders to complete the takeover.

    Toronto-based Inmet announced on Tuesday morning that its minimum tender condition was not met, and it did not take up any Petaquilla shares related to the $133-million cash-and-stock bid.

    The two companies own projects side-by-side in Panama, and the failure of the bid means that the status quo in the region will continue for the time being. Inmet is developing the giant Cobre Panama copper project, while Petaquilla operates a small gold mine right next door.

    The two companies could not agree on what the takeover bid was even about. Inmet said it wanted to remove a potential “source of distraction” in Panama as it pursued the development of Cobre Panama (around environmental issues, for example), while Petaquilla claimed that Inmet needed its land rights in order to carry out the copper project. Inmet said that was nonsense, and the fact that it allowed the bid to expire suggests it is not concerned about that issue.

    “We do not expect that the failure of the offer to acquire [Petaquilla} should have any negative impact on Inmet’s ability to proceed with the construction of the Cobre Panama project,” TD Securities analyst Greg Barnes wrote in a note. He continues to believe that the main purpose of the bid was to “maintain and improve” Inmet’s social license in Panama, a country with little history of mining.

    Petaquilla shares plunged 25% in early trading Wednesday after investors absorbed the news. The company says it has held talks with other parties regarding a potential alternative transaction. (theprovince.com)

    Editor's Comment: Sooner or later I suspect Inmet and Petaquilla will probably come to some sort of an agreement that's both acceptable and mutually beneficial. The big dog on the block is Inmet with their $6 billion dollar foreign direct investment to build their new copper mine. Petaquilla has been working for the past several years to get their small gold mine to production, and now they are actually starting to make some money for a change. They are neighbors and will have to work out their differences, or else we will be seeing these sorts of back and forth headlines for years (or decades) to come. From the macro view - who cares? The development of the mining industry in Panama is massively important for the Panamanian economy, but it really doesn't matter what name is painted on the sides of the trucks.

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