Vancouver —
The company, previously known as Adrian Resources, signed a letter of intent with
Based on a gold price of US$350 per oz., Molejon would have an internal rate of return of about 21%, and capital exenditures are estimated at $45 million, says Petaquilla director Richard Fifer.
Roscoe Postle Associates has been hired to deliver an updated resource estimate, which will form the basis of a mine plan.
In 1995 (before National Instrument 43-101), resources were pegged at 5 million tonnes grading 2.81 grams gold per tonne in the probable category, with 956,000 tonnes at 3.72 grams gold considered possible. The amount of contained gold was estimated to be 570,000 oz.
International Finance Corp. is considering backing 25% of the project through debt financing and possibly taking a 10% equity interest in Petaquilla, reaching its maximum exposure of 35%.
Trenching has outlined potential zones of higher-grade mineralization. Also, a shallowly dipping tabular body of quartz breccia and stockworks, from 2 to 5 metres thick, was tested, returning significant gold grades.
Molejon shows good expansion potential and is open toward the northwest.
Molejon is considered part of the 135-sq.-km Minera Petaquilla project, in which Petaquilla Minerals holds a 52% interest. Inmet holds 48%, and Teck Cominco can earn half of Petaquilla Minerals’ interest by funding the costs required to bring the main copper project into production.
In 1998, AMEC completed a bankable feasibility study of the Minera Petaquilla project, and concluded that the three main porphyry deposits had a minable resource of 1.1 billion tonnes grading 0.5% copper and 0.015% molybdenum, plus 0.09 gram gold per tonne. The report proposed a milling rate of 120,000 tonnes per day and a mine life of 23 years. The stripping ratio was estimated at 0.97:1; capital expenditures, at US$1.1 billion.
The project has been largely idle since 1998, reflecting low commodity prices during most of the subsequent seven years.
Petaquilla Minerals has 50.7 million shares outstanding. The market capitalization is $21 million based on the recent trading level of 42.
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