Vancouver-based Petaquilla Minerals (TSX: PTQ; OTCBB: PTQMF), operator of the Molejon open-pit gold mine in Panama, is facing scrutiny from Canadian and Panamanian regulators, leading to a possible cancellation of its mining concession.
The Panamanian newspaper La Prensa, along with other media outlets, have recently reported that Panama’s commerce and industry ministry will revoke Petaquilla’s concession for the Molejon mine in Colon province’s Donoso district, because it allegedly failed to pay salaries and benefits to 600 employees last year.
Panama’s labour minister Luis Ernesto Carles claims Petaquilla owes 604 workers three months of pay and other entitlements totalling US$3.8 million, the local news agency ANPanama reports.
The company didn’t immediately return emails and phone calls requesting comment. It has not put out a release to confirm or dismiss the media reports and allegations.
Meanwhile, Panama’s Social Security Fund is reportedly investigating the firm for “irregularities involving employee benefits.”
In a Jan. 6 article, La Prensa said that the Panamanian government might not issue mining concessions and will review concessions awarded in the past. If Petaquilla loses its concession, it likely could not bid for it, according to the report.
The financially troubled miner, which started commercial production at Molejon in 2010 before stopping operations in late 2013, is also under pressure by Canadian regulators.
The company missed the B.C. Securities Commission’s deadline to file its financial statements for the 13 months ended July 31, 2014. The initial deadline was on Oct. 29. The company, which changed the end of its fiscal year from June to July, said it couldn’t meet the requirement and received a two-month extension until Dec. 29. It also failed to meet that.
This prompted the BCSC to issue a cease trade order on Dec. 31. The temporary trading suspension on Petaquilla’s shares will stay in place until it files audited financial statements, related management discussions and analysis, and required certifications for the 13 months ended July 31.
In a Jan. 8 release, Petaquilla said it would submit the required fillings “as soon as practically possible.”
The miner is in the late stages of creating a US$25-million trust with a private Panamanian group to fund its working capital. “This is what’s required for start-up of the Molejon mine, which with its resources will consolidate the company,” Petaquilla said in the release.
The junior is also facing a delisting review by the Toronto Stock Exchange. The exchange initiated the review on Nov. 27, 2014, and has given the firm until Jan. 26, 2015, to meet all of its listing requirements.
Petaquilla shares closed Dec. 30 at 2.5¢, for a $5.9-million market capitalization.
Where is Richard Fiffer?