Petaquilla gets dusted off (January 03, 2005)

Vancouver — Revitalized copper and gold prices have prompted Petaquilla Minerals (PTQ-T) to reactivate its namesake copper-gold porphyry project in central Panama.

The company, previously known as Adrian Resources, will do so in conjunction with partners Inmet Mining (IMN-T) and Teck Cominco (TEK-T). The project has been largely dormant since 1998.

Under an agreement in principle, Petaquilla can acquire a 100% interest in the Molejon gold project, which is in the main Petaquilla project area. Before the project can be reactivated, the Panamanian government has to approve a multi-phase mine development plan developed by the three partners.

In 1995, Molejon was estimated to have a probable reserve of 5 million tonnes grading 2.81 grams gold per tonne, plus 956,000 tonnes grading 3.72 grams gold in the possible category. Neither estimate was compliant with National Instrument 43-101.

Petaquilla Minerals has a 52% interest in the large Minera Petaquilla project area, with Inmet holding 48%. Teck Cominco has an option to earn half of Petaquilla’s interest by completing a final feasibility study (which it did in 1998) and funding the company’s share of costs for placing the main project into production.

In 1998, a bankable feasibility study of the Minera Petaquilla project outlined a minable reserve (again, non-compliant with NI 43-101) of 1.11 billion tonnes grading 0.5% copper, 0.09 gram gold per tonne, and 0.015% molybdenum. The report estimated throughput at 120,000 tonnes per day, a mine life of 23 years, and a relatively low stripping ratio of 0.9-to-1. Initial capital costs were pegged at US$1.12 billion.

Petaquilla Minerals has 50.6 million shares outstanding and recently traded in the 40-45 per share range, giving the company a market capitalization of about $21 million.