Petaquilla Minerals (PTQ-T, PTQMF-O) has revealed that it is in talks with Chinese nickel producer Jinchuan Group to finance Petaquilla’s buyout of its partners at the Petaquilla copper project in Panama.
It was announced in December 2005 that Petaquilla was seeking Chinese financing to buy out Teck Cominco (TCK-T, TCK-N) and Inmet Mining (IMN-T, IEMMF-O), which respectively hold an option on 24% and an outright interest of 52% in the project. The two larger companies have previously deferred development of Petaquilla on the basis of a 1998 feasibility study that showed the project had too high a capital cost to be economic.
In April the three partners agreed to fund a revision of the feasibility study to reflect new metal prices and a number of tweaks to the development plan. The revised study is scheduled to be finished this month.
The talks with Jinchuan centre on an offtake agreement, and on forming an operating company owned partly by Petaquilla and partly by Jinchuan to develop the project. Teck and Inmet would presumably be bought out of their interests and Jinchuan would also provide some project financing.
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