Petaquilla study to be updated (May 22, 2006)

The three partners in the Petaquilla copper joint venture in Panama have agreed to have the 1998 feasibility study on the project revised, with new estimates on capital and operating costs.

Inmet Mining (IMN-T, IEMMF-O), which owns 48% of the project, Petaquilla Minerals (PTQ-T, PTQMF-O), which owns 52%, and Teck Cominco (TEK.SV.B-T, TCKBF-O), which has the option to earn half of Petaquilla’s interest, have agreed to engage consulting firm AMEC Americas to revise the study. Petaquilla is hoping to buy the other two partners out of the existing joint venture, financed by Chinese mining interests (T.N.M., Jan. 6/06).

The revisions include examining the proposed mining fleet to determine whether the project would be better served with larger trucks and shovels, looking at construction of a single grinding line in the mill to process 120,000 tonnes of ore daily, and reviewing the proposed flotation line to see if larger equipment would save money.

The project has a large measured and indicated resource — 1.1 billion tonnes grading 0.5% copper, 0.015% molybdenum and 0.09 gram gold per tonne, with some silver credits. The proposed pit had a low stripping ratio, around 1.1:1. But the previous feasibility study, from January 1998, had concluded that capital costs, estimated at US$1.1 billion, would sink the project.

Since that time, the project remained on hold, with Petaquilla (then named Adrian Resources) as the principal champion of further development among the three partners, and Teck annually deferring its participation.