Vancouver-based miner Teck Cominco (NYSE, TSX: TCK) and Torontonian Inmet Mining (TSX: IMN) have entered into an agreement to go ahead with the Petaquilla copper project in Panama, the two reported in a joint statement.
The project concession is held by Panamanian Minera Petaquilla (MPSA), of which Inmet owns 48% and Petaquilla Copper (TSX: PTC) 52%. As contemplated in the existing MPSA shareholders agreement, the new Teck-Inmet deal says Teck may acquire a 26% interest in MPSA from Petaquilla Copper while Inmet would retain 48%.
But Inmet will fund development of the entire project through September 2009 or until it spends at least US$50mn, at which point Teck Cominco must choose whether to take the 26% share by funding 52% and reimbursing Inmet for any investment on Teck's behalf, the statement said.
Should Teck elect to back out of the project, it will sell its interest to Inmet, leaving the Toronto-based miner with a 74% stake.
The US$3.5bn project is slated to produce 4.45Mt copper, 1.63Moz gold and 59,500t molybdenum over the 23-year mine life.
