Canadian miner Inmet bids for partner Petaquilla Coppers' stake for $338 million

08 July 2008

Inmet Mining Corp is making an make $2-per share all-cash offer amounting to $338 million to acquire its partner in its the Petaquilla copper project, Vancouver-based Petaquilla Copper Ltd, subject shareholders willing to sell a minimum 50.1 per cent of the the company's common stock on a fully-diluted basis.

The offer represents a 108-per cent premium to the closing price of the Petaquilla Copper common shares on the Toronto Stock Exchange as at July 4, 2008, the last trading day immediately prior to announcement of the offer, and a premium of 85 per cent to the 20-day volume weighted average price as at the same date.

Inmet is a Canadian-based global mining company that produces copper, zinc and gold, with interests in four mining operations in locations around the world - Cayeli, Pyhasalmi, Troilus and Ok Tedi, and interests in three development properties, Las Cruces, Cerattepe and Petaquilla.

Inmet says it has entered into a lock-up agreement with certain institutional shareholders owning 9.38 per cent of the Petaquilla Copper common stock issued and outstanding common shares, under which such shareholders have agreed to tender their common shares to the Offer.

Inmet's offer for Petaquilla is in keeping with an agreement between the two companies for Inmet to take over management of the project to bring it to production as planned by 2013. The mine is expected to start production in 2013, and yield 223,000 tonnes of copper and 87,000 ounces of gold annually over the first 10 years of its expected 23-year life.

Inmet currently owns 48 per cent of the Petaquilla project, with Petaquilla's, which originally owned the remianing 52-per cent. However, Petaquilla's holding has been subject tio a dispute with diversified miner Teck Cominco, with whom it had an agreement to agreement to transfer half its stake in return for half the funding costs for the project.