Inmet Mining Corp. has failed in its hostile bid to acquire Petaquilla Minerals Ltd., which owns a gold property adjacent to the massive copper mine it is building in Panama.
Petaquilla shares dropped 23.4 per cent, or 15 cents, to close at 49 cents each in Toronto. Inmet stock was up about 1.4 per cent, or 80 cents, to close at $56.76.
Inmet first offered to buy the company in early September for the equivalent of some $112-million in cash and stock, and then raised it again in October. It wants the property to mitigate environmental concerns as it moves forward with Cobre Panama, the largest mining project in the country's history.
Petaquilla says it goes deeper than that, and claims to have concession rights that Inmet needs to develop Cobre Panama, a more than $6-billion project that will be the largest single investment in the Central American country since the Panama Canal.
"Inmet did not acquire any Petaquilla shares pursuant to the offer," the company said on Tuesday after it let its offer for Petaquilla expire at midnight because it did not meet the minimum tender condition of fifty-plus-one per cent.
Petaquilla said from the start that the offers were too low. Petaquilla also said it owns the rights to lands where Inmet plans to construct a tailings dam for Cobre Panama, although Inmet disputes that claim.
"We do not expect that the failure of the offer to acquire PTQ should have any negative impact on Inmet's ability ot proceed with the construction of the Cobre Panama project," TD Mining Research Analyst Greg Barnes said in a report.
Petaquilla Minerals Chief Executive Officer Joao Manuel said on Tuesday he planned to engage with Inmet immediately to discuss alternatives that could see his company cede land rights to Inmet in exchange for guarantees of work orders for the company's infrastructure division, which is slated to be spun out.
"We are willing to engage Inmet immediately and discuss a solution that allows them to develop their copper project," said Mr. Manuel.