- Petaquilla Copper Ltd., the smallest of the three Canadian companies that own the big Petaquilla copper deposit in Panama, said Wednesday that partner Inmet Mining Corp. will now manage the $3.5-billion (U.S.) project in order to bring it to production on schedule.
The company also said it is "in continuous discussions with major mining entities" who may want to get involved in the project, following Petaquilla Copper's announcement last month that it is seeking arbitration over Teck Cominco Ltd.'s involvement.
Currently, Petaquilla Copper owns 52 per cent of the project and Inmet owns 48 per cent. Teck, the largest of the three, has the option to take half of Petaquilla's share by agreeing to fund about half of the mine's development.
Petaquilla Copper said in April that Teck, the copper-and-zinc giant, had not met conditions necessary to exercise this option.
"The arbitration proceedings have inevitably introduced an element of uncertainty with respect to Inmet's proposed work plan for the project," Petaquilla Copper said Wednesday.
It called the appointment of Inmet as project manager "a key step" in bringing the 223,000-tonne-per-year project to production by 2013, as expected.
Petaquilla Copper added it would approach Inmet with a strategy that would allow work to continue on the mine throughout arbitration proceedings.
Inmet has backed Teck in the arbitration dispute and said last month it is "extremely disappointed" in Petaquilla Copper for exposing the mine to development delays.
Meanwhile, Inmet stock tumbled more than 11 per cent Wednesday as analysts cut their ratings and recommendations after Spain's water authority suspended a water permit for the company's Las Cruces copper project in southern Spain.
The company said it is reviewing the authority's concerns and added that it cannot say how long the suspension will continue, or if it will delay ore shipment.
Start-up at the mine had been expected in late 2008. Las Cruces contains proven and probable reserves of 17.6 million tonnes of ore at an average grade of 6.2 per cent copper.
RBC Capital Markets downgraded its rating on Inmet's stock to "sector perform" from "outperform" and slashed its target to $80 (Canadian) from $100, noting that direct ore shipping cannot start in June as previously forecast.