Photo by: Duane Daws
TORONTO (miningweekly.com) – Gold miner Petaquilla Minerals on Monday said that an agreement to completely separate its Molejon gold mine from base metals miner First Quantum Minerals’ Cobre Panama copper/gold mine, located in Panama, would recapitalise and reposition it to pursue new growth opportunities.
Vancouver-based firms Petaquilla and First Quantum last week signed an agreement that would see Petaquilla transfer large swathes of land to First Quantum, among other things, for total payments of up to $60-million.
The cash derived from the agreement would allow Petaquilla to completely address its senior credit facility, effectively eliminating its secured debt and precious metal and loan obligations, and strengthen its balance sheet by reducing short-term liabilities.
This recapitalisation has also enabled the company to restructure and to focus on future growth.
In Panama, Petaquilla is focused on lifting gold output through its plant and leaching operations at the Molejon gold mine to 4 000 oz/m within the next 90 days. The company believes that it has sufficient reserves there to continue at that rate for five more years. It also currently has 152 000 oz of gold, slated for leaching, stockpiled at Molejon.
Meanwhile, Petaquilla would position itself for future growth in the Iberian Peninsula by focusing on expanding the resources and developing its Iberian properties, positioning them to generate cash flow in the shortest order possible.
In Portugal, Petaquilla has completed about 12 000 m of drilling at its Jales-Gralheira project and would “soon” engage an independent consultant to prepare a National Instrument (NI) 43-101-compliant resource estimate.
The company is also working towards a NI 43-101-compliant resource estimate at its Banjas project, having completed a drill programme of about 9 300 m. The company intends to target production in Spain and Portugal in the first half of next year.
Further, Petaquilla said that it was undertaking a comprehensive production review.