BRITISH COLUMBIA

Petaquilla claims court victory over Inmet on mining rights in Panama

02/12/2013 11:29 EST | Updated 04/14/2013 05:12 EDT
VANCOUVER - Petaquilla Minerals Ltd. (TSX:PTQ) says it has scored a legal victory in Panama in its dispute with erstwhile suitor Inmet Mining Corp. (TSX:INM) over mining rights in the Central American country.

Petaquilla said Tuesday that the Panama Supreme Court has rejected arguments by Inmet subsidiary Minera Panama S.A. in the dispute.

The Inmet subsidiary, also known as MPSA, had launched a constitutional challenge after the Ministry of Commerce and Industry upheld Petaquilla's exploration and extraction rights in five areas of Panama's Donoso District.

"As MICI's ruling was a final determination and not subject to appeal, MPSA launched a constitutional claim, which the Supreme Court has ruled not to accept, thus upholding the ruling of MICI," Petaquilla said in a release.

MICI has also rejected MPSA's application for an area of 11,145 hectares for the location of its tailings facilities, while on Feb. 5 Panama's National Lands Administration Authority upheld a resolution from October denying MPSA the use of additional public lands to develop its copper mining project, Petaquilla added.

The lands authority also reaffirmed than any disputes between Petaquilla and MPSA should be resolved via arbitration, it said.

Petaquilla had been the target of a takeover attempt last year by Inmet, which dropped the bid after getting less than the required 50.1 per cent of Petaquilla shares.

Inmet's offer was seen as a move to consolidate the area around its Cobre Panama project, the largest-ever mine development in Panama. Petaquilla's Molejon project neighbours the Inmet development.

Inmet is currently fending a hostile takeover attempt by First Quantum Minerals Ltd. (TSX:FM), which is offering cash and stock worth about $5.1-billion.

Petaquilla shares were up two cents, or 3.85 per cent, at 54 cents in morning trading Tuesday on the Toronto Stock Exchange, while Inmet shares were down 15 cents, or 0.21 per cent, at $69.67.