10/17/2012 10:37 EDT | Updated 12/17/2012 05:12 EST

Petaquilla Minerals reports improved results at Molejon gold mine in Panama

VANCOUVER - Petaquilla Minerals Ltd. (TSX:PTQ), which is facing a hostile takeover bid by Inmet Mining Corp. (TSX:IMN), said Wednesday that its Molejon gold mine in Panama has reported improved results and increased revenue.

The gold miner reported revenue of US$25.9 million for the quarter ended Aug. 31, up eight per cent from the prior quarter, while cash costs per ounce of gold equivalent fell 14 per cent to $524.

Adjusted earnings before interest, taxes, depreciation and amortization amounted to $12.7 million, up 182 per cent from the prior quarter.

Petaquilla said the mine produced 18,459 gold equivalent ounces for the quarter, up two per cent from the prior quarter.

The company attributed the improved results to its move to terminate hedging contracts that required it to deliver a specified amount of gold and silver ounces each month below then-prevailing spot prices.

Petaquilla said that by selling gold and silver at prevailing spot rate it expects to realize significant increases in price.

Inmet said Tuesday it was standing by its $112-million hostile takeover offer for Petaquilla.

Inmet has offered 48 cents per share in cash — or 0.0109 of an Inmet share for each Petaquilla share — in a bid to consolidate the area around its Cobre Panama project.

Petaquilla has said the Inmet offer failed to provide adequate value to shareholders and had been unanimously rejected by company's board.

Shares in Petaquilla were down a penny at 58 cents on the Toronto Stock Exchange on Wednesday, while Inmet shares were up three cents at $47.73.