Agreement Between Minera Panama and Petaquilla

The two large mining projects in Panama have agreed on terms of cooperation, trade relations and dispute resolution.

Wednesday, February 27, 2013

From a statement by Inmet Mining Corporation:

Inmet Mining Corporation (TSX: IMN) and its subsidiary, Minera Panama SA ("MPSA") and Petaquilla Minerals Ltd. ((TSX: PTQ) with some of its subsidiaries (collectively, "Petaquilla") are pleased to announce the signing of a term sheet which establishes a binding agreement between the companies related to the purchase of aggregates, access and use of land, settlement of certain claims, remission of royalties to be received by IMN, and leasing of a camp site for the benefit of mining operations of Petaquilla and MPSA in the district of Donoso, Panama.

The agreements reflected in the term sheet will be incorporated into a definitive agreement to be executed by the parties. The total value of the arrangements agreed by the parties is up to $150 million dollars. IMN guarantees the obligations of MPSA as per the term sheet and the final agreement to be signed between the parties.

The main commercial terms are as follows:

• MPSA will buy, and the Petaquilla Infrastructure Division will provide, up to $100 million dollars (at least $75 million) in aggregate for a period of three years for use in the Cobre Panama project;
• MPSA will lease to the Petaquilla mining division, for an annual fee of $1.3 million U.S. dollars, certain lands to be used for temporary and permanent space as a camp for the Cobre Panama project, and
• Petaquilla has requested mining exploration which, if granted, would give the right to mineral exploration on land where the infrastructure for the Cobre Panama project will be constructed. In the case that, and when, these concessions are granted, certain areas where there is infrastructure for the Cobre Panama project must be formally transferred to MPSA. MPSA also has the option to receive the transfer of certain areas of these concessions that are not required by MPSA under the current plans of the Cobre Panama project.
• The remaining value of the agreement consists of remission of royalties and waiver of certain monetary claims by IMN and MPSA.

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