Arguing that the basic principles of public procurement were not complied with, in Panama the contract between the State and the company Petaquilla Minera has been declared unconstitutional.
The legal dispute began in 2009, when the Environmental Advocacy Center (CIAM) filed an unconstitutionality appeal against the contract that grants a twenty year concession to Cerro Petaquilla to exploit and sell gold, copper and other mineral resources.
Mining companies and spanish citizens are suing the Panamanian State arguing arbitrary and discriminatory measures imposed by the Martinelli Administration are detrimental to their investments.
The companies Petaquilla Gold, Petaquilla Minerals LTD, and Corporación de Recursos Iberia, S.A. are sueing the Panamanian government for $2.3 billion at the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank for direct damages against the company in Panama and its shareholders, reported Laestrella.com.pa.
The concessionaire has filed a reconsideration motion to avoid cancellation of the concession, and while it is resolved, the government will take care of the necessary maintenance work.
The review process to be carried out now by the Ministry of Commerce and Industry (Mici) could take up to two months. Once the process has been completed, it will be decided whether or not to cancel the concession granted to the Canadian company Petaquilla Minerals.
As part of the restructuring process to reactivate the operation in the gold mine, Petaquilla Mineras has appointed Arenisca Properties S.A. to manage works at the mine.
The company Arenisca Properties S.A., responsible for reviving the mining operation, "... Is a shared partnership between Petaquilla Minerals and the investment fund Baseline Financial Group. " It is anticipated that in one month the program to run operations at the mine will be presented.
The operator of Molejon gold mine in Panama has announced that it has obtained a line of credit of up to $25 million to restart operations from February 1st.
Baseline Financial Group is the company that will provide an initial payment of $10 million, with a progressive investment of up to $25 million, to revive the extraction of gold from the mine. The contract stipulates that 60% of the proceeds will go to Petaquilla Minerals, 40% to Baseline Financial Group and 10% will go to the administration of a trust.
For non compliance with the deadline to deliver the financial results of 2013-2014 the securities commission of British Columbia, Canada, the trading of the shares by the owner of the Molejón mine in Panama has been suspended.
Despite having announced in September changes in company structure and operation of the Molejón gold mine in Panama, the Canadian company Petaquilla Minerals continues to face financial difficulties.
The government of Panama has announced that it will liquidate the assets of the concessionaire of the mine El Molejón in order to pay outstanding debts after the company failed to appear before the Ministry of Labour.
The Securities Commission of British Columbia in Canada, has issued a resolution barring the two top executives of Petaquilla from trading shares of the company until financial information is presented for the period ending July 2014.
Problems continue for Petaquilla Minerals, which breached a salary payment arrangement that should have been finalized in October and it has now been reported that two of its executives have been banned from buying or selling shares in the company.
Panama's government has rejected a request to reject exploration permits and mining operations at the San Juan area.
Inmet Mining asked the Department of Mineral Resources of Panama to reject all applications for exploration and exploitation of mineral concessions affecting Minera Panama, a subsidiary of Inmet Mining.
The Canadian company Inmet will define the participation of new partners for its mining project in mid 2012.
The company engaged in the exploration and extraction of minerals, led by its copper mining project in Panama, formerly known as Project Petaquilla, is examining options for getting additional capital and partners to develop the project.
The gold mine project Petaquilla, located in Panama, agreed a leasing structure with a national bank for the purchase of heavy machinery.
According to a company press release, the agreement was made between the bank and Infrastructural Development Panama, SA (PDI), a company's infrastructure subsidiary.
The mining project located in Panama has agreed the sale to Germany's Deustche Bank of 66,650 ounces of gold over the next five years.
Petaquilla has announced that its production commitments with Deustche Bank represent only 6% of the projects total resources.
Of the $45 million price, $2 million will be invested in working capital for the mine while an additional $40 million will go toward paying off pending bond debts.
Since operations began in January 2010, it has had sales of $36 million, paid production expenses of $21 million and sold each ounce for between $945 and $1,152.
The company was granted mining rights on 18 November 2009 and will pay the state 4% of gross earnings over the 20 years it plans to operate.
Each ounce of gold Petaquilla extracts costs the company $600.
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