TORONTO (miningweekly.com) – Base-metals miner Inmet Mining has begun to explore selling a stake in the large Petaquilla project, in Panama, to a strategic partner, president and COO Jochen Tilk said on Wednesday.

However, the process is “still at a very early stage, and we have not yet arrived at any specific arrangement,” he added.

Inmet expects to spend about C$75-million in both 2009 and 2010 on the project.

During the period, the firm will prioritise drilling to establish a new NI 43-101-compliant reserve and updated resource, completing plant and engineering design work based on a 150 000-t/d throughput scenario, and completing an environmental impact assessment for submission to the Panamanian authorities.

After the two-year period, the company hopes to be in a position to make a final decision on construction of the Petaquilla project, he said.

Inmet is now the sole owner of the project, after it bought Petaquilla Copper in 2008, and partner Teck Cominco announced in November that it would sell its 26% holding to Inmet for about $30-million.

A January 2008 study estimated that the project could cost as much as C$3,5-billion, including capital for an oil-fired power plant and port facilities.

Once in production, the Petaquilla mine could produce about 411-million pounds of copper, 95 000 oz of gold, and 8,6-million pounds of molybdenum a year, over 23 years.

All Inmet's capital commitments this year, at its current operations as well as Petaquilla, will be covered from cash flow unless circumstances change dramatically, chairperson and CEO Richard Ross said on a conference call.

Despite weaker prices for copper and zinc, which ate into fourth-quarter revenue, the firm remains profitable going forward.

It would take a significant drop in metals prices from current levels for the firm to consider materially curtailing output or capital spending plans, Ross said.

Inmet shares rose 9% on Wednesday, to C$27,95 apiece by 16:10 in Toronto.

LAS CRUCES

After wading through frustrating regulatory delays at the Las Cruces project, in Spain, Inmet is finally heading towards copper cathode production at the mine, hopefully by midyear, Tilk said.

In May last year, the Spanish water authority withdrew a key permit for the mine – the approval for the dewatering and reinjection system – and informed the firm that it would not be allowed to expose ore in the open pit until the permit was reinstated.

Over the following months, Inmet developed a plan to address the authority's concerns, although the company's fourth-quarter 2008 target date for shipping the first cathode from the mine has come and gone.

However, Tilk said on Wednesday that the firm has received confirmation from the Spanish water authority that the action plan proposed for the mine has been accepted, and the water authority has recommended in writing to the mining authority that it allows Las Cruces to resume mining activities at the bottom of the pit.

“We are now awaiting written feedback from the mining authority, confirming their acceptance of the recommendation,” Tilk said.

The company is implementing the new water plan and preparing for operations to resume, and expects to be in a position to begin mining in the first week of March.

“That would allow us to deliver ore to the plant around March 21 and produce the first cathode from the plant in the middle of April,” Tilk said.

“As you can imagine, we look forward to seeing the first ore running through the system,” he added.

Las Cruces is expected to produce 72 000 t/y of copper over a 15-year life of mine.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.