Inmet Mining's Acquisition of Petaquilla Copper Creates Opportunities

by: FP Trading Desk August 28, 2008 | about stocks: IEMMF.PK / PTQLF.PK    

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Inmet Mining Corp. (IEMMF.PK) is making the right move by buying out joint venture partner Petaquilla Copper Ltd. (PTQLF.PK), according to Raymond James analyst Tom Meyer.

By taking out Petaquilla for C$2.20 a share, Inmet will boost its ownership of the Petaquilla project in Panama from 48% to 74%. Mr. Meyer wrote that the move greatly enhances the value of the project for Inmet while reducing the risk.

Just as important, he noted that the acquisition could create two other major opportunities.

One would be for Inmet to buy out Teck Cominco Ltd.'s (TCK) 26% stake in the project to move its ownership level up to 100%. In that instance, Inmet could then sell a chunk of the project to a copper smelting or metals trading group and get financing to build the mine in exchange for off-take rights. If Teck does not want to sell its interest, another possibility would be for the two companies to jointly reduce their stake in the project and pass it over to an offtaker that can provide financing.

Either way, Mr. Meyer does not expect Inmet to lower its position in the project below 40%. He also said that the market is too pessimistic on Inmet's ability to finance the project, especially since the Petaquilla Copper acquisition provides more flexibility.

In a note, he wrote:

In our view, Inmet and Teck have a currency which is worth far more to the copper industry than the capital markets currently gives credit to.

He has an "outperform" rating on the stock and a price target of $87.00 a share.

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This article has 1 comment:

  •  
    Dec 20 12:35 AM
    Dear Sir
    We are a company in Syria and we want you to provide us with the purity of red copper at 99 ,99% required quantity 1000 tons in principle, the port of Dammam in Saudi Arabia hope to send the payment method and conditions of the deal fully with the price to complete the signing of the contract before the holiday
    Alchba of Commerce and Industry
    Aleppo, Syria
    Phone 00963213111440
    Mobile 00963967112053
    The record number 65321 Aleppo Chamber of Commerce
    mmdouhx@hotmail.com
    2. Chemical composition:

    elements value elements value
    copper (min %age) 99.99% silica (si/ppm) 0.3
    iron (fe/ppm) 2 cobalt (co/ppm) 0.2
    sulphur (s/ppm) 4 arsenic (as/ppm) 0.1
    oxygen (o2/ppm) nil bismuth (bi/ppm) 0.1
    argent (ag/ppm) 10 manganese (mn/ppm) 0.1
    lead (pb/ppm) 0.2 teleurium (te/ppm) 0.05
    nickel (ni/ppm) 0.2 aluminium (al/ppm) 0.5
    selenium (se/ppm) 0.3 magnesium (mg/ppm) 0.4
    antimony (sb/ppm) 0.1

    This report shall be confirmed by CCIC or SGS Report once shipment done.

    Reply | Link to Comment
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