TORONTO (miningweekly.com) – Canadian base-metals miner Inmet Mining wants to have wrapped up most of the detailed engineering, permitting and financing for its large Petaquilla copper/gold project, in Panama, by early 2011, at which point it will make a final decision on whether or not to build the mine, president and COO Jochen Tilk said on Tuesday.

If all goes to plan, production at the mine could begin by 2014.

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

The Toronto-based company produces copper, zinc and gold in Turkey, Finland, Canada and Papua New Guinea, and expects to produce the first copper metal at its delayed Las Cruces mine, in Spain, in early June.

The firm has curtailed some spending because of low metals prices, but work will continue on advancing the Petaquilla asset, so that it is ready to take advantage of an expected rebound in prices and demand, Tilk said at the company's annual shareholders meeting.

“We strongly believe that an inevitable recovery in the economy will coincide with the realisation that there is a significant shortage of copper under development,” he said.

“This situation can only lead to a strong copper price, until supply finally catches up with demand.”

Inmet has budgeted $160-million for Petaquilla for the next two years, and has raised the targets for throughput and metal production at the mine.

The firm is currently conducting a drilling programme at the asset, and plans to complete a NI 43-101-compliant technical report by the end of this year, with a reserve big enough to support a 150 000-t/d mill for a life-of-mine of at least 30 years.

(Preliminary engineering and design work completed early in 2008 had contemplated a throughput of 120 000 t/d, and a 23-year mine life.)

“We expect that the higher throughput targets compared with previous design criteria will have a positive impact on the economics of the project,” Tilk said.

Inmet also wants to have the front-end engineering and design work completed by the end of this year, using the 150 000-t/d base case, for production of 275 000 t/y of copper and 110 000 oz/y of gold.

The base design will also include plans for a third-party power supply, Tilk said.

Finally, the company will complete and submit the environmental and social impact assessment and advance permitting for the mine.

POTENTIAL PARTNERS

With project capital costs estimated at as much as $3,5-billion, Inmet is looking for potential partners to help fund development of Petaquilla.

The process is ongoing, and the company may consider selling a direct interest in the mine to a partner, or securing offtake-based financing with future potential customers and the development banks of the respective countries, Tilk said on Tuesday.

It would like to have a strategic partnership or partnerships, and a financing structure, in place by early 2011, he said.