The success of any drilling company is ultimately predicated on the success of the mining industry in general and more specifically the success of their clients. For this reason Cabo Drilling is particularly pleased by two recent noteworthy releases related to Inmet Mining Corporation.
First, for those of you who have either forgotten or missed it the first time around, Inmet is a Canadian based mining and exploration company with a significant subsidiary operation in Panama that contracted with Cabo on October 18, 2010 for the drilling of 3,705 lineal metres, which has already been exceed by a significant amount.
Well, on January 3rd of this year the following news was released by Inmet:
“...Inmet Mining Corporation (Inmet) is pleased to report that the Government of Panama, through the Autoridad Nacional del Ambiente (ANAM), approved on December 28, 2011 the Environmental and Social Impact Assessment (ESIA) required for development of the Cobre Panama copper project, including the mining operations and related infrastructure, a port facility, and a coal-fired power plant.”
That in itself is significant news, paving the way for a successful venture in Panama that affords Cabo the opportunity for drilling work for years to come. However, that is not where the positive news ends.
The Environmental and Social Impact approval triggers a very significant milestone for Inmet. The following excerpt from a news release posted on Inmet’s web site on January 3rd 2012 lays out the details of this milestone:
“With the announcement of the approval by ANAM of the project ESIA, Korea Panama Mining Corp. (KPMC), a joint venture between Korea Resources Corporation and LS-Nikko Copper Inc., has until January 10, 2012 to notify Inmet as to its election to acquire a 20% interest in the project. If KPMC exercises its option, we would anticipate closing to occur no later than 30 business days after the date of KPMC’s exercise of the option, and at closing, KPMC would be required to invest approximately $155 million in MPSA in accordance with the option.”
Further to this on the tenth of January Korea Panama Mining Corporation (KPMC) elected to exercise their option for $155 million US dollars. The following news release on the Inmet Mining website outlines this development:
“As described in our press release dated January 3, 2012, KPMC is a joint venture between LS-Nikko Copper Inc. (LS-Nikko) and Korean Resources Corporation (KORES). The Option Agreement was announced October 28, 2009, and enables KPMC to acquire a 20% interest in the project for investment of approximately US $155 million, representing KPMC’s share of historical development costs incurred to the date of the Option Agreement and their proportionate share of development costs incurred above a cap of $150 million. This transaction is subject to customary conditions and is expected to close by the end of February 2012.
After closing, KPMC will continue to fund its 20% of development costs, and Minera Panama SA (MPSA), the owner of the Cobre Panama project, and KPMC will enter into an off-take purchase agreement, enabling KPMC to purchase a 20% share of MPSA’s concentrates production on arm’s length market terms, subject to KPMC arranging for related financing.”
It is noteworthy that KPMC will continue to fund 20% of development costs, thereby continuing to make a significant contribution toward project funding.
The bottom line for Cabo and its investors is that the success of our client is our success, and this project looks to be successful for the long-term.
Kevin Hull,
IR Manager
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