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 As at March 31, 2010.

Cobre Panama is a large open-pit copper development project in Panama. The concession is located 120 kilometres west of Panama City and 20 kilometres from the Caribbean Sea coast, in the district of Donoso, Colon province, in the Republic of Panama. The concession consists of four zones totalling 13,600 hectares.

Access to the project area is via the Pan-American Highway system from Panama City to Penonome, surfaced all-weather roads to Llano Grande, and gravel roads via the town of Coclecito. The topography in the concession area is low elevation (less than 300 metres) but rugged with considerable local relief covered by dense rainforest. Climatic conditions are tropical with high precipitation levels, high humidity and relatively high temperatures of 25ºC to 30ºC year-round.

Geology
In 1968, a United Nations Development Program team discovered copper, gold and molybdenum porphyry mineralization in the Petaquilla River region of north-central Panama during a regional survey.

Subsequent exploration outlined the Botija, Colina and Valle Grande porphyry deposits which developed around granodioritic stocks within and peripheral to the Oligocene Petaquilla batholith. Significant epithermal mineralization has also been identified in a more distal setting to the batholith, as well as several other prospects and deposits.

Business structure
We have a 100 percent equity interest in Minera Panamá, S.A. (MPSA), the Panamanian company that holds the Cobre Panama concession. MPSA was incorporated in January 1997 under the laws of the Republic of Panama and has a mineral concession to explore and exploit the Cobre Panama property (Contract-Law No. 9 of February 26, 1997, promulgated by the Government of Panama). Contract-Law No. 9 has an initial twenty-year term from its date of enactment in February 1997 with provisions for two consecutive extensions of twenty years each.

Option Agreement
On October 28, 2009 Inmet and MPSA entered into an option agreement (Option Agreement) with LS-Nikko Copper Inc. (LS-Nikko) through its wholly-owned subsidiary Korea Panama Mining Corp. (KPMC) under which KPMC has the right to acquire a 20 percent interest (Option Interest) in the Cobre Panama copper project(Project). If KPMC exercises the option, it will receive an equity interest in MPSA, owner of the Project.

LS-Nikko has guaranteed KPMC’s obligations under the Option Agreement and Korea Resources Corporation (KORES) will provide financial support to KPMC. The Option Agreement contemplates that KORES may in future become an equal shareholder of KPMC with LS-Nikko.
During the option period, KPMC and Inmet will fund their respective proportionate shares of MPSA’s development costs to a maximum of US$150 million, and Inmet will fund MPSA’s development costs in excess of US$150 million. Assuming MPSA incurs US$150 million of development costs during the option period, KPMC’s non-refundable share would be US$30 million.

The option will be exercisable for a 60 day period after Inmet has publicly announced a decision to proceed with construction and development of the project. Should the option be exercised, KPMC must invest in MPSA an amount that will be its proportionate share of Inmet’s US$501 million investment in MPSA. Such proportionate share will be approximately US$125.5 million. In addition, KPMC would also invest in MPSA its proportionate share of MPSA’s development costs during the option period, if any, that are in excess of US$150 million.

Assuming the option is exercised, Inmet, LS-Nikko, KPMC and MPSA will enter into a shareholders’ agreement containing usual and customary terms to govern the affairs of MPSA and their relationships amongst each other, the essential terms of which have already been agreed to by them. Among other things, the terms will address financing of the Project and governance of MPSA. In addition, Inmet would continue to oversee development and operation of the Project. MPSA and LS-Nikko will also enter into, on terms to be negotiated, an offtake purchase agreement on closing of the option under which LS-Nikko would be entitled to purchase, pro rata to the Option Interest, a share of MPSA’s concentrates production, subject to LS-Nikko arranging for related financing.

Front End Engineering and Design (FEED) Study
On March 31, 2010, we announced the results of the FEED study for Cobre Panama, including capital cost estimates, operating cost estimates, mineral reserves, and other information. The study showed a significant increase in mineral reserves and resources making Cobre Panama one of the largest undeveloped copper porphyry deposits in the world. Design parameters of the project have also improved considerably due to extensive environmental, social and engineering work and, the project's output and size have been expanded by 25 percent. 

Cobre Panama mineral reserves and resources

Mineral reserve estimates by classification

Metal prices                                                            Mining costs 
• Copper (Cu): US $2.00 per pound                         • US $1.33 per tonne of material mined
• Gold (Au): US $750 per ounce                              • Milling and general and administration costs combined
• Silver (Ag): US $12.50 per ounce                          • US $5.37 per tonne of ore milled
• Molybdenum (Mo):US $12.00 per pound

Mineral resource estimates by classification

Contained metal:

Reserves of 2.14 billion tonnes of ore contain 20 billion pounds of copper and 5.0 million ounces of gold.

Measured and indicated resources, which include the mineral reserves, contain 26 billion pounds of copper and 6.3 million ounces of gold.

Inferred resources contain 17 billion pounds of copper and 4.1 million ounces of gold.

The current mine plan (which is based on mineral reserves) defines mining operations until 2045, or for 30 years after production begins. We expect operations to continue beyond 2045 because of the size of the mineral resource.  The table below provides a production and cost summary:

Quality assurance

Mineral reserves and resources have been prepared in accordance with the definitions and guidelines adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (called the CIM definitions and guidelines), and according to National Instrument 43-101 of the Canadian Securities Administrators.

Mineral resources were estimated by Robert Sim, P. Geo., of SIM Geological Inc. and Bruce Davis, Ph.D., Fellow of the AusIMM (FAusIMM), BD Resource Consulting Inc., both qualified persons under National Instrument 43-101.

Mineral reserves were estimated by William Rose, P.E., of WLR Consulting, Inc., a qualified person under National Instrument 43-101.

* As at March 31, 2010. 

quick links

Download the Cobre Panama section from our second quarter press release for the most recent update.

Download a copy of the Cobre Panama 2010 NI 43-101 Technical Report.

Download a copy of the Cobre Panama 2010 FEED Study Executive Summary.

Feasibility Study Update- Volume 1
(PDF English - 13.3 MB)


Feasibility Study Update - Volume 2
(PDF English - 6.3 MB)


Feasibility Study Update - Mine Plan
(PDF English - 32 KB)



Link to the MPSA website at http://www.minerapanama.com/index.php

Latest news
Access any of our news releases in this section

Press Release March 31, 2010
Press Release March 31, 2010
Press Release October 28, 2009
Press Release October 28, 2009
Press Release November 28, 2008
Press Release November 20, 2008
Press Release April 30, 2008
Press Release March 26, 2008
Press Release February 8, 2008
Press Release May 7, 2007
Press Release January 10 2007