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FUNDS WILL GO TO COBRE PANAMA PROJECT
Now Sovereign Wealth Fund Temasek invests heavily in Inmet to fund big Panama copper project
With nearly $600 million pledged to investments in two mining companies in two days, Temasek Holdings is making good on its "fairly bullish" attitude toward mining investments.
Author: Dorothy KosichPosted: Thursday , 01 Apr 2010
RENO, NV -
For the second time in two days, state-owned Singapore investment company Temasek Holdings has made a substantial investment in the mining industry, this time in Toronto's Inmet Mining to the tune of C$500 million (US$493.4 million) in subscription receipts which will be used to fund the massive Cobre Panama copper project.
Last week Temasek said it was seeking mining investments in Africa and Mongolia. By March 30th, the US$123 billion fund agreed to buy US$100 million of convertible debt in the South African platinum miner Platmin Ltd.
On Wednesday Temasek closed another deal, this time for C$500 in subscription receipts that will be used for the development of the US$4.32 billion Cobre Panama project. Ellington Investments, a Temasek subsidiary, has agreed to buy 9.26 million subscription receipts at a price of Cdn$54.0049 each. The closing of the private placement is anticipated by the end of this month.
The receipts can be exchanged for up to 14.16% of Inmet's common shares.
Meanwhile, Korea's LS-Nikko holds a 20% stake in the project, while Inmet retains an 80% stake. Temasek has agreed not to hold more than 19.9% of Inmet common shares.
In January Temasek agreed to buy a US$50 million stake in Robert Friedland's Mongolian coal miner SouthGobi Energy.
Temasek's latest mining investment is the Mina de Cobre Panama project which-during a 30-year mine life-- is expected to yield annual copper production of 254,695 tonnes, average gold production of 89,674 ounces annually, silver production of 1.5 million ounces, and molybdenum production of 3,218 tonnes yearly. Total life of mine production is anticipated to be 7,640,850 tonnes of copper, 2,690,230 ounces of gold, 45,228,358 ounces of silver and 96,537 tonnes of moly.
The Mina de Cobre Panama project has been under consideration since 1968. In September 2008 Inmet acquired joint venture partner Petaquilla Copper and purchased Teck Resources' share of the project.
In a conference call with analysts Wednesday, Inmet officials released project details which include the mine site, a port site at Punta Ricon, a 300 MW coal-fired power plant, an overhead power line, and a mine pit and a tailings management facility.
Inmet hopes the project will be fully financed by the time a decision is made in September 2011 whether to proceed with Cobra Panama. During a conference call, Inmet officials said they would consider corporate financing, reducing the percentage of Inmet's ownership in the project, equity and other options.
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