First Quantum accuses Inmet of trying to sabotage takeover – by Pav Jordan (Globe and Mail – January 12, 2013)

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Leading shareholders of Inmet Mining Corp., say the company is shopping a significant but minority stake in Cobre Panama, the $6.2-billion (U.S.) copper project it is developing in Central America, as it works to fend off a hostile takeover from Canadian rival First Quantum Minerals Ltd.

“First Quantum has been approached, directly and indirectly through its financial advisers, by a number of shareholders of Inmet who have expressed concern that Inmet is proposing to complete a sale of a further minority interest in the Cobre Panama project,” First Quantum said in a statement on Saturday, decrying the tactic as potentially diminishing the economic value of the acquisition of Inmet.

“These concerns are apparently based upon discussions with a senior executive officer of Inmet.” Sources say the stake could be as large as 20 per cent and as small as 15 per cent and would be sold as a tactic to defend against a $5.1-billion hostile bid for all of Inmet from First Quantum, a Vancouver-based firm with key assets in Africa.

Inmet could not be reached for immediate comment on Saturday, but company chairman David Beatty signalled earlier this week that the board was considering its options in the face of the hostile bid, including some that predate the offer.

The bid for Inmet underscores growing belief that global copper markets could resume a powerful decade-old climb in coming years as the global economy starts to grow again after years in the doldrums.

Cobre Panama will produce some 300,000 tonnes of copper a year, making it one of the world’s largest undeveloped copper deposits, on par with mines in key copper geographies in Chile and Peru.

The project is well known to the global copper community. At least a dozen companies have visited the site in the past three years as Inmet tried to attract a joint venture partner to help it pay the huge development costs, but that search had been for the most part called off in recent months as it secured project financing for its 80 per cent share of the project.

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