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TORONTO – Inmet Mining Corp. has received a vote of confidence from royalty firm Franco-Nevada Corp., which is not convinced that First Quantum Minerals Ltd. is the best company to build the Cobre Panama project.
Franco-Nevada has committed US$1-billion to Inmet for the development of Cobre Panama, so it has a unique interest in First Quantum’s $5.1-billion hostile bid for the company. Franco chief executive David Harquail said he has been very impressed with Inmet’s handling of the project so far, and has some ongoing questions about First Quantum’s proposal to build the mine for significantly less money. First Quantum has not approached him yet, he said.
“Our worry is what messages [First Quantum] is sending to Panama and the community when they say they have a different plan or scenario going forward and they expect to spend that much less money. Our preference is to have a more steady-state approach,” Mr. Harquail said in an interview.
“Right now, we’re supporting the folks who have brought us to the table and we have to reserve judgment on the new plans.”
That has to be music to Inmet’s ears. The Toronto-based miner is about to formally reject First Quantum’s bid, and will try to argue that it is the better caretaker of the US$6.2-billion mega-project. First Quantum has talked about reducing capital costs at Cobre Panama, but has not offered up firm numbers.
Mr. Harquail said the priority should be “building it right” rather than spending as little money as possible.
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2013/01/21/franco-nevada-confident-in-inmet-despite-first-quantums-5-1b-takeover-bid/