VANCOUVER, British Columbia, June 6, 2005 (PRIMEZONE) -- Petaquilla Minerals Ltd. (TSX:PTQ) (OTCBB:PTQMF) (the "Company" or "PTQ") is pleased to announce the signing of the Molejon Gold Project Agreement (the "Agreement"), which formalizes the Letter of Intent announced on December 13, 2004.
Highlights of the Agreement
-- Teck Cominco Limited ("Teck") and Inmet Mining Corporation ("Inmet") have agreed to transfer their interests in the Molejon gold deposit and 100% of any other gold deposits occurring on the partner's joint venture lands to Petaquilla Minerals Ltd., subject to a royalty in favour of Teck and Inmet.
-- In addition, the partners have agreed to conduct a review of strategic alternatives in order to potentially advance the development of the jointly owned Minera Petaquilla S.A. copper project.
-- The agreement is subject to the Panamanian Government accepting a multi-phase mine development plan (the "Plan") on terms acceptable to Teck, Inmet and PTQ.
Michael Levy, President of Petaquilla Minerals, stated, "I am very pleased that we were able to reach this agreement with Teck and Inmet. We now have a road map to guide us as PTQ works towards bringing the Molejon Gold deposit into production and developing the jointly-owned copper project".
Terms of the Agreement:
The partners wish to have a mine development plan (the "Plan") for the Concession approved by the Panamanian Government that will facilitate the development of the Molejon Gold Deposit as the first phase of the plan.
Upon receipt of the Panamanian Government's approval of the Plan:
1) The partners will transfer the following property and mineral
rights to PTQ in accordance with the Agreement:
a) that portion of the Concession on which is situated the
Molejon Gold Deposit.
b) the right to explore and mine Gold Deposits on the remainder
of the Concession.
2) The partners will pursue a range of strategic alternatives,
including the potential sale of the copper project, the addition
of a new shareholder, or some other form of joint development
agreement with respect to the project (excluding the Gold
Deposits referred to above).
If, as a result of the agreed review of strategic alternatives, all parties agree to accept a third party offer for the copper project, the proceeds after all related expenses will be distributed in the following proportions:
Teck Cominco 23%
PTQ 29%
Inmet 48%
In the event two of the Parties agree to accept an Offer and one Party rejects the Offer, the Party rejecting the Offer will be required, within 10 business days of such rejection, to pay a "Break Fee" calculated at 2% of the value of the Offer to the other Parties. The Break Fee will be divided between the receiving Parties in proportion to the Equity Ratio. In the event that PTQ is required to pay a Break Fee, PTQ may issue shares to the other two Parties in lieu of paying the fee in cash.
On behalf of the Board of Directors of
PETAQUILLA MINERALS LTD.
"Michael Levy"
Michael Levy, President and Director
FOR FURTHER INFORMATION PLEASE CONTACT:
Petaquilla Minerals Ltd.
Phone: (604) 694-0021 Fax: (604) 694-0063
Website: www.petaquilla.com
NO STOCK EXCHANGE HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.