* Inmet CEO says it could explore other financing options
* Inmet shares close down 7.4 pct on TSX on Friday
(Adds details from interview with CEO, alters dateline)
By Euan Rocha and Sean Mattson
TORONTO/PANAMA CITY, March 4 Shares of Inmet
were the biggest losers on the Toronto Stock Exchange on
Friday, after the government of Panama announced plans to
repeal a recent law that allows foreign government investment
in mines within the Central American country. [ID:nN04106429]
The law, passed less than a month ago, is crucial to Inmet
Mining IMN.TO, as the company plans to partner with
Singapore's state investor Temasek and with Korea Resources
Corp to finance and build its $4.3 billion Cobre Panama
copper-gold project in the country.
Shares of Inmet closed down 7.4 percent, or C$5.12 at C$64,
as the repeal of the law could impact Inmet's plans to finance
Panamanian President Ricardo Martinelli, who originally
championed the new law, made the surprise announcement that he
plans to repeal the law on Thursday at a meeting with an
indigenous community in Western Panama. The group has strongly
protested against the legislation. [ID:nN10276147]
The country's legislature is expected to approve the repeal
when it reconvenes in the coming days. Lawmakers now plan to
meet with indigenous groups and other stakeholders to discuss
However, a spokeswoman for Martinelli's office said there
was no word on whether another reform of the original 1960s-era
mining law that had blocked foreign government investment in
the sector would be presented to lawmakers.
In an interview with Reuters on Friday, Inmet's Chief
Executive Jochen Tilk said it was still unclear whether the
company would be a part of the consultation process that the
government plans to initiate.
Tilk stressed that the government's move does not block the
development of the project, but he conceded that Inmet may have
to look at other alternatives for financing the project.
Inmet could use the strength of its balance sheet to fund
more of the project than it could have in the past said Tilk,
as it is currently in a stronger position due to the surge in
metal prices. He said the company may also look at taking on
debt to help develop the project.
"We also see that partnerships with companies like us that
have strong balance sheet, strong cash flows, are very
possible," said Tilk.
M&A PLANS HURT
Toronto-based Inmet, which owns copper mines spread across
Turkey, Finland and Spain, is trying to acquire rival Lundin
However a C$4.8 billion counter offer from Equinox Minerals
EQN.AX could derail Inmet's friendly deal with Lundin. Many
analysts doubt that Inmet will join a bidding war for Lundin,
as it needs to build a war chest to finance Cobre Panama.
BMO analyst David Cotterell said he views the development
of Cobre Panama as a key part of Inmet's future growth.
"The funding options for the Cobre Panama Project could
potentially place constraints on offering more attractive terms
for Lundin," he said, in a note to clients.
(Reporting by Euan Rocha; editing by Janet Guttsman, Bernard