Gold in Panama

Gold is one of the chemical elements. Represented in the Table of Elements by the symbol Au and with an atomic number of 79, today it is one of the most attractive minerals in the world. It is characterized by its malleable and inert properties. In other words, this strong mineral does not interact with other chemicals or compounds. It does not tarnish and is able to last forever while maintaining its shiny attractiveness.

Throughout time, gold has been mostly used for jewelry and money. For thousands of years it has been measured and prices are quoted in Troy Ounces and Grams. To be able to put the price of gold in perspective today, for example, with one ounce of gold a person would be able to buy a whole set of wardrobe. Gold has the extraordinary ability to store value in both times of inflation and deflation of the economy. This is the reason why many investors see gold as insurance. Its value is not necessarily dependent on the financial system. Unlike shares and bonds, gold has the capacity to always maintain its value. In short, gold is an insurance policy against economic uncertainty.

The Republic of Panama, located in the heart of the Americas has been proven to contain significant quantities of this mineral. Petaquilla Minerals, located approximately 2 hours from Panama City is one of the most developed mining projects in the region.

The distinguished project of Petaquilla is located in the one of the republic’s central provinces near Panama, Colon, Veraguas and Herrera. This mainly agricultural and mineral rich sector is quickly becoming a popular tourist destination.

Among Cocle´s top two main crops produced are tomatoes and sugar. Near Cocle is El Valle de Anton, an exotic valley famous for its golden frogs, Nispero Zoo and botanical garden.

El Valle de Anton is also well known for its local market held on the weekends where unique crafts, plants, fruits and vegetables are found for affordable prices. Artisans in the Cocle region are known for their woven baskets and curious pottery featuring colorful human and animal decorations.

Sites of archeological value are also found in this zone, with significant artifacts recovered from burial sites and ruins throughout the region. Two important locations are El Cano arqueological site and Sitio Conte.

Petaquilla – Informs, IMF projects Panama will grow 6.2% in 2010.

Latin America is one of the best performing regions in the world ‘ leaving behind the global crisis at a pace faster than expected. ”

The Panamanian economy is the most dynamic in Central America this year and next. As stated in the International Monetary Fund (IMF) that has raised the projection for Panama’s growth from 5% to 6.2% this year and 6.3% to 6.7% by 2011.

The projection for this year coincides with the local consultancy Indesa, that last July raised its forecast of 4% to 6.2% and is slightly below the government Panama, which does not rule out closing the year with growth close to 7%.

Some of this growth is due to the mining industry, Petaquilla.

Petaquilla – News, Gold is consolidating at modestly lower levels in advance of today’s FOMC statement.

The Morning Gold Report by Peter A. Grant

Speculation over the past week was that the Fed was prepared to announce as much as $1 trillion in additional quantitative easing measures, which was a contributing factor in the yellow metal’s push to new all-time highs.

However, with inflation in check — at least based on BLS CPI data — and the economy still weak, but not collapsing, it seems more likely that the Fed will keep its powder dry and see if the current QE-lite campaign will keep rates down. We expect the Fed to maintain its “exceptionally low for an extended period” language with respect to the Fed funds target. There may be some clarifying language regarding the Fed’s readiness to ramp up asset purchases if conditions warrant.

I suspect that yesterday’s confirmation from the National Bureau of Economic Research that the “Great Recession” officially ended in June of last year is going to make further accommodations — such as stimulus, unemployment extensions, cash-for-___ and the like — politically more difficult to justify. That may actually leave the Fed as the economy-juicer of last resort, since they don’t need to answer to lawmakers or voters.

Everyone I talked to yesterday scoffed at the notion the recession is over. In the real-world, people continue to struggle and saying they remain “less than optimistic” categorizes those that are the most optimistic.

People are keenly aware that any growth since June 2009 has been driven by massive government borrow and spend programs, with arguably horrible return on investment. Just last week the controller of the city of Los Angeles said the following after conducting an audit of their cut of ARRA stimulus funds, “I’m disappointed that we’ve only created or retained 55 jobs after receiving $111 million.”

Extrapolate that kind of performance across the country, times nearly $800 bln and it becomes quite clear that we put ourselves in a huge hole, with little to show for it. Even if Los Angeles’ $2 million per job created/retained is the exception rather than the rule, improve the national average by 50%, heck even 75% and the ARRA stimulus bill would still be a failure in most rational people’s minds.

There is a day of reckoning coming when we’ll have to figure out how to service our monumental debt burden. As always, the tempting, politically expedient solution is to inflate it away by tanking the dollar. Call it a debt repayment tax, due from everyone and stealthily taken via higher prices on everything.

On the bright side, the NBER went on to say, “the committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007.” So there you go, the odds of a double-dip recession are officially 0%.

Petaquilla’s Molejon mine as a model for future mining ventures

Penonome & Panama City, Panama – In the 50 years following Christopher Columbus’s accidental discovery of the Americas, Spaniards hauled some 21 tonnes of gold out of the east-west isthmus of what is now called Panama. There ended, by AD 1550, Panama’s mining industry. Her dense jungles, populated by snakes and bugs and panthers, and overburdened with mud so slick and greasy you can bury a Land Cruiser in, forbade future prospecting.

Fast-forward 460 years, and Panama is back in the gold-mining game. Petaquilla Minerals, Ltd., (TSX: PTQ) entered gold production this year at its 2,200 tonne/day Molejon open-pit mine north of Penonome, the first of several new precious and strategic metals projects on Panama’s plate.

“Panama lies on a bed of copper and gold,” Robert Henriquez, Panama’s Minister of Commerce and Industry, told us in a recent interview in his Panama City office. “We feel that mining is an area of great potential for us.” He endorses Petaquilla’s Molejon mine as a model for future mining ventures in his country, including Inmet’s (TSX:IMN) nearby prospective $4 billion Cobre porphyry copper-gold deposit 20 km south of the Caribbean shore in Colon province. “They are doing a very nice job and we support their project.”

Forget what you think you know about Panama. Bananas, notes Henriquez, account for just $150 million of Panama’s $25 billion gross national product. The nation’s debt rating was upgraded to Investment Grade status earlier this year by Fitch, Moody, and S&P, joining Mexico, Brazil and Chile in the BBB-minus category. Panama grew its economy even in the depths of the global recession and its jobless rate peaked at 6.4 per cent, versus the 10 per cent in the U.S. and 20 per cent in Spain.

Ambitious public works projects are under way as well, including the $5.2 billion widening of the Panama Canal (under budget and ahead of schedule for its opening in 2014 – the new locks will handle ships with a beam of 200 feet, double the current width) and some $13.6 billion planned for infrastructure improvements, mainly in the areas of transportation, including a new international airport near Cocle to take some of the load off of Tocumen. If anything sucks about Panama, it’s the traffic in and around Panama City: included in the budget are an urban mass-transit system and replacing the city’s overcrowded and antiquated public buses. The country recently negotiated a free-trade agreement with Canada and is awaiting the U.S. Senate’s approval of a similar treaty. (For reasons unknown to this writer, the Obama Administration has held up free-trade deals with both Panama and Colombia that were negotiated during the Bush Administration.)

Panama Commerce Minister Robert Henriquez (center) greets a reporter (left) and Petaquilla Gold President Rodrigo Esquivel

We digress. In 1968, the United Nations initiated a mineral survey of Central America and turned up multiple gold and copper findings the rivers and streams flowing through what is now the 842-square-kilometre Petaquilla Concession. Richard Fifer, a third-generation descendant of Panama ex-pats from Chehalis, Washington, is a player in Panama politics and business. Educated in geophysics, geology and finance, Fifer took an early interest in the Petaquilla district, as did Fifer’s father’s contemporary, the late Panamanian President Omar Torrijos, who saw Panama’s copper and gold deposits as a way out of the country’s chronic poverty. But mining was back-burnered in the aftermath of a chain of military dictators, culminating in Manuel Noriega’s fiasco in the late 1980s. Following Noriega’s removal from Panama by U.S. troops in 1989, Panama has conducted constitutional elections every five years, beginning in 1994.

The Petaquilla mining district returned to the front-burner status during the presidential tenure of Omar Torrijos’s son, Martin. When Martin Torrijos’s Democratic Revolutionary Party was turned out of office during the 2009 elections after a peaceful term (executives may not succeed themselves), it was replaced by the even more pro-mining Democratic Change Party, of which PTQ’s Richard Fifer was a founding member. As part of current President Ricardo Martinelli’s cabinet, Henriquez has been charged with making Panama the first Central American country to achieve First World status.

“Israel has done it, Brazil has done it. We will do it, too” he said.

Molejon is set to produce about 100,000 ounces of gold-equivalent ore annually over an 8-to-10-year mine life, which could be extended should preliminary laboratory successes in recovering gold from the muddy saprolite overburden prove up in the field. You can’t run gold-enriched mud through a jaw-crusher or a ball mill, but you can pelletize it with concrete and extract the yellow metal in a column with the right reagents. Mill capacity, currently at 2,200 tpd, is being expanded to 3,000 tpd, with a future second phase to 5,000 tpd from its existing foundations.

John Kapetas is an agreeable Australian who joined PTQ as exploration VP four years ago after a decade of jungle geology in Africa and Indonesia. He likes the odds of finding at least one more million-ounce gold deposit in the Petaquilla batholiths, and has spent his time with the company walking and canoeing its rivers and streams, collating data from the U.N.’s initial research with more modern sampling and mapping. Of special interest are gold anomalies along the Cocle del Norte River. Petaquilla has set up a 90-man camp and drilling station not far from the Atlantic coast to test Kapetas’ not terribly unconventional theory that where there’s gold in the river, there’s a gold mine waiting to be born nearby.

The first phase of drilling at the Oro del Norte camp will be completed in Q3 2010, which could lead to a mine-construction decision next year following an N.I. 43-101 workup. The company recently announced discovery of a new epithermal gold vein system from its drill and trench program there; Oro del Norte is within trucking distance (20 km) of the Molejon mill.

Petaquilla geologist John Kapetas (right) inspects core at Oro del Norte

“Panama is an easy place to work in,” says Kapetas, who has charge of PTQ’s $200,000 per month exploration budget. “Molejon is a simple ore body in an andesite host.” Between Molejon’s two gold-bearing quartz veins is a vast quantity of aggregate waste rock that has a commercial potential for the road-building that will be necessary to Inmet’s Cobre mine, slated to enter production in 2014. Mud is so predominant in the Panamanian jungles that as much as a metre of aggregate must be overlaid before a road can be stabilized. Petaquilla paid more than $40 per ton for the stuff to build its roads. The company can produce similar aggregate from below its upper quartz zone for a fraction of that price, making Molejon’s lower gold zone much more cost-attractive.

Grade control is critical to Molejon. Lazaro Rodriguez, PTQ’s vice president of operations and manager of the mine, oversees a futuristic high-tech operation that computer-monitors output from the three pits and mill throughput down to the decimal point. Processes can be tweaked from there to maintain a constant 2.9 gram/tonne mine grade. Three ball mills digest feed from crushers, sending 74-micron muck to thickener tanks, then to leach tanks. The solution then passes through carbon pulp columns, then to the cell room. Tailings water is recirculated into the mill. Molejon produces a gold-silver Dore and Petaquilla controls the product’s marketing through to the end-user.

“I think we can get more than 10 years out of that mine,” says Chairman of the Board Richard Fifer, given preliminary test results of Molejon’s saprolite gold returns. Built at a cost of $150 million, Molejon was financed by $69 million of debt, with the balance in equity. On 19 August, PTQ announced it had reached a forward gold sales agreement with Deutsche Bank for $42 million of the remaining debt. In essence, Petaquilla will commit to deliver 68,243 ounces of gold to the bank over the next five years – about 6.3 percent of the company’s total gold resource at Molejon.

“The lower payments that will now be due to the Company’s note holders will allow for an increase in funds to be directed towards the exploration of the Oro Del Norte region where significant gold mineralization has been discovered,” Richard Fifer said. Also, the company is in the process of spinning off its considerable mine-building and infrastructure development capabilities into a new company, Panamanian Development and Infrastructure, Ltd. PTQ will retain a 47.78 percent interest in the new entity. Fifer will settle for a small portion of the $4 billion Inmet is expect to spend building the Cobre.

“Our track record should speak for itself, and for the future of mining in Panama,” Richard Fifer says. “We have opened the door for the mining industry here.”

Petaquilla Chairman Richard Fifer, at his finca in Panama. He works in his spare time to save Panamanian wildlife

Casimir Resource Advisors, LLC, of Cartersville, Georgia, put PTQ on its radar screen in March. Concluded Casimir President Eric T. Allison: “CRA’s review of the Molejon Gold Project has not revealed any fatal flaws. The geological modeling and interpretation is very good and the resource estimates and the Life of Mine Plan based upon them are sound. The mining activities are well planned and appear to be professionally executed. The plant has successfully gone through its start-up and commissioning phases and is currently fine tuning its processes and upgrading equipment as needed to fully achieve and maintain its design capacities. The careful attention to grade control coupled with the close interaction with Geovectra to continually revise the mining plan should allow the project to mine sufficient amounts of ore at high enough grades to meet its planned target of 6,000 ounces of gold per month. The exploration efforts are of high quality and are just beginning to tap into the significant potential of the balance of PTQ’s concessions. Additional growth and revenue generating projects are in the pipeline.”

Rodrigo Esquivel is a Panamanian attorney and President of Petaquilla Minerals’ wholly-owned subsidiary, Petaquilla Gold S.A. He negotiated the companies’ gold-export permits and also the so-called Petaquilla Law, by which the Panamanian National Assembly certified by law PTQ’s leases in the batholiths concession. Among its components:

- A 2 percent royalty once mine-building costs have been recouped;

- Monthly inspections holding PTQ to drinking-water standards for water discharges;

- Expenditures of $1.2 million annually on health centers, schools, road-building, agronomic activities, and chicken- and cattle-farming support.

Additionally, PTQ has agreed to re-vegetate 1,000 hectares of jungle for every 100 hectares it digs up and has a “gentleman’s agreement” to provide hot meals for the schools it has built. The anti-mining NGS can pound sand, or in Panama’s case, mud.

“It has been a wonderful experience for me to be involved in commercial mineral production. We are creating jobs and wealth in an area that was long forgotten,” Esquivel reflects. “Mining can be in a good harmony with the environment and it is the policy of Panama’s government to develop the mining industry.”

Commerce Minister Henriquez says miners and explorers are welcome in Panama so long as they play by the country’s very stringent environmental rules and establish good social contracts. “We are advancing mining projects that previously were only on paper. We welcome their state-of-the-art technologies, their commitment to international standards of environmental quality, and their willingness to support, and to get the support of, their local communities,” he said.

I like these guys. They know their country, they know their geology, and their federal government would like them to succeed. What a refreshing departure, on all fronts, from the U.S. government’s thuggery in the hard-rock western United States.

By David Bond, Editor

Silverminers.com

Petaquilla was granted mining rights on 18 November 2009

Since operations began in January 2010, it has had sales of $36 million, paid production expenses of $21 million and sold each ounce for between $945 and $1,152.

The company was granted mining rights on 18 November 2009 and will pay the state 4% of gross earnings over the 20 years it plans to operate.

Petaquilla Minerals Ltd – Discovery of New Epithermal Gold Vein Systems at the Oro Del Norte Concession

8/9/2010 10:58:35 AM

VANCOUVER, BRITISH COLUMBIA, Aug 09, 2010 (MARKETWIRE via COMTEX News Network) –

Petaquilla Minerals Ltd. (TSX: PTQ)(OTCBB: PTQMF)(FRANKFURT: P7Z) (“Petaquilla” or the “Company”) today announced positive drill and trench results from the Tucan Project on its Oro Del Norte exploration concession located in central Panama. The Tucan Project is approximately 20 kilometres northeast of the Company’s Molejon Mine site, within trucking distance of the mill if a commercially viable deposit is discovered. Petaquilla has also identified five other prospective gold and copper bearing targets in other areas of its concession.

As previously announced March 4, 2010, the Company has been aggressively exploring the concession and has defined an area known as the Tucan Project containing significant surface rock chip samples with dimensions of approximately 2.0 kilometres x 1.5 kilometres. The Tucan Project contains numerous drill ready targets.

Diamond Drilling Program

During the second calendar quarter of 2010, the Company commenced Phase 1 of its planned 5,000 metre diamond drilling program on the first of the identified drill targets. The below results are the first to be released from this drilling program on the Oro Del Norte concession where three drill rigs are currently turning.

To date, 17 diamond drill holes for a total of 2,741 metres have been completed on the initial four target areas within the Tucan Project testing the mineralized structures identified by surface mapping and trenching.

Results for the first 15 drill holes have been received.

Drill result highlights include:

Table 1:
Hole ID   From    To   Intercept Length    Au   (metres) (metres) (metres)  (g/t)
TCDH-001  15.46  22.35   6.89     1.89  includes  15.46   16.15     0.69    11.25
TCDH-002  63.00  64.00   1.00     2.47
TCDH-002   81.30 94.70   13.40    1.47  includes  91.30   94.70     3.40     3.48
TCDH-003   41.00 43.00    2.00    3.39
TCDH-005   24.30 32.05    7.75    0.99  includes  26.30   27.35     1.05     2.51
TCDH-007   57.45 59.50    2.05    1.38  includes  57.45   58.00     0.55     3.59
TCDH-007   97.00 98.00    1.00    1.48
TCDH-011   0.00   1.50    1.50    3.06
TCDH-011  34.50  35.40    0.90    1.32
TCDH-011  60.55  61.70    1.15    2.42
TCDH-011  96.70  98.00    1.30    1.50
TCDH-012  90.50  92.00    1.50    2.33  includes  90.50   91.25     0.75     3.06
TCDH-014  55.80  59.00    3.20    2.32  includes  55.80   58.00     2.20     2.77
TCDH-014  59.75  64.00    4.25    1.45  includes  59.75   61.55     1.80     2.54
TCDH-015 171.25 175.00    3.75    0.70
TCDH-015 178.00 180.00    2.00    1.48  includes 179.00  180.00     1.00     2.28
TCDH-015 183.00 184.00    1.00    1.04

Notes:
1. Assay results for drill holes TCDH-001 to TCDH-010 have been analyzedby ALS Chemex
in North Vancouver, BC, Canada.
2. Assay results for drill holes TCDH-011 to 015 have been analyzed by Petaquilla's
on-site analytical laboratory, which is not a certified independent laboratory,
located at the Company's Molejon Gold Project. Duplicate samples have been collected
and sent to ALS Chemex in North Vancouver for verification and the Company is awaiting
the results of independent analysis. The Company utilizes the service of its in-house
laboratory as it is able to provide a 24 hour turnaround for assay results and, thus,
enabling the Company to quickly verify its exploration strategy on the ground.
3. Drill intersections tabulated under 'Intercept Length' are reported as drilled
thicknesses. Based on core axis to structure angles, true widths are estimated to be
70% to 90% of the interval lengths.

These initial drill holes were completed on the first four drill targets to determine both the style and grade of mineralization in addition to the attitude of the mineralization in this structurally controlled environment. This drilling has achieved these objectives. The mineralized structures tested to date are both steeply southwest and northeast dipping and have a northwest to southeast strike. Additional data obtained from oriented drill core samples has identified the mineralization to be predominantly structurally controlled, having multiple phases of mineralization and containing post mineralization cross cutting structures which offset the main mineralized body.

This drilling has identified numerous gold intercepts in three sub-parallel epithermal vein systems over an area of 1.3 kilometres x 0.4 kilometre.

All three veins systems are open along strike and will continue to be the focus of the drilling effort during this next phase of the drilling program which will now progressively step out toward the southeast of the project area to evaluate their strike extent.

In addition to the above, numerous drill ready targets identified during the late 2009/early 2010 exploration work remain untested and will be drilled during this second phase.

Trenching Program

In conjunction with the diamond drilling program now underway, the Company has completed 243 trenches for a total of 3,972 metres.

The trenching program has resulted in the discovery of two additional sub parallel gold mineralized structures located 170 metres north and 80 metres south respectively to the principle structure which was identified by detailed mapping and sampling completed in the first quarter of 2010.

Results for the first 227 trenches totaling 3,636 metres have been received. Highlights of the trenching results are listed below.

Trench result highlights include:

Table 2:
Trench ID    From   To   Intercept Length    Au   (metres) (metres) (metres)  (g/t)
 ONT-16-6    9.00  13.00    4.00    2.21   includes  12.00   13.00    1.00     5.68
 ONT-16-11   4.00   8.00    4.00    1.22   includes   5.00    6.00    1.00     4.59
 ONT-16-13   8.00  17.00    9.00    0.60   includes  11.00   12.00    1.00     2.84
 ONT-16-14  14.00  17.00    3.00    0.89
 ONT-16-14  19.00  20.00    1.00    8.68
 ONT-16-19   3.00   7.00    4.00    0.80   includes   4.00    5.00    1.00     2.19
 ONT-17-28  19.00  20.00    1.00    3.99
 ONT-17-29   1.00   5.00    4.00    0.95   includes   4.00    5.00    1.00     2.16
 ONT-17-31  11.00  14.00    3.00    0.96
 ONT-17-35   8.00  17.00    9.00    0.79   includes  13.00   14.00    1.00     4.59
 ONT-18-19   2.00   4.00    2.00    2.89   includes   2.00    3.00    1.00     5.43
 ONT-18-24  19.00  21.00    2.00    0.92
 ONT-18-38  16.00  29.00   13.00    1.02   includes  17.00   18.00    1.00    10.88
 ONT-19-28   3.00   8.00    5.00    0.91   includes   7.00    8.00    1.00     3.59
 ONT-21-9    0.00   8.00    8.00    1.86   includes   1.00    3.00    2.00     2.45
 ONT-21-11  15.00  17.00    2.00    2.32   includes  15.00   16.00    1.00     3.03
 ONT-21-16   1.00  15.00   14.00    0.54   includes  10.00   11.00    1.00     1.54

The trenching program will continue aggressively expanding into new areas on the concession which the Company believes is prospective for intrusive related epithermal gold bearing vein systems as evidenced by the discovery during this phase of work.

The Company is encouraged by the positive results achieved by the first phase of exploration trenching and drilling on the Oro Del Norte Concession. Interpretation of both the drill and trench data collected to date confirms the Company’s geological and exploration models for the property.

Petaquilla believes that its 100% owned concessions surrounding its Molejon Gold Project are prospective for intrusive related epithermal gold vein systems and porphyry copper-gold-molybdenum deposits.

Petaquilla is solely funding exploration on its 100% owned concessions.

Mr. John Kapetas, P. Geo., a Qualified Person as defined by National Instrument 43-101 and the Company’s Vice President Exploration & Resources Development, has been overseeing the exploration field program. Mr. Kapetas is ensuring that the appropriate quality assurance protocols are being followed and that the data is being qualified under strict quality controls. He has reviewed and verified the technical mining information contained in this news release.

About Petaquilla Minerals Ltd. – Petaquilla Minerals Ltd. is a gold producer operating its gold processing plant at its 100% owned Molejon Gold Project in Panama. Anticipated throughput for the project during the first year of commercial production is estimated to be 2200 tonnes per day. Commercial production commenced January 8, 2010. The Molejon mine site is located in the south central area of the Company’s 100% owned 842-square kilometer concession lands, a region known historically for gold content.

On behalf of the Board of Directors of PETAQUILLA MINERALS LTD.

Richard Fifer, Director and Non-Executive Chairman of the Board