Petaquilla Minerals Ltd.
OTC Bulletin Board : PTQMF

Petaquilla Minerals Ltd.

September 04, 2009 18:48 ET

Petaquilla Announces Results for the Twelve Months Period Ended May 31, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2009) - Petaquilla Minerals Ltd. ("Petaquilla" or the "Company") (TSX:PTQ)(OTCBB:PTQMF)(FRANKFURT:P7Z) has released its financial and operational results for the period ended May 31, 2009. All figures are in U.S. dollars.

Significant Accomplishments during the period ended May 31, 2009

Molejon Gold Deposit Project

- Mining has commenced with the first gold pour on April 7, 2009.

- All equipment relating to the electrical and mechanical components of the processing facility has been received and installed.

- Emergency tailings pond has been completed.

- All civil work has been completed.

- Ball mills #2 and #3 were put into operation. Ball mill #1 is 90% complete and expected to be put into production in the first quarter of fiscal 2010.

- Road access for the starter pit is complete.

- Construction of the bridge connecting the mine to the plant is now complete.

- All work related to the CIP tanks has been completed. The support structure for the agitation mechanism for the leaching tanks has been completed.

- Construction of mill feed bins is complete.

- The general warehouse, ADR and refinery have been completed.

- Metallurgy lab is complete.

- Tailings pond #2(a) is complete. Tailings pond #2(b) is 80% complete and work on raising the wall of pond #2(a) and #2(b) is currently underway and expected to be completed in the second quarter of fiscal 2010.

- Secondary and tertiary crushing equipment and conveyor systems are 80% complete. The primary crusher is 50% complete. The expected completion date for the secondary and tertiary crushers is the first quarter of fiscal 2010 and the primary crusher will be ready in the second quarter of fiscal 2010.

Environmental Impact Study Approval

On November 26, 2008, the Autoridad Nacional del Ambiente ("ANAM"), the environmental agency of the Government of the Republic of Panama, issued a Resolution approving the Company's Environmental Impact Study Category III (the "EIS"). The Resolution sets out a number of conditions to be satisfied before the Company can attain full commercial production of the Molejon Gold Mine in Panama. On detailed review of the Resolution, it became apparent that some of the conditions were not applicable to the Molejon operation, and others had already been satisfied by the Company. The Company therefore established a working group to cooperate with ANAM to ensure that all conditions are satisfied or waived, so that full commercial production in fiscal 2010 will take place without delay.

During the current period, the Company has been subject to regular inspections confirming its full compliance with the applicable environmental regulations. Petaquilla Gold, S.A., the Company's Panama subsidiary which operates the Molejon plant, has provided additional technical documentation on specific procedures related to the monitoring of the environmental impact on water, soil and air as well as various studies on health and migration of populations within the area of influence of the mine project, fully complying with the conditions defined by ANAM for readiness for commercial production. Accordingly, the Company expects to initiate full production as soon as the technical pre-production testing is completed which is expected to occur at or about the same time as approval from the Ministry of Industry and Commerce is obtained.

Several meetings have been held with ANAM personnel and ANAM's appointed independent ITS Consulting and EnviroLAB Laboratories to establish a routine of regular environmental inspections.

The Company has retained SGS Panama Control Services Inc., part of the Swiss group SGS - Societe Generale de Surveillance, for the process of certification to the international standards on Environmental Management, ISO 14001 and Safety and Occupational Health, OHSAS 18001.

Mill Commissioning and Production

The Company announced wet commissioning on November 28th, 2008, after initiating a pre-production test program; progressively bringing online some of the critical process equipment. During the third quarter, 18,000 tons of low grade ore were used to test the "mine to plant" feed circuitry. Such tests met the requirements of a technical covenant related to the senior secured note financing. This test material did not result in a gold pour.

The Company produced its first gold bar on April 7, 2009.

Gold production - ounces 2,973
Silver production - ounces 1,109
Gold sales - ounces 703
Silver sales - ounces 114
Average realized gold price (per ounce) $ 928.24
Unit cash production cost (per ounce, on a co-product and
by-product basis) $1,793.13

Subsequent to year-end

We are currently conducting an internal investigation under the oversight of the Audit Committee and with the assistance of advisors, of certain of our international operations, focusing on the material weakness identified during our assessment of internal controls as at May 31, 2009. The process is still in the fact-finding stage, and no conclusions can yet be drawn.

(In U.S. dollars, except per share amounts)

Twelve Twelve
months ended One month months ended
May 31, ended May 31, April 30,
2009 2008 2008

Accounting and legal $ 1,944,302 $ 15,536 $ 1,306,921
Accretion of asset retirement
obligation 331,504 52,098 305,692
Consulting fees 370,248 21,170 943,250
Amortization 336,602 35,511 344,968
Filing fees 115,295 280 87,005
Investor relations and
shareholder information 1,121,895 54,595 1,012,822
Office administration 2,152,886 177,657 2,366,940
Rent 240,693 1,630 122,495
Exploration and development costs 7,761,862 562,237 11,690,204
Stock-based compensation 898,454 77,890 5,561,247
Travel 1,014,530 121,849 857,907
Debt issuance costs 6,398,825 3,894,873 -
Wages and benefits 2,916,615 177,329 1,668,455
Total expenses (25,603,711) (5,192,655) (26,267,906)

Foreign exchange (loss) gain (8,157,720) 295,059 1,342,442
Interest income 169,366 78,658 51,926
Interest on long-term debt (37,382) (15,613) (68,465)
Asset usage fees (4,155) (695) 126,775
Gain on sale of equity investment 40,604,938 - 4,347,077
Power and drilling services 156,597 70,094 76,430
Loss from equity investment (2,396,011) (779,846) (8,301,371)
Gain on dilution of equity
investment 2,238,492 - 12,582,085
Redemption loss on senior secured
notes (13,130,982) - -
Mark-to-market loss on senior
secured notes and convertible
senior secured notes (14,939,298) - -
Total other income (expenses) 4,503,845 (352,343) 10,156,899
Net loss for the period (21,099,866) (5,544,998) (16,111,007)

Other comprehensive (loss) gain:
Unrealized (loss) gain on
translating financial statements
to U.S. reporting currency (4,648,716) 487,574 716,555
Comprehensive loss for the year $(25,748,582) $ (5,057,424) $(15,394,452)
Basic and diluted loss per share $(0.22) $(0.06) $(0.17)
Weighted average number of common
shares outstanding 96,019,488 93,131,030 93,131,030

We seek Safe Harbor.

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

Bassam Moubarak, Chief Financial Officer

No stock exchange has approved or disapproved the information contained herein.

Contact Information

  • Petaquilla Minerals Ltd.
    Bassam Moubarak
    Chief Financial Officer
    (604) 694-0021 or Toll free: 1-877-694-0021
    (604) 694-0063 (FAX)