Petaquilla Minerals Ltd.
OTC Bulletin Board : PTQMF

Petaquilla Minerals Ltd.

October 12, 2006 03:05 ET

Petaquilla Minerals Ltd.: Plan of Arrangement to Be Effective

$22,560,000 Private Placement to Close

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 12, 2006) - Michael Levy, the President of Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ)(OTCBB:PTQMF)(FWB:P7Z), is pleased to announce that the Effective Date of the Company's Plan of Arrangement will be October 18, 2006. The Plan of Arrangement between the Company and Petaquilla Copper Ltd. ("Copper") was approved by shareholders of the Company on June 6, 2006, and by the Supreme Court of British Columbia on June 19, 2006.

At the opening of trading on the TSX on Friday, October 13, 2006, the common shares of Petaquilla Minerals Ltd. ("PTQ") will be posted for trading on an ex-distribution basis. There will be no change in the stock symbol or CUSIP number.

Shareholders of record at the close of business on October 17, 2006 (the "Arrangement Record Date"), will become shareholders of two separate companies: PTQ and Petaquilla Copper Ltd. ("Copper"). Each shareholder of the Company on the Arrangement Record Date will receive, in addition to the common share of PTQ already held, one Common Share of Copper. Certificates representing the Company's Common Shares will be deemed to represent PTQ Common Shares, and no new share certificates will be delivered. Certificates representing Copper Common Shares will be mailed as soon as practicable following the Effective Date to those persons whose names appear in the register of holders of the Company's Common Shares at the close of business on the Arrangement Record Date.

In addition, the Company is pleased to announce that, further to the Company's news releases dated July 20, 2006, and August 31, 2006, the Company will on October 17, 2006, complete the closing of a non-brokered private placement for 9,400,000 Units at a price of $2.40 per Unit for gross proceeds in the amount of $22,560,000 (the "Private Placement").

Each Unit consists of one common share and one transferable share purchase warrant of the Company, and each warrant entitles the holder to purchase an additional common share of the Company for a period of five years at a price of $3.00 per share.

As a result, purchasers under the Private Placement will, on the Effective Date of the Plan of Arrangement, receive:

(a) one common share of the Company and one share purchase warrant (a "PTQ Warrant"), where each PTQ Warrant entitles the holder to purchase one common share of the Company for a period of five years; and

(b) one common share of Copper and one share purchase warrant (a "Copper Warrant"), where each Copper Warrant entitles the holder to purchase one common share of Copper for a period of five years.

Until such time as Copper has been listed on a recognized Canadian stock exchange (the "Copper Listing Date"), the Copper Warrant and the PTQ Warrant must be exercised together. From and after the first five trading days after the Copper Listing Date, the Warrants can be exercised separately, and in that event, the respective exercise prices of the PTQ Warrants and the Copper Warrants will be based on $3.00 multiplied by the ratio of the five day volume weighted average price of each of the PTQ and Copper shares during the first five trading days for Copper. The Copper common shares are not currently listed on any stock exchange, and listing will be subject to Copper meeting the minimum listing requirements of the applicable stock exchange.

The PTQ warrants will be subject to a hold period expiring February 18, 2007. Any securities of Copper on or following the Effective Date will be subject to resale restrictions until such time that Copper becomes a reporting issuer or another exemption from resale restrictions is available. The PTQ common shares issued under the Private Placement will be freely tradable following the Effective Date.

The proceeds of the private placement will be used as to Cdn$17,560,000 on the advancement of the Company's Molejon Gold Project in Panama, to pay the expenses of the Private Placement and for working capital, with the remaining Cdn$5,000,000 less transaction expenses being used for the benefit of Copper.

Finders' fees in the form of 398,000 compensation share purchase warrants and cash will be paid in connection with the Private Placement. Each compensation share purchase warrant will have the same terms and conditions as the share purchase warrants issued as part of the Units. The exercise of 361,405 of the compensation share purchase warrants is subject to shareholder approval. In the event that such approval is not obtained, that part of the finders' fee will be paid in cash.

Casimir Capital L.P. acted as a financial advisor to the Company in connection with this transaction.

The statements contained in this news release that are not purely historical are forward-looking statements. Forward-looking statements may relate to the success of any of the Company's strategic initiatives, the Company's expectations, beliefs, growth and future prospects, and the Company's position in the market and future opportunities therein. Forward-looking statements may also include, without limitation, any express or implied statement relating to future events, industry performance, general business and economic conditions or circumstances, regulatory and legal requirements, and other matters, many of which are beyond the control of the Company. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. All forward-looking statements included in this news release are based upon information available to the Company as of the date hereof and the Company does not undertake any obligations to update forward-looking statements should circumstances or management's beliefs or opinions change.

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

Michael Levy, President and Director

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

Contact Information

  • Petaquilla Minerals Ltd.
    Michael Levy
    President and Director
    (604) 694-0021
    (604) 694-0063 (FAX)