NEWS!!! PTQ TO ACQUIRE IBERIAN RES.Petaquilla Minerals Ltd. Enters Letter of Intent with Iberian Resources Corp.VANCOUVER, BRITISH COLUMBIA, Apr 6, 2011 (Marketwire via COMTEX News Network) --
PetaquillaMinerals Ltd. (TSX:PTQ)(OTCBB:PTQMF)(FRANKFURT:P7Z) ("Petaquilla" orthe "Company") is pleased to announce that it has entered into a bindingletter of intent ("LOI") with Iberian Resources Corp. ("Iberian"),pursuant to which the Company proposes to acquire all of the outstandingshares of Iberian (the "Proposed Transaction").
Iberian is aprivate British Columbia company that owns 100% of the Lomero Poyatosmine through its wholly-owned Spanish affiliate Corporacion de RecursosIberia S.L. Lomero Poyatos is located about 110 kilometres northeast ofSeville, in the heart of the Iberian Pyrite Belt. Iberian also ownsseveral other exploration licenses in Iberia through its wholly-ownedSpanish and Portuguese affiliates, and soon expects to receive a smallscale mining license for its Banjas concession in Portugal.
Pursuantto the terms of the LOI, it is proposed that each common share ofIberian will be exchanged for 1.3 common shares of Petaquilla, whichwill result in 39,205,906 additional shares being issued by the Company,valuing the transaction at approximately US$41 million. Thiscorresponds to the low-end value of Behre Dolbear's independentvaluation of Lomero Poyatos. Petaquilla currently has 176,379,501 commonshares issued and outstanding.
Iberian currently has 1,511,248warrants outstanding, each of which is exercisable for one common shareof Iberian at exercise prices in the range of US
.14 to US
.60 percommon share. Subject to the terms of the warrants and applicable law,the LOI provides that each Iberian warrant issued to (i) non-insiders ofIberian, being 430,576 warrants, will be exchangeable for a warrant ofPetaquilla, which in turn will be exercisable for 1.3 common shares ofPetaquilla; and (ii) insiders of Iberian, being 1,080,672 warrants, willbe exchangeable for a warrant of Petaquilla, which in turn will beexercisable for one common share of Petaquilla, all for the sameexercise price provided under the original Iberian warrant.
Iberiancurrently has options outstanding for the purchase of an aggregate of3,357,313 common shares of Iberian at exercise prices in the range ofCDN
.10 to US
.60 per common share. Following the closing of theProposed Transaction, subject to obtaining all necessary approvals, itis anticipated that such options will become options to purchase anaggregate of 3,357,313 common shares of the Company at the exerciseprices provided under the current Iberian options.
The ProposedTransaction is subject to, among other things, negotiating and enteringinto definitive agreements between the parties and obtaining appropriateapprovals from the Toronto Stock Exchange and shareholders of bothPetaquilla and Iberian.
This Proposed Transaction is part of apreviously defined strategy for geographical diversification of theCompany, particularly focused on building a strong presence inmining-friendly jurisdictions of recognized mineralization potential,such as the Iberian Pyrite Belt, where the Lomero Poyatos deposit standsout as an exceptional opportunity.
The Company is committed tothe development of Lomero Poyatos and will be working with BehreDolbear, SGS and the University of Madrid to complete a report on theproject compliant with National Instrument 43-101, which the Companyexpects to be finalized during the fourth quarter of the currentcalendar year. The Lomero Poyatos project already holds a productionlicense.
By approving the LOI, the Board of Directors of Iberianhas recognized the benefits of joining a world class gold producer andits privileged access to management expertise, technological know-howand capital markets.
BEHRE DOLBEAR'S PRELIMINARY REPORT ON THE LOMERO-POYATOS MASSIVE PYRITE (Au-Ag-Cu-Pb-Zn) MINE IN ANDALUSIA, SPAIN
TheLomero Poyatos mine formerly mined about 2.6 million tonnes of massivepyrite for use as raw material for the manufacture of sulphuric acid.The mine closed in 1992 and since then has been investigated by severalcompanies as a possible gold-silver-copper-lead-zinc deposit.
Iberiancommissioned Behre Dolbear International Ltd, in association withGemcon Software International Ltd, to carry out a review of theavailable data pertaining to the Lomero Poyatos mine in order to confirmthe previous mineral resource estimates (by SRK, 2002 and WAI, 2007).
Asthere have been no feasibility studies carried out and there has beenno decision made as to whether the deposit would be mined by open-pit orunderground methods, there is no basis for deciding what would be anappropriate cut-off grade, nor any basis for estimating the likelymining and processing costs. Therefore, the deposit has been treated asan exploration stage project.
Mineral Resource Estimate
The mineral resource estimate was based on the following assumptions:
-- A data-base of existing drill hole data was compiled from previous
exploration records comprising about 50 surface drill holes and a
similar number of underground drill holes.
-- The deposit was defined as all mineralisation assaying greater than 25%
sulphur and a computer generated block model was constructed using
Gemcon(C) software to define the shape and size of the deposit.
-- Based on Ordinary Krigging methods the tonnage and the average gold,
silver, copper, lead and zinc grades of this +25%S deposit were
estimated.
-- The tonnage was based on an assumed bulk density (SG) of 3.3.
-- No cut-off grade was applied.
-- The resources were assigned an Inferred classification (JORC Code,
2004).
Thetotal Inferred Mineral Resource was estimated at 30.4Mt at 2.31 g/t ofgold, 46.56 g/t of silver, 0.67% copper, 0.67% lead and 2.35% zinccontaining 2.26 Moz Gold and 45.51 Moz Silver when applying a 25%Scut-off only.
This preliminary assessment is preliminary innature. It includes inferred mineral resources that are considered toospeculative geologically to have the economic considerations applied tothem that would enable them to be categorized as mineral reserves, andthere is no certainty that the preliminary assessment will be realized.
Qualified Person
RichardJames Fletcher is qualified to act as a "qualified person" as definedin National Instrument 43-101 and accepts responsibility for theinformation on Exploration Results and Mineral Resource Estimate in thisreport. Behre Dolbear affirms that Mr. Fletcher:
-- is aFellow of the Australasian Institute of Mining and Metallurgy; and --has more than 40 years experience in the estimation, assessment andevaluation of mineral resources and ore reserves that is relevant to thestyles of mineralization and the types of deposits underconsideration.
About Petaquilla Minerals Ltd.
Petaquillais a gold producer operating its gold processing plant at its 100%owned Molejon Gold Project in Panama. The Molejon mine site is locatedin the south central area of the Company's 100% owned 842 squarekilometre concession lands, a region known historically for goldcontent.
Disclaimer
This press release includesforward-looking statements. All statements, other than statements ofhistorical fact, contained in this news release, including, but notlimited to, statements regarding the Proposed Transaction, theestimation of mineral resource estimate and the realization of mineralresource estimate, constitute forward-looking statements. Suchforward-looking statements involve known and unknown risks,uncertainties and other important factors beyond Petaquilla's controlthat would cause the actual results, performance or achievements ofPetaquilla to be materially different from future results, performanceor achievements expressed or implied by such forward-looking statementsincluding that the Proposed Transaction may not be completed for anyreason. Such forward-looking statements are based on numerousassumptions regarding successful completion of the Proposed Transaction,Petaquilla's present and future business strategies and the environmentin which Petaquilla will operate in the future. Any forward-lookingstatements speak only as at the date of this document. Petaquillaexpressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained hereinto reflect any change in Petaquilla's expectations with regard theretoor any change in events, conditions or circumstances on which any suchstatements are based, except to the extent required by applicable law.As a result of these factors, the events described in theforward-looking statements in this press release may not occur eitherpartially or at all.
On behalf of the Board of Directors of
PETAQUILLA MINERALS LTD.
Richard Fifer, Director and Chairman of the Board
SOURCE: Petaquilla Minerals Ltd.
PetaquillaMinerals Ltd. Richard Fifer Director and Chairman of the Board (604)694-0021 or Toll free: 1-877-694-0021 (604) 694-0063(FAX)www.petaquilla.com