US$45 million Petaquilla Minerals prepaid forward gold purchase agreement
Arias, Fábrega & Fábrega acted as counsel to Deutsche Bank AG, London Branch, in connection US$45 million Prepaid Forward Gold Purchase Agreement and Full Security Package over company assets in Panama, including Molejon Mine Concession.
The transaction involved filing and recording the first ever priority mortgage over a fully operational mining concession in Panama. Pursuant to the Foreward Agreement, Petaquilla Minerals Ltd. gave full security over all of Petaquilla Minerals Ltd.'s operating subsidiaries and assets in various jurisdictions, the most important and extensive of which were located in Panama. Of particular significance was the need to take a first priority mortgage on the Company's main asset, the Molejon Mine Concession, an operating gold mine in the District of Donoso, Province of Colon, Republic of Panama (the "Molejon Concession").
The mine is operated by Petaquilla Gold, S.A., a wholly owned subsidiary of Petaquilla Minerals, Ltd., and in commercial operation. As such, for more than fourth months, ARIFA worked closely with members of both the Ministry of Commerce and Industry's National Directorate of Mineral Resources, and the semi-autonomous Public Registry, to devise processes and procedures to register the first commercially operating mining concession in the Republic of Panama in more than 40 years.
The process culminated in a series of new regulations issued by the Public Registry meant to streamline the registration process of mining companies wishing to register and record their concessions at the Public Registry.
Once Petaquilla Gold, S.A. was able to successfully register and record its contractual rights over the Molejon Concession at the Public Registry with the help of ARIFA, Deutsche Bank AG was able to then create a perfected first priority mortgage on the Molejon Concession in its favour.
Because the Company was only redeeming a portion of its outstanding debt, the transaction was also unique to Panama in that it involved devising a "shared security package" through the use of a third-party trust agent, Computershare Trust Company of Canada, to act as Collateral Agent and custodian of the collateral for the benefit of both Deutsceh Bank and the remainder of the Noteholders left pursuant to the un-redeemed portion of the Company's debt.
In addition, ARIFA counseled and worked closely with Stikeman Elliot (DB's Canadian counsel) to structure the innovative Gold Forward Purchase Agreement, whereby Petaquilla, acting as Seller, paid Deutche Bank (as "Buyer") in gold produced from active mining operations.