Petaquilla VP Speaks About His Company

| About: Petaquilla Minerals (PTQMF)

On December 24, The Wall Street Transcript interviewed Gianni Kovacevic, the senior Vice President of Corporate Development for The Petaquilla Group of Companies and also a ground floor investor in Petaquilla Minerals Ltd. (OTCPK:PTQMF). Key excerpts follow:

TWST: What is Petaquilla?

Mr. Kovacevic: Petaquilla is a gold and copper development story in Panama. We're working on a very large mining concession of 795 square kilometers and effectively we're currently putting our gold asset into production. It's the precursor to eventually what is planned to be three working mines on that mineral district in Panama. Phase one, which is our gold project, is 120,000 ounces per year of gold production. Our costs are estimated to be $200 an ounce cash cost on gold. We currently have a resource of 1.5 million ounces of gold. We have 1.37 million ounces in Molejon, it's open pit starter pit area. We have another approximately 125,000 ounces in another area called Botija Abajo, just three kilometers from Molejon. The second part of the Petaquilla Minerals story is exploration. We have a very large concession that we've talked about and with that we're going to drill approximately 200,000 meters on the overall concession focusing 40,000 meters on gold exploration and about 160,000 meters for copper exploration with what will be a total of 14 drill rigs on our property, four of which are owned by our sister company, Petaquilla Copper. The third area in Petaquilla Minerals is our very large investment. We are the single largest shareholder of our sister company called Petaquilla Copper. Petaquilla Copper is developing a very large copper porphyry, which is three kilometers from the open pit of Molejon. That is a joint venture partnership with Petaquilla Minerals holding the biggest share of Petaquilla Copper. The joint venture of Petaquilla Copper, the ownership structure in that is 52% owned by Petaquilla Copper and 48% owned by Inmet Mining, a company that trades on the Toronto Stock Exchange and is one of Canada's larger copper mining companies. Teck Cominco, which is Canada's largest mining company, has an earn-in agreement with Petaquilla Copper where if they pay 100% of our costs for production, they would get 50% of our portion or an overall 26% of the project and they would then be the operator at that point. We are on a very aggressive path to production where effectively in the early part of 2008 we look to make a definitive development decision, and Teck Cominco has until March 31, 2008, to earn into the project under the current parameters or they would forfeit that earn-in agreement after March 31, 2008.

TWST: What's the agenda? What's the time line for each company? What should we look for as far as events or milestones over the next 12 to 24 months?

Mr. Kovacevic: Petaquilla Minerals is a company that in the next three to four months, meaning early in quarter one of 2008, will begin full production on the Molejon Gold Project, which gives us 120,000 ounces a year with $200 lifting costs. That's a milestone that we're going to reach. Now we also said in our guidance that when we achieve 1.5 million ounces, we would then expand the gold plant from the starting throughput, which is going to be 2,200 tons a day. We're now expanding that to 5,000 tons a day, which is the reason that we're raising this $30 million to instigate the phase two gold production. That is already engineered and the foundations have already been poured, more of a procurement of equipment and continuation of the facilities that are already in place and will be complete in the next months from the Molejon phase one. That's what the gold development story is. We still drill. We're drilling an additional 40,000 meters in and around Molejon. We're also going to start drilling in two areas, one area called Lata and another area called Cuatro Crestas and those are the two prongs to Petaquilla Minerals. There is the production side of the story with expansion of milling facilities coming, which will start in early 2008. We have our exploration arm on Petaquilla Minerals through the additional meters to be drilled as we've only explored on about 6% of the subsurface on the overall concession. We're committed to very large exploration projects this year, next year and the year after that. The development story for Petaquilla Copper should take place and should start the initiation of that development in early 2008 as well. For Petaquila Copper we are looking toward our 120,000 tons per day copper concentrating facility that we are going to build approximately three kilometers from the Molejon gold project that has the joint venture partnership with Inmet 48% and Teck having the earn-in agreement. That's approximately 39 months of construction, so we look to be a copper producer in the middle to the end of 2011. We also have our copper oxide asset in Petaquilla Copper, which will be spun out from the Petaquilla Copper company; it will be new company called COPE, Copper Oxide Petaquilla. With that company, Teck has no economic interest in that asset. They don't have any economic interest in any of the oxide mineralization in the Copper Joint Venture area. That will be a 52% PTC and 48% partnership with Inmet and they will have the right to technically develop that with us. We're looking to see our initial resource in December 2007 and then our feasibility study, which will be in the middle of 2008. Those are the two development timelines to look for at Petaquilla Copper. It's going to be a substantial producer. The 120,000 tpd concentrator will yield 233,000 tons of copper metal per year and that's based on the 1998 AMEC Feasibility Study, which was updated in January 2007. So economically the numbers come from that study which one can view at

TWST: What are the key summary points for investors as they consider Petaquilla for their current portfolios and longer-term investment strategies?

Mr. Kovacevic: Petaquilla has been a very progressive company by way of shareholder appreciation. We've seen the share price move in the past three years. We've been able to successfully spin out an asset and create more value for our shareholders, unlocking dividends. If one was an investor in Petaquilla three years ago, the stock was $0.50. Petaquilla Minerals is now over C$3 and Petaquilla Copper, we are doing $4.50 financing. You see value that has been around $0.50 and now you can see value of over C$7 a share. The story begins now for Petaquilla. Obviously, as you move through the process of creating a big mining district, there is risk and there are certain things that have to be clarified for the shareholders. Now with a development story both in gold and copper, I think people see it is not a pounds in the ground or ounces in the ground business, but they look at it as a cash flow business from a gold and copper perspective. Globally there's a strong demand for metals and we will produce a very clean copper concentrate and of course gold is a commodity and a form of money if people feel instability in different currencies. I think gold is traditionally going to be that common bond and the common currency for the world. The products that we will sell are US dollar-based and the economy in Panama is as well so there's insulation from what could be instability in the US dollar in the years to come. If you look at Petaquilla Minerals, there's production from gold, exploration upside with what will be 14 drill rigs working for gold and copper exploration and a very large concession. Then we will also have diversification with our investment in Petaquilla Copper, which is very simply the 22.189 million shares of a company that's also on a very aggressive path to production. One has investment in gold production, gold exploration and diversification in one of the largest undeveloped copper assets in the world in a very politically stable country, which is US dollar based and also in a district where there is overwhelming support not only locally, but governmentally in Panama.