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Petaquilla Minerals Ltd. (PTQMF) Receives And Accepts $140 Million Loan Facility

|Includes: Petaquilla Minerals Ltd. (PTQMF)

Petaquilla Minerals has received and accepted from Red Kite Mine Finance Trust I (the lender) an indicative term sheet for a loan facility, in which the lender has offered to provide Petaquilla with a loan facility for an aggregate $140 million to develop, construct, and meet working capital requirements for its projects in Panama and Iberia.

Closing of the loan facility is expected to take place on or near Jan. 15 and is subject to customary due diligence, regulatory approvals, and final legal documentation that reflects the terms of the term sheet.

Upon closing, an initial tranche of $90 million will be available to Petaquilla, and the remaining $50 million will be released based on technical milestones - namely, updated National Instrument 43-101 resource estimates on either of Petaquilla's two projects.

Using the initial $90 million, Petaquilla will be able to, among other things, proceed with the payout of its existing gold and silver prepayment contracts and convertible loan with the London Branch of Deutsche Bank AG, which will effectively free an average of 1,500 gold ounces per month, or around $30 million annual cash flow currently committed to such contracts. The Deutsche Bank payout will additionally free Panama Desarrollo de Infraestructuras, S.A., the company's infrastructure division, for spinout to shareholders during the first calendar quarter of 2013.

In addition to the annual cash flows resulting from the payout of the gold and silver prepayment contracts, the net proceeds from the loan will also allow Petaquilla to bring the Lomero-Poyatos project to its initial onsite production by the middle of 2014.

Petaquilla Minerals is a growing diversified gold producer focused on maximizing shareholder value through a strategy of efficient production, targeted exploration, and select acquisitions. The company operates a surface gold processing plant at its Molejon Gold Project, located in the south central area of Panama - a region known historically for gold content. In addition, Petaquilla has exploration operations at its wholly-owned Lomero-Poyatos project, located in the northeast part of the Spanish/Portuguese (Iberian) Pyrite Belt, and several other exploration licenses in Iberia.

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