Reuters- Vancouver-based mining firm Petaquilla Minerals Ltd (PTQ.TO: Quote, Profile, Research, Stock Buzz) will begin producing gold at its Molejon project in Panama within weeks, the company said. The concession is expected to produce an estimated 100,000 ounces of gold by the end of 2009 and maintain those levels for at least six more years, Chief Financial Officer Bassam Moubarak told Reuters. "We will start production before the end of the year," Moubarak said.
The announcement comes after lengthy delays and a series of environmental complaints about the mine linked to cyanide and deforestation. Originally the project was supposed to begin production in January this year.
Petaquilla now has permission from Panama's environmental regulator to go ahead with the project, Tom Byrne, the company's spokesman, said.
A massive copper project with the same name was spun off from Petaquilla Minerals and went public in 2006. Canadian company Inmet Mining Corp (IMN.TO: Quote, Profile, Research, Stock Buzz) is in the process of wrapping up an acquisition of a majority stake in the project, the largest copper deposit in Panama.
The Petaquilla gold mine will be the first major site to begin production in the country, although a slew of other proposals have been put forward during the commodities boom.

The Russians and the rest of the world will be coming through a widened Panama Canal.
Last Friday, Dec. 5, the Russian Navy sailed a warship into the Panama Canal--the first time since World War II. This week Secretary of State Condoleezza Rice flies to Panama to reinforce U.S. interests in the Zone.
Although it sounds like a reversion to Cold War intrigue that would make you wants to load up on swords, your better bet might be plowshares.
The free trade spirit permeates Panama. It operates the world's second-largest free trade zone after Hong Kong. Its overall economic growth rate matches that of China. Panama has posted 23 consecutive quarters of economic growth, growing gross domestic product by 11.5% in 2007. This is double the pace of the rest of Latin America and well ahead of the U.S.
Three things explain a continuing positive outlook for Panama.
First, the Panamanian construction sector is in hyper-growth mode. U.S. retirees are attracted there by the lower cost of living, a dollarized economy, English-speaking people and proximity to the United States. Several high-profile real estate projects like the Trump Ocean Club are also drawing upscale jet-set buyer attention. Panama City is only a three-hour flight from Miami and has all the signs of a boom town, including building cranes on the skyline and traffic congestion.
Second, the canal widening construction project is boosting the Panamanian economy. This is the largest infrastructure project in Latin America with a price tag of US$5.2Bn. This week, five major multinational agencies are expected to agree on a US$2.3Bn, 20-year long-term financing. The project is already pumping money into the local service-based economy, which should easily reach the 7%-8% International Monetary Fund growth projections for next year,
Third, the economy of the Colon Free Trade Zone represents almost 8% of the entire Panamanian economy and another potential contributor to growth. Last year, trade between the U.S. and Panama amounted to US$4Bn in goods. If the U.S. ratifies the U.S.-Panama Free Trade Agreement, tariffs on 80% of the industrial and consumer goods imported from the U.S. should be eliminated. Lower tariffs will make it easier for U.S. companies like Caterpillar to compete for much-needed earth-moving equipment sales.
The Panama Canal expansion is a massive primary infrastructure program that is likely to spawn secondary projects from corporate and government entities throughout the region. In preparation for the change, the Port of Tampa is planning a five-fold expansion and a new set of locks to accommodate more traffic and longer, wider ships.
In closing, the central principal is clear, the Panama economic miracle is based on free trade and investing in productive assets, something the U.S. is learning about again.