* Panama problems posed hurdle for Inmet
* Equinox's C$4.4 bln offer for Lundin remains open
* Lundin shares close in line with Equinox offer value
* Equinox shares up 1.1 pct, in line with Australian market (Adds investor comment, details)
TORONTO/MELBOURNE, March 30 (Reuters) - Canada's Lundin Mining Corp and Inmet Mining scrapped their merger plan, clearing the way for Lundin to hunt out a bidder to trump a C$4.4 billion ($4.5 billion) takeover offer from Equinox Minerals .
Lundin said it was exploring other sale options and urged shareholders to reject Equinox's bid.
Toronto- and Sydney-listed Equinox had no immediate comment on Lundin's move.
"They are going to put this thing up for sale, and we'll see if people show up for the party," a Lundin shareholder said on Tuesday, before Inmet and Lundin announced they were abandoning their deal.
Lundin and Inmet called off their plan to create a $9 billion copper miner that could produce 500,000 tonnes a year by 2017 after Inmet ran into problems with its key growth project in Panama, making it hard for Inmet to improve its bid for Lundin.
"We have however agreed to mutually terminate the agreement on the grounds that we could not reach a position that we thought would be supported by both companies' shareholders," the companies said in a joint statement.
The government of Panama recently changed its stance on power supply for Inmet's Cobre Panama copper-gold mine, potentially delaying and driving up costs on the $4.3 billion project.
Lundin rejected Equinox's offer last week as inadequate and too risky. It would have had to pay Inmet a C$120 million break fee if it had backed Equinox's offer. [ID:nN20254445]
"Our exploration of alternatives starts immediately and we will be actively and aggressively looking for the best value transaction," Lundin President and Chief Executive Phil Wright said on Tuesday.
Lundin also said it adopted a so-called "poison pill" defense as it searches for alternatives and fends off buyers looking for bargain basement prices.
"Having agreed to terminate with Inmet, we can now pursue new alternatives to significantly improve shareholder value and get a proper premium if we do a change of control transaction," said Lukas Lundin, chairman of Lundin Mining.
The Equinox offer for Lundin, a mix of A$8.10 in cash and 1.29 Equinox shares plus C$0.01, is worth about C$7.59 per share, in line with Lundin's close on Tuesday. ($1 = 0.974 Canadian Dollars) (Reporting by Pav Jordan, Julie Gordon and Sonali Paul; Editing by Ed Davies and Vinu Pilakkott)