IDM’s Red Mountain gold and silver mine gets environmental permit
Canada’s IDM Mining (TSX-V:IDM), which is in the process of being absorbed by fellow miner Ascot Resources (TSX-V:AOT), can now start building its flagship Red Mountain gold and silver mine near Stewart, British Columbia, as it has received the federal government’s environmental approval.
Environment and Climate Change Minister Catherine McKenna said late on Monday that the proposed mine was not likely to have significant adverse effects if the 120 stipulated conditions were met.
Those requisites include measures to protect fish and fish habitat, migration of birds, species at risk, human health, physical and cultural heritage, as well as the current use of lands and resources by Indigenous peoples.
“We are confident that with the mitigation measures in place and the legally-binding conditions the proponent must fulfill, this project will move forward in a way that supports sustainable development,” McKenna said in the statement.
The Red Mountain project, one of the several currently being developed in BC’s prolific Golden Triangle, had already gained provincial environmental approval.
It’s estimated it would take about 18 months to build the mine and bring it into production, with a capital cost of $135 million.
While the property is said to hold high-grade gold and silver reserves, the projected mine life is quite short– about six years – with an average net annual production of 365,000 tonnes of ore per year, and a payback period of two years.
Ascot Resources, which has been working to restart the historic Premier gold mine near Stewart, plans to consolidate that project with Red Mountain, once the friendly $45-million takeover of IDM Mining closes.
Gold miners have lost money for shareholders over the past five years, leading to calls for consolidation, a reduction in management pay and efforts to cut costs and dump non-core assets. Barrick Gold’s $6 billion-takeover of Randgold Resources and Newmont Mining’ whopping $10 billion-acquisition of Goldcorp are considered to be just the beginning of a looming M&A spree in the sector globally.