Newcrest Mining (ASX:NCM) has acquired a 1.5% net smelter return royalty on the Red Chris South project located 5 km from its 70% owned Red Chris gold-copper mine in British Columbia.
As consideration, Newcrest has made a C$225,000 cash payment to previous royalty holder Canada Carbon (TSXV: CCB), which mainly focuses on graphite mining in Quebec.
The royalty was created when Canada Carbon sold the project claims in 2013 to Red Chris Development Company, a subsidiary of Imperial Metals (TSX: III) which owns the remaining 30% of the Red Chris mine.
Canada Carbon had planned to sell the Red Chris South royalty to Toronto-based precious metals streaming company Vox Royalty (TSXV: VOX), but Newcrest as project operator had a right of first refusal, which it elected to use.
The Red Chris mine is viewed by Newcrest as a potential tier 1 asset that could reach a similar scale as its Cadia operations in Australia.
Infill drilling is currently underway to fully define the extent of recent high-grade discoveries, and the plan is to begin decline activities by end of the calendar year to accelerate exploration and for use in future underground mining.
Earlier this year, Newcrest expanded its landholdings in BC’s Golden Triangle by purchasing Skeena Resources’ GJ property, situated about 30 km west of the Red Chris mine.