Newcrest takes over at Red Chris JV
Imperial Metals’ sale of a 70% interest in the Red Chris copper-gold mine in B.C. has officially closed, with Australia’s Newcrest Mining now the operator of the asset.
Newcrest paid $804 million for its majority interest. The deal was first announced in March.
“We are delighted to have closed the Red Chris transaction and add this operating mine to our existing low cost, long-life portfolio,” Newcrest’s managing director and CEO, Sandeep Biswas, said in a release.
“We are pleased with the highly constructive and collaborative relationship we are developing with the Tahltan Nation and the government of British Columbia and look forward to working together as we execute our forward work plan to unlock the significant potential from Red Chris. We are excited to establish a strong presence in British Columbia, a quality mining jurisdiction in a country with roots in mining, much like Australia.”
Red Chris, which began production in 2015 and is located 80 km south of Dease Lake, hosts reserves of 301.5 million tonnes grading 0.36% copper and 0.27 g/t gold. Production for 2019 is forecast at 72-76 million lb. copper and 36,000 to 38,000 oz. gold. Newcrest has said it has identified a clear path to turn Red Chris into a Tier 1 operation.
Imperial will use the funds to pay down debt and as working capital. The company is still suffering the financial repercussions of the 2014 tailings dam failure at its still-suspended Mount Polley copper-gold mine in B.C.
“The sale of a 70% interest in Red Chris to Newcrest will allow Imperial to significantly strengthen its balance sheet, while continuing to hold a 30% interest in a joint venture that will leverage Newcrest’s unique technical expertise in block caving operations,” said Imperial’s president, Brian Kynoch. “We look forward to working alongside Newcrest with this new venture as well as the resumption of exploration activities at Red Chris. As a result of this transaction, Imperial will be in a much better position to create value and opportunities for its shareholders and stakeholders.”
(This article first appeared in The Canadian Mining Journal)