Mr. Brian Kynoch reports
IMPERIAL TO ENTER JOINT VENTURE WITH NEWCREST MINING
Imperial Metals Corp. has entered
into an agreement to sell a 70-per-cent interest in its Red Chris copper and gold asset in British Columbia, Canada, to Newcrest
Mining Ltd. for $806.5-million (U.S.) in cash, while retaining a 30-per-cent interest in the mine. The
company and Newcrest will form a joint venture for the operation of the Red Chris asset going forward, with Newcrest
acting as operator. The consideration payable will be subject to customary adjustments for certain assumed equipment
loans, working capital and non-financial debt at closing.
Imperial Metals' president, Brian Kynoch, said: "This transaction presents a compelling opportunity for all stakeholders as
it allows Imperial to significantly strengthen its balance sheet while forging a strategic partnership with a leading global
mining company. We believe that this joint venture partnership will enable Imperial to unlock significant value at Red
Chris by leveraging Newcrest's unique technical expertise in block caving operations. With a stronger financial position
and highly actionable path to exploiting the underground mining potential of Red Chris, Imperial will be in a much stronger
position to create value and opportunities for its shareholders, stakeholders and the Tahltan Nation. Imperial's portfolio of
assets will include a 100-per-cent interest in the Mount Polley mine, a 100-per-cent interest in the Huckleberry mine and a 30-per-cent interest
in the Red Chris mine, together with a high-potential suite of both advanced- and early-stage exploration projects, including
an approximately 50-per-cent interest in the Ruddock Creek lead/zinc property and a 100-per-cent interest in the Giant Copper property."
Newcrest's managing director and chief executive officer, Sandeep Biswas, said: "We are delighted to add this joint venture into the
Newcrest portfolio. We believe we can bring our unique technical capabilities to unlock the full-value potential of this
orebody in one of the premier gold districts in the world. We have identified a clear path to potentially turn Red Chris into
a Tier 1 operation. The geology of Red Chris is similar to our Cadia orebodies in Australia and we will be applying our
considerable experience in exploration, open-pit mining, caving and processing to maximize the value of Red Chris and the
opportunities in the surrounding region. We look at this opportunity in the same way as we do with Cadia, where we have
proven we can create significant value from deep underground porphyry orebodies. We are pleased to be establishing a
joint venture with Imperial and look forward to building a collaborative relationship with Tahltan Nation and the
government of British Columbia."
Transaction overview and timing
The sale is subject to customary conditions precedent, including all required regulatory approvals and the assignment or
transfer of material permits and contracts. Closing is expected to occur in the third quarter of 2019 with an outside date for
closing of Aug. 15, 2019.
On closing of the asset purchase, an unincorporated joint venture between wholly owned subsidiaries of Newcrest and the
company will be established. Newcrest will be the operator of the joint venture. Each party to the joint venture will
contribute to exploration and development expenditures according to its participant interest (Newcrest 70 per cent; Imperial 30 per cent).
Dilution provisions apply if a party does not contribute to a program and budget.
Use of proceeds
The company intends to use the proceeds from the sale to repay certain existing debt obligations in accordance with their
maturity dates, with remaining funds to be utilized for working capital purposes.
BMO Capital Markets is acting as financial adviser to the company in connection with the transaction. The company's
legal counsel on the transaction is Borden Ladner Gervais LLP.
About Imperial Metals Corp.
Imperial is a Vancouver exploration, mine development and operating company. The company, through its subsidiaries,
owns the Red Chris, Mount Polley and Huckleberry copper mines in British Columbia. Imperial also holds a 50-per-cent interest
in the Ruddock Creek lead/zinc property.
We seek Safe Harbor.
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