Mr. Brian Kynoch reports
IMPERIAL CLOSES SALE OF A 70% INTEREST IN RED CHRIS
Imperial Metals Corp. has closed the previously announced sale of a 70-per-cent interest in its Red Chris copper and gold mine in British Columbia, Canada, to Newcrest Mining Ltd. for a final purchase price of $804-million (U.S.) subject to debt and working capital adjustments. Inclusive of the near-term settlement of some of these adjustments, Imperial received approximately $775-million (U.S.) in net cash consideration.
The company and Newcrest have formed a joint venture for the operation of Red Chris with Newcrest acting as operator. The company retains a 30-per-cent joint venture interest in the Red Chris mine.
The company's president, Brian Kynoch, said: "We are pleased to have the Red Chris mine move to this next chapter and to have completed this transaction with Newcrest. The sale of a 70-per-cent interest in Red Chris to Newcrest will allow Imperial to significantly strengthen its balance sheet, while continuing to hold a 30-per-cent interest in a joint venture that will leverage Newcrest's unique technical expertise in block caving operations. 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."
Newcrest's managing director and chief executive officer, Sandeep Biswas, said: "We are delighted to have closed the Red Chris transaction and add this operating mine to our existing low-cost, long-life portfolio. 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, Canada, a quality mining jurisdiction in a country with roots in mining, much like Australia."
The proceeds from the sale will be used to repay certain existing debt obligations, with remaining funds to be utilized for working capital purposes.
Borden Ladner Gervais LLP acted as the company's legal counsel, and BMO Capital Markets acted as financial adviser in connection with the transaction.
Imperial's Mount Polley and Huckleberry sites have additional exploration targets, which provide opportunity to discover additional and potentially higher-grade resources near the existing facilities, to add to mine life, and to strengthen operations when these mines reopen. This strategy worked well at Mount Polley, when in late 2003, the high-grade Northeast zone (the highest-grade deposit at Mount Polley) was discovered while this mine was on care and maintenance.
At the company's highly prospective Ruddock Creek zinc/lead project near Clearwater, an 8,000-metre drilling program initiated in June is expected to be completed by the end of September, 2019. This diamond drill program is focused on expanding the Q and V zones, located on the westernmost edge of the five-kilometre-long deposit, and is following up on results from RD-18-V41, which intercepted 21.7 metres grading 16.99 per cent zinc, 3.44 per cent lead and 2.41 grams per tonne silver in 2018.
Imperial is a Vancouver exploration, mine development and operating company. The company, through its subsidiaries, owns a 30-per-cent interest in the Red Chris mine, and a 100-per-cent interest in both the Mount Polley and Huckleberry copper mines in British Columbia. Imperial also holds a 48-per-cent interest in the Ruddock Creek lead/zinc property.
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