Newmont Mining has signed an agreement to buy a 50% stake in the Galore Creek copper-gold project in British Columbia, Canada, from NovaGold Resources for $275m.

Galore Creek is an undeveloped asset with estimated resources of eight million ounces of gold and nine billion pounds of copper.

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Under the terms of the deal, Newmont will make an upfront payment of $100m, followed by $75m on the completion of a prefeasibility study or three years from closing, whichever is earlier.

“Galore Creek holds the potential to support decades of profitable copper and gold production in a favourable mining jurisdiction.”

The purchase consideration also includes a payment of $25m to be paid upon the completion of a feasibility study or five years from closing, whichever happens first, and an additional $75m subject to a final decision to develop the project.

Newmont Mining president and CEO Gary Goldberg said: “Galore Creek holds the potential to support decades of profitable copper and gold production in a favourable mining jurisdiction, in line with our strategy to create long-term value for our stakeholders.”

The company also reached an agreement to form a partnership with Teck Resources, which holds the remaining 50% interest in the project.

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Goldberg added: “Partnering with Teck allows us to bring both organisations’ considerable technical, financial and sustainability strengths to bear in evaluating and refining development plans for Galore Creek, and to build on the strong relationships Teck has established with the Tahltan First Nation and British Columbia.”

The collaboration with Teck will define the scope, budget, and timeline for prefeasibility studies over the next several months.

The partners will contribute equally to the annual budget of $10-$15m for the prefeasibility studies, which are expected to take three to four years to complete.

According to Newmont, the project will be governed by a committee that will include members from both companies.