Aerial photograph of Red Chris mine. Credit: Newcrest Mining Limited.

Imperial Metals has signed an agreement to sell a 70% joint venture (JV) interest in its Red Chris mine in British Columbia, Canada to Newcrest Mining, in a deal valued at $806.5m.

As part of the agreement, Imperial will retain a 30% interest in the Red Chris copper and gold mine and will also acquire surrounding tenements. The mine consists of 23,142ha of land with 77 mineral tenures.

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Newcrest plans to fund the acquisition using cash and committed undrawn bank facilities. The company claims that the mine has the potential to be a Tier 1 project, and said to be excited at adding a long-term project to its 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,” said Newcrest managing director and CEO Sandeep Biswas

Once the acquisition closes, the wholly-owned subsidiaries of Newcrest and Imperial will form an unincorporated JV to operate the mine, which will be operated by Newcrest.

Imperial Metals president Brian Kynoch said: “We believe that this JV partnership will enable Imperial to unlock significant value at Red Chris by leveraging Newcrest’s unique technical expertise in block caving operations.

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“We believe we can bring our unique technical capabilities to unlock the full value potential of this orebody.”

“Imperial’s portfolio of assets will include a 100% interest in the Mount Polley mine, a 100% interest in the Huckleberry mine and a 30% interest in the Red Chris mine together with a high potential suite of both advanced and early stage exploration projects.”

Subject to customary conditions, including the required regulatory approvals and the assignment or transfer of material permits and contracts, the sale is expected to be closed in the third quarter of this year.

Imperial plans to use the sale proceeds to repay existing debt obligations and the remaining funds for working capital purposes.