Photo by: Cariboo Regional District Emergency Operations Centre
TORONTO (miningweekly.com) – Canadian base metals miner Imperial Metals on Friday announced that it intended to raise $100-million by issuing senior unsecured convertible debentures to help pay for the clean-up costs following the tailings dam breach at its Mount Polley copper/gold mine, in British Columbia.
The six-year debentures would have a coupon rate of 6% and Imperial revealed that it had received commitments from shareholder Edco Capital Corporation (Edco) – or affiliates – which included billionaire chairperson of Canadian Natural Resources Murray Edwards, for $40-million and The Fairholme Partnership for $40-million.
Edco had also committed to buy six-year nonconvertible debentures bearing interest at 12% to make up the shortfall if $100-million was not raised through the debenture issuing.
The true cost of the Mount Polley spill clean-up, which had been labelled as one of the worst mining accidents in Canadian history, was at this point still a matter of speculation. What was clear is that Imperial would pay for it.
“The company will incur costs for remediation and repair. While the precise costs of remediation and repair are presently unknown, [Imperial] believes the costs can be managed over time given the underlying value of its assets and the resources provided by additional financing, together with insurance proceeds,” Imperial said in a statement on Friday.
The tailings dam breach at the Mount Polley mine had resulted in the loss of production from the mine for an uncertain length of time.
The spill had cast doubts on Imperial’s Red Chris copper/gold mine, also in British Columbia, after the company revealed on Friday that despite mine construction nearing completion and commissioning scheduled to start in September, it still required the amendment of the Red Chris Environmental Management Act approval that would allow operational effluent discharges to the tailings impoundment.
The company also projected an additional $25-million to complete the Red Chris mine above the previous estimate and a further $36-million to complete the Iskut extension of the Northwest Transmission Line from Bob Quinn to Tatogga.
For the three months ended June, Imperial reported net income of $15.2-million, or $0.20 a share, compared with net income of $7.5-million, or $0.10 a share, in the same period a year earlier.
Adjusted net income was $8.9-million, $0.12 a share, compared with $6-million, or $0.08 a share, in the June 2013 quarter.
Revenues were $51.1-million compared with $41.3-million in the comparative 2013 quarter, owing to higher copper and slightly lower gold shipments, offset by lower copper and gold prices, during the period under review.