PERTH (miningweekly.com) – Gold miner Newcrest has struck an $806.5-million joint venture agreement with TSX-listed Imperial Metals over the Red Chris gold/copper mine, and its surrounding tenements, in British Columbia.

Newcrest will acquire a 70% interest in the Red Chris assets, which produced around 44.8-million pounds of copper and 29 569 oz of gold, at a cash cost of $2.41/lb of copper, in the first nine months of the 2018 calendar year.

The openpit copper/gold porphyry project has a mineral resource of 20-million ounces of gold and 13-billion pounds of copper, covering 23 142 ha of land and consisting of 77 mineral tenures, five of which are mining leases.

“We are delighted to add this asset into the Newcrest portfolio. Following due diligence, 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 MD and CEO Sandeep Biswas.

“We have identified a clear pathway to potentially turn this orebody into a Tier 1 operation. The geology of Red Chris is similar to our Cadia orebody, in Australia, and we will be applying our considerable experience in exploration, openpit mining, caving and processing to maximise the value of Red Chris and the opportunities in the surrounding region.”

Biswas pointed out that the company would optimise the current openpit mine plan and will pursue initiatives to improve the operational productiveness and milling recoveries.

The current openpit mine has an existing 11-million-tonne-a-year processing plant and associated infrastructure, which Biswas said allowed brownfield expansion options in the future.

The company would also apply new technologies at the Red Chris operations, which had previously proven successful for Newcrest, including block caving, coarse ore floating and mass sensing and sorting.

Biswas said that Newcrest was of the opinion that the orebody could potentially become a high margin bulk underground block cave. Newcrest will conduct studies and will review the ore reserve to allow for reporting in accordance with the Joint Ore Reserve Committee, and will look at the potential transition to a future block cave operation.

Biswas told Newcrest shareholders on Monday that the acquisition of the Red Chris mine was a measured entry into North America, and aligned with the company’s strategic goals of building a global portfolio of Tier 1 orebodies, where the company could deliver value through the application of its operating capabilities.

“We are well known in North America, the majority of our shareholders are from there. But being an operator in North America will certainly lift our profile and hopefully broaden our investor base.

“This is our first operating asset in that time zone, so it is a big milestone for us. We now have a footprint and we are targeting the America’s as a growth strategy with a lot of exploration projects, so it all fixes well with that strategy. But the overriding factor in this transaction is value,” Biswas said.

Imperial president Brian Kynoch said that the transaction with Newcrest presented a compelling opportunity for all stakeholders as it allowed 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.”

Newcrest will fund the acquisition from cash and committed undrawn bank facilities, which together amounted to more than $3-billion at the end of December.