Oilsands mogul Murray Edwards to help fund Mount Polley mine spill cleanup – by Christopher Donville and Andy Hoffman, (Bloomberg News – August 15, 2014)

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Oilsands mogul Murray Edwards is backing a $100 million bond sale by Imperial Metals Corp. that will help fund the cleanup of a B.C. mine-waste spill, the worst accident of its kind in Canada in 20 years.

Edwards, Imperial’s largest shareholder, agreed to buy $40 million of the 6 percent, 6-year senior unsecured convertible debentures via Edco Capital Corp., a company he controls.

The Fairholme Partnership LP will buy another $40 million. If the issuance fails to raise the full amount sought, Edco will buy non-convertible notes bearing interest at 12 percent to make up the shortfall, Imperial said yesterday in a statement.

Murray, 54, who holds a 36 percent stake in Imperial, has business interests that span energy, engineering and a stake in a National Hockey League team. Buying the bonds isn’t the first time that he’s helped fund development of the Mount Polley copper and gold mine, the scene of last week’s accident, said David Davidson, an analyst at Paradigm Capital Inc.

“Once he invests in something, he supports it through thick and thin,” Davidson, who’s based in Toronto and whose rating on Imperial is under review following the spill, said today in an interview. “Not only is he committed to Mount Polley, but he’s committed at a really tough time.”

Imperial said funds from the sale and Imperial’s operations, and insurance proceeds, will be enough to cover costs at Mount Polley as well as the completion of its Red Chris project, which like Mount Polley is in British Columbia.

In 2003, Edwards bought stock sold by Imperial to fund exploration at the Mount Polley site. Two years later, a company he controlled provided Imperial with a credit facility to help restart the mine. No one at Imperial was immediately available to comment on Edwards’ support of the mine.

“While the precise costs of remediation and repair are presently unknown, the company believes that the costs can be managed over time,” Imperial said in the statement.

Imperial shares rose 15 percent to C$10 at 2:37 p.m. in Toronto. The stock has plunged 40 percent since the Aug. 4 accident, erasing about C$500 million of market value.

The failure of a waste-pond dam at the copper and gold mine, 400 kilometers (250 miles) northeast of Vancouver, unleashed a torrent of waste that left local residents unable to bathe in or drink the water from their taps. The ban on using water has now been lifted for most of the area near the spill.

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