One of Australia’s largest miners is buying a majority interest in a B.C. mine from Imperial Metals Corp. for US$806-million, providing a cash injection for the struggling Vancouver company that is backed by billionaire executive Murray Edwards.
Melbourne-based Newcrest Mining Corp. struck a deal on the weekend for 70 per cent of Imperial’s Red Chris property, a mine that opened three years ago and last year produced 12,000 ounces of gold.
Imperial’s board has been conducting in a strategic review of the business as it tries to get out of financial trouble. In 2014, a catastrophic tailings dam failure forced Imperial to suspend operations at its Mount Polley copper-gold mine in British Columbia for almost a year. Imperial has also dealt with operating problems at Red Chris since it started production in 2015.
The company has one of the lowest credit ratings given by Moody’s Investors Service, and last week announced it had received a temporary extension from creditors on three of its loans.
For shareholders, it has been a painful ride: The shares traded for nearly $17 shortly before the Mount Polley disaster, but closed last week at $1.98 on the Toronto Stock Exchange. Mr. Edwards owns about 41 per cent of Imperial, according to Refinitiv data, and has been a large investor in the company since the 1990s.