Australian Miner, Newcrest swallows over Canadian mine for US$807 Million.Not to be outdone in the race for mergers and acquisitions, Australian gold miner has floored a Canadian copper/gold miner for US$806.5 million.
Newcrest said on Monday it would buy a 70 percent joint-venture interest in, and operator ship of, the Red Chris mine and surrounding tenements in British Columbia from Toronto-listed Imperial Metals Corp. “If you look at the balance sheet metrics we are still well within our financial metrics,” Newcrest Chief Executive Sandeep Biswas was quoted.
The Red Chris buy comes amid a shakeup in the gold industry after Barrick Gold Corp’s offer for Newmont Mining in an $18 billion deal that was later rejected leading to a Joint Venture between the two mining giants for their Nevada operations. Newcrest’s funding for the Red Chris acquisition will be through a mix of cash and undrawn bank facilities. Imperial acquired the Red Chris project in 2007 and spent $662 million to build the mine, with first production in 2015. The purchase would allow Newcrest to leverage its block cave mining expertise which is seeing one of its flagship mines Cadia on an expansion phase in a top tier mining jurisdiction with plenty of exploration potential.
“The bulk of the resource is underground, and that’s where the grade increases at depth. So, what we do with block caving is we go right down to the bottom and start mining from the bottom up. So that is one of the key reasons we think we can unlock this ore body and make it a tier one operating mine,” he said. Red Chris is a copper and gold porphyry deposit with an operating open-pit mine and mineral resources of 20 million ounces of gold and 13 billion pounds of copper.