Imperial Metals (TSX: III; US-OTC: IPMLF) may be nursing a black eye from the August tailings dam failure at its Mount Polley mine in central B.C., but the company says it’s pleased with its cleanup efforts so far, and that it is also advancing its Red Chris project in the far north of the province with the help of a new $50-million secured credit facility.
With the additional financing, made public after markets closed on Jan. 19, the company says it has mitigated any issues with ongoing liquidity based on the timelines for operations at its advanced-stage copper-gold project 80 km south of Dease Lake.
“Red Chris is going to be the new crown jewel of Imperial Metals — it’s our entry into the big leagues,” Steve Robertson, the company’s vice-president of corporate affairs, says in an interview.
Commercial production at the 30,000-tonne-per-day open-pit operation remains on track to start in March or April, and the total capital cost is still expected to come in at $643 million.
The project was hooked up to the power grid in November and mining got underway on both the East and Main zones in December.
Imperial personnel have started crushing and conveying ore to the coarse ore stockpile in preparation for commissioning the mill.
The company hit another milestone last month when it sold the Iskut power line extension to B.C. Hydro for $52 million, banking the funds on Dec. 19.
Looking ahead, Robertson says he expects Imperial to receive the environmental permit to discharge tailings at Red Chris “very shortly,” and that the company has “a letter of support from the Tahltan [First Nation] to issue it.”
As for an impact benefits agreement, the company has made progress since it started negotiations 25 months ago.
“We’re in the late stages of working on an agreement with the Tahltan,” Imperial’s vice-president of corporate development Gordon Keevil says. “We’re working with the leadership and the community to finalize an agreement.”
At Mount Polley, meanwhile, where the tailings dam breach on Aug. 4 sent millions of cubic metres of tailings into the Quesnel Lake watershed, Imperial is sticking to its $67.4-million estimate for cleanup costs and says remediation work is progressing well.
“We’re still working in the lower third of the Hazeltine Creek and we’ve got two sedimentation ponds that have been put into operation and are very effective in reducing the sediment load that is emptying into Quesnel Lake,” Robertson says. “A lot of channel restoration is well underway, and we feel we’re in a good position to restart vegetation activities once we get into the [second quarter].”
Robertson confirmed that the company has received approval to repair the breached section of the dam and said that work is already underway. “We’re repairing the dam in order to handle the water that is going to come at spring break-up — it’s a further stabilization measure,” he explains. “All material will be in place by the end of February and we’ll install a cut-off wall, and that should be done by the end of March.”
He adds that “the work we’ve done and our progress has been tremendous.”
Imperial hopes to reopen Mount Polley. It submitted an application to the government on Jan. 12 requesting a temporary operational permit that would allow the company to deposit tailings in its Springer pit. The tailings would be capped at 4 million tonnes, which Robertson says would last the company through 2015.
“The source of mill feed will be from underground [1,000 tonnes] and the balance from the Caribou pit, and 20% from existing stockpiles,” Robertson says, estimating that with a minimum public consultation period of at least 30 days, it will probably take a couple of months to get through the permitting, and another couple of months to ramp up.
If the application is approved, Imperial could resume operations at Mount Polley as early as April.
Imperial has kept most of its workforce and continues to employ 300 of the mine’s original 370 employees.
Robertson says that “with the application for temporary resumption of operations, we should be able to keep most of those folks employed over the long-term, and also bring back as many as we can.”
Over the last year, Imperial Metals shares have traded in a range of $7.29 to $18.63, and at press time changed hands at $9.04 apiece. The company has 75 million shares outstanding.
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