Imperial’s wholly owned Red Chris copper/gold project is 91% complete and is expected to start production in May 2014.
The Red Chris copper/gold project is located 80 km south of Dease Lake in the traditional territory of the Tahltan First Nation in northwest British Columbia. Access to the site is 20 km from Highway 37. Reserves of over 300 million tonnes grading 0.359% copper and 0.274 g/t gold provide for a 28 year project life at a milling rate of 30,000 tonnes per day. Recovered metal in concentrate would total 2.08 billion lbs copper and 1.324 million oz gold.
The cost of constructing the Red Chris mine is estimated to be $500.0 million, a 12.7 % increase from the previous estimate of $443.6 million. The work at Red Chris to date has been funded by cash flow from operations, equipment financed by non-current debt, the Company’s line of credit and a new $75.0 million line of credit facility with a significant shareholder.
The 287 kV Northwest Transmission Line (NTL) from Skeena substation to Bob Quinn is under construction by BC Hydro with a planned completion date of May 2014. A subsidiary of Imperial will construct the 93 kilometre extension (Iskut Extension) from Bob Quinn to Tatogga. Imperial will finance the $82M cost of the extension. BC Hydro will purchase the line for $50M, leaving the net cost of $30M to be absorbed by Imperial.
Imperial Metals trades on the TSX with symbol III at $12.44 per share. The market cap is $926 M.
Red Chris has lots of potential to become a much larger operation. Management is concentrating on getting the mine operational early next year, but has built in long term growth by carefully planning its infrastructure location.
The company also benefits from synergies of having three mines in BC. It can move equipment between locations to put it to best use.
The Red Chris mine is the first of several projects in north-western BC benefiting from BC Hydro’s grid extension northwards.