Imperial Metals raising $53 million for B.C. mines

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Imperial Metals Corp. (III-TSX) said it has arranged to raise $53 million from a non brokered private placement of non-convertible debentures. The company said it has been advised that Murray Edwards, the company’s biggest shareholder, will subscribe for $40 million worth of the debentures.

Imperial’s principal properties in British Columbia include the wholly-owned Mount Polley and Huckleberry copper mines, plus the 30%-owned Red Chris mine. The company said proceeds of the financing will be used for ongoing operations at Mount Polley and continued exploration and feasibility work at Red Chris.

The company said the debentures have a four-year term ending December 16, 2026. Imperial said it intends to issue 6.62 million warrants that will be exercisable into common shares of the company at a price of $2.10., subject to all required shareholder and regulatory approvals. Interest at 10% annually will be payable semi-annually in cash with the first payment due on June 16, 2023. Should the warrants not receive the requisite approvals, interest on the debentures will increase to 12% annually.

News of the financing came after the close of trading on December 9, 2022, when Imperial shares closed at $1.89. The shares are currently trading in a 52-week range of $4.25 and $1.83.

Imperial formed a joint venture with Australian partner Newcrest Mining Ltd. [NCM-ASX] at the Red Chris copper gold mine in Northern B.C. in March 2019, after agreeing to sell a 70% stake in the mine to Newcrest.

Imperial said Red Chris metal production for the third quarter of 2022 was 19.2 million pounds of copper and 17,513 ounces of gold, down 13% and 10% respectively from the second quarter of 2022. Imperial’s 30% portion of the second quarter production was 5.75 million pounds of copper and 5,254 ounces of gold.

Mount Polley is an open pit copper/gold mine with an underground component located in south-central B.C., 56 kilometres northeast of Williams Lake. The property covers 20,113 hectares, consisting of seven mining leases and 46 mineral claims.

Back in August, 2014 Imperial reported that a tailings storage facility at Mount Polley was breached, releasing 24 million cubic metres of mine waste into nearby waterways, impacting lakes, rivers and aquatic ecosystems.

A flurry of investigations found that the tailings dam failed because of the strength and location of a layer of clay underneath the dam was not taken into account in the design or in subsequent dam raises.

The company began work required to reopen the mine in the fourth quarter of 2021, with initial mill commissioning and operations beginning on June 25, 2022.

Production at Mount Polley was 2.4 million pounds of copper and 5,084 ounces of gold in the third quarter. In the December 9, 2022, news release, Imperial said Mount Polley achieved the highest monthly copper and gold production to date since the startup with 1.78 million pounds of copper and 2,639 ounces of gold being produced in November. The company said the operation is still being impacted by unanticipated electrical failures which have reduced throughput rates.

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