Newcrest Mining will acquire 70 per cent of the Red Chris copper-gold mine for $US806.5 million ($1.14 billion) from Canadian company Imperial Metals.
The open-pit mine in the Canadian province of British Columbia contains mineral resources of 20 million ounces of gold and 13 billion pounds of copper (equivalent to 5.9 million tonnes of contained copper).
The controlling interest represents Newcrest’s first entry into the North American mining market, where it plans to introduce the relatively new technique of block caving — a form of deliberately induced collapse — to maximise the mine’s potential as a high margin underground block cave.
Newcrest managing director and chief executive Sandeep Biswas said the Red Chris orebody shared similar geology to Cadia, and Newcrest had “identified a clear pathway to potentially turn this orebody into a Tier 1 operation”.
“We look at this opportunity in the same way as we do with Cadia, where we have proven we can create significant value from deep underground porphyry orebodies,” Biswas said.
Newcrest already employs this technique at its Cadia East gold mine in New South Wales, which features one of the world’s deepest block caves (1.4 kilometres).
The company will become Red Chris’ operator as a result of the deal, which is expected to close in the third quarter of 2019.
Red Chris was built at a cost of $C661 million ($698 million) over two years. It has been in operation since July 2015 and employs around 500 people under Imperial Metals.