Canada's Imperial Metals raising money to clean up mine waste spill

Fri Aug 15, 2014 8:41am EDT

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Aug 15 (Reuters) - Imperial Metals Corp, the company behind last week's major spill of mine waste in Western Canada, is raising C$100 million ($92 million) in debt to cover cleanup costs and finish building its newest mine.

The tailings dam burst at Imperial's Mount Polley copper and gold mine in British Columbia, an accident that analysts say could cost between C$50 million and C$500 million to clean up.

"While the precise costs of remediation and repair are presently unknown, the company believes that the costs can be managed over time, given the underlying value of the company's assets and by the resources provided by the additional financing," Imperial said in a release late on Thursday.

The Canadian company said it would issue C$100 million worth of convertible debentures.

Top Imperial shareholder N. Murray Edwards, the billionaire chair of oil and gas company Canadian Natural Resources Ltd , is a key part of the company's response to the spill.

His Edco Capital and affiliates have committed to buy C$40 million of the issue, and Edco has committed to buying more if needed to ensure Imperial raises the full C$100 million.

Imperial said the Fairholme Partnership LP has also committed to buy C$40 million. The Fairholme Partnership is a hedge fund launched last year by Bruce Berkowitz's Miami-based Fairholme Capital Management.

Imperial's new Red Chris mine, also in British Columbia, is almost fully built, but with Mount Polley shut down indefinitely, it has lost a key source of source of cash.

($1 = $1.0897 Canadian) (Reporting by Allison Martell; Editing by Steve Orlofsky)

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