(Adds detail on new review of Red Chris mine tailings dam)
Aug 15 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.
"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 that
boosted investor confidence in the company's prospects.
Shares of Imperial, which have fallen sharply since the
spill, rose 15.3 percent to C$10.37 in Toronto on Friday.
The tailings dam burst at Imperial's Mount Polley copper and
gold mine in British Columbia, a spill that analysts say could
cost between C$50 million and C$500 million to clean up. The
mine has been closed indefinitely, costing Imperial a key source
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 giant Canadian Natural Resources,
is stepping in to help Imperial.
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 has also committed
to buy C$40 million. Fairholme is a hedge fund launched in 2013
by Bruce Berkowitz's Miami-based Fairholme Capital Management.
Imperial's new Red Chris mine, also in British Columbia, is
almost fully built, but it needs one more permit approved before
it can start production, said Steve Robertson, vice president of
corporate affairs, in a message on Wednesday.
The permit is required before Imperial can deposit tailings
into a storage facility at Red Chris, he said, adding that the
process of obtaining the approval is under way.
Chad Day, the president of Tahltan Nation, the aboriginal
group that has been negotiating an impact benefit agreement with
Imperial for Red Chris, has said he now has new questions and
concerns about the mine's tailings pond.
British Columbia's minister of energy and mines, Bill
Bennett, has been in discussions with Imperial and the Tahltan
Nation, said ministry spokesman David Haslam in a statement.
As a result, "Imperial Metals has agreed that it will not
begin operations at Red Chris until the Tahltan can undertake an
independent engineering review of the facility," he said.
Imperial will cover the cost of the review.
On Thursday, British Columbia's Information and Privacy
Commissioner said she will investigate whether the province's
government should have warned the public about risks posed by
"In the aftermath of the breach, concerns are being raised
about what government knew about the condition of the Mount
Polley mine and whether the public should have been notified of
potential risks before the disaster occurred," said Commissioner
Elizabeth Denham in a release.
(Reporting by Allison Martell; Editing by Steve Orlofsky)