Newmont Mining Corp. announced agreements to acquire a 50 percent interest in the Galore Creek Partnership (GCP) from Novagold Resources Inc. and to form a partnership with Teck Resources Limited (Teck), which owns the remaining stake. Galore Creek, located in British Columbia, Canada is one of the largest undeveloped copper-gold projects with resources previously reported by Teck of 227 t (8 million oz) of gold and 4.1 Mt (9 billion lbs) of copper.
The Novagold agreement encompasses a staged and contingent investment of $275 million, with an initial payment of $100 million; a payment of $75 million on the earlier of prefeasibility study completion or three years from closing; and a payment of $25 million on the earlier of completing a feasibility study or five years from closing. A final $75 million payment would be contingent on a final decision to develop the project.
“Galore Creek holds the potential to support decades of profitable copper and gold production in a favorable mining jurisdiction, in line with our strategy to create long-term value for our stakeholders,” said Gary Goldberg, president and chief executive officer. “Partnering with Teck allows us to bring both organizations’ considerable technical, financial and sustainability strengths to bear in evaluating and refining development plans for Galore Creek, and to build on the strong relationships Teck has established with the Tahltan First Nation and British Columbia.”
Newmont and Teck will define the scope, budget, and timeline for prefeasibility studies over the next several months and expect the prefeasibility studies to be completed over three to four years with an annual budget of $10 to $15 million (50 percent basis). GCP will be governed by a management committee comprised of leaders from Newmont and Teck and managed by a GCP study director and team, supported by Newmont and Teck subject matter experts.
Over the last five years, Newmont has built nine new mines and expansions on four continents – on or ahead of schedule and at or below budget. These include Akyem and the Phoenix Copper Leach in 2013, the Turf Vent Shaft in 2015, Merian and Long Canyon in 2016, the Tanami Expansion Project in 2017, and Twin Underground and Northwest Exodus in 2018. The company also completed a value-accretive acquisition of Cripple Creek and Victor in 2015 and delivered a profitable expansion at the mine in 2016.