Centerra Gold Inc., a gold mining company based in Toronto, announced earlier this summer it had struck a deal to purchase Thompson Creek Metals, the company that owns Endako Mine.
The surface molybdenum mine located near Fraser Lake suspended operations in December 2014 and was placed on care and maintenance in July 2015 due to weakness in the molybdenum price. Over 300 workers have lost their jobs since operations were suspended at Endako Mine.
The US$1.1-billion deal to purchase Thompson Creek Metals solves problems for both parties, according to the Financial Post.
While Centerra Gold is eager to diversify its markets and get its hands on Thompson Creek’s Mount Milligan - an open-pit copper and gold mine approximately 150 km northwest of Prince George with 2.2 billion pounds of copper reserves and 5.7 million ounces of gold reserves -, Thompson Creek gets a financial rescue.
The Financial Post says Thompson Creek has more than US$800 million of debt coming due between 2017 and 2019.
“Following a strategic review process and the evaluation of numerous strategic alternatives to address Thompson Creek’s upcoming debt maturities, I am pleased to announce the business combination of Thompson Creek with Centerra,” said Jacques Perron, President and CEO of Thompson Creek. “We believe the combination with Centerra represents a unique opportunity for our shareholders to gain exposure to additional high-quality assets.”
Scotty Perry, CEO of Centerra Gold, said the new acquisition is a “highly compelling transformative transaction that diversifies Centerra’s operating platform.”
So what will happen to Endako Mine? Could operations resume any time soon?
According to Centerra Gold, that won’t be the case, at least for now.
The Endako Mine will be kept on care and maintenance, with potential to recommence operations at a later date.
“The molybdenum business is expected to operate on a cash flow neutral basis and represents significant potential value upside in the future,” says a Centerra Gold press release.