Gold sector spending spree continues with Newcrest’s $800 million deal for Canadian mine

Newcrest Mining has agreed on a US$806.5 million deal with Canadian miner Imperial Metals Corp to control its Red Chris copper and gold mine in British Columbia, extending the recent spending spree in the gold sector.

Melbourne-based Newcrest, the world’s third biggest gold producer by market value, will acquire a 70% joint venture interest in the Red Chris mine and will become the operator of the site.

Australia’s top gold producer will gain a producing asset in North America with significant underground development opportunities, at a time when major gold players are consolidating their positions in the sector with acquisitions to boost reserves.

“It’s a modest operating asset at the moment — the real attraction for us is the size of orebody,” said Newcrest’s CEO Sandeep Biswas said in a phone interview.

“It’s a multi-decade life potential mine, so that plays right into our portfolio of multi-decade operations. It’s got the potential of significant size.”

Red Chris has estimated resources of 20 million ounces of gold and 13 billion pounds of copper, according to Newcrest. The company previously set a deadline for the end of 2020 to increase its exposure from four to five ‘tier-one’ assets – the industry’s highest quality mines.

Meanwhile, Biswas revealed that Newcrest would be open to examining the proposed sales of assets in Australia if Barrick Gold’s hostile takeover bid for Newmont Mining is successful. Barrick said last week it plans to proceed with the takeover, despite being rebuffed by its rival.