In danger of breaking a loan covenant because of a slow ramp-up at its Red Chris copper-gold mine, in northwestern British Columbia, Imperial Metals (TSX: III) is turning once again to its largest shareholders for financial help.
One of the clauses under a $200-million senior credit facility for Imperial’s Red Chris stipulated that the mine was supposed to reach commercial production by June 1. However, a lack of water caused by a late spring runoff has delayed plant commissioning by about a month and the company needs additional funds to see it through to commercial production. First production was achieved in February.
Oil sands financier N. Murray Edwards, who controls 36% of Imperial’s shares, has agreed to provide the company a short-term loan of $30 million bearing 12% interest through Edco Capital. Imperial is planning an $80-million rights offering to repay the Edco loan, which is due in six months, to support the Red Chris ramp-up, and help advance its Mount Polley mine back to production.
Read the complete article at NorthernMiner.com/news/red-chris-delay