Newmont (TSX: NGT; NYSE: NEM) announced Thursday its acquisition of a 50% interest in the Galore Creek Partnership (GCP) from NovaGold Resources (TSX: NG; NYSE: NG), in collaboration with Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK), the owner of the remaining stake.
Under the 2018 share purchase agreement with NovaGold, Newmont made staged and contingent payments totalling US$275 million to gain participation in the copper-gold project in northwestern British Columbia.
Newmont made an initial payment of US$100 million, with an additional US$75 million scheduled upon completion of the prefeasibility study or within three years from closing. Another payment of US$25 million will be made upon completing the feasibility study or within five years from closing, with a final contingent payment of US$75 million, subject to a decision to develop the project.
Newmont’s president and CEO, Gary Goldberg, said in a statement that Galore Creek holds the potential to support “decades of profitable copper and gold production” in a favourable mining jurisdiction, in line with its strategy to create long-term value for stakeholders.
He also highlighted the benefits of partnering with Teck, leveraging both organizations’ technical, financial, and sustainability strengths to evaluate and refine Galore Creek development plans. Additionally, the partnership aims to build on Teck’s established relationships with the Tahltan First Nation and the provincial government.
In the coming months, Newmont and Teck will define the scope, budget, and timeline for prefeasibility studies, with an expected completion period of three to four years and a yearly budget of US$10-US$15 million (on a 50% basis).
The governance of the GCP will be overseen by a management committee comprising leaders from Newmont and Teck, supported by a GCP study director and team, along with experts from both companies.
Galore Creek holds potential as one of the largest undeveloped copper-gold projects, with measured and indicated resources of 9.3 million oz. gold and 5.1 million tonnes copper held in 1.1 billion tonnes of material grading 0.26 gram gold per tonne and 0.47% copper, as previously reported by Teck in 2014.
The GCP is currently undertaking a prefeasibility study, expected to be completed by mid-2023, which will underpin a major regulatory process incorporating proposed project changes.
A 2023 field program is underway and is planned to continue through October. The program includes a drill campaign of about 25,000 metres focused on geotechnical, metallurgical, and resource development drilling.
In addition to the drill program, environmental baseline studies are ongoing throughout the project area and test pitting is underway to characterize surface materials for infrastructure placement and construction. The field and operations team is also working to improve the safety of the access road between Highway 37 and the Ch’iyone camp.
GCP would add to Newmont’s development track record, after building nine new mines and expansions on four continents over the past 10 years, all delivered on or ahead of schedule and at or below budget. These include Akyem in Ghana, Merian in Suriname, and the Tanami expansion project in Australia; as well as several projects in Nevada since 2013 such as the Phoenix copper leach project, the Turf vent shaft at Leeville, Long Canyon, Twin Creeks Underground and Northwest Exodus.
Additionally, the company’s acquisition of Cripple Creek and Victor in Colorado in 2015 followed a subsequent expansion of the mine in 2016.
Newmont shares traded at $56.25 on Friday afternoon in Toronto, valuing the company at $44.7 billion. The company’s shares traded in a 52-week window of $51.44 and $76.08.
