Imperial Metals suspends Mount Polley due to low copper pricesMount Polley shutdown will not affect remediation work, Imperial says
Mount Polley shutdown will not affect remediation work, Imperial says
By Kelsey Rolfe
January 08, 2019
As part of the suspension plan, Imperial Metals will mill low-grade stockpiles at Mount Polley, pictured, until the end of May. Courtesy of Imperial Metals
Imperial Metals is temporarily shuttering its Mount Polley mine, the site of an infamous 2014 tailings dam collapse, citing declining copper prices.
The company will mill low-grade stockpiles until the end of May, and said the shutdown will have no impact on the environmental monitoring and remediation work at the mine.
The price of copper has decreased sharply since the middle of 2018, caused by trade tensions between the United States and China, and the slowed growth of China’s economy. Copper started the year at around US$2.60 per pound – down significantly from around US$3.25 per pound at the beginning of 2018.
“Full operations will resume once the economics of mining at Mount Polley improve,” Imperial Metals said in a statement on Monday.
Imperial reported in November that the mine, located near Williams Lake in south-central British Columbia, had generated $17.8 million in revenue during the third quarter, in comparison to $24.1 million in Q3 2017, caused by reduced production and lower copper prices.
The company has reported net losses of between $50.25 million and $62.6 million in 2015, 2016 and 2017, and quarterly losses all throughout 2018. Imperial announced in September it would begin a restructuring process, which could involve the sale of some of its assets, a joint venture, a recapitalization or the sale or merger of the company.
It also said at the time it had extended the deadline for both its $200-million secured revolving senior credit facility and its second lien credit facility to Feb. 15, from Oct. 1 and Dec. 1, respectively. Edco Capital, a company connected with Imperial’s major shareholder Murray Edwards, stepped up to the plate to guarantee its senior credit facility at a reduced interest rate of 2.25 per cent.
Its $26-million bridge loan was also extended to Feb. 28, from Jan. 5 previously.
In the company’s third-quarter results, Imperial said there “can be no assurance” that it could successfully finish its restructuring.
“The completion of the restructuring process creates a material uncertainty that could have an adverse impact on the company’s financial condition and results of operations and may cast significant doubt on the company’s ability to continue as a going concern,” it said.
Since then, Imperial received a $108-million out-of-court settlement from Knight Piesold and AMEC, the two engineering companies it sued over the Mount Polley dam collapse, which it said “provided liquidity” for the company’s restructuring committee to continue pursuing options.
Reuters reported in December the company had selected BMO as its financial advisor for the process.