Newmont Mining will buy NovaGold Resources’ 50 per cent interest in the joint-venture Galore Creek copper-gold-silver project for US$275 million, making it Teck Resources’ new partner on the project.

Galore Creek, located 150 kilometres northwest of Stewart, B.C. in the Tahltan Nation’s traditional territory, has Proven and Probable Reserves of 69 million tonnes at 0.59 per cent copper and 0.32 grams per tonne (g/t) gold.

Under the terms of the deal, Newmont will pay NovaGold US$100 million upfront, US$75 million after Newmont and Teck complete an updated prefeasibility study, and a further US$25 million after the completion of a feasibility study. Both Teck and Newmont have agreed to each spend between US$10-15 million annually on updating the prefeasibility study, which they anticipate will be completed in the next three to four years.

The final US$75-million payment is contingent upon Teck and Newmont’s decision to develop the project.

“Galore Creek holds the potential to support decades of profitable copper and gold production in a favorable mining jurisdiction, in line with our strategy to create long-term value for our stakeholders,” Newmont CEO Gary Goldberg said in a press release. “Partnering with Teck allows us to bring both organizations’ considerable technical, financial and sustainability strengths to bear in evaluating and refining development plans for Galore Creek, and to build on the strong relationships Teck has established with the Tahltan First Nation and British Columbia.”

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Interest in copper projects has been growing among major mining companies. This year Lundin Mining made repeated offers to acquire Nevsun Resources’ Timok copper-gold project in Serbia, most recently earlier this month, and Rio Tinto is reportedly on the hunt for a “prime” copper asset.  

Copper is expected to be in continued high demand thanks to its role in batteries for electric vehicles and renewable energy. London-based CRU Group expects 15 per cent of copper demand growth between 2016 and 2021 to come from the automotive sector.

NovaGold said offloading its share of Galore Creek will help improve its balance sheet as it looks to invest in its Donlin gold project in Alaska in partnership with Barrick Gold.

“This transaction is a win-win for all parties,” said Thomas Kaplan, NovaGold’s chairman. “For NovaGold’s shareholders, it is the continuation of a laser-focused strategy of unlocking the value of its assets and transforming the company into a pure play on Donlin gold, which we believe is the most important gold development story in the industry.”