Imperial Metals will sell 70 per cent of its Red Chris copper and gold mine in British Columbia to Australian gold and copper producer Newcrest Mining for US$806.5 million, the company announced Monday.

The joint venture comes at a time of financial strain for Imperial. In September 2018, the company announced that it would begin a financial and business restructuring process, and said a joint venture, asset sales, or a sale of the company were all on the table. Since the announcement, Imperial temporarily ceased production at its Mount Polley mine in January and has extended its credit facilities twice since the start of 2019.

Imperial president Brian Kynoch said the agreement with Newcrest will put his company in a much more advantageous financial position.

“This transaction presents a compelling opportunity for all stakeholders as it allows Imperial to significantly strengthen its balance sheet while forging a strategic partnership with a leading global mining company,” Kynoch said. “With a stronger financial position and highly actionable path to exploiting the underground mining potential of Red Chris, Imperial will be in a much stronger position to create value and opportunities for its shareholders, stakeholders and the Tahltan Nation.”

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The company has stated that it will use the proceeds from the sale to repay some of its debt obligations, with the remainder being used as working capital.

Newcrest will assume the responsibility of operating the mine in the future. Newcrest’s managing director and CEO Sandeep Biswas stated that the company will be able to turn Red Chris into a tier one operation – a mine that offer significant output at low cost.

“We believe we can bring our unique technical capabilities to unlock the full value potential of this orebody in one of the premier gold districts in the world,” Biswas said. “The geology of Red Chris is similar to our Cadia orebodies in Australia and we will be applying our considerable experience in exploration, open pit mining, caving and processing to maximize the value of Red Chris and the opportunities in the surrounding region.”

According to Newcrest’s most recent quarterly report, the Cadia operation – which consists of three mines in Western Australia – hit record quarterly and half-year gold production of 239,000 and 453,000 ounces, respectively, as well as a record low quarterly all-in sustaining cost of US$121 per ounce.

The sale is expected to occur in the third quarter of 2019.