Phil Welton, General Manager of Mount Milligan and Endako Mines gave a presentation to residents and stakeholders on Wed Oct 4, 2017 following a community BBQ at the Fort St. James Community Centre.
Welton spoke about Centerra Gold’s acquisition of Thompson Creek Metals (TCM), and moved through slides outlining Mount Milligan’s safety, environment and expansion, exploration, employment and community commitments including the status of Endako Mine.
He mentioned one of the challenge areas for Mount Milligan is its water supply; that Mount Milligan is a closed system relying on putely on precipitation and runoff as its only current water source and recent dry conditions with decreased snowpack has dams at suboptimal levels.
Mount Milligan is located approximately 90 miles north of Fort St. James. It is a conventional truck-shovel open-pit copper and gold mine with concentrator and processing plant. Mount Milligan has the second largest gold reserve in Canada. The mine is reported to have an estimated mine life of 22 years. It is the fourth year of full production since October 8, 2013 when the mine was first commissioned.
The construction of the mine started in 2010 and cost roughly $1.5 Billion. It is the first new large mining operation in British Columbia in over 15 years.
Centerra Gold acquisition of TCM
The project was originally owned by US-based Thompson Creek Metals, who typically mine molybdenum but who are diversifying their portfolio through this open pit copper and gold mine.
In October 2016, Centerra, a leading Canadian-based global gold producer acquired Thompson Creek Metals Company Inc., total transaction value of approximately US$1.1 billion.
Centerra agreed to buy Thompson Creek Metals (Mount Milligan and Endako mines) and its nearly US$900 million in debt for $1.1 billion to allow Thompson Creek’s creditors to be paid. Centerra shareholders own 92 percent of the two companies, with eight percent owned by Thompson Creek’s stockholders.
Welton reported that since October last year the company has been moving through transition and integration. They have added 60+ salaries and hourly staff since the acquisition and operational effectiveness has improved.
TCM was hurt by the slump in molybdenum. In 2015 Thompson Creek began shopping around for a buyer because the clock was ticking with its debt “was rated as junk and $300-million of it was maturing in 3 years, at the end of 2017” reported the Globe and Mail.
TCM used to be a large producer but had to cut production when prices fell, closing the Endako mine in Fraser Lake on Dec. 31, 2014.
Endako mine had been in continuous production for 52 years since 1965. Molybdenum is a type of coal ore which is used in the production of steel, particularly stainless and construction grade steel. Centerra Gold is continuing to hold Endako mine on care and maintenance, currently focusing on dust reduction and continuing land surface reclamation and rehabilitation initiatives such as growing rice plants.
“The combination with Thompson Creek is a highly compelling transformative transaction that diversifies Centerra’s operating platform and adds low risk production and cash flow from a very high quality, long-lived asset in Mount Milligan,” Centerra CEO Scott Perry said in a statement at the time of the takeover.