The Mount Milligan mine project has hit some financial bumps, but it has not derailed the plans to open.
Thompson Creek Metals, the mine's development company, sold some if its future interests to offset the shortfalls.
"We are hitting all our major milestones," said Jocelyn Fraser, the director of corporate responsibility for Thompson Creek Metals, owners of the Mount Milligan project. "It is a pretty amazing sight to see. Construction is in accordance with our plan. We are still on track to open as scheduled in the third quarter of 2013. The pace is fantastic. We have more than 900 people on-site now and a push is on now to fill the 300-plus permanent positions on the operations side. About 200 of those jobs remain to be filled."
The project is being funded in part by the proceeds of another mine owned by Thompson Creek Metals, that being the Endako Mine between Fraser Lake and Francois Lake. It produces molybdenum, but the ore extraction there has had some problems and the price of that commodity has dropped ($14.64 per pound during the second quartr of 2012, down from $17.33 per pound at the same point of 2011).
The recent costs of labour, energy and consumables also went up in unexpected ways, said Fraser.
To cover all this off, Thompson Creek Metals sold another 12.25 per cent of the gold proceeds to the Royal Gold company, already in partnership on this endeavor.
"Royal Gold [now owns] 52.25 per cent of the refined gold production from the Mount Milligan project, and Royal Gold's aggregate investment in the project (including amounts previously funded and commitments for future funding) will have increased to $781.5 million," said a company statement.
"We are very pleased with Royal Gold's increased investment and continued support in the advancement of our Mount Milligan project," said Thompson Metals CEO Kevin Loughrey said. "We believe that the terms of this transaction and its timing make it the best alternative available to ensure that construction continues to proceed in accordance with our development plan. We believe that Mount Milligan will transform our company into a diversified, base metals producer beginning late 2013 and significantly strengthen our Company's financial performance."
Further action included, as was previously reported, curtailment of new ore extraction at Endako Mine. Instead, operations at Endako for the short-term will be to mill the ore already stockpiled there.