billion over six years to continue production at Kennecott until 2032. The expansion would allow mining to continue into new areas of the ore body and would help the mine produce an estimated 1,000,000 tonnes of refined copper from 2026 to 2032. The company also declared that it would cut the
mine’s carbon footprint by permanently closing its coal-fired power plant and sourcing renewable energy certificates. Kennecott produced 186,800 tonnes of mined copper and produced 184,600 tonnes of refined copper in 2019, representing an eight per cent and five per
cent drop respectively compared to the full-year 2018. According to Rio Tinto’s fourth-quarter report, this was due to increased grade variability, reduced copper concentrate availability as well as planned and unplanned maintenance at the smelter. – Matthew Parizot
COVID-19 scuttles SilverCrest mining deal Syndicate of financial firms backs out of $75 million agreement to invest in junior miner Even though it finally managed to close a $101 million non-brokered private placement of common shares, SilverCrest Metals Inc. experienced first-hand the challenges COVID-19 presents to companies looking for investment deals, as an earlier agreement collapsed due to concerns about how the virus would affect the mining industry and the markets. On April 17, Vancouver-based SilverCrest issued a statement saying that the current deal, which was originally announced on April 13 for $75 million was oversubscribed, and that the final details saw the company issue 13,465,001 common shares at a price of $7.50 per share resulting in gross proceeds of $100,987,507.50. This happened roughly a month after an agreement between the miner and some institutional investors initially came together and fell apart, all over the course of one week in March. When the Vancouver-based exploration company with a focus on the Las Chispas mining district in Sonora, Mexico issued a statement on March 11, everything was positive: a syndicate of underwriters led by National Bank Financial Inc., Eight Capital Corp. and Scotia Capital Inc. had agreed to purchase 9,100,000 common shares of the SilverCrest on a bought-deal basis at a price of $8.25 per share. In total, the deal was worth a minimum of $75,075,000 with the potential for an even greater investment as provisions were included for the purchase of an additional 15 per cent of the SilverCrest shares. SilverCrest planned to use the funding to continue exploration and development of its Las Chispas project (a feasibility study is currently underway 18 | CIM Magazine | Vol. 15, No. 3
Courtesy of SilverCrest Metals
By Carolyn Gruske
SilverCrest planned to use the funding to continue exploration and development of its Las Chispas project in Mexico. and a decision about starting construction is expected to be made this summer) and for general working capital and administrative purposes. That plan, however, is now in jeopardy. On March 18, the miner issued a statement explaining that “it has received notice from National Bank Financial Inc. purporting to terminate its obligations.” The reason cited for the change of heart is COVID-19. The pandemic is being used to trigger what is known as the “disaster out” clause in the offering agreement. March 11 was also the day the World Health Organization formally declared the outbreak of the virus a pandemic noting at that point there were 118,000 confirmed cases in 114 countries.
“Our decision to exercise this clause, along with Scotia and Eight Capital – our collective decision – was not because of the company. This is not a reflection on SilverCrest. It is however, a reflection, really, on what has changed and changed very dramatically since March 11,” said Toronto-based Brian Davis, co-president and co-CEO of National Bank Financial Inc. “What we identified in particular was how the epidemic has spread and became, later that evening, designated as a pandemic by the World Health Organization. That has led to border closures, travel restrictions, declarations of states of emergency. These measures affect us domestically and internationally. And they have clearly, profoundly, adversely affected the financial markets in general.
