Aug. 15 (Bloomberg) -- Imperial Metals Corp. plans to raise C$100 million ($92 million) selling convertible notes to help pay for the cleanup at its Mount Polley mine, the scene of the worst waste spill in Canada in at least two decades.
Imperial’s largest shareholder, oil-sands investor Murray Edwards, has committed to buying C$40 million of the 6 percent, 6-year senior unsecured convertible debentures via Edco Capital Corp., a company controlled by Edwards.
The Fairholme Partnership LP committed to another C$40 million of the notes. If the issuance fails to raise the full C$100 million, Edco will buy non-convertible notes bearing interest at 12 percent to make up the shortfall, Imperial said.
Funds from the sale and Imperial’s operations, and insurance proceeds, will be enough to cover costs at Mount Polley as well as the completion of its Red Chris project, which like Mount Polley is in British Columbia, Imperial said in a statement after the close of trading yesterday.
“While the precise costs of remediation and repair are presently unknown, the company believes that the costs can be managed over time,” Vancouver-based Imperial said.
British Columbia officials are investigating the Aug. 4 failure of a dam at the waste pond at Mount Polley. The resulting torrent of waste poured into local waterways, leaving local people without drinking water. Operations at the copper and gold mine are still suspended.
Shares of Imperial have plunged 48 percent since the accident and closed yesterday at C$8.73 in Toronto.
Edwards has a 36 percent stake in Imperial, according to the company’s website.