Yahoo Finance Rio Tinto buys $25M stake in Yukon's Casino mine project
Yukon's massive Casino mine project has a new investor, and it's one of the biggest mining companies in the world — Rio Tinto.
Rio Tinto Canada Inc. has bought a $25.6-million stake in the Casino project which is owned by Western Copper and Gold.
"This is a large project and we've been pretty open that it was going to require probably a bigger company than ourselves to move it forward," said Paul West-Sells, CEO of Western Copper and Gold.
"Now we have ... depending on how you look at it, the second- or third-largest mining company in the world, with Rio Tinto involved."
The Casino project is located in central Yukon, about 330 kilometres northwest of Whitehorse. According to Western Copper and Gold, it's one of the largest copper-gold deposits in the world.
The project has been in the works for years and the proposed mine is now in the environmental assessment phase. If approved, the mine is expected to have a life of about 22 years, employing about 1,000 people during the four-year construction phase and 400 people when in operation.
"It's a big project. It's important for the economy, it's important for Canada," West-sells said.
He said the deal with Rio Tinto has been about 18 months in the making. With copper prices now soaring to record highs, he believes the time was right for Rio Tinto to seal the deal.
"These large mining companies, when commodity prices are are high, they usually have lots of cash on the books. And so they are trying to go out and spend it. One of the ways in which they spend it is to make investments in companies like ourselves," West-Sells said.
Western Copper and Gold will remain the sole owner of the Casino project, and its operator. Rio Tinto's investment will go toward a feasibility study and further exploration.
Rio Tinto will also have certain rights as an investor, including the right to appoint one member of the project's technical committee, and a non-voting observer to all of the company's board meetings.
The investment gives Rio Tinto — part owner of the N.W.T.'s Diavik Diamond Mine — another foothold in Canada's North.
It also "adds to the likelihood that Casino is going to be a mine sooner rather than later," West-Sells said.
"They're really excited to come up to the Yukon. They're going to be up there helping us with the exploration over the summer ... really, this is their introduction to the Yukon," he said.
