A China-based engineering company and its Canadian subsidiary will acquire 30 percent of the Tulsequah Chief Mine in British Columbia at the headwaters of the Taku River.
Mine owner Chieftain Metals says is has a non-binding agreement with China CAMC Engineering Company – or CAMCE — and Procon Holdings of Alberta to build and operate the mine.
CAMCE will arrange long-term financing for 70 percent of mine development costs with a Chinese financial institution. The agreement calls for the CEO of Procon to join Chieftain’s Board of Directors, with the right to appoint a second director when the loaned is closed. Procon will invest nearly $10 million for more than 22.4 million shares of Chieftain Metals at $4 a share.
Mine officials did not return KTOO calls, but in a news release, Chieftain President and CEO Victor Wyprsyski says Procon’s investment will provide 2013 funding to complete a feasibility study and on-site projects. No details as to what the on-site projects would be.
Chieftain purchased the property about two years ago. Wypryski has said Chieftain plans to be operating the old multi-metals mine within the next three years. Tulsequah has been closed for more than 60 years, leaching Acid Rock Drainage into the Tulsequah River, a tributary of the salmon-rich Taku. The company appears to have a cash-flow problem. It recently shut down a water treatment plant due to high operating costs. That has put it in violation of its Environmental Management Act permit from the B.C. government.