- 2015 Federal Election
Miners borrow to advance Kitsault mine
THE COMPANY wanting to open a molybdenum mine at Kitsault on the north coast is borrowing $40 million to finance work leading up to the start of construction.
Avanti will use some of the money to rebuild a bridge leading to Kitsault so that it can better handle the increased truck traffic resulting from construction traffic, says company president Mark Premo.
And it will also provide BC Hydro with a financial surety so it can then re-energize a power line going into the location that will service the moly mine.
Avanti is now working on obtaining construction and related permits following provincial environmental approval granted this spring.
It also is anticipating federal approval by year’s end.
The $40 million being borrowed is just over half of what the company has already spent in determining the operational and financial viability of its project and in steering it through various governmental economic and environmental assessments since it bought the property in 2008.
The current bridge leading to Kitsault has Glulam stringers and a timber deck while the new one will have steel beam girders and a concrete deck.
“The province is responsible for the replacement [and] Avanti is paying for the bridge replacement. However, the bridge will be the property of the province,” said Premo.
Work on the BC Hydro line is needed to re-energize it to 138 kilovolts from its current 25 kilovolt capacity.
Premo said that involves work at BC Hydro’s New Aiyansh substation at several places along the line leading from the substation to the Kitsault mine site.
BC Hydro will do the work and the financial surety, a line of credit, is released as Avanti purchases power, Premo added.
Also to be financed with the loan is detailed engineering for the mine to reduce capital cost risk, preparing tender documents for contract awards, installing communications to support construction, making a deposit on equipment for the tailings dam, expanding Avanti’s Kitsault camp, expanding the company’s management team, completing permitting and paying for banking and other financial expenses.
Avanti will need close to $1 billion to build its mine and plans on a combination of borrowing and selling equity to hit that target.
In the meantime, the Nisga’a Lisims Government is suing the province, alleging it failed to properly assess the environmental impacts of the project on water quality, marine habitat and human health, as well as the social, economic and cultural effects on the Nisga’a citizens.
Kitsault is not within Nisga’a treaty lands but is within Nisga’a traditional territory.