Yellowhead Mining Inc. announced on Tuesday that it has entered into an investment agreement with Matco Investments Ltd., a private investment firm based in Calgary.
Yellowhead has issued to Matco an $8 million secured convertible debenture on a private placement basis. Full conversion of the debenture into common shares of the company is subject to shareholder approval at a special meeting of shareholders to be held on Dec. 30.
The proceeds of the Matco financing will primarily be used to complete the environmental assessment process for Yellowhead's 100 per cent-owned Harper Creek project and for general corporate purposes.
Frank D. Wheatley, Yellowhead's CEO, said, "Yellowhead is extremely pleased to have reached agreement with Matco to provide the Matco financing, as this will allow Yellowhead to move forward with the environmental assessment process for the Harper Creek Project.”
Wheatley added that completing the environmental assessment process will represent the next significant milestone in the development of the Harper Creek Project.
Matco was at one time the owner of the former Weyerhaeuser sawmill property in Vavenby.
Yellowhead bought the 80 ha property from Matco for a reported $2.15 million in November of 2011. Yellowhead’s proposed Harper Creek copper-gold-silver mine would be located about 10 km southwest of Vavenby.
According to Yellowhead, there would be 600 jobs created during the construction phase and about 430 jobs once the mine became operational.
A preliminary economic assessment put the lifetime of the mine at 22 years.
Last May the provincial Environmental Assessment Office asked Yellowhead to redo its application for an environmental assessment certificate. The application as submitted did not meet the requirements, the EAO said.
For example, a large earth-fill dam would be constructed to hold the mine's tailing pond. This dam would gradually be raised until it was 180 m in height. Yellowhead's consultant was asked for further information to ensure the dam would be safe.