Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Canadian Natural Resources Limited    CNQ   CA1363851017

CANADIAN NATURAL RESOURCES LIMITED

(CNQ)
  Report
Delayed Quote. Delayed Toronto Stock Exchange - 01/15 04:20:21 pm
31.52 CAD   -4.51%
01/14Canadian Natural Resources Maintained at Buy at TPH Ahead of Q4 Results
MT
01/06Canada's oil sands hit record high production - gov't data
RE
01/04Hedge funds bet on recovery in 2021
RE
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Huge cleanup bill for Imperial Metals may force partial asset sale

08/11/2014 | 04:51pm EST

TORONTO (Reuters) - Canada's Imperial Metals Corp (>> Imperial Metals Corporation) faces huge cleanup costs after a major spill at its Mount Polley mine that may force the miner to sell part of a prized new asset unless its biggest shareholder steps in to help, bankers and industry executives said.

TORONTO (Reuters) - Canada's Imperial Metals Corp (>> Imperial Metals Corporation) faces huge cleanup costs after a major spill at its Mount Polley mine that may force the miner to sell part of a prized new asset unless its biggest shareholder steps in to help, bankers and industry executives said.

Imperial is on the hook for cleanup costs related to the spill, which sent billions of gallons of sludge containing metals and minerals coursing into waterways last week.

Analysts said costs could range from C$50 million to C$500 million, once a proper assessment is made on the impact of one of Canada's worst mine spills in decades.

The mine, which produced 38.5 million pounds of copper and 45,800 ounces of gold last year, has been shut indefinitely.

Debt rating agency Moody's warned on Friday it was concerned the miner may not have the liquidity to absorb the financial impact of the spill.

Imperial had C$1.5 million in cash versus C$464 million in debt, and a working capital deficit of C$21.7 million as of the end of March, according to its financial statements.

"The shutdown of Mount Polley will stretch thin an already tight balance sheet," Raymond James analyst Adam Low said in a note to clients.

Imperial Metals declined multiple requests for comment.

One source close to Imperial Metals said it was not clear how much insurance the miner could count on to meet the tab.

In the boilerplate risks section of its annual report in March, Imperial said its property and liability insurance may not provide enough coverage for losses related to environmental pollution and other hazards. It said it may elect not to insure against certain things such as environmental pollution when coverage is not available at economically feasible premiums. It was not known whether Imperial had acted on that.

LOANS OR ASSET SALE

A second source close to the matter said Imperial had other options to cover the costs.

Help could come from N. Murray Edwards, the billionaire chair of Canadian Natural Resources Ltd (>> Canadian Natural Resources Limited), Canada's No. 2 oil and gas company. He owns about 36 percent of Imperial and his closely held Edco Capital is one of its creditors.

Last year, when the Imperial was lining up financing for its Red Chris copper-gold mine, Edwards guaranteed half of a $150 million bank credit facility, and Edco provided more credit.

Edwards did not respond to a request for comment.

A more likely outcome is the sale of royalties from nearly finished Red Chris in British Columbia or off-loading a stake in the asset itself. A royalty deal would give Imperial an instant cash injection and in exchange give the purchaser a set percentage of future profits or revenue from Red Chris.

Industry players said companies ranging from diversified miner Glencore Plc (>> Glencore PLC) to more specialized mine financing firms such as Franco-Nevada Corp (>> Franco-Nevada Corporation) and Silver Wheaton Corp (>> Silver Wheaton Corp.) are all likely to consider funding any royalty structure.

An outright sale of a stake in Red Chris may also be on the table. With opposition likely from some environmental and First Nations groups in the area, mining industry insiders say the company may well be forced into selling a majority stake in Red Chris and ceding its position as operator of the mine.

"This type of significant negative event can also impact a company's social license," Derek Macpherson, an analyst with M Partners said, referring to the local support needed for a mine to operate.

(Additional reporting by Julie Gordon in Vancouver)

By Euan Rocha and Allison Martell


© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
CANADIAN NATURAL RESOURCES LIMITED -4.51% 31.52 Delayed Quote.3.04%
FRANCO-NEVADA CORPORATION -1.32% 154.26 Delayed Quote.-3.35%
GLENCORE PLC -1.79% 279.9 Delayed Quote.20.13%
IMPERIAL METALS CORPORATION -5.45% 5.03 Delayed Quote.4.31%
SILVER -3.10% 24.7585 Delayed Quote.-2.98%
WHEATON PRECIOUS METALS CORP. -2.35% 50.75 Delayed Quote.-4.53%
All news about CANADIAN NATURAL RESOURCES LIMITED
01/14Canadian Natural Resources Maintained at Buy at TPH Ahead of Q4 Results
MT
01/06Canada's oil sands hit record high production - gov't data
RE
01/04Hedge funds bet on recovery in 2021
RE
2020From automation to Bitcoin, Canadian investors see opportunity in 2021
RE
2020TITANIUM : CNQ Sign Project Coordination Agreement For 2020 Engineering Phase of..
MT
2020Investors turn bullish on pandemic-hit North America oil stocks
RE
2020SHOPIFY : TSX edges higher as gain by Shopify offsets drag from energy sector
AQ
2020ANALYST ACTIONS : Canadian Natural Kept at Outperform by RBC Following Budget Re..
MT
2020ANALYST ACTIONS : Canadian Natural Resources Kept at Buy at TPH Following Invest..
MT
2020Goldman Sachs Adjusts Price Target on Canadian Natural Resources to $27 From ..
MT
More news
Financials
Sales 2020 16 545 M 12 988 M 12 988 M
Net income 2020 -1 130 M -887 M -887 M
Net Debt 2020 21 571 M 16 933 M 16 933 M
P/E ratio 2020 -31,7x
Yield 2020 5,31%
Capitalization 37 227 M 29 231 M 29 223 M
EV / Sales 2020 3,55x
EV / Sales 2021 2,85x
Nbr of Employees 10 180
Free-Float 97,8%
Chart CANADIAN NATURAL RESOURCES LIMITED
Duration : Period :
Canadian Natural Resources Limited Technical Analysis Chart | CNQ | CA1363851017 | MarketScreener
Technical analysis trends CANADIAN NATURAL RESOURCES LIMITED
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 23
Average target price 38,76 CAD
Last Close Price 31,52 CAD
Spread / Highest target 42,8%
Spread / Average Target 23,0%
Spread / Lowest Target 1,52%
EPS Revisions
Managers and Directors
NameTitle
Tim Shawn McKay President, Chief Operating Officer & Director
Norman Murray Edwards Executive Chairman
Mark A. Stainthorpe Chief Financial Officer & Senior VP-Finance
Stephen C. Suche Vice President-Information & Corporate Services
Joy P. Romero Vice President-Technology & Innovation
Sector and Competitors
1st jan.Capitalization (M$)
CANADIAN NATURAL RESOURCES LIMITED3.04%29 231
CONOCOPHILLIPS12.83%48 186
CNOOC LIMITED12.67%46 585
EOG RESOURCES, INC.18.69%34 530
ECOPETROL S.A.7.80%28 718
PIONEER NATURAL RESOURCES COMPANY11.84%27 580