Copper mining company Taseko Mines has agreed to divest its Harmony gold project located in British Columbia, Canada to JDS Gold.

Under the terms of the agreement, JDS Gold, a new company controlled by JDS Energy & Mining and affiliates, will obtain the ownership and operatorship of the Harmony gold project.

Taseko would retain a 15% carried interest in JDS, and a 2% net smelter return royalty on the project.

Also, it holds the right to terminate the agreement, and assume 100% ownership of Harmony if JDS fails to meet certain development milestones and an IPO within an agreed timeframe.

Taseko president and CEO Stuart McDonald said: “We are continually looking for ways to create shareholder value from our extensive pipeline of high-quality development projects.

“With Florence Copper expected to commence construction later this year and our large-scale Yellowhead Copper project preparing to enter the environmental assessment process, we did not expect to be in a position to advance Harmony for a number of years.

“JDS Energy & Mining Inc. has a proven track record of developing mineral projects, and this transaction structure allows Taseko to participate in their success and create value from this asset in the near-term.”

The Harmony gold project is a high-grade development-stage gold project located on Graham Island in Haida Gwaii, off the west coast of British Columbia, Canada.

Previous owners of the project, which includes 58 mineral claims covering 177km2, have conducted more than 80,000m of drilling in 543 holes.

Historical resource estimate of the project shows more than 3 million ounces of gold within 22 million tonnes and 42 million tonnes of resources grading 1.77 and 1.41g/t gold respectively at a 0.60 g/t gold cut-off grade.

Purchased in late 2001, Taseko has advanced engineering work at the project till 2008, before its focus shifted to its Gibraltar Mine.

JDS Energy and Mining CEO Jeff Stibbard said: “As a mining development company, we are always in search of high-quality projects in safe jurisdictions, particularly in Canada.

“Harmony, which had been in Taseko’s inventory for two decades, is a mining project which fits very well within the JDS group.

“With our engineering, permitting and mine construction expertise, we believe we can advance this project and create significant value for all stakeholders.”