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Canadian miner Taseko Mines has agreed to sell its Harmony gold project on Graham Island, off the coast of British Columbia, to a newly incorporated company controlled by JDS Energy and Mining.

JDS Gold would acquire the high-grade development stage project, which has a historical resource containing more than three-million ounce of gold.

Previous owners of the project have carried out more than 80 000 m of drilling in 543 holes.

Taseko purchased the project in late 2001 and advanced engineering work until 2008, when the company focused efforts on its Gibraltar mine.

“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,” said JDS Energy and Mining CEO Jeff Stibbard.

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

Taseko also has the right to terminate the agreement and revert to 100% ownership of Harmony in the event JDS does not achieve certain project development milestones and an initial public offering or other liquidity event within an agreed timeframe.

“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 and Mining 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,” said Taseko president and CEO Stuart McDonald.