Teck announces $610m silver streaming agreement with Franco-Nevada
Teck has seen its stock price jump 17% in two days since it announced the silver streaming deal with Franco-Nevada. — Photo courtesy El Comercio
Teck Resources Limited (“Teck”) (TSX: TCK.A and TCK.B, NYSE: TCK) has announced that it and a subsidiary have entered into a long-term streaming agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) (TSX: FNV; NYSE: FNV) linked to production at the Antamina mine. Teck holds a 22.5% interest in Compañía Minera Antamina S.A. (“CMA”) which owns and operates Antamina.
Teck has seen its stock price jump 17% in two days since it announced the silver streaming deal with Franco-Nevada.
Franco-Nevada will make an upfront payment of US$610 million to Teck and will pay 5% of the spot price at the time of delivery for each ounce of silver delivered under the agreement. Teck will deliver silver to Franco-Nevada equivalent to 22.5% of payable silver sold by CMA, using a silver payability factor of 90%. After 86 million ounces of silver have been delivered under the agreement, the stream will be reduced by one third. Closing of the transaction is subject to completion of certain corporate matters and customary conditions and is expected to take place in the first half of October.
CMA is not a party to the agreement with Franco Nevada and Teck’s rights as a shareholder of CMA are unaffected by the agreement.
Scotia Capital Inc. is acting as financial advisor to Teck.
About Antamina
Antamina is a large copper and zinc mine located 270 kilometres north of Lima, Peru. In 2014, Antamina produced 344,900 tonnes of copper, 211,000 tonnes of zinc, 3.1 million pounds of molybdenum and 12 million ounces of silver.
The shareholders of CMA are BHP Billiton Plc (33.75%), Glencore plc (33.75%), Teck (22.5%) and Mitsubishi Corporation (10%).
About Teck
Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. Headquartered in Vancouver, Canada, its shares are listed on the Toronto Stock Exchange under the symbols TCK.A and TCK.B and the New York Stock Exchange under the symbol TCK. Learn more about Teck at www.teck.com or follow @TeckResources.
