Company will retain shareholder rights in Peru's Antamina Mine
VANCOUVER—Teck Resources Ltd. has entered into a long-term streaming agreement with Franco-Nevada Corp. The Canadian miner will stream production at the Antamina Mine, in which is owns a 22.5 per cent stake, to a subsidiary of Franco-Nevada.
Under the agreement, Franco-Nevada will make a US$610 million upfront payment, while Teck will pay 5 per cent of the spot price at the time of delivery for each ounce of silver. After 86 million ounces of silver have been delivered under the agreement, the stream will be reduced by one-third.
“Franco-Nevada is pleased to partner with Teck on the Antamina mine to create our first pure silver stream,” David Harquail, president and CEO of Franco-Nevada, said. “This further strengthens and diversifies our portfolio with a proven, long-life, high-margin asset that will be immediately accretive. This investment provides our shareholders with metal price optionality over multiple cycles and potential further exploration and expansion upside.”
The companies said closing of the transaction is subject to completion of certain corporate matters and customary conditions. The deal is expected to close in the first half of October.
Teck noted its rights as a shareholder in the Antamina Mine, located in Peru will be unaffected by the agreement.