Teck acquires oil sands partner SilverBirch for C$435M
Teck Resources Ltd. (TSX:TCK.A) announced today that it will acquire its oilsands partner SilverBirch Energy Corp. (TSXV:SBE) for over C$435 million.
Canada's largest publicly traded mining company said it will pay $8.50 cash for each of Calgary-based SilverBirch’s shares plus one share of a new company, to be called SilverWillow Energy Corp.
After the announcement, SilverBirch’s stocks went up over 32 per cent, trading at about $9.54.
SilverWillow will hold most SilverBirch’s assets except for its 50 percent stake in Frontier and the Equinox oil-sands project in northeastern Alberta.
“The Frontier ownership structure is simplified, our exposure to oil sands leases not amenable to mining is reduced, and Teck now has the opportunity to explore new potential partnerships and other alternatives to move Frontier towards development,” Teck Chief Executive Officer Don Lindsay said in the statement.
Howard Lutley, President and Chief Executive Officer of SilverBirch said he believed that the transaction provides excellent value to the company’s shareholders and that this was “the appropriate time to exit the Frontier project.”
“SilverWillow will be able to focus its attention on the very promising, existing 100% owned, Audet in situ oil sands prospect while gaining 100% control over the Birch Mountains leases and other lands that have significant oil sands exploration potential,” added Lutley.
According to Teck’s website, the Frontier project is expected to begin production in late 2021,
The deal, which has SilverBirch’s board’s approval, is subject to regulatory and shareholder approval. It is expected to close by April 16.