Teck Resources grabs Goldcorp’s stake in Mexican project for $50 million
Canada's largest diversified miner Teck Resources (TSX:TCK.B) (NYSE:TCK) is buying Goldcorp’s (TSX:G) (NYSE:GG) 21% minority interest in the San Nicolás copper-zinc project located in Zacatecas, Mexico for $50 million.
Once the deal is completed, which is expected to happen in the third quarter of 2017, Teck will be the sole owner of the San Nicolás project, which it would be an open-pit operation that would take three to four years to bring into production. However, Teck has not decided whether it will develop the project as additional work is required before getting to that stage.
The news comes on the heels of the sale of Goldcorp’s Camino Rojo gold and silver project, also in Mexico, to Orla Mining (TSX-V:OLA), as part of the gold producer’s ongoing efforts to focus on highly profitable, core assets, it said in a separate statement.
The San Nicolás copper-zinc project is located in Zacatecas.
Earlier this year, the world's third largest gold producer by market value, agreed to sell Guatemalan Cerro Blanco gold-silver project to Bluestone Resources Inc. (TSX-V: BSR).
Just a day later, it also sold its Los Filos gold-and-silver mine in Mexico to Leagold Mining Corp (TSX-V: LMC-H).
Teck, which primarily mines coal, zinc and copper, posted in April earnings and revenue that lagged expectations on weakness at its zinc unit.
The division reported first quarter gross profit of $164 million on increased operating costs and a 23% output decline at Red Dog mine, due to lower grades. Zinc in concentrate production fell to 130,000 tonnes from 165,000 tonnes in the same period last year.
Teck, which is also North America’s largest producer of steelmaking coal, also lowered its 2017 zinc guidance to 590,000-615,000 tonnes from 660,000-680,000 tonnes previously.
Analysts believe that taking control of the San Nicolás project may help the Vancouver-based miner boost its zinc output down the road.
The company’s shares jump on the news and were last trading in Toronto 3.26% higher to Cdn$23.44. Goldcorp stock, instead, was down 2% to Cdn$17.03, but most gold producer were falling on Thursday too.