Teck ups stake in Peruvian copper/gold project

VANCOUVER (miningweekly.com) – Canadian diversified miner Teck Resources has agreed to buy all outstanding shares of TSX-V-listed AQM Copper for C$25-million, the company said Monday.

Teck already owns about 30% of AQM’s stock, and the deal will give it access to the junior’s 30% indirect interest in the Zafranal copper/gold project, in southern Peru, in which Teck holds a 50% indirect interest.

Under the arrangement, AQM shareholders will receive C$0.23 in cash for each AQM common share held, implying a total equity value for AQM of C$35-million on a 100% fully diluted basis.

Pending customary conditions, including approval by holders of AQM shares, options and deferred share units, as well as court and regulatory approvals, the transaction is expected to close in January 2017.

The Zafranal copper/gold project is owned by joint venture company Compañia Minera Zafranal (CMZ). Teck holds a 50% direct interest in CMZ and the remaining 50% direct interest is held by Minera AQM Copper Peru (MAQM), a Peruvian company. AQM holds a 60% direct interest in MAQM and Mitsubishi Materials Corporation (MMC) holds the remaining 40% interest in MAQM.

AQM released the results of a prefeasibility report on the Zafranal copper/gold project on May 24. AQM has drilled more than 137 000 m since 2010, reporting 510.7-million tonnes grading 0.36% copper and 0.07 g/t gold in the measured and indicated resource categories.

Upon closing, Teck will hold an 80% interest in CMZ and MMC will hold the remaining 20% interest with an option to increase its interest up to 30%. Teck and MMC have agreed to restructure ownership of the Zafranal project following closing, so that each party will hold its interest in CMZ directly or through wholly owned subsidiaries.