Teck Resources to buy Toronto's AQM for $25 million
Shares of Teck Resources Ltd. (TSX:TCK.B) were up almost 3% as of press time after the company announced November 21 it has inked a $25 million all-cash deal to purchase AQM Copper Inc. (TSX-V:AQM), a Toronto-based junior miner with a 30% indirect interest in the Zafranal copper-gold project in Peru.
Teck already owns a 50% indirect interest in the project, and the move will bring its share to 80%."With the announcement today of Teck's all-cash offer for AQM, I believe there is an opportunity for shareholders of AQM to benefit greatly from the immediate cash premium, while avoiding potential near-term dilution in the current challenging commodity price environment," said AQM president and CEO Bruce Turner.
"Teck has been a great joint venture partner in advancing Zafranal through to a strong pre-feasibility, and Zafranal will be better positioned for future development in the hands of a major with significant cash resources such as Teck."
AQM shareholders will receive $0.23 per common share, which represents a 53% premium. The junior miner has the option of accepting a "superior proposal" from a competing buyer between now and the time the deal closes, which is expected to happen in January 2017, but it gives Teck the right to match any bids.
The Zafranal project is located 70 km north of Arequipa, Peru.The deal is subject to AQM shareholder, court and regulatory approvals.
As of press time, Teck shares were trading at $31.72, which is an increase of just under 3%. Shares in the junior miner were up 50% to $0.075.
Map of the Zafranal mine project in Peru | Image: QMCopper.com