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September 19, 2022

Agnico Eagle to buy stake in Teck’s Mexican copper-zinc mine

Teck and Agnico Eagle will become joint venture partners for the San Nicolás copper-zinc development project.

Agnico Eagle Mines has agreed to pick a 50% stake in Teck Resources subsidiary Minas de San Nicolas (MSN), which owns the San Nicolás copper-zinc development project located in Zacatecas, Mexico.

Upon completion of the transaction, Teck and Agnico Eagle will become joint venture (JV) partners at San Nicolás project with equal shares.

As per the agreed terms, Agnico will subscribe for $580m shares in MSN. This represents the acquisition cost at $290m for 50% stake in the project.

Agnico will also contribute 50% of the initial cost of $580m for the project, which is said to be the country’s largest undeveloped volcanic-hosted massive sulfide deposit (VHMS) deposit.

Teck president and CEO Don Lindsay said: “San Nicolás is a high-quality project, located in a leading mining jurisdiction, with high grades, extremely competitive capital intensity, and first quartile costs.”

Agnico Eagle president and CEO Ammar Al-Joundi said: “This is a unique opportunity to create a long-term partnership between two high quality mining companies working together to de-risk and optimise a world class VMS deposit in a premier mining jurisdiction.

“Agnico Eagle’s project development, permitting and construction experience in Mexico, combined with Teck’s base metals expertise, operating excellence and marketing leadership, are complementary skillsets and will contribute to the timely and successful development and operation of San Nicolás.”

Subject to customary conditions including regulatory nod, the deal is scheduled to close in the first half of 2023.

Located in Zacatecas, a major mining state in Mexico, the San Nicolás project holds significant geological potential and several poly-metallic and precious metals opportunities.

Based on current cost environment and estimate accuracy. Teck and Agnico Eagle expect the project development to cost $1-$1.1bn.

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