Teck Resources has entered a definitive agreement to sell its 70% interest in Haib Minerals to Deep-South Resources, which already owns an existing 30% stake.
Haib Minerals owns full interest in the Haib copper project in the Karas region of southern Namibia. This project hosts significant copper-molybdenum porphyry deposits.
Under the sales agreement, Teck Resources will receive 13.6 million Deep-South common shares upon closure.
After completion of the transaction, Teck will hold around 35% of Deep-South’s outstanding shares on an undiluted basis.
Currently, Teck Resources owns 4.16 million Deep-South common shares.
Deep-South has agreed to issue additional shares to Teck Resources after closure of the deal if Teck-ownership at Deep-South falls below 35%.
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Teck Resources also holds a $373,195 convertible debenture, which when converted will increase its ownership at Deep-South to nearly 38%, calculated on a partially diluted basis assuming conversion of debenture only.
Teck Resources opted to acquire Deep-South common shares in order to facilitate the sale of its interest in Haib.
Based on market conditions and other concerned factors, Teck can decide to increase or decrease its holdings in Deep-South.
The Haib copper deposit was discovered in the 1950s, with Rio Tinto and Falconbridge conducting more than 50,000m of drilling in the 1970s.