Under the terms of the deal announced Friday, Agnico Eagle will purchase US$580 million worth of shares of a wholly-owned subsidiary of Teck, making it an equal partner in the San Nicolás copper-zinc project in Mexico.
In a release, Agnico Eagle President and Chief Executive Officer Ammar Al-Joundi said the deal allows the gold miner to increase its exposure to base metals in a friendly mining jurisdiction.
“This is a unique opportunity to create a long-term partnership between two high quality mining companies working together to de-risk and optimize a world class [volcanogenic massive sulphide] deposit in a premier mining jurisdiction,” he stated.
“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.”
Volcanogenic massive sulphide deposits are ore-rich formations that typically have high concentrations of base metals, though in this case there are trace amounts of precious metals, which is traditionally in Agnico Eagle’s wheelhouse.
The companies said Agnico’s investment will cover the first US$580 million in post-closing development costs for the mine, which is expected to enter production in 2026. Subsequent funding obligations will be subject to each partner’s stake in the open-pit operation, which has a mine life of 15 years. Overall development costs are expected to be in the range of US$1 billion to US$1.1 billion.
The transaction is expected to close in the first half of 2023.
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