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Teck (TECK) Closes Joint Venture Transaction With Agnico Eagle
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Teck Resources Ltd. (TECK - Free Report) announced the completion of its joint venture transaction with Agnico Eagle Mines Limited (AEM - Free Report) to advance the San Nicolas copper-zinc development project. Teck and Agnico Eagle have formed a 50/50 strategic alliance at San Nicolas to advance permitting and development of the high-quality copper-zinc project in Zacatecas, Mexico.
Teck and Agnico Eagle entered a joint venture shareholders agreement on Sep 16, 2022. Agnico Eagle agreed to subscribe for $580 million in Minas de San Nicolas, S.A.P.I. de C.V. ("MSN") shares under the agreement, giving Agnico Eagle a 50% stake in MSN.
The companies intend to submit an Environmental Impact Assessment and Permit application for San Nicolas in the first half of 2023, with a feasibility study expected to be completed in early 2024.
As the companies announced in September 2022, the first production from the project is expected in 2026, with a projected mine life of 15 years and significant potential for mine life extension and regional exploration upside. Over the first five years of production, the companies expect to produce 63,000 tons per annum of copper and 147,000 tons per annum of zinc in concentrate. Teck and Agnico Eagle anticipate development capital costs of $1,000-$1,100 million.
The completion of the joint venture, the initiation of authorization and the completion of the next phase of technical studies complement Teck’s strategy to boost its Copper Growth portfolio.
Teck’s 2023 copper production guidance is unchanged. Copper production is anticipated to be 390,000-445,000 tons in 2023. In the fourth quarter of 2022, the Copper segment’s net sales declined 18.5% year over year to CAD$753 ($554 million) million. The segment’s gross profit was CAD$248 million ($182 million) in the reported quarter, down 44% from the year-ago quarter on lower average realized copper price and lower sales volumes.
Price Performance
The company’s shares have gained 11% in the past year against the industry’s 25.2% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stock to Consider
Teck Resources currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Olympic Steel’s fiscal 2023 earnings per share is pegged at $3.50. Earnings estimates have moved 61% north in the past 60 days. ZEUS has a trailing four-quarter earnings surprise of 26.2%, on average. Its shares have gained 30.3% in the past year.
The Zacks Consensus Estimate for Alamos Gold’s earnings per share is pegged at 44 cents for 2023. Earnings estimates have been revised 12.8% upward in the past 60 days. AGI has gained 48.2% in a year.
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Teck (TECK) Closes Joint Venture Transaction With Agnico Eagle
Teck Resources Ltd. (TECK - Free Report) announced the completion of its joint venture transaction with Agnico Eagle Mines Limited (AEM - Free Report) to advance the San Nicolas copper-zinc development project. Teck and Agnico Eagle have formed a 50/50 strategic alliance at San Nicolas to advance permitting and development of the high-quality copper-zinc project in Zacatecas, Mexico.
Teck and Agnico Eagle entered a joint venture shareholders agreement on Sep 16, 2022. Agnico Eagle agreed to subscribe for $580 million in Minas de San Nicolas, S.A.P.I. de C.V. ("MSN") shares under the agreement, giving Agnico Eagle a 50% stake in MSN.
The companies intend to submit an Environmental Impact Assessment and Permit application for San Nicolas in the first half of 2023, with a feasibility study expected to be completed in early 2024.
As the companies announced in September 2022, the first production from the project is expected in 2026, with a projected mine life of 15 years and significant potential for mine life extension and regional exploration upside. Over the first five years of production, the companies expect to produce 63,000 tons per annum of copper and 147,000 tons per annum of zinc in concentrate. Teck and Agnico Eagle anticipate development capital costs of $1,000-$1,100 million.
The completion of the joint venture, the initiation of authorization and the completion of the next phase of technical studies complement Teck’s strategy to boost its Copper Growth portfolio.
Teck’s 2023 copper production guidance is unchanged. Copper production is anticipated to be 390,000-445,000 tons in 2023. In the fourth quarter of 2022, the Copper segment’s net sales declined 18.5% year over year to CAD$753 ($554 million) million. The segment’s gross profit was CAD$248 million ($182 million) in the reported quarter, down 44% from the year-ago quarter on lower average realized copper price and lower sales volumes.
Price Performance
The company’s shares have gained 11% in the past year against the industry’s 25.2% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stock to Consider
Teck Resources currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Olympic Steel Inc. (ZEUS - Free Report) and Alamos Gold Inc. (AGI - Free Report) . ZEUS currently flaunts a Zacks Rank #1 (Strong Buy) and AGI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Olympic Steel’s fiscal 2023 earnings per share is pegged at $3.50. Earnings estimates have moved 61% north in the past 60 days. ZEUS has a trailing four-quarter earnings surprise of 26.2%, on average. Its shares have gained 30.3% in the past year.
The Zacks Consensus Estimate for Alamos Gold’s earnings per share is pegged at 44 cents for 2023. Earnings estimates have been revised 12.8% upward in the past 60 days. AGI has gained 48.2% in a year.