Argentine explorer Yamana Resources (TSE) has granted Teck (TSE) the right to acquire up to a 60% interest in its gold project in the province of Santa Cruz.
Yamana holds interests in 76 properties in five regional projects, including several properties that make up the Santa Cruz project.
Teck can earn a 50% interest by spending US$15 million on exploration and feasibility work. In addition, it must buy 1.2 million Yamana units at $2.92 per unit, with each unit consisting of one common share and a half-share purchase warrant, exercisable for a 1-year period. A full purchase warrant and $3.92 will be exchangeable for an additional share.
Teck can earn another 10% by delivering a favorable feasibility study on any property in the Santa Cruz project. As operator during the exploration stage, Yamana will spend more than $1.75 million on the initial exploration program.
Teck will have seven years, dating from completion of this initial program, to earn its full 60% interest. It will assume operatorship at the onset of any feasibility study.
If Teck earns its 60% interest, Yamana may elect either to maintain its 40% participating interest or accept a 20% carried interest. Should it opt for the latter arrangement, Teck will retain half of Yamana’s 20% share of cash flow to recover capital costs incurred from the production decision.
The closing of the agreement is subject to due diligence, regulatory approval and a 30-day first right of refusal previously granted to Noranda (TSE).
Be the first to comment on "Teck to option Yamana property"