Teck and Agnico Eagle announce agreement on the San Nicolás copper-zinc project

Ammar Al-Joundi, President and CEO of Agnico Eagle. Photo: Agnico Eagle

Agnico Eagle Mines Limited  and Teck Resources Limited  recently announced today that Agnico Eagle has agreed to subscribe for a 50% interest in Minas de San Nicolás, S.A.P.I. de C.V., a wholly-owned Teck subsidiary which owns the San Nicolás copper-zinc development project located in Zacatecas, Mexico.

As a result of the Transaction, Teck and Agnico Eagle will become 50/50 joint venture partners at San Nicolás. 

"San Nicolás is a high-quality project, located in a leading mining jurisdiction, with high grades, extremely competitive capital intensity, and first quartile costs," said Don Lindsay, President and CEO of Teck. "The opportunity to add the operating and development experience of Agnico Eagle should generate substantial benefits for the project including for all stakeholders throughout the project life cycle."

"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 VMS deposit in a premier mining jurisdiction," added Ammar Al-Joundi, President and CEO of Agnico Eagle. "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."

Transaction Highlights: 

  • Agnico Eagle will subscribe for US$580 million of MSN shares, giving Agnico Eagle a 50% interest in MSN.  The subscription proceeds received from Agnico Eagle will be used by MSN to fund the first US$580 million of post-closing costs with subsequent funding to be contributed according to each partner's ownership percentage.  Agnico Eagle's contributions will be made as study and development costs are incurred – there is no up-front payment from Agnico Eagle
  • The US$580 million share subscription implies a notional US$290 million acquisition cost to Agnico Eagle for 50% of the San Nicolás project plus the contribution by Agnico Eagle of 50% of the first US$580 million of project costs for its own account
  • Agnico Eagle's funding in the first two years is expected to be approximately US$50 million
  • Establishes a 50/50 joint venture between two Canadian-based global mining leaders each with demonstrated track record of successful joint operations
  • Governance arrangements with equal representation from Teck and Agnico Eagle, to leverage and implement each shareholder's skillsets
  • Agnico Eagle to be deemed to be a 50% shareholder in MSN for governance purposes upon closing of the Transaction, which is expected in the first half of 2023