Teck sells Mexican gold project interest for $150 million

16 August 2009 | 07:46 Code : 19441 Geoscience events
Teck Resources (TCKb.TO: Quote) will sell its majority interest in the Morelos gold...

Teck Resources (TCKb.TO: Quote) will sell its majority interest in the Morelos gold project in Mexico for just over $150 million in cash and stock to junior-listed Gleichen Resources (GRL.V: Quote), the companies said on Thursday.The sale, worth $150 million in cash and 4.9 percent of Gleichen’s outstanding shares, worth about C$800,000, is part of an asset sale plan by Teck to help pay off debt taken on last year to finance its takeover of Fording Canadian Coal Trust.Teck currently owns 78.8 percent in the Morelos property, while the rest is owned by Goldcorp (G.TO: Quote). The deal is expected to close in the fourth quarter.In a statement, Gleichen said the deal is conditional on the company raising $175 million through a best efforts private placement of subscription receipts. Macquarie Capital Markets and Jones, Gable & Company acted as financial advisors to Gleichen, it said.Teck borrowed nearly $10 billion to buy Fording at the top of top of the market last year, just before resource prices plunged and credit markets froze up.Teck stock closed at C$27.79 on the Toronto Stock Exchange on Thursday, while Gleichen closed at 55 Canadian cents on the TSX Venture Exchange.($1=$1.08 Canadian) (Reporting by Cameron French; editing by Peter Galloway)

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