On October 7, 2015, Teck Resources Limited (Teck) and a subsidiary entered into a long-term streaming agreement with Franco-Nevada Corporation (Franco-Nevada) linked to production of silver at the Antamina mine in Peru. Teck holds a 22.5 per cent interest in Compañía Minera Antamina S.A. (CMA), the joint venture company which owns and operates Antamina, along with partners BHP Billiton Plc (33.75 per cent), Glencore Plc (33.75 per cent) and Mitsubishi Corporation (10.00 per cent).
Under the agreement, Teck will deliver to Franco-Nevada all recovered silver from its 22.5 per cent interest in Antamina, using a fixed silver payability factor of 90 per cent.
After 86 million ounces of silver have been delivered under the agreement, the stream will be reduced by one third. A one-time US$610-million advance payment was made to Teck funded by a wholly owned Canadian subsidiary of Franco-Nevada. Franco-Nevada will also pay 5 per cent of the spot price at the time of delivery for each ounce of silver delivered under the agreement.
Teck, headquartered in Vancouver, British Columbia, is a diversified resource company.
Franco-Nevada is the leading gold-focused royalty and stream company with the largest and most diversified portfolio of cash-flow producing assets.
Borden Ladner Gervais LLP acted as Canadian counsel to Teck with a team led by Fred Pletcher that included Erik Goldsilver, Michael Waters and Michelle Wilkinson.
Torys LLP acted as counsel to Franco-Nevada with a team that was led by Michael Amm that included Philip Mohtadi, Melissa Prado and Craig Maurice.