Waneta Dam. — Photo courtesy Teck
Teck Resources Limited has announced that BC Hydro has exercised its right of first offer to purchase Teck’s two-thirds interest in the Waneta Dam in British Columbia, Canada, for $1.2 billion cash.
There are no material changes to the commercial terms of the previously announced Waneta purchase agreement between Fortis Inc. ("Fortis"), and Teck. Under the agreement, Teck Metals Ltd. (“Teck Metals”) will be granted a 20-year lease to use the two-thirds interest in Waneta to produce power for its industrial operations in Trail. Annual payments will begin at approximately $75 million per year and escalate at 2% per annum, equivalent to an initial power price of $40/MWh based on 1,880 GWh of energy per annum. Teck Metals will have an option to extend the lease for a further 10 years at comparable rates.
Under the Waneta purchase agreement with Fortis, Teck expects to pay Fortis a break fee of approximately $28 million.
Teck expects to realize a net book gain of approximately $800 million on closing. No cash tax will be payable on the proceeds.
Closing of the transaction is subject to customary conditions, including receipt of regulatory approvals and certain consents, and is not expected before the first quarter of 2018.
Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. Headquartered in Vancouver, Canada, its shares are listed on the Toronto Stock Exchange under the symbols TECK.A and TECK.B and the New York Stock Exchange under the symbol TECK. Learn more about Teck at www.teck.com or follow @TeckResources.
