Teck could raise $1B from silver stream sales to Silver Wheaton, TD says

The Red Dog Mine could be one of the mine streams Teck would sell. — Photo courtesy Teck Resources

Vancouver-based Teck Resources Limited is reportedly looking to sell some of its sliver production capacity according a Seeking Alpha report.

According to the report Teck Resources (NYSE:TCK) has said it is on the lookout for copper acquisitions, so TD Securities analysts raise the possibility that it could raise $1B from sales of ~75% of its silver production from the Antamina, Red Dog and Highland Valley mines to Silver Wheaton (NYSE:SLW).

Selling silver streams to add production could make sense for TCK and would reduce debt or equity issuance, the firm says, and SLW could easily fund the purchase of the three TCK streams with its existing credit facility and would not have to issue equity state the TD analysts.

The acquisition would provide immediate growth, adding ~6.2M oz. of silver production in the first year, TD says.

Silver Wheaton is the largest precious metal streaming company in the world. The company has entered into a number of agreements where, in exchange for an upfront payment, it has the right to purchase, at a low fixed cost, all or a portion of the silver and/or gold production from several high-quality mines located in politically stable regions around the globe. Silver Wheaton currently has streaming agreements for 21 operating mines and 6 development stage projects.

Source: Seeking Alpha