Teck Resources Ltd (USA) (NYSE:TECK) announced today that the company would be selling 70 percent interest, to which it owns in Haib Minerals to Deep South. Currently, this agreement between the two companies is a definitive one.

However, despite selling its entire sharing interest in Haib Minerals, both companies will benefit a great deal from this agreement.

Details about Haib Mineral interest shares

Currently, Deep South has a 30 percent ownership in Haib Minerals. However, following the sale, to which Teck agreed, the company will have 100 percent interest holdings in Haib Minerals. Haib Minerals is a project, which is located in Namibia.

However, as was agreed, Teck will be receiving 13,600,000 common shares of Deep-South, once the deal is closed. It was announced that this share count, in addition to the rough 4,166,666 common shares that Teck currently has in Deep South, will result in Teck having a total of roughly 35% shares in Deep South.

It was also announced, that if post-agreement, it is discovered that the total number of shares in Teck’s possession is equivalent to less than 35 percent stake in Deep South, the company will then proceed to release additional shares to Teck, in order to satisfy Teck’s post-ownership agreement of 35 percent stakes.

The purpose of this agreement between the two companies

Teck stated that the reason behind this proposed agreement between the two companies is in order to ensure the acquisition of Haib Minerals. However, a companyspokesman went on to explain that depending on various factors, including market analysis reports, they may or may not decide to acquire more of Deep South common shares.

THE MORNING REPORT

Start your workday the right way with the news that matters most.

Your information is 100% secure with us and will never be shared Disclaimer & Privacy Policy

The likelihood that Teck will receive additional shares from Deep South upon closing, to satisfy the agreement, is rather low. This is due to the fact that currently, Teck holds $373,195 in Deep South, which when converted is equivalent to 38 percent holdings in Deep South.