Teck Resources CEO pours more cold water on M&A speculation

Tue Mar 31, 2015 3:49pm EDT
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March 31 (Reuters) - Teck Resources Ltd on Tuesday poured more cold water on speculation it was in talks to merge with or acquire a rival mining company, saying although it had looked at opportunities none have met its criteria.

Teck Chief Executive Don Lindsay said there is nothing he is aware of in the works on Antofagasta, HudBay Minerals or Zaldivar, a copper mine owned by Barrick Gold Corp , according to two sources who attended a Teck investor day event in Toronto.

Vancouver-based Teck and Chile-focused miner Antofagasta denied on Monday that they were in talks about a merger after Bloomberg news reported that the two mining companies were in early stage discussions.

Teck's shares had rallied 11 percent on Monday on news of the possible deal but the stock pulled back by a similar margin on Tuesday, following the denials.

Lindsay told investors that although Teck has looked at many opportunities, including some transactions that have since been completed by others, nothing had met the company's criteria for mine life, asset quality and cost profile, one of the sources said.

A Teck spokesman could not immediately be reached for comment.

Sources familiar with the matter told Reuters last year that Teck, along with Newmont Mining Corp, Blackstone Group and Magris Resources, had jointly explored a bid for the Las Bambas copper mine in Peru, which Glencore Xstrata eventually sold for $6 billion to a Chinese consortium led by MMG Ltd, the Hong Kong-listed offshore arm of China's state-owned Minmetals Corp.

Last week National Bank analyst Shane Nagle suggested in a research note that Teck should buy Canadian-based HudBay to boost its copper and zinc exposure at a time when prices for coal, Teck's biggest commodity by revenue, are weak and it faces big spending commitments on the Fort Hills oil sands project.

Analysts have also suggested that Teck should take a run at Barrick's Zaldivar copper mine in Chile, which the Financial Times earlier this month said Barrick may put up for sale. (Reporting by Nicole Mordant in Vancouver; Editing by Cynthia Osterman)