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Teck Resources TECK has entered into an option and joint venture agreement with Grid Metals Corp. to explore and develop the Mawka nickel project in southeastern Manitoba, Canada. Per the deal, TECK has the option to acquire up to 70% interest in the project in two stages.
For this, Teck Resources will have to make a total cash payment of CAD$1.6 million ($1.12 million) and fund a total of CAD$15.7 million ($11.02 million) in expenditures. This will be made in different stages by TECK through 2025-2031.
TECK-Grid to Explore Nickel, Copper & Other Metals at Makwa
The focus of the TECK & Grid Metals agreement will be the discovery of a Tier 1 magmatic nickel-copper-PGM-cobalt deposit at Makwa. The agreement is subject to approval by the TSX Venture Exchange.
The Makwa project is one of two copper-nickel-PGM properties owned by Grid Metals. The project boasts excellent infrastructure, including year-round road access, local hydro-electric power and proximity to major rail and trucking routes.
The Makwa project includes two past-producing nickel sulfide mines, three pit-constrained nickel sulfide resources and numerous high-grade nickel and copper-rich magmatic sulfide surface showings.
Details of the Deal Between Teck Resources & Grid Metals
Per Grid Metals’ latest report, the open pit resources at Makwa comprised 14.2 million tons in the indicated category with 0.48% nickel, 0.11% copper, 0.02% cobalt, 0.37 gram per ton of palladium (Pt) and 0.10 gram per Pt. This translates to 0.75% nickel equivalent.
The First Option can be exercised by TECK over four years till May 31, 2028. Teck Resources will have to make a firm commitment of CAD$0.4 million (or minimum cash payment) on or before Jan. 31, 2025. Thereafter it will have to make cash payments of CAD$0.1 million by Jan. 31, 2026, and another CAD$0.1 million by Jan. 31, 2027. In addition, TECK will incur an aggregate of CAD$5.7 million in exploration expenditures over the 2025-2028 period.
Upon the completion of these payments, the company will own 51% of the Makwa project and Grid Metals the remaining 49%. After this, Teck Resources can exercise the second option to raise its stake by 19% in the project. This can be made by incurring CAD$10 million in exploration expenditures over a period of three years (ending May 31, 2031). Teck Resources will have to make a payment of $1 million in cash or by the subscription for Grid shares priced at a 25% premium.
TECK Stock’s Price Performance
The company’s shares have gained 6.5% in the past year against the industry’s 15.4% decline.