Teck Resources To Buy AQM Copper - Quick Facts

(RTTNews) - Teck Resources Limited (TCK, TCK_A.TO) said it has agreed to acquire all of the issued and outstanding common shares of AQM Copper Inc. (AQM.V) that it does not already own, by way of a statutory plan of arrangement.

Teck currently holds 42.26 million shares of AQM, representing about 30 percent of AQM's issued and outstanding common shares.

AQM's principal asset is a 30 percent indirect interest in the Zafranal copper-gold project located in southern Peru, abouty 70 kilometers north of Arequipa.

Teck currently holds a 50 percent indirect interest in the Zafranal project. On completion of the transaction Teck will hold an 80 percent interest in Compania Minera Zafranal S.A.C. or CMZ, a joint venture company that owns the Zafranal copper-gold project.

Under the arrangement, AQM shareholders will receive C$0.23 in cash per AQM common share. The total cash consideration payable to AQM security holders - other than Teck, and including option holders and deferred share unitholders - is about C$25 million. This implies a total equity value for AQM of C$35 million on a 100 percent fully-diluted basis.

Among other things, the agreement provides for a non-solicitation covenant on the part of AQM, subject to customary "fiduciary out" provisions that entitle AQM to consider and accept a superior proposal, a right in favor of Teck to amend its proposal to match any superior proposal.

In certain circumstances, the agreement also provides for the payment to Teck of a termination payment of C$1 million.

Holders of about 18 percent of outstanding AQM shares, including all of AQM's directors and officers, have agreed to vote in favor of the transaction. The AQM board is unanimously recommending that AQM security holders vote in favor of the transaction.

Closing of the transaction is subject to approval by holders of AQM shares, options and deferred share units. The transaction is expected to close in January 2017.