Canadian miner Teck Resources is making good progress with the process of bringing a partner into its northern Chile copper development project and plans to announce a transaction next month, CEO Don Lindsay said on Thursday.
The company sees the Quebrada Blanca Phase 2 expansion as its most significant growth opportunity and has previously indicated that it could double its copper business.
Teck is considering selling a 30% to 40% stake in the $4.8-billion project, newswire Reuters reported earlier, and listed Rio Tinto, Mitsubishi and Sumitomo as parties potentially interested in bidding for the stake.
“We expect that a transaction could be announced in December and closed in the first half of 2019,” Lindsay said in a statement, announcing a $400-million share repurchase and dividend distribution.
Teck will pay an eligible dividend of $0.15 a share on its outstanding Class A common shares and Class B subordinate voting shares on December 31. This dividend represents the regular quarterly dividend of $0.05 a share contemplated by Teck’s dividend policy and a supplemental dividend of $0.10 a share.
In addition to the $86-million aggregate dividend payment, the board has directed management to apply $400-million to the repurchase of Class B subordinate voting shares under Teck’s previously announced normal course issuer bid programme, including the $73.5-million of purchases made since that programme received regulatory approval in October.
Taking into account the $0.15 a share of base dividends already paid in 2018, this represents $573-million in aggregate of dividends and share repurchases.
“Share repurchases under our normal course issuer bid are an appropriate use of capital at this time given the value inherent in our shares and the positive outlook for our business,” Lindsay said.
Teck’s normal course issuer bid programme authorises the company to purchase up to 40-million Class B subordinate voting shares through the period ended October 9, 2019.