Vancouver's Teck Resources Ltd. (TSX:TCK.B) plans to sell its 40% interest in Alaska's Pogo mine to Sumitomo Metal Mining Co. Ltd. for US$245 million.
Because Sumitomo Metal already owns an indirect 51% interest in the project and another Sumitomo affiliate owns the remaining 9%, the deal gives Sumitomo complete ownership of the mine.
The non-binding memorandum of understanding comes after Teck received a third-party offer to acquire Teck's stake in the Alaskan project.
The deal is expected to close by the end of the second quarter, subject to the negotiation and settlement of a definitive agreement, adjustment for working capital, and other customary closing conditions.
The deal is the latest in a series of divestitures Teck has made to pay down the debt it assumed from its acquisition of Fording Canadian Coal Trust, which closed last October.
In late April, the company gained a reprieve of its debt obligations after negotiating with its lenders to defer upcoming debt payments. Under amended terms, Teck deferred US$4.4 billion of payments due in 2009, extended the maturity date of US$3.5 billion of its bridge loan to October 30, 2011, and rescheduled 50% of approximately US$3.3 billion of amortization payments to become payable in quarterly installments in 2012.
The company still has to pay down US$1.7 billion of its US$5.2 billion bridge loan by October 30, 2009.
Teck's share price range during the past week: between $11.18 and $12.36; 52-week high: $52.90; 52-week low: $3.35.