Canada's Teck Resources to acquire oilsands partner SilverBirch for $435 mn
10 January 2012
Teck Resources Ltd, Canada's largest diversified mining company, yesterday agreed to acquire its oilsands partner SilverBirch Energy, for $435 million in order to get full control of the Frontier oilsands project in the resource-rich Athabasca region of Alberta.
The deal gives Vancouver-based Teck, full ownership of Frontier oil-sands project, which is expected to produce more than 277,000 barrels of bitumen a day and about 2.8 billion barrels over the anticipated 30-year life of the project. It is expected to begin production in late 2021, according to Teck's website.
''The Frontier ownership structure is simplified, our exposure to oil sands leases not amenable to mining is reduced, and Teck now has the opportunity to explore new potential partnerships and other alternatives to move Frontier towards development,'' Teck CEO Don Lindsay said in a statement.
Teck will take full ownership of Frontier and Equinox projects, as well as a nearby property Twin Lakes and spin out the rest into a new junior company, SilverWillow Energy Corp.
Teck will also contribute $25 million of working capital to SilverWillow.
The deal will also give Tech more flexibility in finding a project partner to help fund the Frontier project, estimated at about $23-billion over four phases.