Canada’s largest mining company, Teck Resources Inc. (NYSE: TCK) has agreed to purchase the portion of oil sands developer privately held SilverBirch Energy Corp. (OTC: SBEXF) that Teck did not already own for about $423 million. Silver Birch shareholders will receive CAD $8.50 (about $8.27) in cash for each share they hold of Silver Birch plus one share of a new company, SilverWillow Energy Corp.
According to the announcement:
SilverWillow will hold substantially all of the assets of SilverBirch other than SilverBirch’s 50% interest in the Frontier and Equinox oil sands project. In connection with the arrangement, Teck will contribute to SilverWillow CAD $25 million in working capital and its 50% interest in several oil sands leases that are currently jointly owned with SilverBirch. As a result, SilverWillow is expected to begin operations with approximately CAD $25 million in net working capital.
Teck is seeking to expand its operations beyond coal, copper, and zinc. The company is currently the world’s second largest producer of seaborne metallurgical coal.
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