Morning Briefing: Teck Resources to Spin Out Steelmaking Coal

Welcome to Mining Stock Daily. I’m Trevor Hall. And I’m Paul Harris.

Today is Tuesday February 21st.

Monday was a holiday in the U.S. but the precious metals trade globally. Gold traded from $1846 per ounce Sunday evening to as high as $1856 before getting hit after the Asian markets closed. It traded back up the $1856 and was shoved lower once again right after the afternoon London price fix down to $1851, where it settled in the Globex electronic session. Silver was punked lower Sunday evening down to $21.56 per ounce but during the prime eastern hemisphere buying hours it ran up to $21.90 before settling at $21.81. 

The Mining Stock Journal suggested that the trading patterns in gold and silver continue to correlate with the eastern hemisphere market trading hours when there's a preponderance of physical metal buying and the price rises vs the western hemisphere trading hours when paper derivatives trading takes control of the price. That said, based on the extreme technically oversold condition of the gold, silver and the mining stocks as well as negative sentiment readings, the probability is skewed heavily toward the likelihood of a big move higher in the sector.

We will get to the news from the miners and explorers in a moment, but first a word about today’s sponsor.

This episode of Mining Stock Daily is brought to you by…Western Copper and Gold

Western Copper and Gold is focused on developing the world-class Casino project in Canada's Yukon Territory. The Casino project consists of an impressive 11 billion pounds of copper and 21 million ounces of gold in an overall resource. Western Copper and Gold trades on the TSX and the NYSE American with WRN. Be sure to follow the company via their website, www.westerncopperandgold.com.

And here’s what you need to know this morning….

Teck Resources announced it will reorganize its business into two separate institutions, Teck Metals and Elk Valley Resources. Teck Metals will be growth-oriented, with premier, low-cost base metals production, a top-tier copper development portfolio and a disciplined capital returns policy. EVR will be a high-margin Canadian steelmaking coal producer, focused on long-term cash generation and providing cash returns to shareholders, with significant equity value accretion potential. The Separation is structured as a spin-off of Teck’s steelmaking coal business by way of a distribution of EVR common shares to Teck shareholders. Teck Metals will retain a substantial interest in steelmaking coal cash flows through a transition period in the form of an 87.5% interest in a gross revenue royalty and preferred shares of EVR. Under the Transition Capital Structure, Teck Metals will receive quarterly payments consisting of Royalty payments and preferred share redemption amounts that will in aggregate equal 90% of EVR free cash flow. For now, Teck Resources trades on the TSX and the NYSE with TECK. 

Hecla Mining is making a play to acquire ATAC Resources in Yukon, Canada and obtain the Rackla and Connaught projects with a non-binding 14c per share offer in a $31 million all stock deal. Last year Hecla bought Alexco Resources for its Keno Hill operation. ATAC recently rebuffed a 12c per share all stock offer from Victoria Gold valuing the company at C$25 million. Hecla would also make a C$2 million strategic investment into a new exploration Spinco which would hold the remaining assets of ATAC, with a right of first refusal to acquire any or all of the Spinco Assets, and acquire a number of units to own 19.9% of Spinco’s stock following completion of the strategic investment. Hecla Mining (NYSE:HL). ATAC Resources (TSX-V:ATC, OTCQB:ATADF) News release

Arizona Sonoran Copper announced assays from 7 drill holes from the Parks/Salyer infill program where drill spacing is being reduced to 76m to upgrade the inferred mineral resource to an indicated category. The total program consists of 32,000m in 46 holes, of which 35 for 23,689m have now been drilled. The program continues to support the tenor of mineralization and has extended the high-grade zones in the north and south. the Company has also completed three hydrology holes at Parks/Salyer to collect groundwater data. Highlights included 133.7m @ 1.17% CuT & 0.008% Mo in hole 113 including 17.8m @ 4.0% CuT and 0.021% Mo. The company recently closed a bought deal financing and has a cash balance of US$31 million.  Arizona Sonoran Copper (TSX:ASCU | OTCQX:ASCUF) News release

Canadian North Resources reported assays for 40 holes for 10,550m from drilling at its polymetallic Ferguson Lake property in Nunavut, Canada. Highlights included 21m at 1.11% Cu, 0.71% Ni, 0.10% Co, 1.29g/t Pd, 0.15g/t Pt and 0.050 g/t Rh in hole 470. Of the 68 holes drilled in the program, 27 infill holes confirm the continuity of the known mineralized zones for resource upgrade; and 37 expansion holes extended the main mineralized horizon near-surface for up to 1,500m along strike outside the resource estimate block model. Ferguson Lake hosts a June 2022 Indicated Resource of 24.3 million tonnes containing 455 million pounds copper, 321Mlb nickel, 37.5Mlb cobalt, 1.08 Moz palladium and 180,000oz platinum. Canadian North Resources TSXV: CNRI news release

TDG Gold reported assays from drilling at its Shasta gold-silver project in the Toodoggone District of British Columbia where it completed 20 diamond holes for 5,034m in 2022. The results confirm and expand high grade Au-Ag mineralization surrounded by medium to lower grade mineralization over broader intervals on the west side of the Shasta deposit. Mineralization was encountered over about 200m of effective strike length, and suggest the Shasta mineralized structure may have a shallower dip to the west than currently modelled, which may indicate potential to expand the mineral resource even further west, and down dip of the current drilling. Highlights included 33m grading 2.52 g/t Au and 95 g/t Ag in hole 57 including 9.5m grading 7.76 g/t Au and 271 g/t Ag. TDG Gold (TSXV:TDG) News release

Aurion Resources shared results from the scout drilling program in the Kaares area at its wholly owned Risti property located in the Central Lapland Greenstone Belt in northern Finland. Results included 2.41 g/t gold over 56.55m, which was an extension to a previously announced partial results. Other results included 1.22 g/t gold over 19.9m and 2.27 g/t over 11.3m. The high-grade mineralization at Vanha along the main shear zone and the discovery of multiple gold mineralized zones along the splays branching from the main shear zone during the recent scout drilling program demonstrates that the Kaares area has a high potential to host multiple gold occurrences. Aurion Resources trades on the TSXV with AU and on the OTCQX with AIRRF. News Release

New Pacific Metals reported assay results from a deep drill hole at its Carangas Silver-Gold Project in Oruro, Bolivia. To date, assays from 86 holes from the 115 drilled in 2022 have been released. Hole 96 stepped out 60m from hole 44 towards the northeast at the East Dome and hit a silver horizon and then a polymetallic zone before hitting a gold zone where it intercepted 524m @ 1.24 g/t Au and 8 g/t Ag. New Pacific Metals (TSX: NUAG; NYSE American: NEWP), news release

CopperCorp says it commenced a 3-hole scout diamond drilling program at the Skyline Project in Tasmania. Drilling will test under outcropping mineralization along the Dora trend where previous rock sampling returned anomalous assays including up to 6.3% Cu, 47.7g/t Au,250g/t Ag, 2.25% Co, 5.5% Zn, 2.3% Pb, and 839ppm TREO from individual samples. The drill program is partially co-funded by the Tasmanian government. CoperCorp trades on the TSXV with CPER and on the OTCQB with CPCPF. News Release

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