Boston, MA 05/06/2014 (wallstreetpr) – Teck Resources Ltd (USA) (NYSE:TCK) has announced the acquisition of an additional 2,000,000 common shares in Erdene Resource Development Corp at a cost of $0.175 per common share, in a private placement. The acquisition essentially brings Teck stake in Erdene to 9,142,857 common shares, and 1,071,429 shares purchase warrants. Inclusion of all the warrants would essentially bring Teck stake in Erdene to 14.2% calculated on a diluted basis.
Teck Cost Cutting Measures
Erdene is a mining company specializing in exploration acquisition and development of base and precious metals in Mongolia. The subscription has been on an investment perspective with Teck Resources Ltd (USA) (NYSE:TCK) being given the opportunity to either increase or decrease its investments, depending on market conditions or any other relevant factor.
The investment comes at a time that Teck is planning to lay off, 5% of its workforce or 600 employees as a larger plan of streamlining its operation costs. TCK has already confirmed it has been able to attain a total of $345 million annual costs savings to date and is now targeting $200 million in cuts going forward with an additional $150 million in capital spending.
Higher met coal prices essentially means that Teck will be forced to defer the restart of its Quintette coal project in British Colombia. The company is planning to offset this development by restarting its Pend Oreille Zinc mine in Washington as Zinc Prices continue to show significant resurgence.
Teck Q1 Highlights
The first quarter was not one of the most profitable for the mining giant considering its adjusted profit attributed to shareholders sunk from a high of $328 million as of last year to a low of $105 million. Cost reduction measures continue exceed targets with $345 million achieved to date
Cash flow from operations for the quarter also dropped to $470 million compared to a high of $776 million for the first quarter of 2013. Teck Resources Ltd (USA) (NYSE:TCK) has also confirmed it will be paying a dividend of $0.45 per share on its Class a common shares that will be paid on July 2, 2014 to shareholders on record as of June 16, 2014.
