GRL Completes Morelos Purchase $180M in the treasury and an easily expandable resource
17th November 2009
TORONTO (miningweekly.com) – TSX Venture Exchange-listed Gleichen Resources has completed its acquisition of 78,8% of the Morelos gold project, in Mexico, from diversified miner Teck Resources, the companies announced on Tuesday.
In a transaction first announced in August, Gleichen paid $150-million in cash, about 1,6-million in shares and 12,4-million special warrants, which, once exercised, will leave Teck with about 4,9% of the smaller company.
Teck will put the cash proceeds towards reducing what remains of its term loan, taken on to acquire Fording Canadian Coal last year, the company confirmed.
The term debt will be reduced to around $2,37-billion thanks to the Morelos cash, the company said.
Teck CEO Don Lindsay said last month the loan will be down to about $1,1-billion, after the miner completes all the asset sales already announced.
Gleichen, meanwhile, announced that it has appointed two new directors – Terry MacGibbon and Fred Stanford.
Stanford has also been named president and CEO, replacing Michael Murphy, who will remain as a director.
Earlier this month, Gleichen completed a C$241,5-million private placement of special warrants, to fund the Morelos transaction.
“Gleichen is well funded to carry out the necessary work to bring the Morelos project to the feasibility stage and is in the process of assembling excellent management and technical teams to carry out this work,” Stanford said in a statement.
The remaining 21,2% interest in the Morelos project is owned by Canadian gold-miner Goldcorp.
Shares in Gleichen Resources slid 2,34% on Tuesday, to C$1,25 apiece by 13:31 in Toronto.
Teck was up 0,86%, at C$35,26 a share.
Edited by: Liezel Hill
