Canadian copper and zinc miner Teck Cominco [NYSE: TCK] said that it has sold the 5.6 million shares of Kinross Gold [NYSE: KGC] that Teck acquired when it sold Kinross its 60% share of the Lobo-Marte gold property in Chile.
Teck Cominco, which has been selling assets and cutting costs to pay down debt it took on last year to buy Fording Canadian Coal Trust, will pocket about $101 million for the shares, bringing its gross proceeds on the sale of Lobo Marte to about $141 million.
Teck took on $9.8 billion in debt to buy Fording, $5.8 billion of which was a bridge loan that is due in October.
The company had hoped to pay down most of the loan through cash flow and tax savings, but the plunge in copper, coal, and zinc prices has forced Teck to begin a fire sale of assets to get the loan down to a level it can renegotiate.
Teck will record a pre-tax gain of $171 million on sale of Lobo Marte and the shares, of which $160 million will be recorded in the first quarter.
The company has said it will sell its gold assets and it is taking bids on a minority stake in its Elk Valley coal business, which it took full control of when it bought Fording. Also on the table is Teck’s 20% stake in the Fort Hills oil sands project.
– luke
