Teck Resources reaches deal to enter Chile copper project

Australia's Golden Rim Resources (ASX: GMR) and Canada's largest diversified miner Teck Resources (TSX: TECK.A | TECK.B) (NYSE: TECK) have signed an option and joint venture to develop the Loreto copper project in Chile protocol. .

Golden Rim said the asset is located 120 kilometers north of Quebrada Blanca, Teck's main growth project, and is surrounded by businesses operated by BHP and Codelco.

The transaction grants Teck's subsidiary Teck Chile an option to acquire up to a 75% interest in Loreto by providing Golden Rim with a cash installment of $600,000. The Vancouver-based miner also has to spend $17 million on exploration.

"Golden Rim believes that Loreto likely represents the last undeveloped Oligocene-Eocene outcrop porphyry system in northern Chile," managing director Craig Mackay said in the statement.

The company noted that the mineral concession for its neighbouring Paguanta project was not included in the agreement, adding that it was seeking an alternative deal for the asset.

Teck is currently expanding its Quebrada Blanca mine. The project, called Quebrada Blanca Phase 2 (QB2), is scheduled to begin operations in the second half of this year and will double the company's copper production by 2023.

The company recently said that the cost of the nearly completed expansion could increase by $500 million, to between $900 million and $1.1 billion.

The project will allow Teck to extend the life of the aging mine by 28 years and increase copper production to 300,000 tonnes per year from 287,000 tonnes in 2017.

The mining giant is already working on a third phase, which would double Quebrada Blanca's copper production capacity to 600,000 tonnes per year. The potential expansion would make the mine the second-largest copper mine in Chile after Escondida. It would also place it among the top five copper mines in the world.