Teck Resources Limited (“Teck”), (TSX: TECK.A and TECK.B, NYSE: TECK) today announced the closing of the sale of its two-thirds interest in the Waneta Dam in British Columbia, Canada, to BC Hydro for $1.2 billion cash.
The transaction has received the necessary regulatory approvals and consents, including approval by the BC Utilities Commission. Teck will record an after-tax gain of approximately $820 million as a result of the sale, with no cash tax payable on the proceeds.
As part of the sale, Teck Metals Ltd. (“Teck Metals”) holds a 20-year lease to use the two-thirds interest in Waneta to produce power for its industrial operations in Trail. Annual payments will begin at approximately $75 million per year and escalate at rwo per cent per annum, equivalent to an initial power price of $40/MWh based on 1,880 GWh of energy per annum. Teck Metals has an option to extend the lease for a further 10 years at comparable rates.