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Japanese Companies to Buy Teck's Pogo Gold Mine Stake

By Miho Yoshikawa
Reuters
Thursday, April 30, 2009

Japan's Sumitomo Metal Mining Co Ltd said it and Sumitomo Corp will buy Teck Resources Ltd's 40 percent stake in the Pogo gold mine in Alaska, making the Japanese mining company the operator of an overseas mine for the first time.

A Sumitomo Mining spokesman said the two firms would buy all of Teck's stake for $245 million, plus working capital, although they have not yet decided how to divide the stake they buy. He said Sumitomo Mining will take over from Teck as operator of the mine, which produces 11-12 tonnes of gold a year and had estimated gold reserves of 109 tonnes as of the end of 2008.

"We have held becoming a nonferrous metals major as one of our strategic targets, and the acquisition of the stake is in line with this goal," the company said in a statement.

Sumitomo Mining currently holds a 51 percent stake in the mine, which is located about 90 miles southeast of Fairbanks, and Sumitomo Corp holds 9 percent.

Teck has reportedly been seeking buyers for its assets, including its interest in Pogo, as part of its plan to cut its debt load. It is looking to sell assets to raise cash to pay off a $5.8 billion bridge loan to help finance its acquisition last year of Fording Canadian Coal Trust.

Teck Resources, Canada's largest base metals miner, was formerly known as Teck Cominco.