10/07/2015 07:13 EDT | Updated 10/07/2016 01:12 EDT

Teck sells its share of Antamina silver output to Franco-Nevada in streaming deal

TORONTO — Franco-Nevada Corp. (TSX:FNV) has agreed to make a US$650-million advanced payment this month to Teck Resources Ltd. (TSX:TCK.B) in return for a 22.5 per cent share of the silver produced by the Antamina joint venture in Peru. 

Deliveries of silver under the agreement begin in the fourth quarter, with Franco-Nevada paying five per cent of the spot silver price for each ounce of silver delivered to it.

Franco-Nevada says it expects to receive between 900,000 and 1.1 million ounces by the end of December and between 2.8 million and 3.2 million ounces annually, going forward.

The stream will be reduced by one-third after 86 million ounces have been delivered to Franco-Nevada and output is currently expected to last 30 years.

Antamina is ranked as the world's eighth biggest copper producer, owned jointly by BHP Billiton (33.75 per cent), Glencore (33.75), Teck (22.5) and Mitsubishi (10.0), through Compania Minera Antamina S.A.

The Canadian Press