Teck's Highland Valley Copper mine in British Columbia's Interior, on March 26, 2017.JONATHAN HAYWARD/The Canadian Press
Teck Resources Ltd. TECK-B-T is playing a key role in a US$60-million financing and debt restructuring for the developer of a northern U.S. mine that will bring the two businesses together at a time of cross-border trade acrimony.
Vancouver-based Teck is buying a US$40-million equity stake in junior miner Bunker Hill Mining Corp. BNKR-X, which is redeveloping a shuttered mine near Coeur d’Alene, Idaho.
The Bunker Hill mine will produce zinc and lead concentrate, silver and trace amounts of the critical minerals germanium and gallium, which are used in such applications as electronics and communications.
Teck will process the materials at its Trail, B.C., smelter and refinery after the mine starts up late this year. It said in a statement that the transaction will bolster the North American critical minerals supply chain.
In addition, Bunker Hill is launching a US$20-million brokered equity offering led by Bank of Montreal, Canadian Imperial Bank of Commerce and Red Cloud Securities Inc. It is also restructuring debt held by Sprott Streaming and Royalty Co. and Monetary Metals Bond III LLC, US$15-million of which is being converted into equity.
Taken together, the transactions will allow Bunker Hill, which had been hobbled by pricey debt, to complete its project and begin supplying Teck, said Richard Williams, Bunker Hill’s executive chairman and a former chief operating officer at Barrick Gold Corp. ABX-T The mine is about 65 per cent complete and full production is slated for early 2026.
“What we won’t have going into that very tricky period is cash-flow risk,” Mr. Williams said in an interview. “Well have enough cash on the balance sheet to make sure that for any of the unexpected issues that often occur during commissioning we’ve got the funding to sort it out.”
The financings come at a difficult and chaotic time in Canada-U.S. relations, as a result of U.S. President Donald Trump’s tariff threats and Canadian antipathy toward his frequent jibes about annexing the country.
On Thursday, Mr. Trump exempted goods from both Canada and Mexico that are covered under a continental trade agreement for a month from tariffs that he had imposed earlier this week. Mr. Williams said the company had not determined how it may be affected by U.S. import duties or Canadian countermeasures.
Despite the bilateral friction, the United States is seeking more North American supplies of critical minerals such as germanium and gallium after dominant supplier China banned exports of the materials to the U.S. The critical minerals are important to its defence industry.
A recent report by the Washington-based Center for Strategic and International Studies noted Canada is already a large supplier of the essential metals to the U.S., and is well-positioned to contribute to North American security as a result.
“Bolstering co-operation on critical minerals for the defence industry furthermore offers a way for both countries to find common ground amid frustrations surrounding trade and security,” the authors wrote.
Mr. Williams said Teck’s Trail operations are considered strategic as a supplier to the United States. Now, amid the trade war, a Canadian company is putting money into an American business in a show of how important the two countries are to each other, he said.
“To me, it’s a very interesting dimension that needs to be taken into account when people are talking trade wars. It’s not just that Teck is helping us to bring a mine into production in the United States,” he said.
After the deal, Teck will have about a 35-per-cent interest in Bunker Hill, which means the junior miner’s other shareholders must approve it. In lieu of a special meeting, Bunker Hill plans to seek written consent for the deal, it said.