The first production from the Mexican copper-zinc project is expected to be achieved in 2026

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Agnico Eagle Mines to enter into a joint venture with Teck Resources for the San Nicolás copper-zinc project. (Credit: Khusen Rustamov from Pixabay)

Agnico Eagle Mines has inked a $580m deal with Teck Resources to acquire a 50% interest in the latter’s fully-owned subsidiary Minas de San Nicolás, which owns the San Nicolás copper-zinc project in Mexico.

The deal will be executed through subscription of shares in Minas de San Nicolás. It will result in Agnico Eagle Mines becoming the joint venture partner of Teck Resources in the copper-zinc asset located in Zacatecas.

San Nicolás is an undeveloped volcanic-hosted sulfide deposit (VHMS) deposit.

According to Teck Resources, as on 31 December 2021, San Nicolás contained 105.2 million tonnes of proven and probable mineral reserves at average grades of 1.12% copper, 0.4 g/t gold, 1.48% zinc, and 22 g/t silver. This comes to more than 2% on a copper equivalent basis.

Teck Resources president and CEO Don Lindsay said: “San Nicolás is a high-quality project, located in a leading mining jurisdiction, with high grades, extremely competitive capital intensity, and first quartile costs.

“The opportunity to add the operating and development experience of Agnico Eagle should generate substantial benefits for the project including for all stakeholders throughout the project life cycle.”

The first production from the San Nicolás copper-zinc project is anticipated to be achieved in 2026. The asset’s estimated mine life is 15 years and there is a possibility for extending the mine life as well as regional exploration upside, said Agnico Eagle Mines.

Over its first five years of production, the mine is expected to produce 63,000 tonnes per annum (tpa) of copper and 147,000tpa of zinc in concentrate.

Based on current estimates, the companies anticipate that the development capital costs will be in the range of $1bn and $1.1bn.

Agnico Eagle Mines president and CEO Ammar Al-Joundi said: “This is a unique opportunity to create a long-term partnership between two high quality mining companies working together to de-risk and optimize a world class VMS deposit in a premier mining jurisdiction.

“Agnico Eagle’s project development, permitting and construction experience in Mexico, combined with Teck’s base metals expertise, operating excellence and marketing leadership, are complementary skillsets and will contribute to the timely and successful development and operation of San Nicolás.”

The transaction, which is anticipated to close in the first half of 2023, is subject to the preceding conditions and regulatory approvals.