Teck Resources has entered into an agreement to acquire SilverBirch Energy Corp. Under the arrangement, SilverBirch shareholders will receive C$8.50 in cash and one share of a new company, SilverWillow Energy Corp., per SilverBirch common share. SilverWillow will hold substantially all of the assets of SilverBirch other than the company’s 50% interest in the Frontier and Equinox oil sands projects. Teck will contribute C$25 million in working capital to SilverWillow along with its its 50% interest in several oil sands leases that are currently jointly owned with SilverBirch.
“For $435 million, this transaction strengthens the Frontier project,” said Don Lindsay, president and CEO, Teck. “The Frontier ownership structure is simplified, our exposure to oil sands leases not amenable to mining is reduced, and Teck now has the opportunity to explore new potential partnerships and other alternatives to move Frontier toward development.”
“SilverWillow will be able to focus its attention on the very promising, existing 100% owned, Audet in situ oil sands prospect while gaining 100% control over the Birch Mountains leases and other lands that have significant oil sands exploration potential,” said Howard Lutley, president and CEO, SilverBirch.
The board of directors of SilverBirch unanimously approved the transaction. Completion of the transaction is subject to regulatory approvals and approval by SilverBirch shareholders, as well as other customary conditions.