The undisclosed stake in Barrick's Fourmile gold project could add up to $3 billion in value to a combined Anglo-Teck group
A previously undisclosed royalty held by Teck Resources on Barrick Mining's Fourmile gold project in Nevada has strengthened the case for Anglo American PLC's (LSE:AAL) proposed merger with the Canadian miner, according to Citigroup analysts.
The Globe and Mail reported this week that Teck owns a 10% net profits interest on Fourmile, a project Barrick has described as one of the most significant gold discoveries of the century, with the royalty rising to 15% once six million ounces of gold are produced. The Globe and Mail
Documents filed with Nevada's Eureka County in 2011 show the royalty arrangement covers vast tracts of land in the state, including both the Fourmile project and the Goldrush mine, which entered production in 2024. The Globe and Mail
Fourmile is generally valued at between $10 billion and $20 billion, and Citi analysts estimate that Teck's carry-free royalty stake implies a value uplift of between $1 billion and $3 billion on the Teck deal for Anglo American, the FTSE 100 mining group.
With the combined market capitalisation of Anglo and Teck standing at around $70 billion following a recent pullback, the bank said the royalty could represent a meaningful addition to the merged company's worth.
With gold trading near $4,800 an ounce, Teck's royalty could generate around $300 million a year in revenue, with total payments potentially stretching well into the billions, according to the Globe & Mail report.
Neither Barrick nor Teck has confirmed the precise terms of the arrangement.