Zinc and Oil Sands Spur Teck’s Rise

Article Excerpt

TECK COMINCO LTD. $64 (Toronto symbol TEK.SV.B; SI Rating: Average) has formed a partnership with UTS Energy Corp. which spent $6.1 million for the right to explore a new oil sands property in Alberta. (Teck and UTS are also partners in the proposed Fort Hills mining project.) That’s a tiny investment for Teck, which earned $2.00 a share (total $405 million) in the third quarter of 2005. But deals like this expand the company’s involvement in a promising region and industry. Teck has soared in the past few months, as zinc prices moved from $1,200 U.S. a tonne in July 2005 to around $2,000 U.S. a tonne in early 2006. Prices could move higher, as an accident at China’s biggest zinc mine could force it to temporarily shut down. Spreading industrialization in China and other parts of Asia should also keep zinc prices high. Despite the recent rise, Teck still trades for just 12.0 times the $5.34 a share that it will…

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