Topic: How To Invest

The Successful Investor Hotline – Friday, February 24, 2023

Article Excerpt

TECK RESOURCES LTD., $52.81, Toronto symbol TECK.B, remains a buy for investors seeking long-term gains from the Resources sector of their portfolio. The company now plans to spin off its metallurgical coal (a key ingredient in steelmaking) operations as a separate, publicly-traded company called Elk Valley Resources Ltd. (EVR). Investors will receive 0.1 of a common share of EVR for each Teck share they own as well as a cash payment of $0.39 a share. The distribution of EVR shares and cash is a return of capital to Teck shareholders, which will reduce the tax cost of their shares. The remaining firm will change its name to Teck Metals Corp. and operate the company’s copper and zinc mines. Under the terms of the plan, EVR will also pay a royalties and issue preferred shares to Teck Metals. In all, those payments will amount to about 90% of EVR’s free cash flow (regular cash flow less capital expenditures). The royalty payments will end when they reach…