Teck Resources Limited (TCK) announced that it has received approval from the Toronto Stock Exchange (TSE) to make a normal course issuer bid to purchase its Class B subordinate voting shares. Per the normal course issuer bid, Teck can buyback up to 20 million Class B subordinate voting shares between Jul 2, 2014, and Jul 1, 2015, which represents about 3.53% of the outstanding Class B subordinate voting shares, or 4.39% of the public float, as of Jun 19, 2014.
The company’s shares rose as much as around 1.8% following the news during trading hours.
Teck is pursuing normal course issuer bid as the market price of its Class B shares may keep varying from time to time, not revealing their underlying value. The company believes that the share buyback program may provide value by reducing the number of shares outstanding at attractive prices.
Teck will buyback the shares through the facilities of the TSX, the NYSE or any other exchanges in both Canada and the U.S., if eligible. The company may also buyback shares as permitted under the TSX's regulations, including private agreements under an issuer bid exemption order or block purchases in accordance with the applicable regulations.
Other than any exceptions, Teck is authorized to purchase a maximum of 449,574 Class B subordinate voting shares – which is 25% of the average daily trading volume on any one day, as per the TSX’s rules.
Teck released its first-quarter 2014 results in April. The company’s adjusted profit attributable to shareholders was $105 million or 18 cents per share versus $328 million or 56 cents per share in the year-ago quarter. The company’s sales were $2,084 million, a decline of 10.6% year over year.
Teck is Canada’s biggest diversified resource company, committed to responsible mining and mineral development.
Teck currently has a Zacks Rank #2 (Buy).
Other companies in the mining space worth considering include Hi-Crush Partners LP (HCLP), BHP Billiton plc (BBL) and Dominion Diamond Corp. (DDC). While Hi-Crush Partners carries a Zacks Rank #1 (Strong Buy), BHP Billiton and Dominion Diamond have a Zacks Rank #2 (Buy).