Gleichen one step closer to netting Teck’s Morelos

Vancouver – Gleichen Resources (GRL-V, GRLFF-O) closed a $241 million financing to buy Teck‘s (TCK. B-T, TCK-N) 78.8% stake in the Morelos gold project for US$150 million and a 4.9%-Gleichen stake.

The financing, led by Macquarie Capital Markets, BMO Capital Markets and GMP Securities, comprises 241.5 million special warrants that when exercised give holders title to one share of Gleichen at $1 and a quarter share purchase warrant. Whole share purchase warrants are exercisable at $1.30 until Nov. 12, 2011.

Gleichen says funds will be released from escrow so long as the conditions of the Morelos Gold project acquisition are fulfilled and no adverse material change in Gleichen’s financial condition occur.

The Morelos project, which Teck had been advancing through to a feasibility study, would become Gleichen’s chief asset. Morelos is a four hour drive south of Mexico City, Mexico.

Morelos’ measured and indicated resources stand at 28 million tonnes grading 3.2 grams gold. A prefeasibility study proposed a US$300 million mine that would produce about a quarter-million-oz. gold per year.

For Teck the transaction is all about paying down once hefty loans.

Debt-busting Teck is now well on its way out of a financial Jello it had been sinking into after taking on debt worth US$10 billion to acquire Fording Canadian Coal Trust in 2008.

For the third quarter, 2009, ending Sept. 30, 2009, Teck reported it had eliminated a US$5.8 million bridge loan and slashed a US$4 billion term loan down by US$1.3 billion.

As of Sept. 30, 2009, Teck’s asset sales, proceeds of which are destined to lower the term loan even further, so far come to US$1.1 billion. Teck has about US$1.5 billion in the bank.

Both Gleichen and Teck have said to expect the Morelos transaction to close in the fourth quarter 2009. Goldcorp (G-T, GG-N) owns the remaining 21.2% interest in the project.