Teck's Undisclosed Royalty Adds $3B to Anglo Merger Case

Edgen Stock·Mar 20 2026, 13:43

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Key Takeaways

A previously undisclosed royalty held by Teck Resources on a major Barrick Gold project could add billions in value to Teck, strengthening the case for its proposed merger with Anglo American. This revelation, brought to light by Citigroup analysts, introduces significant valuation changes for all three mining giants.

Teck holds a 10% net profits royalty on Barrick's Fourmile gold project, which could add up to $3 billion in value to the proposed Anglo American merger.
Barrick's planned IPO of its North American business faces revaluation, as the previously undisclosed royalty may reduce Fourmile's estimated $15 billion value.
The discovery enhances Teck's attractiveness as an acquisition target, supporting analyst price target revisions into the C$79 to C$82 range as the Anglo American deal progresses.

Teck Royalty Revelation Could Add $3 Billion to Merger

A previously undisclosed royalty held by Teck Resources on Barrick Mining's Fourmile gold project in Nevada could add up to $3 billion in value to a combined Anglo-Teck entity, according to a March 20 report from Citigroup analysts. The royalty entitles Teck to a 10% net profits interest on the project, which Barrick has called one of the most significant gold discoveries of the century. This figure is set to increase to 15% once six million ounces of gold are produced from the site.

This hidden asset significantly bolsters Teck's valuation as it finalizes a proposed merger with Anglo American PLC. The royalty pact, originally signed in 2011, covers a project that Barrick's preliminary economic assessment estimates could produce up to 750,000 ounces of gold annually for at least 25 years. The revelation gives Anglo American a stronger rationale for the acquisition by adding a substantial, long-term revenue stream to Teck's portfolio.

Barrick's IPO Valuation Faces Potential Downgrade

The disclosure of Teck's royalty creates significant valuation questions for Barrick's planned initial public offering of its North American business. Barrick had not publicly disclosed the royalty, a detail that surprised market analysts. Josh Wolfson, an analyst with RBC Dominion Securities, had previously valued the Fourmile project at $15 billion, or 15.6% of Barrick's total net asset value. Following the news, he stated his valuation would likely need a downward revision.

The rough math is 10 per cent NPI would be 10 per cent lower value.

— Josh Wolfson, Analyst, RBC Dominion Securities.

The development also introduces friction into Barrick's relationship with Newmont Corp., its joint venture partner in Nevada Gold Mines (NGM). While Fourmile is currently excluded from NGM, it is expected to be integrated later, forcing Newmont to decide whether to pay Barrick to maintain its 38.5% interest or accept dilution. The newly understood royalty complicates the economics of that future decision.