PERTH (miningweekly.com) – The Australian arm of Canadian miner Teck Resources has exercised its pre-emptive right over the Reward zinc project, in the Northern Territory, usurping a A$21-million offer from Marindi Metals.

ASX-listed Rox Resources in August accepted Marindi’s offer for its 49% share in the Reward project, subject to Teck not exercising its option over the project. Teck can earn a 70% interest in the Reward project by spending A$15-million by 2018.

At the time that Rox and Marindi struck the deal, Teck expressed its concern over the agreement and its implications for the joint venture agreement, reserving its pre-emptive rights.

Teck has now exercised this right and has matched the Marindi offer, offering Rox a cash consideration of A$8-million, shares worth A$3.6-million, or alternatively A$2.6-million in cash, a three-year promissory note with a face value of A$5.25-million, and a deferred payment of A$3.75-million, payable upon the completion of a bankable feasibility study or the expiry of six years, whichever came first.

Teck’s offer is subject to the company raising funds to complete the acquisition and the satisfaction of a number of conditions.

“Monetising our interest in the Reward project represents a successful outcome for our shareholders,” said Rox MD Ian Mulholland.

“This shows that the market was significantly under-valuing the project and validates our decision to sell. Rox will now review our strategic options with a focus on generating new growth and value opportunities.”

Meanwhile, Marindi said that it was seeking legal advice on the validity of the pre-emption by Teck, and was reserving its rights until it had time to consider its position.

However, the company said that Teck’s decision to acquire Rox’s share of the Reward project was a strong endorsement of the validity of Marindi’s strategy to acquire the asset and of the long-term outlook for zinc.

The offer also highlighted the strong outlook for Marindi’s own nearby landholdings in the McArthur River basin, the company said, as well as its Newman base metals project, in Western Australia, both of which represented attractive zinc exploration and development assets.

The Reward project has a mineral resource of 58-million tonnes, grading 12.7% lead and zinc at its Teena deposit, while the Myrtle deposit is estimated to host 44-million tonnes, grading 5% lead and zinc.