Nov. 12 (Bloomberg) -- Teck Cominco Ltd. said it may sell gold mines and stakes in other projects to repay $9.8 billion of debt used to buy Fording Canadian Coal Trust.

The company is aiming for a ``significant reduction'' in a $5.8 billion one-year bridge loan in the first half of next year, Ron Vance, vice president of corporate development for Vancouver-based Teck, said today in a presentation in New York. Teck said it may consider bond sales when conditions improve.

Chief Executive Officer Don Lindsay bought Fording to boost output of coal used in steelmaking, as a credit freeze caused steel demand to slump and producers to cut output. Teck is counting on asset sales and record contract coal prices to reduce debt that's now almost three times its market value.

``Selling the gold assets won't yield a meaningful number'' in the context of the debt reduction, Kerry Smith, a mining analyst at Haywood Securities Inc. in Toronto, said today in an interview. The pricing of next year's coal contract ``won't be nearly as good as what people are expecting. That's why the stock is getting pounded.''

Teck slid C$1.54, or 18 percent, to C$7.21 at 10:52 a.m. in Toronto Stock Exchange trading, valuing the company at C$3.61 billion ($2.94 billion.) The stock has dropped 85 percent since July 31, the day the company said it agreed to buy Fording.

Teck also has to repay a second $4 billion loan over three years in 11 equal installments starting in April.

Pogo Mine

The company's gold assets comprise 40 percent of the Pogo mine in Alaska, which produces 350,000 ounces to 400,000 ounces of gold a year, according to Teck's Web site. The company also shares ownership of the Hemlo mine in Ontario with Barrick Gold Corp. The mine produced 330,000 ounces last year.

``We're currently in discussions with several interested parties,'' Vance said. The gold portfolio is ``an area that presents real, current opportunities for us.''

Teck will also seek to cut spending and cut back on new projects to ensure repayments, Vance said. An expected $1 billion tax rebate from the Canadian government and less taxes on earnings will also help the company cut debt, he said.

``We remain confident we can effectively and efficiently deal with challenges of servicing acquisition debt,'' Vance said.

To contact the reporters on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net; Stewart Bailey in New York at sbailey7@bloomberg.net.

Last Updated: November 12, 2008 11:21 EST