NEW YORK (TheStreet) -- Shares of Teck Resources (TCK) were gaining 9.4% to $15.16 on heavy trading volume Monday following reports that the copper mining company is contemplating a merger with Antofagasta (ANFGY) .

The two copper miners recently held early-stage talks about the possible merger, according Bloomberg. Any merger reportedly hinges on the approval of the families that control the two companies.

The potential deal would be primarily stock based, but there is no guarantee Teck Resources and Antofagasta will be able to reach an agreement.

A merger of the two companies would create one of the world's largest copper producers. Both miners have large operations in Chile that could be combined in the merger to reduce costs, according to Bloomberg.

About 10.1 million shares of Tech Resources were traded by 3 p.m. Monday following the report, above the company's average trading volume of about 4.3 million shares a day.

TheStreet Ratings team rates TECK RESOURCES LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TECK RESOURCES LTD (TCK) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite the weak revenue results, TCK has outperformed against the industry average of 18.7%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.31 is sturdy.
  • TECK RESOURCES LTD's earnings per share declined by 42.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, TECK RESOURCES LTD reported lower earnings of $0.63 versus $1.66 in the prior year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TECK RESOURCES LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • You can view the full analysis from the report here: TCK Ratings Report