Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (Teck)
today announced its unaudited second quarter results for 2023.
“We were deeply saddened to report an employee fatality in the
second quarter at our Quebrada Blanca Operations. Our deepest
sympathies go out to the employee's colleagues and loved ones.
Learnings from the investigation are being shared across Teck and
with industry peers to prevent future incidents," said Jonathan
Price, CEO. “In the second quarter we achieved another major
milestone at our QB2 project with the first sale of copper
concentrate as we ramp up to full production later this year. We
continue to explore a range of options to realize the full
potential of our world-class base metals business and to progress
our overall copper growth pipeline, including receiving regulatory
approval for our Zafranal project in May. Strong performance from
our steelmaking coal business contributed to solid financial
results in the second quarter, further reinforcing the inherent
value of our high-margin steelmaking coal business."
Highlights
- Adjusted profit attributable to shareholders1 of $643 million
or $1.24 per share in Q2 2023.
- Profit from continuing operations attributable to
shareholders of $510 million or $0.98 per share in Q2
2023.
- Adjusted EBITDA1 was $1.5 billion in Q2 2023 driven by
continued robust commodity prices and strong steelmaking coal
sales. Profit from continuing operations before taxes was $805
million in Q2 2023.
- We completed the first shipment and sale of copper concentrate
at QB2 in the second quarter. Line 1 is operating well as per
expectations, and Line 2 is in commissioning. We continue to expect
to be operating at full production rates by the end of 2023.
- We generated cash flows from operations of $1.1 billion, ending
the quarter with a cash balance of $1.8 billion. In June, we made
our first scheduled semi-annual repayment of US$147 million on the
QB2 project finance facility, further deleveraging our balance
sheet.
- Our liquidity as at July 26, 2023 is $7.0 billion,
including $1.7 billion of cash.
- We completed $85 million in Class B subordinate voting share
buybacks pursuant to our normal course issuer bid. We also paid $65
million to shareholders in Q2 through our regular quarterly base
dividend.
- In April, we closed the transaction to form the joint
venture on the San Nicolás copper-zinc project in Mexico and in
June finalized the Environmental Impact Assessment permit
application, which is planned for submission in Q3 2023. In May, we
announced that the Zafranal copper-gold project in Peru received
regulatory approval from the Peruvian environmental authority.
- On May 12, 2023, we completed the plan of arrangement under the
Canada Business Corporations Act to implement a six-year sunset of
the multiple voting rights attached to the Class A common
shares.
Financial Summary Q2 2023 |
|
|
|
|
|
Financial Metrics(CAD$ in millions, except per
share data) |
Q2 2023 |
Q2 2022 |
Revenue |
$ |
3,519 |
$ |
5,300 |
Gross
profit |
$ |
1,410 |
$ |
3,142 |
Gross profit
before depreciation and amortization1 |
$ |
1,841 |
$ |
3,559 |
Profit from
continuing operations before taxes |
$ |
805 |
$ |
2,522 |
Adjusted
EBITDA1 |
$ |
1,479 |
$ |
3,290 |
Profit from
continuing operations attributable to shareholders |
$ |
510 |
$ |
1,582 |
Adjusted
profit attributable to shareholders1 |
$ |
643 |
$ |
1,772 |
Basic
earnings per share from continuing operations |
$ |
0.98 |
$ |
2.95 |
Diluted
earnings per share from continuing operations |
$ |
0.97 |
$ |
2.90 |
Adjusted
basic earnings per share1 |
$ |
1.24 |
$ |
3.30 |
Adjusted diluted earnings per share1 |
$ |
1.22 |
$ |
3.25 |
Note: 1. This is a non-GAAP financial measure or
ratio. See “Use of Non-GAAP Financial Measures and Ratios” for
further information.
Key Updates
Executing on our copper growth strategy –
QB2 a long-life, low-cost operation with major expansion
potential
- We completed the first shipment and sale of copper concentrate
at QB2 in the quarter.
- Line 1 is operating well as per expectations, and Line 2
is in commissioning.
- The concentrate pipeline, concentrate filter plant and storage
systems are in operation at the port.
- We continue to expect to be operating at full production rates
by the end of 2023, and our previously disclosed capital cost
guidance for QB2 of US$8.0 to $8.2 billion is unchanged.
- Due to delays in construction and commissioning, our 2023
annual production guidance for QB2 has been updated to 80,000
tonnes to 100,000 tonnes. Our previously disclosed 2024 — 2026
annual production guidance for QB2 is unchanged.
Safety and Sustainability
Leadership
- Trail Operations was the first stand-alone zinc processing site
globally to receive the Zinc Mark, verifying its performance in
responsible production criteria including GHG emissions, community
health and respect for Indigenous Peoples' rights.
- Teck was named one of the Best 50 Corporate Citizens in Canada
by Corporate Knights.
Guidance
- We have updated our previously issued 2023 annual production
guidance to reduce our copper production as a result of lower QB2
production, and to reduce lead production at Red Dog. There are no
other changes to our previously disclosed guidance.
- Our guidance is outlined in summary below and our usual
guidance tables, including three-year production guidance, can be
found on pages 28 — 32 of Teck’s second quarter results for 2023 at
the link below.
2023 Guidance – Summary |
Current |
Production Guidance |
|
Copper (000’s tonnes) |
330 - 375 |
Zinc (000’s tonnes) |
645 - 685 |
Refined zinc (000’s tonnes) |
270 - 290 |
Steelmaking coal (million tonnes) |
24.0 - 26.0 |
Sales Guidance
– Q3 2023 |
|
Red Dog zinc in concentrate sales (000’s tonnes) |
240 - 280 |
Steelmaking coal sales (million tonnes) |
5.6 - 6.0 |
Unit
Cost Guidance |
|
Copper net cash unit costs (US$/lb.)1 2 |
1.60 - 1.80 |
Zinc net cash unit costs (US$/lb.)1 |
0.50 - 0.60 |
Steelmaking coal adjusted site cash cost of sales
(CAD$/tonne)1 |
88 - 96 |
Steelmaking coal transportation costs (CAD$/tonne) |
45 - 48 |
Notes: 1. This is a non-GAAP financial measure or
ratio. See “Use of Non-GAAP Financial Measures and Ratios” for
further information. 2. Excludes Quebrada Blanca.
Click here to view Teck’s full second quarter
results for 2023.
WEBCAST
Teck will host an Investor Conference Call to
discuss its Q2/2023 financial results at 11:00 AM Eastern time,
8:00 AM Pacific time, on July 27, 2023. A
live audio webcast of the conference call, together with supporting
presentation slides, will be available at our website at
www.teck.com. The webcast will be archived at www.teck.com.
Reference:
Fraser Phillips, Senior Vice President, Investor
Relations and Strategic Analysis: 604.699.4621
Chris Stannell, Public Relations Manager:
604.699.4368
USE OF NON-GAAP FINANCIAL MEASURES AND
RATIOS
Our financial results are prepared in accordance
with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board. This document
refers to a number of non-GAAP financial measures and non-GAAP
ratios which are not measures recognized under IFRS and do not have
a standardized meaning prescribed by IFRS or by Generally Accepted
Accounting Principles (GAAP) in the United States.
The non-GAAP financial measures and non-GAAP
ratios described below do not have standardized meanings under
IFRS, may differ from those used by other issuers, and may not be
comparable to similar financial measures and ratios reported by
other issuers. These financial measures and ratios have been
derived from our financial statements and applied on a consistent
basis as appropriate. We disclose these financial measures and
ratios because we believe they assist readers in understanding the
results of our operations and financial position and provide
further information about our financial results to investors. These
measures should not be considered in isolation or used in
substitute for other measures of performance prepared in accordance
with IFRS.
Adjusted profit attributable to
shareholders – For adjusted profit attributable to
shareholders, we adjust profit (loss) attributable to shareholders
as reported to remove the after-tax effect of certain types of
transactions that reflect measurement changes on our balance sheet
or are not indicative of our normal operating activities.
EBITDA – EBITDA is profit before
net finance expense, provision for income taxes, and depreciation
and amortization.
Adjusted EBITDA – Adjusted EBITDA
is EBITDA before the pre-tax effect of the adjustments that we make
to adjusted profit attributable to shareholders as described
above.
Adjusted profit attributable to shareholders,
EBITDA, and Adjusted EBITDA highlight items and allow us and
readers to analyze the rest of our results more clearly. We believe
that disclosing these measures assists readers in understanding the
ongoing cash generating potential of our business in order to
provide liquidity to fund working capital needs, service
outstanding debt, fund future capital expenditures and investment
opportunities, and pay dividends.
Adjusted basic earnings per share
– Adjusted basic earnings per share is adjusted profit attributable
to shareholders divided by average number of shares outstanding in
the period.
Adjusted diluted earnings per
share – Adjusted diluted earnings per share is adjusted
profit attributable to shareholders divided by average number of
fully diluted shares in a period.
Gross profit before depreciation and
amortization – Gross profit before depreciation and
amortization is gross profit with depreciation and amortization
expense added back. We believe this measure assists us and readers
to assess our ability to generate cash flow from our business units
or operations.
Unit costs – Unit costs for our
steelmaking coal operations are total cost of goods sold, divided
by tonnes sold in the period, excluding depreciation and
amortization charges. We include this information as it is
frequently requested by investors and investment analysts who use
it to assess our cost structure and margins and compare it to
similar information provided by many companies in the industry.
Adjusted site cash cost of sales
– Adjusted site cash cost of sales for our steelmaking coal
operations is defined as the cost of the product as it leaves the
mine excluding depreciation and amortization charges, out-bound
transportation costs and any one-time collective agreement charges
and inventory write-down provisions.
Total cash unit costs – Total
cash unit costs for our copper and zinc operations includes
adjusted cash costs of sales, as described below, plus the smelter
and refining charges added back in determining adjusted revenue.
This presentation allows a comparison of total cash unit costs,
including smelter charges, to the underlying price of copper or
zinc in order to assess the margin for the mine on a per unit
basis.
Net cash unit costs – Net cash
unit costs of principal product, after deducting co-product and
by-product margins, are also a common industry measure. By
deducting the co- and by-product margin per unit of the principal
product, the margin for the mine on a per unit basis may be
presented in a single metric for comparison to other
operations.
Adjusted cash cost of sales –
Adjusted cash cost of sales for our copper and zinc operations is
defined as the cost of the product delivered to the port of
shipment, excluding depreciation and amortization charges, any
one-time collective agreement charges or inventory write-down
provisions and by-product cost of sales. It is common practice in
the industry to exclude depreciation and amortization as these
costs are non-cash and discounted cash flow valuation models used
in the industry substitute expectations of future capital spending
for these amounts.
Adjusted site cash cost of sales per
tonne – Adjusted site cash cost of sales
per tonne is a non-GAAP ratio comprised of adjusted site cash cost
of sales divided by tonnes sold. There is no similar financial
measure in our consolidated financial statements with which to
compare.
Profit Attributable to Shareholders and
Adjusted Profit Attributable to Shareholders
|
Three months ended |
Six months ended |
|
June 30, |
June 30, |
(CAD$ in millions) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Profit from continuing operations attributable
toshareholders |
$ |
510 |
$ |
1,582 |
$ |
1,676 |
$ |
3,101 |
Add (deduct) on an after-tax basis1: |
|
|
|
|
Loss on debt purchase |
— |
46 |
— |
46 |
QB2 variable consideration to IMSA and ENAMI |
69 |
37 |
71 |
96 |
Environmental costs |
3 |
(51) |
16 |
(111) |
Inventory write-downs (reversals) |
— |
23 |
— |
23 |
Share-based compensation |
42 |
6 |
60 |
88 |
Commodity derivatives |
23 |
34 |
19 |
(3) |
Loss (gain) on sale or contribution of assets |
— |
(1) |
(186) |
— |
Elkview business interruption claim |
(81) |
— |
(149) |
— |
Profit from discontinued operations2 |
— |
93 |
— |
145 |
Other |
77 |
3 |
66 |
7 |
|
|
|
|
|
Adjusted profit attributable to shareholders |
$ |
643 |
$ |
1,772 |
$ |
1,573 |
$ |
3,392 |
|
|
|
|
|
Basic earnings per share from continuing
operations |
$ |
0.98 |
$ |
2.95 |
$ |
3.25 |
$ |
5.78 |
Diluted earnings per share from continuing
operations |
$ |
0.97 |
$ |
2.90 |
$ |
3.20 |
$ |
5.67 |
Adjusted basic earnings per share |
$ |
1.24 |
$ |
3.30 |
$ |
3.05 |
$ |
6.33 |
Adjusted diluted earnings per share |
$ |
1.22 |
$ |
3.25 |
$ |
3.00 |
$ |
6.21 |
|
|
|
|
|
Notes: 1. Adjustments for the three and six
months ended June 30, 2022 are as previously reported.
2. Adjustment required to remove the effect of discontinued
operations for the three and six months ended June 30, 2022.
Reconciliation of Basic Earnings per share
to Adjusted Basic Earnings per share
|
Three months ended |
Six months ended |
|
June 30, |
June 30, |
(Per share amounts) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Basic earnings per share from
continuingoperations |
$ |
0.98 |
$ |
2.95 |
$ |
3.25 |
$ |
5.78 |
Add (deduct)1: |
|
|
|
|
Loss on debt purchase |
— |
0.09 |
— |
0.09 |
QB2 variable consideration to IMSA and ENAMI |
0.14 |
0.07 |
0.14 |
0.18 |
Environmental costs |
— |
(0.10) |
0.03 |
(0.21) |
Inventory write-downs (reversals) |
— |
0.04 |
— |
0.04 |
Share-based compensation |
0.08 |
0.01 |
0.11 |
0.17 |
Commodity derivatives |
0.05 |
0.06 |
0.04 |
(0.01) |
Loss (gain) on sale or contribution of assets |
— |
— |
(0.36) |
— |
Elkview business interruption claim |
(0.16) |
— |
(0.29) |
— |
Profit from discontinued operations2 |
— |
0.18 |
— |
0.27 |
Other |
0.15 |
— |
0.13 |
0.02 |
|
|
|
|
|
Adjusted basic earnings per share |
$ |
1.24 |
$ |
3.30 |
$ |
3.05 |
$ |
6.33 |
|
|
|
|
|
Reconciliation of Diluted Earnings per
share to Adjusted Diluted Earnings per share
|
Three months ended |
Six months ended |
|
June 30, |
June 30, |
(Per share amounts) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Diluted earnings per share from continuing
operations |
$ |
0.97 |
$ |
2.90 |
$ |
3.20 |
$ |
5.67 |
Add
(deduct)1: |
|
|
|
|
Loss on debt purchase |
— |
0.08 |
— |
0.08 |
QB2 variable consideration to IMSA and ENAMI |
0.13 |
0.07 |
0.13 |
0.18 |
Environmental costs |
0.01 |
(0.09) |
0.03 |
(0.2) |
Inventory write-downs (reversals) |
— |
0.04 |
— |
0.04 |
Share-based compensation |
0.08 |
0.01 |
0.11 |
0.16 |
Commodity derivatives |
0.04 |
0.06 |
0.04 |
(0.01) |
Loss (gain) on sale or contribution of assets |
— |
— |
(0.35) |
— |
Elkview business interruption claim |
(0.15) |
— |
(0.28) |
— |
Profit from discontinued operations2 |
— |
0.17 |
— |
0.27 |
Other |
0.14 |
0.01 |
0.12 |
0.02 |
|
|
|
|
|
Adjusted diluted earnings per share |
$ |
1.22 |
$ |
3.25 |
$ |
3.00 |
$ |
6.21 |
|
|
|
|
|
Notes:1. Adjustments for the three and six months ended June 30,
2022 are as previously reported.2. Adjustment required to remove
the effect of discontinued operations for the three and six months
ended June 30, 2022.
Reconciliation of EBITDA and Adjusted
EBITDA
|
Three months ended |
Six months ended |
|
June 30, |
June 30, |
(CAD$ in millions) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Profit from continuing operations before taxes |
$ |
805 |
$ |
2,522 |
$ |
2,661 |
$ |
4,890 |
Finance
expense net of finance income |
39 |
40 |
69 |
83 |
Depreciation and amortization |
431 |
417 |
854 |
832 |
|
|
|
|
|
EBITDA |
1,275 |
2,979 |
3,584 |
5,805 |
|
|
|
|
|
Add
(deduct)1: |
|
|
|
|
Loss on debt purchase |
— |
63 |
— |
63 |
QB2 variable consideration to IMSA and ENAMI |
114 |
62 |
116 |
161 |
Environmental costs |
4 |
(71) |
21 |
(153) |
Inventory write-downs (reversals) |
— |
32 |
— |
32 |
Share-based compensation |
56 |
5 |
78 |
115 |
Commodity derivatives |
30 |
45 |
24 |
(4) |
Loss (gain) on sale or contribution of assets |
1 |
(2) |
(257) |
— |
Elkview business interruption claim |
(117) |
— |
(219) |
— |
Profit from discontinued operations2 |
— |
182 |
— |
304 |
Other |
116 |
(5) |
104 |
11 |
|
|
|
|
|
Adjusted EBITDA |
$ |
1,479 |
$ |
3,290 |
$ |
3,451 |
$ |
6,334 |
|
|
|
|
|
Notes: 1. Adjustments for the three and six
months ended June 30, 2022 are as previously reported.
2. Adjustment required to remove the effect of discontinued
operations for the three and six months ended June 30, 2022.
Reconciliation of Gross Profit Before
Depreciation and Amortization
|
Three months ended |
Six months ended |
|
June 30, |
June 30, |
(CAD$ in millions) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Gross profit |
$ |
1,410 |
$ |
3,142 |
$ |
3,076 |
$ |
5,620 |
Depreciation and amortization |
431 |
417 |
854 |
832 |
|
|
|
|
|
Gross profit before depreciation and amortization |
$ |
1,841 |
$ |
3,559 |
$ |
3,930 |
$ |
6,452 |
|
|
|
|
|
Reported
as: |
|
|
|
|
Copper |
|
|
|
|
Highland Valley Copper |
$ |
97 |
$ |
217 |
$ |
233 |
$ |
463 |
Antamina |
226 |
298 |
456 |
556 |
Carmen de Andacollo |
(3) |
37 |
9 |
76 |
Quebrada Blanca |
— |
7 |
(1) |
20 |
Other |
(2) |
— |
(6) |
— |
|
|
|
|
|
|
318 |
559 |
691 |
1,115 |
|
|
|
|
|
Zinc |
|
|
|
|
Trail Operations |
33 |
12 |
69 |
46 |
Red Dog |
123 |
183 |
250 |
457 |
Other |
(12) |
(1) |
(2) |
(4) |
|
|
|
|
|
|
144 |
194 |
317 |
499 |
|
|
|
|
|
Steelmaking coal |
1,379 |
2,806 |
2,922 |
4,838 |
|
|
|
|
|
Gross profit
before depreciation and amortization |
$ |
1,841 |
$ |
3,559 |
$ |
3,930 |
$ |
6,452 |
|
|
|
|
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING
STATEMENTS
This news release contains certain forward-looking
information and forward-looking statements as defined in applicable
securities laws (collectively referred to as forward-looking
statements). These statements relate to future events or our future
performance. All statements other than statements of historical
fact are forward-looking statements. The use of any of the words
“anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”,
“will”, “project”, “predict”, “potential”, “should”, “believe” and
similar expressions is intended to identify forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. These statements speak only as of the
date of this news release.
These forward-looking statements include, but are
not limited to, statements concerning: our focus and strategy;
anticipated global and regional supply, demand and market outlook
for our commodities; expectation that QB2 will be a long-life,
low-cost operation with major expansion potential; QB2 capital cost
guidance and development capital spending in 2023; expectation that
cost pressures at QB2 can be mitigated, expectation that QB2 will
reach ramp up to full production capacity by the end of 2023; our
expectation that the Antamina MEIA will be approved in the second
half of 2023; execution of our copper growth strategy; expectations
regarding our QBME project, including the impact of the project and
associated timing expectations for permitting, production and
completion of the feasibility study; expectations regarding the
NewRange joint venture, including our ability to advance permitting
at the NorthMet and Mesaba deposits, our ability to have the
NorthMet 404 Wetland Permit reinstated, and the timing for
completion of the NorthMet feasibility study; expectations
regarding the San Nicolás project, including timing for submission
of the environmental impact assessment and permit application
and completion of the feasibility study; expectations
regarding the Highland Valley Copper 2040 project, including its
potential to extend operations to at least 2044 and timing for
feasibility study completion and EIA submission; expectations
regarding the Zafranal project, including timing for completion of
the feasibility study; expectations regarding the Galore Creek
project, including advancement of the prefeasibility study;
expectations regarding the advancement of Schaft Creek and
NuevaUnión; expectations regarding impacts to our business from the
B.C. port workers strike, including elevated transportation costs;
expectations for stabilization and reduction of the selenium trend
in the Elk Valley; expectations for total water treatment capacity;
projected spending, including capital and operating costs, from
2023-2024 on water treatment, water management and incremental
measures associated with the Direction; timing of advancement and
completion of key water treatment projects; our expectation that we
will increase our water treatment capacity to 127.5 million litres
per day by the end of 2026; expectations regarding engagement with
U.S. regulators on water quality standards; expectations regarding
finance expenses for the second half of 2023; expectations
regarding increased general and administrative expenses;
expectations with respect to the impacts of the Chilean Mining
Royalty bill; expectations regarding timing and amount of income
tax payments; liquidity and availability of borrowings under our
credit facilities; our ability to obtain additional credit for
posting security for reclamation at our sites; all guidance
appearing in this document including but not limited to the
production, sales, cost, unit cost, capital expenditure, and other
guidance under the heading “Guidance” and discussed in the various
business unit sections; our expectations regarding inflationary
pressures and increased key input costs, including profit based
compensation and royalties; and expectations regarding the adoption
of new accounting standards and the impact of new accounting
developments.
These statements are based on a number of
assumptions, including, but not limited to, assumptions disclosed
elsewhere in this document and assumptions regarding general
business and economic conditions, interest rates, commodity and
power prices; acts of foreign or domestic governments and the
outcome of legal proceedings; the supply and demand for, deliveries
of, and the level and volatility of prices of copper, zinc and
steelmaking coal and our other metals and minerals, as well as
steel, crude oil, natural gas and other petroleum products; the
timing of the receipt of permits and other regulatory and
governmental approvals for our development projects and other
operations, including mine extensions; positive results from the
studies on our expansion and development projects; our ability to
secure adequate transportation, including rail and port services,
for our products; our costs of production and our production and
productivity levels, as well as those of our competitors;
continuing availability of water and power resources for our
operations; changes in credit market conditions and conditions in
financial markets generally; the availability of funding to
refinance our borrowings as they become due or to finance our
development projects on reasonable terms; availability of letters
of credit and other forms of financial assurance acceptable to
regulators for reclamation and other bonding requirements; our
ability to procure equipment and operating supplies in sufficient
quantities and on a timely basis; the availability of qualified
employees and contractors for our operations, including our new
developments and our ability to attract and retain skilled
employees; the satisfactory negotiation of collective agreements
with unionized employees; the impact of changes in Canadian-U.S.
dollar, Canadian dollar-Chilean Peso and other foreign exchange
rates on our costs and results; engineering and construction
timetables and capital costs for our development and expansion
projects; our ability to develop technology and obtain the benefits
of technology for our operations and development projects; closure
costs; environmental compliance costs; market competition; the
accuracy of our mineral reserve and resource estimates (including
with respect to size, grade and recoverability) and the geological,
operational and price assumptions on which these are based; tax
benefits and tax rates; the outcome of our coal price and volume
negotiations with customers; the outcome of our copper, zinc and
lead concentrate treatment and refining charge negotiations with
customers; the resolution of environmental and other proceedings or
disputes; our ability to obtain, comply with and renew permits,
licenses and leases in a timely manner; and our ongoing relations
with our employees and with our business and joint venture
partners.
In addition, assumptions regarding the Elk Valley
Water Quality Plan include assumptions that additional treatment
will be effective at scale, and that the technology and facilities
operate as expected, as well as additional assumptions discussed
under the heading “Elk Valley Water Management Update.” Assumptions
regarding QB2 include current project assumptions and assumptions
regarding the final feasibility study, estimates of future
construction capital at QB2 are based on a CLP/USD rate range of
800 — 850, as well as there being no further unexpected material
and negative impact to the various contractors, suppliers and
subcontractors for the QB2 project that would impair their ability
to provide goods and services as anticipated during commissioning
and ramp-up activities. Statements regarding the availability of
our credit facilities are based on assumptions that we will be able
to satisfy the conditions for borrowing at the time of a borrowing
request and that the facilities are not otherwise terminated or
accelerated due to an event of default. Assumptions regarding the
costs and benefits of our projects include assumptions that the
relevant project is constructed, commissioned and operated in
accordance with current expectations. Expectations regarding our
operations are based on numerous assumptions regarding the
operations. Our Guidance tables include disclosure and footnotes
with further assumptions relating to our guidance, and assumptions
for certain other forward-looking statements accompany those
statements within the document. Statements concerning future
production costs or volumes are based on numerous assumptions
regarding operating matters and on assumptions that demand for
products develops as anticipated, that customers and other
counterparties perform their contractual obligations, that
operating and capital plans will not be disrupted by issues such as
mechanical failure, unavailability of parts and supplies, labour
disturbances, interruption in transportation or utilities, or
adverse weather conditions, and that there are no material
unanticipated variations in the cost of energy or supplies.
Statements regarding anticipated steelmaking coal sales volumes and
average steelmaking coal prices depend on timely arrival of vessels
and performance of our steelmaking coal-loading facilities, as well
as the level of spot pricing sales. The foregoing list of
assumptions is not exhaustive. Events or circumstances could cause
actual results to vary materially.
Factors that may cause actual results to vary
materially include, but are not limited to, changes in commodity
and power prices; changes in market demand for our products;
changes in interest and currency exchange rates; acts of
governments and the outcome of legal proceedings; inaccurate
geological and metallurgical assumptions (including with respect to
the size, grade and recoverability of mineral reserves and
resources); operational difficulties (including failure of plant,
equipment or processes to operate in accordance with specifications
or expectations, cost escalation, unavailability of labour,
materials and equipment, government action or delays in the receipt
of government approvals, changes in royalty or tax rates,
industrial disturbances or other job action, adverse weather
conditions and unanticipated events related to health, safety and
environmental matters); union labour disputes; impact of COVID-19
and related mitigation protocols; political risk; social unrest;
failure of customers or counterparties (including logistics
suppliers) to perform their contractual obligations; changes in our
credit ratings; unanticipated increases in costs to construct our
development projects; difficulty in obtaining permits; inability to
address concerns regarding permits or environmental impact
assessments; and changes or further deterioration in general
economic conditions. The amount and timing of capital expenditures
is depending upon, among other matters, being able to secure
permits, equipment, supplies, materials and labour on a timely
basis and at expected costs. Certain operations and projects are
not controlled by us; schedules and costs may be adjusted by our
partners, and timing of spending and operation of the operation or
project is not in our control. Certain of our other operations and
projects are operated through joint arrangements where we may not
have control over all decisions, which may cause outcomes to differ
from current expectations. Current and new technologies relating to
our Elk Valley water treatment efforts may not perform as
anticipated, and ongoing monitoring may reveal unexpected
environmental conditions requiring additional remedial measures.
QB2 costs, commissioning and commercial production is dependent on,
among other matters, our continued ability to advance commissioning
and ramp-up as currently anticipated and successfully manage
through any remaining impacts of COVID-19, including but not
limited to absenteeism and lowered productivity. QB2 costs may also
be affected by claims and other proceedings that might be brought
against us relating to costs and impacts of the COVID-19 pandemic.
Production at our Red Dog Operations may also be impacted by water
levels at site. Sales to China may be impacted by general and
specific port restrictions, Chinese regulation and policies, and
normal production and operating risks. The forward-looking
statements in this news release and actual results will also be
impacted by the continuing effects of COVID-19 and related matters,
particularly if there is a further resurgence of the virus.
We assume no obligation to update forward-looking
statements except as required under securities laws. Further
information concerning risks, assumptions and uncertainties
associated with these forward-looking statements and our business
can be found in our Annual Information Form for the year ended
December 31, 2022, filed under our profile on SEDAR (www.sedar.com)
and on EDGAR (www.sec.gov) under cover of Form 40-F, as well as
subsequent filings that can also be found under our profile.
Scientific and technical information in this
quarterly report regarding our coal properties, which for this
purpose does not include the discussion under “Elk Valley Water
Management Update” was reviewed, approved and verified by Jo-Anna
Singleton, P.Geo. and Cameron Feltin, P.Eng., each an employee of
Teck Coal Limited and a Qualified Person as defined under National
Instrument 43-101. Scientific and technical information in this
quarterly report regarding our other properties was reviewed,
approved and verified by Rodrigo Alves Marinho, P.Geo., an employee
of Teck and a Qualified Person as defined under National Instrument
43-101.
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