Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (Teck)
today announced its unaudited third quarter results for 2023.
“We made solid progress on the ramp-up of our flagship QB2
copper project, generating gross profit in the third quarter, and
we remain on track to achieve design throughput by year end," said
Jonathan Price, CEO. “Positive financial performance was driven by
continued strong commodity prices, partially offset by lower
steelmaking coal sales due to supply chain disruptions – resulting
from the B.C. port strike and wildfires – in the quarter.”
Highlights
- Adjusted profit attributable to shareholders1 of $399 million,
or $0.77 per share, in Q3 2023.
- Profit from continuing operations attributable to shareholders
of $276 million, or $0.53 per share, in Q3 2023.
- Adjusted EBITDA1 was $1.2 billion in Q3 2023, driven by robust
prices for copper and steelmaking coal and higher base metals sales
volumes. Profit from continuing operations before taxes was $589
million in Q3 2023.
- Sales volumes in our copper and zinc business units were higher
than the same period last year. QB2 continued to ramp-up operations
with production of 18,300 tonnes of copper and sales of 14,300
tonnes generating gross profit before depreciation and
amortization1 of $19 million in the third quarter.
- The QB2 plant is performing well and we continue to expect to
achieve design throughput at QB2 by the end of 2023.
- Steelmaking coal prices remain robust, driven by supply
constraints and strong demand, particularly from India and China.
Prices rose through the third quarter and into October, with FOB
premium spot prices trading at US$343 per tonne as of October
23, 2023. Our high-margin steelmaking coal business unit is well
positioned to continue to deliver strong financial performance in
the fourth quarter.
- We generated cash flows from operations of $736 million, ending
the quarter with a cash balance of $1.3 billion.
- Our liquidity as at October 23, 2023 is $7.0 billion,
including $1.5 billion of cash.
- We continue to advance our copper growth portfolio. In the
third quarter, we completed the feasibility study for our HVC 2040
project and submitted the Project Environmental Assessment to the
Environmental Assessment Office of British Columbia in October
2023.
Financial Summary Q3 2023
Financial Metrics(CAD$ in millions, except per
share data) |
Q3 2023 |
Q3 2022 |
Revenue |
$ |
3,599 |
$ |
4,260 |
Gross profit |
$ |
831 |
$ |
1,797 |
Gross profit before
depreciation and amortization1 |
$ |
1,360 |
$ |
2,255 |
Profit from continuing
operations before taxes |
$ |
589 |
$ |
1,081 |
Adjusted EBITDA1 |
$ |
1,213 |
$ |
1,901 |
Profit from continuing
operations attributable to shareholders |
$ |
276 |
$ |
741 |
Adjusted profit attributable
to shareholders1 |
$ |
399 |
$ |
923 |
Basic earnings per share from
continuing operations |
$ |
0.53 |
$ |
1.42 |
Diluted earnings per share
from continuing operations |
$ |
0.52 |
$ |
1.40 |
Adjusted basic earnings per
share1 |
$ |
0.77 |
$ |
1.77 |
Adjusted diluted earnings per share1 |
$ |
0.76 |
$ |
1.74 |
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
- QB2 generated gross profit before depreciation and
amortization1 of $19 million in the third quarter.
- Line 2 fully commissioned at the end of September, benefiting
from the learnings from Line 1 commissioning with a faster, more
effective ramp-up schedule.
- At the end of the third quarter the plant has been operating
consistently at 70% of design capacity. We expect to be operating
at design throughput and recovery rates by year end, although we
expect to be at the lower end of our 2023 annual production
guidance for QB2.
- Construction completion of the molybdenum plant is now expected
by the end of the fourth quarter of 2023 and the port offshore
facilities completion is expected in the first quarter of 2024.
Existing shipping arrangements are expected to provide adequate
capacity for shipping product though the first quarter of
2024.
- Delays in construction of the molybdenum plant and port
offshore facilities, slower than planned demobilization progress
and contract claims risk have put pressure on our capital cost
guidance. As a result, we have updated our capital cost guidance
for QB2 to US$8.6 to US$8.8 billion from our previously disclosed
guidance of US$8.0 to US$8.2 billion. Significant efforts are
ongoing to mitigate the risks and cost pressures.
Safety and Sustainability Leadership
- Our High Potential Incident Frequency remained low at a rate of
0.13 in the third quarter.
- We announced an agreement with Norden that is expected to
reduce CO2 emissions in our steelmaking coal supply chain for Teck
shipments handled by Norden.
Note:
1. This is a non-GAAP
financial measure or ratio. See “Use of Non-GAAP Financial Measures
and Ratios” for further information.
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 third quarter results for 2023 at
the link below.
- Our previously disclosed guidance has been updated for changes
to our capital cost guidance for QB2, as outlined above, 2023
annual copper, molybdenum and steelmaking coal production guidance,
noted below, and 2023 capitalized stripping guidance for our copper
business unit.
- Our 2023 annual copper production guidance has decreased to
320,000 to 365,000 tonnes from 330,000 to 375,000 tonnes, driven by
a localized geotechnical event at Highland Valley Copper that
occurred in August. We do not expect this geotechnical event to
impact our annual production guidance beyond 2023. Our 2023 annual
copper production guidance for QB2 is unchanged from our previously
disclosed guidance of 80,000 to 100,000 tonnes, although we expect
to be at the lower end of this range.
- Our 2023 annual molybdenum production guidance has decreased to
3.0 to 3.8 million pounds from 4.5 to 6.8 million pounds due to the
delay in the construction of the QB2 molybdenum plant, as outlined
above.
- Due to plant challenges this year, we have reduced our 2023
annual steelmaking coal production guidance to 23.0 to 23.5 million
tonnes from 24.0 to 26.0 million tonnes. We implemented a plant
improvement initiative in the second and third quarters. Combined
with the completed major maintenance outages, we are seeing
improved plant performance in the fourth quarter and we are well
positioned for the remainder of the year.
2023 Guidance – Summary |
Current |
Production
Guidance |
|
Copper (000’s tonnes) |
320 - 365 |
Zinc (000’s tonnes) |
645 - 685 |
Refined zinc (000’s tonnes) |
270 - 290 |
Steelmaking coal (million tonnes) |
23.0 - 23.5 |
Sales Guidance –
Q4 2023 |
|
Red Dog zinc in concentrate sales (000’s tonnes) |
130 - 150 |
Steelmaking coal sales (million tonnes) |
5.8 - 6.2 |
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 third quarter results for
2023.
WEBCAST
Teck will host an Investor Conference Call to discuss its
Q3/2023 financial results at 8:00 AM Eastern time, 5:00 AM Pacific
time, on October 24, 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 annual financial results are prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board. Our interim financial
results are prepared in accordance with IAS 34, Interim Financial
Reporting (IAS 34). 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 September 30, |
Nine months ended September 30, |
(CAD$ in millions) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
Profit from continuing
operations attributable to shareholders |
$ |
276 |
|
$ |
741 |
|
$ |
1,952 |
|
$ |
3,842 |
|
Add (deduct) on an after-tax
basis1: |
|
|
|
|
Asset impairment |
|
— |
|
|
952 |
|
|
— |
|
|
952 |
|
Loss on debt purchase |
|
— |
|
|
— |
|
|
— |
|
|
46 |
|
QB2 variable consideration to IMSA and ENAMI |
|
(45 |
) |
|
12 |
|
|
26 |
|
|
108 |
|
Environmental costs |
|
(25 |
) |
|
7 |
|
|
(9 |
) |
|
(104 |
) |
Inventory write-downs |
|
4 |
|
|
15 |
|
|
4 |
|
|
38 |
|
Share-based compensation |
|
21 |
|
|
26 |
|
|
81 |
|
|
114 |
|
Commodity derivatives |
|
10 |
|
|
(4 |
) |
|
29 |
|
|
(7 |
) |
Loss (gain) on disposal or contribution of assets |
|
6 |
|
|
1 |
|
|
(186 |
) |
|
1 |
|
Elkview business interruption claim |
|
(1 |
) |
|
— |
|
|
(150 |
) |
|
— |
|
Chilean tax reform |
|
69 |
|
|
— |
|
|
69 |
|
|
— |
|
Loss from discontinued operations2 |
|
— |
|
|
(936 |
) |
|
— |
|
|
(791 |
) |
Other |
|
84 |
|
|
109 |
|
|
156 |
|
|
116 |
|
|
|
|
|
|
Adjusted profit
attributable to shareholders |
$ |
399 |
|
$ |
923 |
|
$ |
1,972 |
|
$ |
4,315 |
|
|
|
|
|
|
Basic earnings per
share from continuing operations |
$ |
0.53 |
|
$ |
1.42 |
|
$ |
3.77 |
|
$ |
7.23 |
|
Diluted earnings per
share from continuing operations |
$ |
0.52 |
|
$ |
1.40 |
|
$ |
3.72 |
|
$ |
7.10 |
|
Adjusted basic
earnings per share |
$ |
0.77 |
|
$ |
1.77 |
|
$ |
3.81 |
|
$ |
8.12 |
|
Adjusted diluted
earnings per share |
$ |
0.76 |
|
$ |
1.74 |
|
$ |
3.76 |
|
$ |
7.98 |
|
|
|
|
|
|
Notes:
1. Adjustments for the three and nine months ended September 30,
2022 are as previously reported.2. Adjustment required to remove
the effect of discontinued operations for the three and nine months
ended September 30, 2022.
Reconciliation of Basic Earnings per share to Adjusted
Basic Earnings per share
|
Three months ended September 30, |
Nine months ended September 30, |
(Per share amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
Basic earnings per share from continuing
operations |
$ |
0.53 |
|
$ |
1.42 |
|
$ |
3.77 |
|
$ |
7.23 |
|
Add (deduct)1: |
|
|
|
|
Asset impairment |
|
— |
|
|
1.82 |
|
|
— |
|
|
1.79 |
|
Loss on debt purchase |
|
— |
|
|
— |
|
|
— |
|
|
0.09 |
|
QB2 variable consideration to IMSA and ENAMI |
|
(0.09 |
) |
|
0.02 |
|
|
0.05 |
|
|
0.20 |
|
Environmental costs |
|
(0.05 |
) |
|
0.01 |
|
|
(0.02 |
) |
|
(0.20 |
) |
Inventory write-downs |
|
0.01 |
|
|
0.03 |
|
|
0.01 |
|
|
0.07 |
|
Share-based compensation |
|
0.05 |
|
|
0.05 |
|
|
0.16 |
|
|
0.21 |
|
Commodity derivatives |
|
0.02 |
|
|
(0.01 |
) |
|
0.06 |
|
|
(0.01 |
) |
Loss (gain) on disposal or contribution of assets |
|
0.01 |
|
|
— |
|
|
(0.36 |
) |
|
— |
|
Elkview business interruption claim |
|
— |
|
|
— |
|
|
(0.29 |
) |
|
— |
|
Chilean tax reform |
|
0.13 |
|
|
— |
|
|
0.13 |
|
|
— |
|
Loss from discontinued operations2 |
|
— |
|
|
(1.79 |
) |
|
— |
|
|
(1.49 |
) |
Other |
|
0.16 |
|
|
0.22 |
|
|
0.3 |
|
|
0.23 |
|
|
|
|
|
|
Adjusted basic
earnings per share |
$ |
0.77 |
|
$ |
1.77 |
|
$ |
3.81 |
|
$ |
8.12 |
|
|
|
|
|
|
Notes:
1. Adjustments for the three and nine months ended September 30,
2022 are as previously reported.2. Adjustment required to remove
the effect of discontinued operations for the three and nine months
ended September 30, 2022.
Reconciliation of Diluted Earnings per share to Adjusted
Diluted Earnings per share
|
Three months ended September 30, |
Nine months ended September 30, |
(Per share amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
Diluted earnings per share from continuing
operations |
$ |
0.52 |
|
$ |
1.40 |
|
$ |
3.72 |
|
$ |
7.10 |
|
Add (deduct)1: |
|
|
|
|
Asset impairment |
|
— |
|
|
1.80 |
|
|
— |
|
|
1.76 |
|
Loss on debt purchase |
|
— |
|
|
— |
|
|
— |
|
|
0.09 |
|
QB2 variable consideration to IMSA and ENAMI |
|
(0.09 |
) |
|
0.02 |
|
|
0.05 |
|
|
0.20 |
|
Environmental costs |
|
(0.05 |
) |
|
0.01 |
|
|
(0.02 |
) |
|
(0.19 |
) |
Inventory write-downs |
|
0.01 |
|
|
0.03 |
|
|
0.01 |
|
|
0.07 |
|
Share-based compensation |
|
0.05 |
|
|
0.05 |
|
|
0.15 |
|
|
0.21 |
|
Commodity derivatives |
|
0.02 |
|
|
(0.01 |
) |
|
0.06 |
|
|
(0.01 |
) |
Loss (gain) on disposal or contribution of assets |
|
0.01 |
|
|
— |
|
|
(0.35 |
) |
|
— |
|
Elkview business interruption claim |
|
— |
|
|
— |
|
|
(0.29 |
) |
|
— |
|
Chilean tax reform |
|
0.13 |
|
|
— |
|
|
0.13 |
|
|
— |
|
Loss from discontinued operations2 |
|
— |
|
|
(1.77 |
) |
|
— |
|
|
(1.46 |
) |
Other |
|
0.16 |
|
|
0.21 |
|
|
0.30 |
|
|
0.21 |
|
|
|
|
|
|
Adjusted diluted
earnings per share |
$ |
0.76 |
|
$ |
1.74 |
|
$ |
3.76 |
|
$ |
7.98 |
|
|
|
|
|
|
Notes:
1. Adjustments for the three and nine months ended September 30,
2022 are as previously reported.2. Adjustment required to remove
the effect of discontinued operations for the three and nine months
ended September 30, 2022.
Reconciliation of EBITDA and Adjusted
EBITDA
|
Three months ended September 30, |
Nine months ended September 30, |
(CAD$ in millions) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
Profit from continuing
operations before taxes |
$ |
589 |
|
$ |
1,081 |
|
$ |
3,250 |
|
$ |
5,971 |
|
Finance expense net of finance
income |
|
39 |
|
|
44 |
|
|
108 |
|
|
127 |
|
Depreciation and amortization |
|
529 |
|
|
458 |
|
|
1,383 |
|
|
1,290 |
|
|
|
|
|
|
EBITDA |
|
1,157 |
|
|
1,583 |
|
|
4,741 |
|
|
7,388 |
|
|
|
|
|
|
Add (deduct)1: |
|
|
|
|
Asset impairment |
|
— |
|
|
1,234 |
|
|
— |
|
|
1,234 |
|
Loss on debt purchase |
|
— |
|
|
— |
|
|
— |
|
|
63 |
|
QB2 variable consideration to IMSA and ENAMI |
|
(75 |
) |
|
40 |
|
|
41 |
|
|
201 |
|
Environmental costs |
|
(35 |
) |
|
9 |
|
|
(14 |
) |
|
(144 |
) |
Inventory write-downs |
|
6 |
|
|
21 |
|
|
6 |
|
|
53 |
|
Share-based compensation |
|
26 |
|
|
33 |
|
|
104 |
|
|
148 |
|
Commodity derivatives |
|
15 |
|
|
(7 |
) |
|
39 |
|
|
(11 |
) |
Loss (gain) on disposal or contribution of assets |
|
9 |
|
|
1 |
|
|
(255 |
) |
|
1 |
|
Elkview business interruption claim |
|
(2 |
) |
|
— |
|
|
(221 |
) |
|
— |
|
EBITDA from discontinued operations2 |
|
— |
|
|
(1,115 |
) |
|
— |
|
|
(811 |
) |
Other |
|
112 |
|
|
102 |
|
|
223 |
|
|
113 |
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
1,213 |
|
$ |
1,901 |
|
$ |
4,664 |
|
$ |
8,235 |
|
|
|
|
|
|
Notes:
1. Adjustments for the three and nine months ended September 30,
2022 are as previously reported.2. Adjustment required to remove
the effect of discontinued operations for the three and nine months
ended September 30, 2022.
Reconciliation of Gross Profit Before Depreciation and
Amortization
|
Three months ended September 30, |
Nine months ended September 30, |
(CAD$ in millions) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
Gross profit |
$ |
831 |
|
$ |
1,797 |
|
$ |
3,907 |
|
$ |
7,417 |
Depreciation and amortization |
|
529 |
|
|
458 |
|
|
1,383 |
|
|
1,290 |
|
|
|
|
|
Gross
profit before depreciation and amortization |
$ |
1,360 |
|
$ |
2,255 |
|
$ |
5,290 |
|
$ |
8,707 |
|
|
|
|
|
Reported as: |
|
|
|
|
Copper |
|
|
|
|
Highland Valley Copper |
$ |
57 |
|
$ |
140 |
|
$ |
290 |
|
$ |
603 |
Antamina |
|
215 |
|
|
245 |
|
|
671 |
|
|
801 |
Carmen de Andacollo |
|
1 |
|
|
(18 |
) |
|
10 |
|
|
58 |
Quebrada Blanca |
|
19 |
|
|
(9 |
) |
|
18 |
|
|
11 |
Other |
|
1 |
|
|
— |
|
|
(5 |
) |
|
— |
|
|
|
|
|
|
|
293 |
|
|
358 |
|
|
984 |
|
|
1,473 |
|
|
|
|
|
Zinc |
|
|
|
|
Trail Operations |
|
22 |
|
|
(14 |
) |
|
91 |
|
|
32 |
Red Dog |
|
220 |
|
|
424 |
|
|
470 |
|
|
881 |
Other |
|
(2 |
) |
|
6 |
|
|
(4 |
) |
|
2 |
|
|
|
|
|
|
|
240 |
|
|
416 |
|
|
557 |
|
|
915 |
|
|
|
|
|
Steelmaking coal |
|
827 |
|
|
1,481 |
|
|
3,749 |
|
|
6,319 |
|
|
|
|
|
Gross profit before
depreciation and amortization |
$ |
1,360 |
|
$ |
2,255 |
|
$ |
5,290 |
|
$ |
8,707 |
|
|
|
|
|
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 expectations for development capital spending and capitalized
ramp-up commissioning costs; expectation that cost pressures at QB2
can be mitigated; expectation that QB2 will continue to ramp-up and
achieve design throughput by the end of 2023; our expectation with
respect to completion of the port and molybdenum plant at QB2;
expectation of reduced CO2 emissions in our steelmaking coal supply
chain for shipments handled by Norden; expectations with respect to
improved plant performance in the fourth quarter; expectations with
respect to timing and receipt of approval of the MEIA at Antamina;
expectations with respect to execution of our copper growth
strategy; expectations regarding our Quebrada Blanca Mill Expansion
project, including timing for permitting and completion of the
feasibility study; expectations regarding the HVC 2040 project,
including timing for feasibility study completion; expectations
regarding the San Nicolás project, including timing for submission
of the MIA-R permit application and completion of the feasibility
study; expectations regarding the Zafranal project, including
timing for commencement of detailed engineering; expectations
regarding the NewRange joint venture, including our ability to
advance permitting and the timing for completion of the NorthMet
feasibility study; expectations regarding the Galore Creek project,
including advancement of the prefeasibility study; expectations
with respect to replacement of the KIVCET boiler at Trail
Operations; 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 150 million litres per day by the end of 2026;
expectations regarding engagement with U.S. regulators on water
quality standards; expectations regarding finance expenses in 2024
and general and administration expenses through year end 2023;
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,
capitalized stripping, and other guidance under the heading
“Guidance” and as discussed elsewhere 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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