Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Investor Presentation (July 2020)
170 slides from Teck Resources Limited Class A's investor presentation, Jul 28, 2020
Slide 1: Investor Meetings
Investor Meetings July 28, 2020
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentations contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securit
Slide 3: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements of new technologies in accordance with our expectations. 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 expec
Slide 4: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights • Continuing to operate responsibly and safely to support economic recovery • Took steps to: ‒ Further strengthen our financial position ‒ Reduce costs; and ‒ Position Teck to significantly improve margins towards the end of 2020 and early 2021, as we complete major ca
Slide 5: Second Quarter 2020 Earnings
Second Quarter 2020 Earnings Impacted by COVID-19 Q2 2020 Q2 2019 Revenue $ 1.7 billion $ 3.1 billion Gross profit before depreciation and amortization1 $ 453 million $ 1.4 billion Gross profit $ 139 million $ 1.1 billion EBITDA1 $ 177 million $ 827 million Adjusted EBITDA1 $ 485 million $ 1.3 billi
Slide 6: Second Quarter 2020 Earnings & Adjusted Earnings
Second Quarter 2020 Earnings & Adjusted Earnings (C$M) Q2 2020 Q2 2019 Profit (loss) attributable to shareholders $ (149) $ 231 Add (deduct) on an after-tax basis: Asset impairment - 109 COVID-19 costs 147 - Environmental costs 69 25 Inventory write-downs (reversals) 38 9 Share-based compensation 17
Slide 7: Key Updates: COVID-19 Impact on our Business
Key Updates: COVID-19 Impact on our Business • All operations are currently producing • Economic impacts of the pandemic have reduced demand and prices for our products • Expensed $260 million in COVID-19 costs in Q2 2020 7
Slide 8: Key Updates: Steelmaking Coal Business Update
Key Updates: Steelmaking Coal Business Update • Focus on increasing margins, not volumes • Q2 2020 sales were 5 million tonnes • Shifting our cost base lower due to: - Declining strip ratio - Elkview plant expansion - Cardinal River closure - Cost Reduction Program - RACE21TM 8
Slide 9: Key Updates: QB2 Update
Key Updates: QB2 Update • Construction ramping back up, with over 3,000 people currently on site • Planning to continue a gradual ramp up of the construction workforce over the next three months towards the pre-suspension workforce level, as conditions allow - Expect to have ~4,000 people on site by
Slide 10: Key Updates: Neptune Facility Upgrade Progress
Key Updates: Neptune Facility Upgrade Progress • Project remains in line with our previously announced capital estimate and schedule • Five-month suspension of terminal operations began in May 2020 • Completion of construction expected in Q1 2021 The new double dumper barrels, staged at Neptune in J
Slide 11: Key Updates: Strong Financial Position
Key Updates: Strong Financial Position • Reduced near-term debt maturities and further strengthened liquidity by adding a US$1 billion revolving credit facility • Continue to focus on our cost reduction program • Achieved significant reductions as at June 30, 2020: ‒ ~$250 million1 in operating cost
Slide 12: Key Updates: Guidance Update
Key Updates: Guidance Update • Issued updated guidance for H2 2020 • Changed categories for capital expenditures guidance to sustaining capital, growth capital or capitalized stripping • Nearing the end of the major capital deployment phase for Neptune and Active Water Treatment Facilities at Elkvie
Slide 13: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Q2 2020 • Sales were 5.0 Mt, despite steelmakers cutting production faster than during the Global Financial Crisis in 2008/09 • Adjusted site cash cost of sales1 of $68 per tonne reflects lower sales volumes Updated 2019A H1 2020A H2 2020 Guidance • Production averaged
Slide 14: Copper Business Unit
Copper Business Unit Q2 2020 • Production reflects temporary suspension of operations at Antamina, which ramped up to full production ahead of plan • Highland Valley gradually ramped back up to full production rates • Significantly lower total cash unit costs2 reflect our Updated 2019A H1 2020A H2 2
Slide 15: QB2 Update
QB2 Update Construction activities partially suspended since mid-March • Strict COVID-19 protocols in place to protect the health and safety of our workers and communities where we operate Planning to continue a gradual ramp up of the construction workforce over the next three months, as conditions
Slide 16: Zinc Business Unit
Zinc Business Unit Q2 2020 • Lower Red Dog production due to maintenance challenges and lower grades • Red Dog zinc sales of 93 kt, in line with seasonality • Lower net cash unit costs2 • Trail’s zinc production impacted by annual zinc roaster Updated 2019A H1 2020A H2 2020 Guidance maintenance Prod
Slide 17: Energy Business Unit
Energy Business Unit Q2 2020 • Fort Hills Partners safely and efficiently reduced operations to a single train facility in Q2 2020, which helped reduce negative cash flows in light of COVID-19 and unprecedented low Western Canadian Select prices Updated 2019A H1 2020A H2 2020 • Inventory write-down
Slide 18: Cash Flow
Cash Flow Cash Changes in Q2 2020 ($M) 2000 888 (792) 1000 300 (97) (78) (52) (40) (26) 14 336 219 0 Cash - start Cash flow from Net proceeds from PP&E Capitalized Interest and Expenditures on Repayment of Dividends paid Other Cash - end of quarter operations debt issuance stripping finance charges
Slide 19: COVID-19 Expenditures
COVID-19 Expenditures • Costs related to capital projects that do not COVID-19 Expenditures qualify for capitalization are expensed as $260 million in Q2 2020 incurred in other operating income (expense) Cost of sales • Costs not directly related to production are $34M Other operating expensed as in
Slide 20: Cost Reduction Program (CRP)
Cost Reduction Program (CRP) • Achieved significant total reductions to June 30, 2020: ‒ ~$250 million1 in operating cost reductions ‒ ~$430 million1 in capital cost reductions • Our cost reduction program has been included in our guidance since Q3 2019 • No change to previous target of ~$1 billion1
Slide 21: Strong Financial Position
Strong Financial Position Further Strengthened Liquidity Maintaining Investment Grade Credit Ratings • C$6.9 billion of liquidity1 as at July 22, 2020, including $430 million in cash Reduced Near-Term Debt Maturities • US$5.0 billion available through two committed • Issued US$550 million of 3.9% 10
Slide 22: Summary
Summary • Quality operating assets in stable jurisdictions • Copper growth strategy - funded and being implemented • Continuing to advance our key priorities to generate long term value for shareholders: 1. QB2 Project 2. Neptune Facility Upgrade 3. RACE21TM 4. Cost Reduction Program Significant pot
Slide 23: Appendix
Appendix Teck
Slide 24: Notes
Notes Slide 5: Second Quarter 2020 Earnings 1. Gross profit before depreciation and amortization, EBITDA, adjusted EBITDA, adjusted profit attributable to shareholders, adjusted basic earnings per share and adjusted diluted earnings per share are non-GAAP financial measures. See “Non-GAAP Financial
Slide 25: COVID-19 Response
COVID-19 Response = | a | ig Teck
Slide 26: COVID-19 Response: Five Pillar Approach
COVID-19 Response: Five Pillar Approach Employee Communities & Business Communication Prevention Support Public Health Continuity • Nothing is more important than the health and the safety of our employees, contractors and the communities where we operate • Following the most up-to-date direction fr
Slide 27: Supporting Global and Community Priorities
Supporting Global and Community Priorities $20-million fund to support COVID-19 response building on our existing programs Supporting healthcare Supporting international relief Support for women, COVID-19 providers and infection and regional organizations to Indigenous peoples, other Support control
Slide 28: COVID-19 Response
COVID-19 Response Prevention and Employee Support Employee Prevention Support • Remote work implemented where feasible • Detailed internal protocols and resources: mandatory declaration for visitors, Take 5 • Reduced on-site crews at sites to support survey, COVID-19 Response Protocol, Contact physi
Slide 29: COVID-19 Response
COVID-19 Response Communities & Public Health; Business Continuity Communities & Business Public Health Continuity • $20 million COVID-19 support fund launched, • All Teck operated sites continue to operate including Teck Community Response Fund with strong prevention protocols in place • One millio
Slide 30: COVID-19 Response In Steelmaking Coal
COVID-19 Response In Steelmaking Coal COVID19 Take 5 / To Limit the Spread Completed Pass Rate Issues Teck Inspections Resolved 45,000+ 97.9% 780 Type of Audits Auditors • “Take 5” symptom screening (32,000+) • Health & Safety • Supervisors • Joint Safety Team Committees • Facility cleaning and disi
Slide 31: COVID-19 Response In Steelmaking Coal (cont.)
COVID-19 Response In Steelmaking Coal (cont.) COVID19 Take 5 / To Limit the Spread Audit Process Coal Response Update • “Take 5” symptom screening completed during • No confirmed cases across Teck Coal shift exchange • Teck Coal COVID-19 Next Steps Strategy • Sites have implemented thermal screening
Slide 32: Quebrada Blanca
Quebrada Blanca Photo: Concentrator Grinding Area
Slide 33: QB2 Value Creation
QB2 Value Creation Delivers on Copper Growth Strategy • Rebalances Teck's portfolio over time to make the contribution from copper equal to or greater than steelmaking coal • World class, low cost copper opportunity in an excellent geopolitical jurisdiction • First production expected in H2 2022 • L
Slide 34: QB2 Capital Estimate Updated April 1, 2020
QB2 Capital Estimate Updated April 1, 2020 Capital cost does not include impact of COVID-19 Current Estimate1 Capital Cost (inc. escalation) US$5.2B To-go April 1, 2020 US$3.9B • Engineering, Contract Formation and Procurement approaching 100% Exchange Rate and in close out 775 CLP:USD • Includes ac
Slide 35: QB2 Project
QB2 Project Executing on a world class development asset Highlights Location Vast, long life deposit in favourable jurisdiction Chile Peru Very low strip ratio Bolivia Arica y Arica Parinacota Region Low all in sustaining costs (AISC)1 Cerro Tarapacá Colorado Collahuasi Region Potential to b
Slide 36: QB2 Rebalances Teck's Portfolio
QB2 Rebalances Teck’s Portfolio Delivers on copper growth strategy • Rebalances Teck's portfolio over time to make the Teck's Annual Copper Production (kt Cu) contribution from copper similar to steelmaking coal 587 • On a consolidated basis copper production is 116 doubled • On an attributable basi
Slide 37: QB2's Competitive Cost Position
QB2’s Competitive Cost Position Competitive Operating Cost & Capital Intensity Low Cash Cost Position • Given the exceptionally low strip ratio, consistent grade C1 Cash Cost2 & AISC3 Curve1 (US$/lb, 2023E) profile, compact site layout, and high level of automation, QB2 is expected to have attractiv
Slide 38: Vast, Long Life Deposit at Quebrada Blanca
Vast, Long Life Deposit at Quebrada Blanca QB2 Uses Only ~20% of R&R1 Extension Potential • Resources exclusive of Reserves increased 55% from Reserve and Resource Tonnage (Mt) 2017 to the 2019 Reserves and Resources Tonnage1 • Initial 28 year mine life processes ~20% of the 2019 Reserve and Resourc
Slide 39: QB2 Project Economics Comparison
QB2 Project Economics Comparison 7 8 Reserve Sanction Case1 Case2 Mine Life Years 28 28 Strip Ratio First 5 Full Years 0.16 0.44 LOM3 0.41 0.70 C1 Cash Cost4 First 5 Full Years US$/lb $1.29 $1.28 LOM3 US$/lb $1.47 $1.37 AISC5 First 5 Full Years US$/lb $1.40 $1.38 LOM3 US$/lb $1.53 $1.42 The descript
Slide 40: QB2 Reserves and Resources Comparison
QB2 Reserves and Resources Comparison Reserve Case (as at Nov. 30, 2018)1,2 Sanction Case (as at Nov. 30, 2018)2,4 Silver Silver Cu Mo Grade Cu Mo Grade RESERVES Mt Grade % Grade % RESERVES Mt Grade % Grade % ppm ppm Proven 476 0.51 0.018 1.40 Proven 409 0.54 0.019 1.47 Probable 924 0.47 0.019 1.25
Slide 41: ENAMI Interest in Quebrada Blanca
ENAMI Interest in Quebrada Blanca Organizational Chart • The government of Chile owns a 10% non-funding interest in Compañía Minera Teck Quebrada Blanca Teck SMM SC S.A. (CMTQB) through its state-run minerals company, Empresa Nacional de Minería (ENAMI) 100% 83.33% 16.67% • ENAMI has been a partner
Slide 42: Quebrada Blanca Accounting Treatment
Quebrada Blanca Accounting Treatment Balance Sheet Cash Flow • 100% of project spending included in property, plant and • 100% of project spending included in capital equipment expenditures • Debt includes 100% of project financing • In 2019, Sumitomo1 contribution recorded within • Total shareholde
Slide 43: Notes - Appendix: Quebrada Blanca
Notes - Appendix: Quebrada Blanca Slide 34: QB2 Capital Estimate Updated April 1, 2020 1. On a 100% go forward basis from January 1, 2019 including escalation and excluding working capital or interest during construction using actual realized exchange rates until March 30, 2020 and assuming a CLP/US
Slide 44: Notes - Appendix: Quebrada Blanca
Notes - Appendix: Quebrada Blanca Slide 42: QB2 Reserves and Resources Comparison 1. Mineral reserves are constrained within an optimized pit shell and scheduled using a variable grade cut-off approach based on NSR cut-off US$13.39/t over the planned life of mine. The life-of-mine strip ratio is 0.4
Slide 45: Strategy and Overview
Strategy and Overview Teck
Slide 46: Consistent Long-Term Strategy
Consistent Long-Term Strategy • Diversification • Long life assets • Low cost • Appropriate scale • Low risk jurisdictions 46
Slide 47: Attractive Portfolio of Long-Life Assets
Attractive Portfolio of Long-Life Assets Low risk jurisdictions 47
Slide 48: Global Customer Base
Global Customer Base Revenue contribution from diverse markets (2019) 1 1 48
Slide 49: Quality Operating Assets in Stable Jurisdictions
Quality Operating Assets in Stable Jurisdictions STEELMAKING COAL COPPER Elk Valley Mines Antamina, Highland Valley, Carmen de Andacollo • Long life • Long life • High quality steelmaking coal • Competitive cost • Low carbon intensity • Low carbon intensity • ~$27 billion of Adjusted • Strong growth
Slide 50: Long-Term Strategy: Copper Growth from Steelmaking Coal and Zinc
Long-Term Strategy: Copper Growth from Steelmaking Coal and Zinc We are implementing a copper growth strategy, financed by strong cash flows from steelmaking coal and zinc COPPER STEELMAKING COAL • Building QB2: long-life, low-cost • Strong long-term cash flow operation with major expansion • Growin
Slide 51: Our Key Priorities
Our Key Priorities • QB2 is a long-life, low-cost operation with significant expansion potential • Rebalances our portfolio over time • QB has potential to become a top five global copper producer • Our Neptune facility upgrade secures a long term, low cost and reliable supply chain for our steelmak
Slide 52: Diverse Pipeline of Growth Options
Diverse Pipeline of Growth Options In Construction Medium-Term Future Options Growth Options QB2 QB3 Galore Creek Zafranal Schaft Creek Copper Strong platform HVC Brownfield Mesaba with substantial growth options NuevaUnión San Nicolás (Cu-Zn) Zinc Red Dog VIP2 Project Antamina Brownfield Teena Prem
Slide 53: Disciplined Approach to M&A
Disciplined Approach to M&A $1,500 Recent Transaction History QB2 Divestment Waneta Dam, (30%)7 $1,200M6 $1,072M Net Proceeds (Cost) (C$M) Antamina $1,000 Silver Stream2 $795M CdA Gold $500 Stream1, Osisko Royalty Sandstorm Royalty $206M Project Corridor Package, Package3 /Nueva Union, Wintering Hil
Slide 54: Production Guidance
Production Guidance H1 2020 H2 2020 3-YEAR GUIDANCE1 ACTUALS GUIDANCE1 (2021-2023) Steelmaking Coal 10 Mt 11-12 Mt 26.0-27.0 Mt Copper2,3,4 Highland Valley Concentrate 56.4 kt 70-75 kt 145-165 kt Antamina Concentrate 35.1 kt 45-50 kt 90 kt Carmen de Andecollo Concentrate + Cathode 31.5 kt 27-30 kt 5
Slide 55: Sales and Unit Cost Guidance
Sales and Unit Cost Guidance Sales Q2 2020 ACTUALS Q3 2020 GUIDANCE1 Steelmaking Coal 5.0 Mt 5.0-5.4 Mt Zinc - Red Dog Zinc in Concentrate 93 kt 160-180 kt Unit Costs H1 2020 ACTUALS H2 2020 GUIDANCE1 2 Steelmaking Coal Adjusted site cash cost of sales6 C$66/t C$60-64/t Transportation costs C$41/t C
Slide 56: Capital Expenditures Guidance
Capital Expenditures Guidance Sustaining and Growth Capital Quebrada Blanca Phase 2 (Teck’s share 2020 (Teck’s share 2020 in CAD$ millions) Guidance1 in CAD$ millions) Guidance1 Sustaining QB2 Capital Expenditures $ 1,820 Steelmaking coal2 $ 630 Total capex, before SMM/SC contribution $ 3,350 Copper
Slide 57: Commodity Price Leverage
Commodity Price Leverage1 MID-POINT OF 2020 PRODUCTION ESTIMATED EFFECT ON ESTIMATED EFFECT ON GUIDANCE2,5 CHANGE ANNUALIZED PROFIT3 ANNUALIZED EBITDA3 $C/$US C$0.01 C$31M /$0.01∆ C$46M /$0.01∆ Coal 21.5 Mt US$1/tonne C$17M /$1∆ C$26M /$1∆ Copper 282.5 kt US$0.01/lb C$5M /$0.01∆ C$8M /$0.01∆ Zinc4 8
Slide 58: Capital Allocation Framework
Capital Allocation Framework SUSTAINING SUPPLEMENTAL BASE CAPEX SHAREHOLDER DIVIDEND (including stripping) DISTRIBUTIONS The balance of remaining cash is available to finance further enhancement or growth opportunities. Plus at Least 30% If there is no immediate need Available Cash Flow1 for this ca
Slide 59: Strong Track Record of Returning Cash to Shareholders
Strong Track Record of Returning Cash to Shareholders ~$6.8 billion returned from January 1, 2003 to June 30, 2020 Dividends • $4.4 billion since 2003, representing ~32% of free cash flow1 Share Buybacks • $2.3 billion since 2003, representing ~17% of free cash flow1 59
Slide 60: Tax-Efficient Earnings in Canada
Tax-Efficient Earnings in Canada ~C$3.4 billion in available tax pools at December 31, 2019 • Includes: ‒ $2.6 billion in net operating loss carryforwards ‒ $0.5 billion in Canadian Development Expenses (30% declining balance p.a.) ‒ $0.3 billion in allowable capital loss carryforwards • Applies to
Slide 61: Share Structure & Principal Shareholders
Share Structure & Principal Shareholders Teck Resources Limited at December 31, 2019 VOTING SHARES HELD PERCENT RIGHTS Class A Shareholdings Temagami Mining Company Limited 4,300,000 55.4% SMM Resources Inc (Sumitomo) 1,469,000 18.9% Other 1,996,503 25.7% 7,765,503 100.0% Class B Shareholdings Temag
Slide 62: Notes: Appendix – Strategy and Overview
Notes: Appendix – Strategy and Overview Slide 50: Global Customer Base 1. Gross profit before depreciation and amortization is a non-GAAP financial measure. See “Non-GAAP Financial Measures” slides. Slide 51: Quality Operating Assets in Stable Jurisdictions 1. Adjusted EBTIDA generated from October
Slide 63: Notes: Appendix – Strategy and Overview
Notes: Appendix – Strategy and Overview Slide 58: Capital Expenditures Guidance 1. As at July 22, 2020. See Q2 2020 press release for further information. 2. Steelmaking coal sustaining capital guidance includes $305 million of water treatment capital. 3. RACE21TM capital expenditures for 2020 inclu
Slide 64: Sustainability
Sustainability Teck
Slide 65: Sustainability Leadership
Sustainability Leadership Teck’s Performance on Top ESG Ratings • “A” rating since 2013 • Top ranked diversified • Top-ranked mining (scale of CCC – AAA) metals mining company company 2019 World • Highest industry rank in & North American Indices • Outperforming 4 of our largest 5 industry peers car
Slide 66: Focus on Sustainability Leadership
Focus on Sustainability Leadership Ambitious Sustainability Goals in Eight Strategic Themes Health and Safety Climate Change Responsible Production Our People Water Tailings Management Communities and Biodiversity and Indigenous Peoples Reclamation Full list of strategic priorities and goals appear
Slide 67: Sustainability Leadership
Sustainability Leadership Aligned with Leading External Standards and Practices See the full list on our Memberships and Partnerships page (https://www.teck.com/responsibility/approach-to-responsibility/policies-and-commitments/memberships-&-partnerships/) 67
Slide 68: Health and Safety
Health and Safety 2019 Performance • 85% of employees trained in new hazard Incident Frequency (per 200,000 hours worked) identification program against a target of 50% 0.5 0.4 • Safety performance in 2019 0.3 - 16% reduction in High-Potential Incidents 0.2 - 18% decrease in Lost-Time Disabling 0.1
Slide 69: Climate Action
Climate Action Positioning for Low-Carbon Economy Scope 1+2 emissions per copper equivalent ranking1 Well positioned for a (tCO2e/t CuEq, 2017) Low-Carbon Economy Among lowest GHG intensity miners globally on a copper-equivalent basis GHG intensity for steelmaking coal and copper production among lo
Slide 70: Climate Action
Climate Action Key Activities for Short-Term Goals Reduce the carbon Procure 50% of Accelerate the adoption of intensity of our our electricity demands zero-emissions alternatives operations by in Chile from clean for transportation by by energy by 2025 and displacing the 33% 2030 100% by 2030 equiv
Slide 71: Climate Action
Climate Action Path to Carbon Neutrality Apply Prioritize Opportunities and Deliver Cost Competitive Reductions Decarbonization Emissions Framework sources Select abatement options Renewable 2020-2030: Avoid Power supply energy Target readily available, cost Mitigation Hierarchy Electrification comp
Slide 72: Climate Action
Climate Action Cleaner, Safer Vehicles Initiative • 27 of the world’s leading mining companies and OEMs collaborating in a non-competitive space via ICMM • Accelerating the development of a new generation of mining vehicles with less: o GHG emissions o Diesel particulate matter o Chance of collision
Slide 73: Water Management
Water Management Long Term Strategic Priorities and Goals Implement innovative water management and water treatment solutions to protect water quality downstream of all our operations. Transition to seawater or low-quality water sources for all operations in water-scarce regions by 2040. 73
Slide 74: Water Quality in the Elk Valley
Water Quality in the Elk Valley Advancing Innovative Technologies Elk Valley Water Quality Plan developed with government, Indigenous Peoples and communities to address water quality challenges Saturated Rock Fill Tank-Based Plants Nitrate Reduction 74
Slide 75: Elk Valley Water Treatment
Elk Valley Water Treatment Clear Path Forward for Improving Water Quality Millions of Litres per Day Total investment in water treatment of $640 to $690 million1 from 2020-2024 1. From 2021 to 2024, we also plan to spend ~$85 million in capital on source control and calcite management and ~$90 milli
Slide 76: Tailings Management
Tailings Management Our Approach • Management and emergency Teck has comprehensive systems and response aligned with Towards procedures in place based on 6 levels Sustainable Mining Protocols of protection: • Dam Safety Inspection reports and special review by external experts 1 Surveillance 2 Inter
Slide 77: Further Strengthening Tailings Safety and Security
Further Strengthening Tailings Safety and Security 1. Special review by external experts • Confirmed no immediate or emerging issues that could result in failure • Confirmed Teck tailings management practices industry leading 2. Supporting industry-wide improvements • ICMM-UN-PRI Global Tailings Rev
Slide 78: Relationships with Communities and Indigenous Peoples, Respecting Human Rights
Relationships with Communities and Indigenous Peoples, Respecting Human Rights • Agreements in place at all mining operations within or adjacent to Indigenous Peoples’ territories • $225 million to Indigenous businesses in 2019 through procurement • 72% of total local employment in 2019 • $19 millio
Slide 79: Inclusion and Diversity
Inclusion and Diversity • Inclusion and Diversity: pledged to improve representation of under-represented groups in our workforce: women, Indigenous, Asian, Black, and all people of colour (BIPOC), persons with disabilities, and members of the LGBTQ+ community • Gender Diversity: 20% of workforce ar
Slide 80: Sustainability Performance and Compensation
Sustainability Performance and Compensation • Compensation program is linked to sustainability and health and safety performance through individual, department and company-wide objectives. • Objectives related to climate change, communities and Indigenous Peoples, tailings and water management and o
Slide 81: Questions and Further Information
Questions and Further Information ESG Resources for Investors • Sustainability reporting for 19 years in Core accordance with the Global Reporting Initiative (GRI) Standards and G4 Mining and Metals Sector Disclosures • Sustainability Accounting Standards Board (SASB) Index published in March 2020 •
Slide 82: Collective Agreements
Collective Agreements OPERATION EXPIRY DATES Elkview October 31, 2020 Fording River April 30, 2021 Antamina July 31, 2021 Highland Valley Copper September 30, 2021 Trail Operations May 31, 2022 Cardinal River June 30, 2022 January 31, 2022 Quebrada Blanca March 31, 2022 November 20, 2022 September 3
Slide 83: Notes: Appendix – Sustainability
Notes: Appendix – Sustainability Slide 71: Climate Action 1. Source: Barclays Research, Teck. 83
Slide 84: Technology and Innovation
Technology and Innovation Teck
Slide 85: RACE21
RACE21TM Renew Automate • Unify and modernize Teck’s core systems • Accelerate and scale autonomy program • Establish technology foundation that facilitates • Transformational shift in safety deployment of Connect and Automate reliably and at • Reduce per-tonne mining costs with smaller fleets scale
Slide 86: RACE21
RACE21TM Connect Empower • Link disparate systems into a collaborative digital • The natural implication of Renew, Automate, and platform with powerful tools for sensing and analyzing Connect is we can re-imagine what it means to work in real time at Teck and re-design our operating model to attract
Slide 87: Significant Value To Be Captured
Significant Value To Be Captured SAFETY PROFITABILITY PRODUCTIVITY COST Transformational Step-change Increased Reduced safety impact with impact to productivity through operational costs fewer people in profitability new technologies by achieving high risk and internal manufacturing environments inn
Slide 88: Electrification of Mining
Electrification of Mining Electric crew buses at our Electric boom vehicles to be Working with OEMs through steel making coal tested in pit. ICMM to develop zero-GHG operations. surface mining vehicles Teck is taking steps to reduce its carbon footprint by starting to electrify the fleet. 88
Slide 89: Steelmaking Coal Business Unit & Markets
Steelmaking Coal Business Unit & Markets
Slide 90: Steelmaking Coal Market
Steelmaking Coal Market COVID-19 reducing demand, supply, and already low investment Near term outlook: Uncertainties remain but signs of Steelmaking Coal Prices1 (US$/t) recovery emerging • China: Risk of import quotas but record steel output, 300 positive price arbitrage, and lower Mongolian impor
Slide 91: Steelmaking Coal Facts
Steelmaking Coal Facts Global Coal Production1: ~7.8 billion tonnes Steelmaking Coal Production2: ~1,130 million tonnes Export Steelmaking Coal2: ~320 million tonnes Seaborne Steelmaking Coal2: • ~0.7 tonnes of steelmaking coal is used to ~285 million tonnes produce each tonne of steel3 • Up to 100
Slide 92: Steelmaking Coal Demand Growth Forecast
Steelmaking Coal Demand Growth Forecast Demand impacted by COVID-19 but signs of recovery Seaborne Steelmaking Coal Imports1 (Mt) Change 2020 vs. 2019 315 5 12 320 310 12 300 10 290 4 283 280 270 260 2019 China JKT India Europe Brazil 2020 Includes: • China: Imports supported by positive price • Eur
Slide 93: Indian Steelmaking Coal Imports
Indian Steelmaking Coal Imports Mid- & long-term imports supported by secular demand and government targets Indian Crude Steel Production1 (Mt) Indian Seaborne Coking Coal Imports2 (Mt) 120 60 100 50 80 40 60 30 40 20 20 10 0 0 93
Slide 94: Chinese Steelmaking Coal Imports
Chinese Steelmaking Coal Imports YTD May 2020 seaborne imports up by +11 Mt Chinese Crude Steel Production (CSP), Hot Metal Chinese Coking Coal Imports2 (Mt) Production (HMP) and Coal Production (Mt)1 1200 520 100 1000 500 80 800 480 16 60 33 15 26 34 600 460 24 28 40 19 13 15 400 440 20 60 20 48 44
Slide 95: Large Users in China Increasing Imports
Large Users in China Increasing Imports ~2/3 of China crude steel produced on coast; projects support imports Seaborne Coking Coal Imports1 (Mt) ZONGHENG FENGNAN PROJECT • Inland plant relocating to coastal area 80 • Capacity: crude steel 8 Mt • Status: Construction started in 2017; 2 of 5 blast 60
Slide 96: Chinese Steel Margins
Chinese Steel Margins Margins improving from the March/April lows China Hot Rolled Coil (HRC) Margins and Steelmaking Coal (HCC) Prices1 (US$/t) 350 300 250 200 150 100 50 0 -50 May-15 Jul-15 May-16 Jul-16 May-17 Jul-17 May-18 Jul-18 May-19 Jul-19 May-20 Jul-20 Jan-15 Mar-15 Jan-16 Mar-16 Jan-17 Mar
Slide 97: Chinese Scrap Use Continues to Remain Low
Chinese Scrap Use Continues to Remain Low Scrap supply limits EAF share in steel output China’s Scrap Ratio Lower than Other Countries China Steel Use By Sector (20191) (2000-2019)2 100% 83% 80% 69% 55% 60% 42% 40% 34% Others Construction 40% 22% 15-25% 50-60% 20% 0% Turkey USA EU Russia Korea Japan
Slide 98: Steelmaking Coal Supply Forecast to Shrink
Steelmaking Coal Supply Forecast to Shrink COVID-19 and market driven supply response Seaborne Steelmaking Coal Exports1 (Mt) Change 2020 vs. 2019 320 314 10 310 9 300 3 2 2 2 290 285 280 270 260 2019 USA Australia Russia Canada Mozambique Other 2020 Includes: • USA: Cost pressures and weak demand •
Slide 99: US Coal Producers are Swing Suppliers
US Coal Producers are Swing Suppliers Australian Steelmaking Coal Exports1 (Mt) US Steelmaking Coal Exports1 (Mt) 70 200 180 60 160 50 140 120 40 100 30 80 60 20 40 10 20 0 0 99
Slide 100: Canadian & Mozambique Steelmaking Coal Exports
Canadian & Mozambique Steelmaking Coal Exports Canadian Exports1 (Mt) Mozambique Exports1 (Mt) 40 9 8 35 7 30 6 25 5 20 4 15 3 10 2 5 1 0 0 100
Slide 101: 2nd Largest Seaborne Steelmaking Coal Supplier
2nd Largest Seaborne Steelmaking Coal Supplier Competitively positioned to supply steel producers worldwide Sales Distribution CHINA 2013: ~30% EUROPE 2017: ~15% 2013: ~15% INDIA 2017: ~20% 2019: ~10% 2013: ~5% 2019: ~15% 2017: ~10% AMERICAS 2019: ~15% ~5% ASIA EXCL. CHINA & INDIA 2013: ~40% 2017: ~
Slide 102: An Integrated Long Life Coal Business
An Integrated Long Life Coal Business ELK VALLEY British Columbia Prince Rupert Elco Quintette • 840 million tonnes1 of Ridley Alberta Fording River reserves support ~26 to 27 Mt Terminal Prince George Edmonton of annual production for many Greenhills years Elkford Cardinal River Line Creek • Geogra
Slide 103: Long Life with Growth Potential in Steelmaking Coal
Long Life with Growth Potential in Steelmaking Coal Annual Production Capacity1 (Million tonnes) 27 million tonnes of annual 30 production capacity in 2021 29 Structure and beyond 28 Transition 27 Moving Past Transition: 26 • Coal Mountain closed and production has 25 been replaced with new mining a
Slide 104: Steelmaking Coal Unit Costs
Steelmaking Coal Unit Costs Unit Costs1 in 2019 Depreciation and Operating Cost1 Breakdown in 2019 Amortization Labour 31% 23% Contractors and Consultants 13% Royalties Operating Costs Operating Supplies 16% 1% 48% Repairs and Maintenance Parts 19% Energy 17% Transportation Other 4% 29% Total 100% 1
Slide 105: Setting Up for Strong Long-Term Cash Flows In Steelmaking Coal
Setting Up for Strong Long-Term Cash Flows In Steelmaking Coal Executing on four pillars to transform Targeting long term cost of cost structure and optimize margins sales below ~$60 per tonne • Strip ratio decreasing over next four years ‒ Future strip ratio on par with historical average • Strateg
Slide 106: Investing in Production Capacity and Productivities In Steelmaking Coal
Investing in Production Capacity and Productivities In Steelmaking Coal Maintaining historical dollar per $30 Sustaining Capital, Excluding Water Treatment and Neptune1 ($/t) tonne sustaining investment levels $25 2010-2016: Average spend of ~$11 per tonne1 $20 • Swift at Fording River and Line Cree
Slide 107: Teck's Pricing Mechanisms
Teck’s Pricing Mechanisms Coal sales book generally moves with the market SALES MIX Pricing Mechanisms (%) • ~40% quarterly contract price • ~60% shorter than quarterly pricing mechanisms (including “spot”) 20% Index Linked PRODUCT MIX 80% Fixed • ~75% of production is high-quality HCC Price • ~25%
Slide 108: Quality and Basis Spreads
Quality and Basis Spreads Impact Teck’s average realized steelmaking coal prices HCC / SHCC Prices and Spread1 (US$/t) HCC Seaborne / China Domestic Prices 350 100 350 and Spread2 (US$/t) 120 100 300 300 80 75 60 250 250 40 200 20 50 200 150 0 (20) 150 100 (40) 25 100 (60) 50 (80) 0 0 50 (100) Seabo
Slide 109: West Coast Port Capacity
West Coast Port Capacity NEPTUNE COAL TERMINAL • Planned capacity growth to >18.5 Mtpa Port Capacity • 100% ownership of coal capacity (Nominal Mt) • Current coal capacity 12.5 Mtpa 40 • Significant investment to upgrade and rejuvenate RIDLEY TERMINALS 30 • Current capacity 18 Mtpa • Teck contract:
Slide 110: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 92: Steelmaking Coal Market 1. Source: Argus, Teck. Plotted to July 20, 2020. Slide 93: Steelmaking Coal Facts 1. Source: IEA. 2. Source: Wood Mackenzie (Long Term Outlook H1 2020). 3. Source: World Coal Association. Assumes all of the steel required is produ
Slide 111: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 104: An Integrated Long Life Coal Business 1. As at December 31, 2019,Teck portion, excluding oxide. Source: Teck AIF. Slide 105: Long Life with Growth Potential in Steelmaking Coal 1. Subject to market conditions and obtaining relevant permits. Slide 106: St
Slide 112: Copper Business Unit & Markets
Copper Business Unit & Markets
Slide 113: Supply Continues to be at Risk, Copper Demand Improves
Supply Continues to be at Risk Copper Demand Improves • Stronger cathode demand in China putting upward pressure on copper prices • Demand Ex-China improving slowly • Government closures of mines, ports and distribution keeping concentrate market tight and impacting cathode supply • Concentrate mark
Slide 114: Copper Market
Copper Market Raw materials weigh on downstream production Tightness in Scrap Market Supporting Copper Price1 • Demand for raw materials and mine 2,000 disruptions keeping concentrate demand high ‒ Mine production cuts over 900 kt RMB/Mt 1,000 vs. smelter cuts of ~250 kt ‒ Chinese smelters trying to
Slide 115: Global Copper Mine Production Increasing Slowly
Global Copper Mine Production Increasing Slowly Mine Production Set To Increase 1.6 Mt By 20231 Global Copper Mine Production2 (kt contained) Includes: Mine kmt 22,000 PT – Freeport (vs 2019) 480 20,000 Kamoa – Kakula 350 Quebrada Blanca 300 18,000 Quellaveco 300 16,000 Cobre Panama (vs 2019) 272 Ch
Slide 116: Copper Disruptions Return To Impact Mines
Copper Disruptions Return To Impact Mines TC/RCs Spot and BM Falling1 (US$/lb) Disruptions (kt)2; $120 2005 2007 2009 2011 2013 2015 2017 2019 $110 0 $100 -200 $90 -400 4.0% $80 YTD Reported $70 -600 2.7% $60 -800 3.6% $50 4.0% -1,000 $40 $30 -1,200 If South American Mines Run at 90% for Remainder o
Slide 117: Rapid Growth in Chinese Copper Smelter Capacity
Rapid Growth in Chinese Copper Smelter Capacity Limited and delayed domestic mine projects Chinese Copper Mine Growth1 +3.2 Mt of New Smelting Capacity2 (kt) (kt blister) 400 400 2019 -2021 2022 2023 2018/2019 2020 2021 – 2023 137kt 130 kt 25 kt 1,6230 kt 670 kt 930 kt 300 300 200 200 100 100 0 0 11
Slide 118: Copper Supply
Copper Supply Mine production rising and scrap availability falling Sanctioned Projects Since 20171 (kt) Chinese Scrap/Blister Imports Fall2 New mines commissioned: +2.3Mt (Copper content, kt) Of which ~1.8Mt deferred or delayed 3,000 3,000 2,000 2,500 1,000 2,000 0 1,500 2013 2014 2015 2016 2017 20
Slide 119: Copper Metal Stocks
Copper Metal Stocks Raw material shortages increase cathode demand • Exchange stocks have fallen 263kt since March 2020, Daily Copper Prices (US$/mt) and Stocks1 (kt) now equivalent to 6 days of global consumption $12,000 1,800 • SHFE stocks have decreased ~221kt since Lunar 1,600 $10,000 New Year 1
Slide 120: Long Life and Stable Assets in Copper
Long Life and Stable Assets in Copper Antamina Highland Valley Carmen de Andacollo Quebrada Blanca • Returned to full production • Returned to full production; • Production rates • Production rates rates ahead of plan recovery plans in place maintained with reduced maintained with reduced • Guidance
Slide 121: Copper Unit Costs
Copper Unit Costs Unit Costs1 in 2019 Depreciation and Operating Cost1 Breakdown in 2019 Amortization Labour 29% 25% Contractors and Consultants 11% Royalties Operating Costs Operating Supplies 16% 1% 69% Repairs and Maintenance Parts 16% Transportation Energy 20% 5% Other 8% Total 100% 121
Slide 122: Cost Discipline and Cash Flow Focus in Copper
Cost Discipline and Cash Flow Focus in Copper Productivity Focused on Minimizing Capital • Focus on asset management and cross • Essential water, tailings and regulatory site sharing projects drive sustaining capital • Robust continuous improvement requirements pipeline a key driver of margins • Nea
Slide 123: Major Growth and Life Extension Projects in Copper
Major Growth and Life Extension Projects in Copper Focus remains on QB2 construction, with other projects slowed Quebrada Blanca • Focus is on QB2 and construction re-start • QB2: 316 kt of CuEq production for first 5 years1 - Doubles copper production with low strip ratio and AISC of US$1.38/lb cop
Slide 124: Notes: Appendix – Copper
Notes: Appendix – Copper Slide 115: Copper Market 1. Source: Shanghai Metal Market. 2. Source: Wood Mackenzie. Slide 117: Global Copper Mine Production Increasing Slowly 1. Source: Data compiled by Teck based on information from Wood Mackenzie and Company Reports (average production first 10 years).
Slide 125: Zinc Business Unit & Markets
Zinc Business Unit & Markets Teck
Slide 126: Zinc Mine Disruptions Maintain Pressure on Smelters
Zinc Mine Disruptions Maintain Pressure on Smelters • COVID-19 and poor financials resulted in numerous mine closures, eliminating significant production in 2020 • Mines restarting after COVID-19 shutdowns starting to resume supply slowly, refined production not yet affected • Chinese and ROW manufa
Slide 127: Zinc Market
Zinc Market Raw materials shortages and improving demand support prices Steel Demand in China Supporting Zinc Price1 • Demand for raw materials and mine disruptions due to COVID-19 keeping concentrate demand high Operating Rates % 110 80 ‒ Mine production growth in 2020 now forecast 50 to decline wi
Slide 128: Logistical Issues and Low Prices Impacted Chinese Mines, Smelter Production Increases
Logistical Issues and Low Prices Impacted Chinese Mines, Smelter Production Increases Chinese Mine Production Flat in 20201 Chinese Refined Production Up 11% Since 20182 (kt Contained) (kt Contained) 5,000 7,000 6,500 4,500 6,000 4,000 5,500 3,500 5,000 4,500 3,000 4,000 2,500 3,500 2,000 3,000 2013
Slide 129: Global Mine Production Slowly Recovering, Although Cuts Already Significant for Year
Global Mine Production Slowly Recovering, Although Cuts Already Significant for Year Estimated Chinese Zinc Mine Growth Changes in Mine Production Since Q1 20182 Rarely Achieved1 (Kmt Contained) New Mines China Mines ROW Mines Change 600 1,000 0 400 360 392 -1,000 350 270 300 -2,000 250 237 200 200
Slide 130: Despite Increased Production in China, Increased Demand for Imported Metal Continues
Despite Increased Production in China, Increased Demand for Imported Metal Continues De-stocking Continues Additional Zinc Metal Chinese Stocks at Record Lows1,2 (kt) Required to Fill the Gap3 (kt) 1,600 1,600 1,400 1,400 1,200 1,200 1,087 1,095 1,109 1,000 1,000 800 767 797 800 652 627 600 600 503
Slide 131: Zinc Supply
Zinc Supply Mine production at risk of declining further in 2020; 2021 growth optimistic • Chinese mine production was expected to recover in Zinc Mine Production1 (kt contained) 2020, after environmental policy cut production in 16,000 last two years 14,000 - COVID-19 related logistical issues rest
Slide 132: Zinc Concentrate Treatment Charges
Zinc Concentrate Treatment Charges Treatment Charges1 (USD/dmt) 350 300 250 200 150 100 50 0 Spot TC Benchmark TC 132
Slide 133: Zinc Metal Stocks
Zinc Metal Stocks Consecutive deficits decreased zinc inventories Daily Zinc Prices1,2 (US$/mt) • Deficits over past 5 years have driven down and Stocks1,2 (kmt) stocks, with terminal stocks at only 2.1 days at 5,000 2,500 the beginning of 2020 4,500 4,000 2,000 • LME refined zinc stocks are up almo
Slide 134: Largest Global Net Zinc Mining Companies
Largest Global Net Zinc Mining Companies Teck is the Largest Net Zinc Miner1(kt) Provides significant exposure to a rising zinc price 400 Public Company 350 Teck Private Company 300 250 200 150 100 50 0 134
Slide 135: Integrated Zinc Business
Integrated Zinc Business Red Dog Trail • Operations maintained with travel • Operations maintained with reduced restrictions and modified schedules workforce on site • Guidance of 260,000 to 285,000 tonnes • Guidance of 155,000 to 165,000 tonnes zinc in H2 2020 refined zinc and 30,000 to 35,000 tonn
Slide 136: Cost Discipline and Cash Flow in Zinc
Cost Discipline and Cash Flow in Zinc Productivity Focused on Minimizing Capital • Focus on asset management and cross • Essential water, tailings and regulatory site sharing projects drive sustaining capital • Robust continuous improvement requirements pipeline a key driver of margins • Near term h
Slide 137: Red Dog Sales Seasonality
Red Dog Sales Seasonality • Operates 12 months Zinc Sales 1 (%) • Ships ~ 4 months 40% 34% 30% 30% • Shipments to inventory in Canada 21% 15% 20% and Europe; Direct sales to Asia 10% • ~65% of zinc sales in second half 0% of year Q1 Q2 Q3 Q4 • ~100% of lead sales in second half Lead Sales1 (%) of ye
Slide 138: Zinc Unit Costs
Zinc Unit Costs Unit Costs1 in 2019 Depreciation and Amortization 10% Operating Cost1 Breakdown in 2019 Royalties Operating Costs Labour 36% 13% 38% Contractors and Consultants 10% Operating Supplies 12% Repairs and Maintenance Parts 10% Concentrate Energy 18% Purchases Other 14% 27% Total 100% Tran
Slide 139: Red Dog Net Cash Unit Cost Seasonality
Red Dog Net Cash Unit Cost Seasonality Normal quarterly variation not expected in 2020 Red Dog Net Cash Unit Costs1 (US$/lb) 0.60 0.40 0.20 - Q1 Q2 Q3 Q4 • Seasonality of Red Dog unit costs largely due to lead sales during the shipping season • Higher net cash unit costs expected in H2 2020 as by-pr
Slide 140: Red Dog in Bottom Quartile of Zinc Cost Curves
Red Dog in Bottom Quartile of Zinc Cost Curves 20 Percent of Zn Mines at Risk of Closing at Current Price Total Cash + Capex Cost Curve 20201 (US¢/lb) 200 2020 Costs Based on Current Prices Current Spot LME Price 180 160 140 120 100 80 60 40 20 RED DOG 0 0% 25% 50% 75% 100% 140
Slide 141: Red Dog Extension Project
Red Dog Extension Project Long Life Asset • Aktigiruq exploration target of 80-150 Mt @ 16-18% Zn + Pb1 • Anarraaq Inferred Resource2: 19.4 Mt @14.4% Zn, 4.2% Pb Quality Project • Premier zinc district • Significant mineralized system • High grade Stable Jurisdiction • Operating history • ~12 km fro
Slide 142: Notes: Appendix – Zinc
Notes: Appendix – Zinc Slide 129: Zinc Market 1. Source: Shanghai Metal Market. 2. Source: Based on information from the International Zinc Study Group Data. Slide 130: Logistical Issues and Low Prices Impacted Chinese Mines, Smelter Production Increases 1. Source: Data compiled by Teck based on inf
Slide 143: Energy Business Unit & Markets
Energy Business Unit & Markets
Slide 144: Energy Benchmark Pricing
Energy Benchmark Pricing Calendar NYMEX WTI Price1 , WTI/WCS Basis Differential at Hardisty2 and WTI/WCS Basis Differential at the US Gulf Coast3 (US$/bbl) 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 - (10) (10) Calendar NYMEX WTI Price WTI/WCS Basis Differential at Hardisty WTI/WCS Basis Diff
Slide 145: Fort Hills is A Modern Oil Sands Mine
Fort Hills is A Modern Oil Sands Mine Production @ 100% • Higher quality partially de-carbonized (kbpd) PFT product (lower GHG emissions) 250 De-bottleneck potential 200 Best monthly • Due to COVID-19 and low WCS production rate (201 kbpd) prices, operations temporarily 150 transitioned to a single
Slide 146: Canada is a Leader in ESG
Canada is a Leader in ESG The world benefits from Fort Hills low carbon intensity product during transition to renewables Yale’s Environmental Performance Index World Oil Producers Of Top 10 Oil Reserve Countries Ranked By Corruption and Volume1 80 60 40 20 0 Canada should be a supplier of choice to
Slide 147: Best In Class Low Carbon Intensity Production
Best In Class Low Carbon Intensity Production Our Fort Hills blend can displace carbon intensive crudes Total Life Cycle Emissions Intensity Estimated Improvements Since 2012 (kg CO2e/bbl refined product – gasoline/diesel) Production & Refining End-User Fuel Consumption GHG Emissions Intensity (kg C
Slide 148: Fort Hills Blend Widely Accepted In Market
Fort Hills Blend Widely Accepted In Market A preferred feedstock and supplier of choice We produce a high quality refinery feedstock Delivery Location (Kbpd) • Low GHG intensity: <50% of US crude supply Teck Blend: • Including in-situ and upgraded synthetic 32.4 Kbpd Our sales mix provides diverse m
Slide 149: Export Capacity Needed To Meet Global Demand
Export Capacity Needed To Meet Global Demand New pipelines starting to progress towards a clearer line of sight Near term (2019-2021): Western Canada Supply & Markets1 (Mbpd) • Canadian export capacity lagging Reliant on crude by rail 2019-2022 7.5 • Reliant on rail (400-500 Kbpd) 7.0 Pipeline devel
Slide 150: Notes: Appendix – Energy
Notes: Appendix – Energy Slide 146: Energy Benchmark Pricing 1. The WTI CMA is an average of the daily settle quoted price for WTI prices for future deliveries for the trading days during a calendar month. Source: CME Group. As at July 21, 2020. 2. WCS at Hardisty: an index value determined during t
Slide 151: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 152: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 which are not measures recognized under IFRS
Slide 153: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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
Slide 154: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Profit (Loss) and Adjusted Profit Three months ended Three months ended Six months ended Six months ended (C$ in millions) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Profit (loss) attributable to shareholders $ (149) $ 231 $ (461) $ 861 Add
Slide 155: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Basic Earnings (Loss) Per Share to Adjusted Basic Earnings (Loss) Per Share Three months ended Three months ended Six months ended Six months ended (Per share amounts) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Basic earnings (loss) per shar
Slide 156: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Diluted Earnings (Loss) Per Share to Adjusted Diluted Earnings Per Share Three months ended Three months ended Six months ended Six months ended (Per share amounts) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Diluted earnings (loss) per share
Slide 157: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio (A) (B) (C) (A+B+C) Twelve months ended Three months ended Three months ended Twelve months ended (C$ in millions) December 31, 2019 June 30, 2019 June 30, 2020 June 30, 2020 Profit (loss) $ (588) $ 894 $ (496) $ (1,978)
Slide 158: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt to Adjusted EBITDA Ratio - Continued (A) (B) (C) (A+B+C) Twelve months ended Three months ended Three months ended Twelve months ended (C$ in millions) December 31, 2019 June 30, 2019 June 30, 2020 June 30, 2020 Total debt at period end (F) $ 4,
Slide 159: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months ended Three months ended Six months ended Six months ended (C$ in millions) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Profit (loss) $ (185) $ 250 $ (496) $ 894 Finance expense net of finance income 11
Slide 160: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit Before Depreciation and Amortization Three months ended Three months ended Six months ended Six months ended (C$ in millions) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Gross profit $ 139 $ 1,051 $ 537 $ 2,093 Depreciation and a
Slide 161: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit (Loss) Margins Before Depreciation Three months ended Three months ended Six months ended Six months ended (C$ in millions) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues Steelmaking coal (E) $ 792 $ 1,588 $ 1,815 $ 3,140 C
Slide 162: Non-GAAP Financial Measures
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Cost of sales as reported $ 734 $ 868 $ 1,511 $ 1,694 Less: Trans
Slide 163: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenue as reported $ 405 $ 646 $ 975 $ 1,276 By-product revenue (A) (41) (
Slide 164: Non-GAAP Financial Measures
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenue as reported $ 479 $ 609 $ 1,087 $ 1,321 Less: Tr
Slide 165: Non-GAAP Financial Measures
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 - Continued Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Payable pounds sold (millions) (E) 173.4 177
Slide 166: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenue as reported $ 44
Slide 167: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback, Bitumen & Blended Bitumen Price Realized Reconciliations - Continued Three months ended Three months ended Six months ended Six months ended (C$ in millions, except where noted) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Per barrel a
Slide 168: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Coal Business Unit Adjusted EBITDA October 1, 2008 to (C$ in millions) June 30, 2020 Gross Profit $ 19,463 Add back: Depreciation and amortization 7,466 Gross profit, before depreciation and amortization $ 26,929 Deduct: Other costs (422) Adjusted EBITDA
Slide 169: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Free Cash Flow 2003 to (C$ in millions) Q2 2020 Cash Flow from Operations $47,166 Debt interest and finance charges paid (5,652) Capital expenditures, including capitalized stripping costs (26,853) Payments to non-controlling interests (NCI) (642) Free C
Slide 170: Investor Meetings
Investor Meetings July 28, 2020