Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Investor Day (April 2018)
40 slides from Teck Resources Limited Class A's investor day presentation, Apr 4, 2018
Slide 1: Steelmaking Coal Operations
Steelmaking Coal Operations April 4, 2018 Robin Sheremeta, Senior Vice President, Coal
Slide 2: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation 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 Securities Act (Ontario)
Slide 3: Steelmaking Coal Operating Strategy
Steelmaking Coal Operating Strategy Maximize and Sustain Strategies Strong Cash Flow • Safe production ‒ Maximize synergies in the Elk Valley ‒ Optimize raw coal inventory • Truck/shovel productivity ‒ Sustain top quartile haul truck productivity through innovation ‒ Efficiency from new & larger ope
Slide 4: 2017 – A Year of Challenges; A Year of Action
2017 – A Year of Challenges; A Year of Action Decisive Action to Maximize Profitability Action Taken Results • Fording spent ~$38M on contract mining • Generated ~$65M in free cash flow • Elkview spent ~$4M on truck rentals • Generated ~$15M in free cash flow • Elkview spent ~$7M on maintenance cont
Slide 5: Strong Execution Through Innovation
Strong Execution Through Innovation 120% Productivity Journey1 • Generating value through productivity Percentage of Target 110% Up 24% from 2012-2018 ‒ Up 24% in the last 6 years 100% ‒ Generating $130M to $150M 90% 80% annualized savings since 2012 70% 60% 2012 2013 2014 2015 2016 2017 2018 • Impr
Slide 6: Transitioning Operations to Capture Margin
Transitioning Operations to Capture Margin 2018 Budget vs. 2017 Actuals Strip ratio increasing from 10.2 to 10.5 with closure of Coal Mountain • Production gap will be made up at the other Elk Valley mines Mine plan impacts, offset ~$2.70/t Hauling 1 km longer, offset with improved by higher value p
Slide 7: Strip Ratio Supports Future Production
Strip Ratio Supports Future Production Strip Ratio 11 10 Clean Strip Ratio 9 8 7 6 5 4 0 ~ ~ 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 6 year avg $100 Total Costs¹ $90 • Strip ratio increase planned in 2018 ‒ Low strip, low cost Coal Mountain closing $/tonne $80 $70 ‒ Development a
Slide 8: Reducing Average Mining Capital Spend by ~$7/t
Reducing Average Mining Capital Spend by ~$7/t Capital Expenditures, Excluding Water Treatment 700 2018 capital reinvestment in our operations, lower future spend 600 500 2009-2015: Average spend of ~$13/t1 • Reinvestment in 5 shovels, 50+ haul Capital ($M) 400 trucks, mining area development and pl
Slide 9: Water Sustaining Capital
Water Sustaining Capital $850-900M Total 2018-2022 - Five-year capital spend expected to be $850M-$900M for: • Commissioned one active water treatment facility (AWTF) • Construction of three additional AWTF’s 2023-2032: • Average capital cost of ~$65M per year • Up to five additional AWTFs $65M 9
Slide 10: Water Strategy - Innovation
Water Strategy - Innovation Use and Enhancement of Biological Promising Research Process Present in Backfill Pits and Development Saturated Rock Fills (SRF) Inject mine Extract impacted water treated water • 10,000m3/d full scale trial commissioned in January 2018 Monitoring ‒ $41M construction, $10
Slide 11: Maintaining 27 Mt and/or Growing the Business
Maintaining 27 Mt and/or Growing the Business1 Annual Production Upcoming Closures 28 • Coal Mountain closing mid 2018 (2.5 Mt capacity) • Cardinal River production slowing to 2020 closure 24 (1.4 Mt in 2018; 1.8 Mt capacity) Production (milliones tonnes) 20 Current Growth • Line Creek investing in
Slide 12: Summary
Summary • Safe and productive operations always • Sustaining a competitive margin across any cycle • Producing ~27 Mt per year or more for decades1 12
Slide 13: Notes
Notes Slide 5: Strong Execution Through Innovation 1. Productivity reflects performance of Teck’s 320 ton haul truck fleet against an internal haulage baseline model. The baseline model anticipates an expected rate of material movement per equipment operating hour taking into account size of truck f
Slide 14: Base Metals Operations
Base Metals Operations April 4, 2018 Dale Andres, Senior Vice President, Base Metals
Slide 15: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation 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 Securities Act (Ontario)
Slide 16: Transforming our Base Metals Business
Transforming our Base Metals Business Performance Focused • Optimize safe production and asset utilization • Continued focus on cost and productivity improvement Foster Innovation and Leverage Technology • Implement with flexibility, speed and agility • Drive long-term competitiveness Execute on Gro
Slide 17: Performance
Performance Driving improved results at our Copper operations • Successful Quebrada Blanca (QB) transition to dump leach with lower costs • Record mill throughput rate at Highland Valley Copper (HVC) in 2017 • Record zinc production at Antamina • Strong foundation going forward - New labour agreemen
Slide 18: Performance
Performance Focused programs with broad impacts Accelerated Maintenance Program Supply Management Program • Significant focus on Reliability Management • Leverages Teck-wide spending to improve: Programs - Contract management efficiency - Expansion of Condition Based - Product specifications and con
Slide 19: Resetting the bar at Trail Operations
Performance Resetting the bar at Trail Operations • Annual refined zinc production Step Change in Refined Zinc Production increased to ~310 kt since 2015 - Targeting further sustainable #2 Acid Plant improvements in zinc production 320 • Second new acid plant advancing well Annual Zinc Production (k
Slide 20: Red Dog quickly adapting to new ore source
Performance Red Dog quickly adapting to new ore source Successful Qanaiyaq pit ramp up Significant cost reductions realized - Difficult metallurgy and weathered ore - Significantly improved throughput rates at start from 450 tph to 510 tph - Stockpile blending strategies modified - Optimized use of
Slide 21: Innovation and Technology
Innovation and Technology Unlocking value everyday at Red Dog Ore management and processing improvements: • Reducing ore loss and dilution through blast movement monitoring • Energy savings and better recovery in the mill - High strength rare earth magnets improve selective flotation recovery of fin
Slide 22: Innovation and Technology
Innovation and Technology Managing risk and improving productivity at Carmen de Andacollo Dust Management Improvements Innovative Use of Sizer to Address Bottleneck • Truck-mounted dust sensors to assess the • Sizer used in non-traditional application to reduce effectiveness of dust suppressants on
Slide 23: Highland Valley Copper 2040 Project
Growth and Improvement Opportunities Highland Valley Copper 2040 Project • Advancing HVC Mine Life Extension Pre-Feasibility Study - Targeting extension of ~15 years, to at least 2040 - Leveraging investments in Mill Optimization Project (2013) and D3 Ball Mill (2019) - Capturing value from Shovel-b
Slide 24: Growth and Improvement Opportunities: Red Dog
Growth and Improvement Opportunities Red Dog • A world-class mining district • Aktigiruq Exploration Target1 - 80-150 Mt - 16-18% Zn+Pb • Anarraaq Inferred Resource2 - 19.4 Mt @14.4% Zn, 4.2% Pb • VIP2 project advancing - Increases mill throughput by ~15%, helping to offset lower grades - Commission
Slide 25: Growth and Improvement Opportunities: Chile
Growth and Improvement Opportunities Setting up major growth projects in Chile for long-term success Quebrada Blanca Phase 2 • 300 kt of CuEq production for first 5 years1 • Detailed engineering ~60% complete and EIA approval anticipated in Q2 2018 • Advancing both execution and operational readines
Slide 26: Transforming our Base Metals Business
Transforming our Base Metals Business Performance Focused • Optimize safe production and asset utilization • Continued focus on cost and productivity improvement Foster Innovation and Leverage Technology • Implement with flexibility, speed and agility • Drive long-term competitiveness Execute on Gro
Slide 27: Notes
Notes Slide 24: Growth and Improvement Opportunities – Red Dog 1. Aktigiruq is an exploration target, not a resource. Refer to press release of September 18, 2017, available on SEDAR. Potential quantity and grade of this exploration target us conceptual in nature. There has been insufficient explora
Slide 28: Energy Operations
Energy Operations April 4, 2018 Tim Watson, Senior Vice President
Slide 29: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation 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 Securities Act (Ontario)
Slide 30: Fort Hills Operations Update
Fort Hills Operations Update First Oil Achieved • Fort Hills achieved first oil production on January 27, 2018 Excellent Plant Start Up • At volumes exceeding expectations Production Testing • Opportunities to increase production Product Quality • Meeting or exceeding expectations Cost Update • Summ
Slide 31: First Oil Achieved
First Oil Achieved Teck Share of Bitumen Production (21.3%) 40000 35000 Bitumen Production bpd 30000 25000 20000 15000 10000 Actual Production Low Guidance 5000 High Guidance 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec • The first of three trains in secondary extraction started producing oi
Slide 32: Excellent Plant Start Up
Excellent Plant Start Up • Safe startup • Startup date within four weeks of original forecast ‒ On target excluding the six-week delay due to wildfires • First train achieved production capacity in two weeks • Product will have a lower “well to wheels” GHG emissions than other oil sand operations1 A
Slide 33: Plant Start Up: Simplified Process
Plant Start Up: Simplified Process 1. Mining 2. Ore Preparation 4. Secondary Extraction (X3) 3. Primary Extraction 33
Slide 34: Plant Start Up: Secondary Extraction
Plant Start Up: Secondary Extraction Flare SRU2 VRU Late April SRU1 FSU1/ TSRU1 FSU2/ FSU3/ Mid May TSRU2 TSRU3 TSRU Solvent Froth 2nd Stage Tanks SRU is Solvent Recovery; TSRU is Tailings Solvent Recovery; FSU is Froth Settling; VRU is Vapour Recovery. 34
Slide 35: Production Testing
Production Testing Testing underway to understand the ultimate capacity of each area of the plant including major units within each area • Mining, ore preparation, and secondary extraction may have excess capacity • Looking for debottlenecking opportunities Froth settling unit 35
Slide 36: Excellent Product Quality
Excellent Product Quality • Product density in the expected range • Solids and water content well below pipeline requirements 36
Slide 37: Cost Update
Cost Update Operating costs1 are expected to: • Average $35-40/bbl in 2018 • Drop on a per-barrel basis as production ramps up through the year • Reach $20-30/bbl by year end 37
Slide 38: Summary
Summary • First oil achieved, with a safe and productive start up • Excellent plant start up, with product quality meeting or exceeding expectations • Operating costs in line with expectations • Start of another long-life mining asset 38
Slide 39: Notes
Notes Slide 31: First Oil Achieved 1. Guidance for Teck’s share of production at the Fort Hills mining and processing operations in 2018 is at our estimated working interest of 21.3%, and is 8,000 to 16,000 bitumen barrels per day in Q1 2018, 12,000 to 20,000 bpd in Q2 2018, 24,000 to 28,000 bpd in
Slide 40: Strong Execution
Strong Execution April 4, 2018 Robin Sheremeta, Senior Vice President, Coal Dale Andres, Senior Vice President, Base Metals Tim Watson, Senior Vice President