Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Non-Deal Roadshow (October 2019)
164 slides from Teck Resources Limited Class A's roadshow presentation, Oct 21, 2019
Slide 1: Investor Meetings
Investor Meetings October 21, 2019
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 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 suppl
Slide 4: A Transformational Time for Teck
A Transformational Time for Teck Milestones Solid Future Value Achieved Foundation Catalysts • QB2 permit received, • Quality operating assets • Positioned for cash returns sanctioning announced, in stable jurisdictions to shareholders partnership closed and • Strong financial position • QB2/QB3 pro
Slide 5: 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 6: Strong Track Record of Returning Cash to Shareholders
Strong Track Record of Returning Cash to Shareholders ~$6.1 billion returned from January 1, 2003 to June 30, 2019 Dividends • $4.3 billion since 2003, representing ~27% of free cash flow1 Share Buybacks • $1.8 billion since 2003, representing ~11% of free cash flow1 6
Slide 7: QB2 Value Creation
QB2 Value Creation Delivers on Copper Growth Strategy Low Strip Ratio2 • Rebalances Teck's portfolio over time to make QB2 (0.7:1) the contribution from copper similar to steelmaking coal • World class, low cost copper opportunity in an excellent geopolitical jurisdiction Antamina (2.9:1)3 • First p
Slide 8: Accelerating Our RACE21 Innovation-Driven Efficiency Program
Accelerating Our RACE21TM Innovation-Driven Efficiency Program RACE21TM • Looks across the full value chain, from mine to port • Leverages existing, proven technology to improve productivity and lower costs • Focused on delivering significant value by 2021 - 2019: Expansion of programs such as predi
Slide 9: Teck's Performance on Top ESG Ratings
Teck’s Performance on Top ESG Ratings ESG Evaluation Teck’s Performance • Named to 2019 Global 100 Most Sustainable Corporations list by Corporate Knights • Ranked 37th globally; only mining company listed • Top-ranked mining company on both the World and North American Indices • “A” rating since 20
Slide 10: Low Cost, Low Carbon Producer
Low Cost, Low Carbon Producer • Among world’s lowest GHG intensity for GHG Emissions Intensity Ranges Among steelmaking coal and copper production ICMM Members2 (kgCO2e per tonne of product) • Fort Hills – one of the lowest carbon Copper Coal intensities among North American oil sands producers on a
Slide 11: Responsible Tailings Management
Responsible Tailings Management Teck has a comprehensive systems and procedures in place Further Tailings Governance Steps based on six pillars: 1. Special review by external experts 1. Surveillance 4. Internal Review Technology 5. Detailed Third-Party - Confirmed no immediate or emerging 2. Staff I
Slide 12: Supply Fundamentals Offsetting Weaker Demand In Copper and Zinc
Supply Fundamentals Offsetting Weaker Demand In Copper and Zinc Copper Zinc • Cathode market balanced for next 2 years • Global concentrate market in surplus; • Global macro concerns impacting demand constrained smelter production lifting assumptions and prices • Smelter bottleneck constrained refin
Slide 13: Steelmaking Coal Market
Steelmaking Coal Market • Raw materials pricing under pressure due to Coal Price1 (US$/t) declining steel margins Steelmaking coal price averaged US$181/t, • Growing demand, especially in India, Southeast or US$200/t on an inflation-adjusted basis, Asia and China from January 1, 20081 • Capital mark
Slide 14: A Transformational Time for Teck
A Transformational Time for Teck Future Value Catalysts Positioned For Transformation Growth Through Cash Returns Through Innovation: QB2/QB3 Execution to Shareholders RACE21TM Compelling Value 14
Slide 15: Appendix
Appendix Teck
Slide 16: Notes
Notes Slide 6: Strong Track Record of Returning Cash to Shareholders 1. From January 1, 2003 to June 30, 2019. Free cash flow is a non-GAAP financial measure. See “Non-GAAP Financial Measures” slides. Slide 7: QB2 Value Creation 1. As at January 1, 2019. Assumes optimized funding structure. Does not
Slide 17: Quebrada Blanca
Quebrada Blanca Teck = ae ae =
Slide 18: QB2 Project Disclosure
QB2 Project Disclosure All economic analysis with respect to the QB2 project based on a development case which includes inferred resources within the life of mine plan, referred to as the Sanction Case, which is the case on which Teck is basing its development decision for the QB2 project. Inferred
Slide 19: 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 Will be a top
Slide 20: 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 584 • On a consolidated basis copper production is 116 doubled • On an attributable basi
Slide 21: QB2 is a World Class Copper Opportunity
QB2 is a World Class Copper Opportunity Project Metrics1 US$2.4-$4.2B 14%-18% After-Tax NPV8%2,3 Unlevered After-Tax IRR2,3 (100%) US$1.1-$1.4B 316 kt First 5 Full Years Annual EBITDA2 First 5 Full Years Annual CuEq Production4 US$1.28/lb US$1.38/lb First 5 Full Years C1 Cash Cost (net of by-product
Slide 22: Increasing Teck's Returns on QB2
Increasing Teck's Returns on QB2 Enhancing IRR Reducing Teck's Equity Contributions • Transaction with Sumitomo and US$2.5 billion • Transaction proceeds and project financing project financing significantly enhances Teck's reduce Teck's equity contributions to ~US$693 IRR million3 with no contribut
Slide 23: QB2's Competitive Cost Position
QB2’s Competitive Cost Position Competitive Operating Cost & Capital Intensity Low Cash Cost Position • Given the exceptionally low strip ratio, consistent grade C1 Cash Cost3 & AISC4 Curve1 (US$/lb, 2023E) profile, compact site layout, and high level of automation, QB2 is expected to have attractiv
Slide 24: Vast, Long Life Deposit at QB
Vast, Long Life Deposit at QB QB2 Uses Less than 25% of R&R Extension Potential • Resource exclusive of Reserve increased 40% since Reserve and Resource Tonnage (Mt) 2017 • Initial 28 year mine life processes <25% of the currently +40% defined Reserve and Resource Tonnage • Deposit is capable of sup
Slide 25: QB3 – Long-Term Growth
QB3 – Long-Term Growth Expansion potential to realize full potential of the orebody • QB2 utilizes less than 25% of resource Copper Mineralization from 2018 Drilling1 • QB3 evaluating options to exploit the full value of the • 2018 drilling returned long intervals of +0.5% Cu, with resource through
Slide 26: Clear Path to Production at QB2
Clear Path to Production at QB2 Construction Approach Operational Readiness • Key project elements are segregated by area and can be managed more • Early focus on operational readiness and commissioning to ensure a efficiently reducing risk: seamless transition to operations – Open pit mine (120 Mtp
Slide 27: Execution Readiness at QB2
Execution Readiness at QB2 Experienced project team including Bechtel, a leading EPCM company Teck Owner's Team Name Title Years of Experience Major Project Experience Karl Hroza Project Director 25+ Sturgeon Refinery, El Morro, Koniambo, Fort Hills, Ravensthorpe Sergio Vives Director, Environment a
Slide 28: QB2 Project Economics Comparison
QB2 Project Economics Comparison Changes Since Feasibility Study1 Sensitivity Analysis1 2016 FS Reserve Sanction RESERVE CASE8 US$3.00 US$3.25 US$3.50 (Reserves) Case 7 Case 8 Mine Life years 25 28 28 Annual EBITDA11 (US$B) Throughput ktpd 140 143 143 First 5 Full Years $1.0 $1.2 $1.3 General LOM Mi
Slide 29: 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 Cu Mo Silver Cu Mo Silver RESERVES Mt Grade % Grade % Grade RESERVES Mt Grade % 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 30: ENAMI Interest in QB
ENAMI Interest in QB 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 at QB since 1
Slide 31: 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 will recorded within • Total share
Slide 32: Notes - Appendix: Quebrada Blanca
Notes - Appendix: Quebrada Blanca Slide 19: QB2 Project 1. All-in sustaining costs (AISC) are net cash unit costs (also known as C1 cash costs) plus sustaining capital expenditures. Net cash unit costs are calculated after cash margin by-product credits assuming US$10.00/lb molybdenum and US$18.00/o
Slide 33: Notes - Appendix: Quebrada Blanca
Notes - Appendix: Quebrada Blanca Slide 23: QB2’s Competitive Cost Position 1. Source: Wood Mackenzie. 2. Based on first five full years of copper equivalent production. Copper equivalent production calculated assuming US$3.00/lb copper, US$10.00/lb molybdenum and US$18.00/oz silver without adjustin
Slide 34: Strategy and Overview
Strategy and Overview Teck
Slide 35: Consistent Long-Term Strategy
Consistent Long-Term Strategy • Diversification • Long life assets • Low cost • Appropriate scale • Low risk jurisdictions 35
Slide 36: Attractive Portfolio of Long-Life Assets
Attractive Portfolio of Long-Life Assets Low risk jurisdictions 36
Slide 37: Global Customer Base
Global Customer Base Revenue contribution from diverse markets (2018) 1 37
Slide 38: Diverse Pipeline of Growth Options
Diverse Pipeline of Growth Options In Construction Medium-Term Future Options Growth Options QB2 QB3 Galore Creek HVC D3 Project Zafranal Schaft Creek Copper Strong platform HVC Brownfield Mesaba with substantial growth options NuevaUnión San Nicolás (Cu-Zn) Zinc Red Dog VIP2 Project Antamina Brownf
Slide 39: Production Guidance
Production Guidance 2018 RESULTS 2019 GUIDANCE1 3 YEAR (2020-2022) GUIDANCE1 Steelmaking Coal 26.2 Mt 25.5-26.0 Mt 26.5-27.5 Mt Copper2,3,4,6 Highland Valley Concentrate 100.8 kt 115-120 kt 135-155 kt Antamina Concentrate 100.4 kt 95-100 kt 90-95 kt Carmen de Andecollo Concentrate + Cathode 67.2 kt
Slide 40: Sales and Unit Cost Guidance
Sales and Unit Cost Guidance Sales Q2 2019 RESULTS Q3 2019 GUIDANCE1 Steelmaking Coal 6.4 Mt 6.3-6.5 Mt Zinc - Red Dog Zinc in Concentrate 86 kt 165-170 kt Unit Costs 2018 RESULTS 2019 GUIDANCE1 Steelmaking Coal Adjusted site cost of sales2 C$62/t C$62-65/t Transportation costs2 C$37/t C$37-39/t Uni
Slide 41: Capital Expenditures Guidance
Capital Expenditures Guidance Sustaining, Major Enhancement, New Mine Development Quebrada Blanca 2 (TECK’S SHARE 2019 (TECK’S SHARE 2019 IN CAD$ MILLIONS) 2018 GUIDANCE1 IN CAD$ MILLIONS) 2018 GUIDANCE1 Sustaining QB2 Capital Expenditures $ 414 $ 1,450 Steelmaking coal2 $ 232 $ 515 Total capex, bef
Slide 42: Commodity Price Leverage
Commodity Price Leverage1 MID-POINT OF 2019 PRODUCTION ESTIMATED EFFECT ON ESTIMATED EFFECT ON GUIDANCE2 CHANGE ANNUALIZED PROFIT3 ANNUALIZED EBITDA3 $C/$US C$0.01 C$45M /$0.01∆ C$72M /$0.01∆ Coal 26.25 Mt US$1/tonne C$20M /$1∆ C$31M /$1∆ Copper 300 kt US$0.01/lb C$5M /$0.01∆ C$8M /$0.01∆ Zinc4 942.
Slide 43: Tax-Efficient Earnings in Canada
Tax-Efficient Earnings in Canada ~C$3.8 billion in available tax pools1 • Includes: ‒ $2.9 billion in net operating loss carryforwards ‒ $0.7 billion in Canadian Development Expenses (30% declining balance p.a.) ‒ $0.2 billion in allowable capital loss carryforwards • Applies to cash income taxes in
Slide 44: Share Structure & Principal Shareholders
Share Structure & Principal Shareholders Teck Resources Limited1 VOTING SHARES HELD PERCENT RIGHTS Class A Shareholdings Temagami Mining Company Limited 4,300,000 55.4% 32.1% SMM Resources Inc (Sumitomo) 1,469,000 18.9% 11.0% Other 1,999,304 25.7% 14.9% 7,768,304 100.0% 58.0% Class B Shareholdings T
Slide 45: Notes: Appendix – Strategy and Overview
Notes: Appendix – Strategy and Overview Slide 37: Global Customer Base 1. Gross profit before depreciation and amortization is a non-GAAP financial measure. See “Non-GAAP Financial Measures” slides. Slide 39: Production Guidance 1. As at July 24, 2019. See Teck’s Q2 2019 press release. 2. Metal cont
Slide 46: Notes: Appendix – Strategy and Overview
Notes: Appendix – Strategy and Overview Slide 42: Commodity Price Leverage 1. As at July 24, 2019. Before pricing adjustments, based on our current balance sheet, our expected 2019 mid-range production estimates, current commodity prices and a Canadian/U.S. dollar exchange rate of $1.32. See Teck’s
Slide 47: Sustainability
Sustainability Teck
Slide 48: Sustainability Strategy
Sustainability Strategy • Strong sustainability performance enabled by a strategy built around developing opportunities and managing risks Community Water Our People • Implementing a sustainability strategy with short-term, five-year goals and long-term goals stretching out to 2030 Biodiversity Ener
Slide 49: Why Sustainability Matters
Why Sustainability Matters • Reduced risk of operations disruption • Increased access to capital at a lower cost • Efficient project and permit approvals • Increased cost savings and productivity • Meet rising supply chain and societal expectations • Higher financial returns • Employee retention and
Slide 50: Health and Safety Performance
Health and Safety Performance • Safety performance in 2018 Incident Frequency (per 200,000 hours worked) - 28% reduction in High-Potential 0.6 Incidents 0.5 - 21% decrease in Lost-Time Injury 0.4 Frequency 0.3 • Conducted Courageous Safety 0.2 Leadership training with 97% of 0.1 employees 0 • Two fa
Slide 51: Leading Practices in Tailings Management
Leading Practices in Tailings Management Transparency • Details on all tailings facilities available online • Dam Safety Inspections publically available on our website Collaboration • Actively engaged on the International Council on Mining and Metals (ICMM) Tailings Position Statement and Governanc
Slide 52: Responsible Tailings Management
Responsible Tailings Management 100% Comprehensive systems and procedures in place based on six pillars: 1. Surveillance 4. Internal Review of tailings Technology 5. Detailed Third-Party facilities 2. Staff Inspections Reviews independently verified to meet 3. Annual External 6. Independent Review e
Slide 53: Reducing Freshwater Use
Reducing Freshwater Use Teck in top 10 of 50+ companies ranked by DJSI • Water recycled average of 3 times at DJSI Water Related Risk Assessment mining operations in 2018 2018 Percentile Rankings2 100 • Target to reduce freshwater use at Teck 90 (84th percentile) Chilean operations by 15% by 2020 80
Slide 54: Taking Action on Climate Change
Taking Action on Climate Change Teck in top 5 of 50+ companies ranked by DJSI • Goal to reduce GHG emissions by DJSI Climate Strategy Assessment 450,000 tonnes by 2030 and have 2018 Percentile Rankings2 100 Teck already reduced 289,000 tonnes of (95th percentile) 90 emissions as a result of projects
Slide 55: Lower-Risk Jurisdictions, Comprehensive Assessments
Lower-Risk Jurisdictions, Comprehensive Assessments Teck in top 5 of 50+ companies ranked by DJSI • All operations in countries with DJSI Human Rights Assessment well-developed mining industries: 2018 Percentile Rankings2 100 Teck Canada, United States, Chile, Peru (95th percentile) 90 • Robust regu
Slide 56: Strengthening Relationships with Indigenous Peoples
Strengthening Relationships with Indigenous Peoples • Agreements in place at all mining operations within or adjacent to Indigenous Peoples’ territories • Achieved agreements with all Indigenous communities near the QB2 project ‒ 8 of 8 agreements with Indigenous communities ‒ 7 of 7 agreements with
Slide 57: Employee Relations and Diversity
Employee Relations and Diversity 18% • 57% of our employees are unionized and there were zero strikes in 2018 • Collective agreements at Quebrada women in our workforce Blanca, Line Creek and Carmen de 20% Andacollo operations set to expire in 2019; collective agreement at Antamina currently expired
Slide 58: Collective Agreements
Collective Agreements OPERATION EXPIRY DATES November 30, 2019 Quebrada Blanca January 31, 2022 March 31, 2022 Line Creek May 31, 2019 September 30, 2019 Carmen de Andacollo December 31, 2019 Elkview October 31, 2020 Fording River April 30, 2021 Antamina July 31, 2021 Highland Valley Copper Septembe
Slide 59: Notes: Sustainability
Notes: Sustainability Slide 52: Responsible Tailings Management 1. Sustainability Accounting Standards Board Standards. https://www.sasb.org/ Slide 53: Reducing Freshwater Use 1. Sustainability Accounting Standards Board Standards. https://www.sasb.org/ 2. SAM Corporate Sustainability Assessment 201
Slide 60: Technology and Innovation
Technology and Innovation Teck
Slide 61: Teck is Actively Pursuing a Transformation Of Our Business Through Technology
Teck is Actively Pursuing a Transformation Of Our Business Through Technology RACE21TM RENEW AUTOMATE CONNECT EMPOWER Modernize Teck’s Accelerate and Develop Design future technology scale autonomy digital platform operating model foundation program for sensing and to empower our analytics employees
Slide 62: RACE21: Renew and Automate
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 63: RACE21: Connect and Empower
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 64: 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 65: $150M Plan Announced in our Q2 2019 Results
$150M Plan Announced in our Q2 2019 Results “RACE21™ is about taking a company-wide approach to renewing our technology infrastructure, looking at opportunities for automation and robotics, connecting our data systems to enable broad application of advanced analytics and artificial intelligence, and
Slide 66: Specific Opportunities Are Targeted For 2019
Specific Opportunities Are Targeted For 2019 Processing Analytics Mining Analytics Predictive Maintenance • Wash plant optimization • Haul cycle analytics • Maintenance analytics • Mill optimization • Fuel dashboard • Drill & blast optimization 66
Slide 67: 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. 67
Slide 68: RACE21 - Transforming Our Business
RACE21TM - Transforming Our Business RACE21TM Teck’s Future Operation (Autonomy program Value for mobile fleet substantially complete) RACE21TM (Significant value captured) RACE21TM (Target: $150M) 2019 2021 2023 2025-30 End Today RACE21TM – Teck transforming to be a leader RACE21TM – Teck’s future
Slide 69: Steelmaking Coal Business Unit & Markets
Steelmaking Coal Business Unit & Markets
Slide 70: Steelmaking Coal Facts
Steelmaking Coal Facts Global Coal Production1: ~7.5 billion tonnes Steelmaking Coal Production2: ~1,150 million tonnes Export Steelmaking Coal2: ~350 million tonnes Seaborne Steelmaking Coal2: • ~0.7 tonnes of steelmaking coal is used to ~310 million tonnes produce each tonne of steel3 • Up to 100
Slide 71: Steelmaking Coal Demand Growth Forecast
Steelmaking Coal Demand Growth Forecast Growth drivers: Southeast Asia, India and China Seaborne Steelmaking Coal Imports1 (Mt) Change 2019 vs. 2018 330 4 4 5 318 0.8 315-319 320 5 309 310 300 290 280 2018 SE Asia China India Europe 2019, ex Brazil 2019 Includes: Brazil • Southeast Asia: Growth most
Slide 72: Indian Steelmaking Coal Imports
Indian Steelmaking Coal Imports Imports supported by secular demand and government growth 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 72
Slide 73: Growing India Steelmaking Coal Imports
Growing India Steelmaking Coal Imports India plans to achieve 300 Mt of crude steel capacity by 2030-2031 India’s Hot Metal Capacity; Projects and Operations1 National Steel Policy 20172 Projections Jammu & Existing Hot Metal Capacity Kashmir Parameters (2030-31) Brownfield Expansion Greenfield Proj
Slide 74: Chinese Steelmaking Coal Imports
Chinese Steelmaking Coal Imports Seaborne YTD August 2019 imports up by +3 Mt Chinese Crude Steel Production (CSP), Hot Metal Production (HMP) and Coal Production (Mt)1 Chinese Coking Coal Imports2 (Mt) 1200 520 90 80 1000 500 70 16 800 480 60 35 15 26 50 28 24 600 460 19 13 40 15 20 400 440 30 60 4
Slide 75: 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 70 • Capacity: crude steel 8 Mt 60 • Status: Construction started in 2017; 2 of 5 BFs 50
Slide 76: Chinese Steel Margins
Chinese Steel Margins Margins have declined but remain positive China Hot Rolled Coil (HRC) Margins and Steelmaking Coal (HCC) Prices1 (US$/t) 350 300 250 200 150 100 50 0 -50 China HRC Gross Margins China Domestic HCC Price Argus Premium HCC CFR China 76
Slide 77: Chinese Scrap Use to Increase Slowly
Chinese Scrap Use to Increase Slowly EAF share in crude steel production to recover only to 2013’s level China’s Scrap Ratio was ~1/2 of World Average China Steel Use By Sector in 20171 (%) (2000-2018)2 100% 78% 80% 72% 55% 60% 40% 39% 35% 32% 37% 40% 23% 18% Others 20% 15-25% 0% Auto 5-10% Construc
Slide 78: Steelmaking Coal Supply Growth Forecast
Steelmaking Coal Supply Growth Forecast Growth comes from Australia, Russia and Colombia Seaborne Steelmaking Coal Exports1 (Mt) Change 2019 vs. 2018 330 4 1 1 2 319 4 312-319 320 1 5 309 310 300 290 280 2018 Australia Russia Colombia Indonesia Canada Mozambique 2019, USA 2019 ex.USA Includes: • Aus
Slide 79: US Coal Producers are Swing Suppliers
US Coal Producers are Swing Suppliers Australian Steelmaking Coal Exports1 (Mt) US Steelmaking Coal Exports2 (Mt) 200 70 180 60 160 140 50 120 40 100 30 80 60 20 40 10 20 0 0 79
Slide 80: Canadian & Mozambique Steelmaking Coal Exports
Canadian & Mozambique Steelmaking Coal Exports Canadian Exports1 (Mt) Mozambique Exports2 (Mt) 40 9 35 8 30 7 25 6 20 5 4 15 3 10 2 5 1 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 80
Slide 81: 2nd Largest Seaborne Steelmaking Coal Supplier
2nd Largest Seaborne Steelmaking Coal Supplier Competitively positioned to supply steel producers worldwide Sales Distribution CHINA 2013: ~30% NORTH AMERICA EUROPE 2017: ~15% ~5% 2013: ~15% INDIA 2017: ~20% 2018: ~10% 2013: ~5% 2018: ~15% 2017: ~10% 2018: ~15% ASIA EXCL. CHINA & INDIA 2013: ~40% LA
Slide 82: An Integrated Long Life Coal Business
An Integrated Long Life Coal Business ELK VALLEY British Columbia Prince Rupert Elco Quintette Ridley Fording • 940 million tonnes of reserves Terminal Alberta River support ~27 Mt of production Prince George Edmonton for many years Greenhills Elkford Cardinal River • Geographically concentrated Lin
Slide 83: Long Life With Growth Potential in Steelmaking Coal
Long Life With Growth Potential in Steelmaking Coal 26.0-26.5 million tonnes in 2019 Annual Production Capacity1 (Mt) • Advancing production in new areas to fully 29 28 offset Coal Mountain closure 27 27-28 million tonnes in 2020 and beyond 26 25 • Investment in plant throughput capacity at 24 Elkvi
Slide 84: Maximizing Cash Flow in Any Steelmaking Coal Market
Maximizing Cash Flow in Any Steelmaking Coal Market High Price Environment Cost of Sales and Realized Sales Price ($/t) $243 • Production focus to capture high margins $250 $226 $224 and maximize free cash flow1 $194 ‒ Utilize higher cost equipment, contractor $200 $153 labour, internal overtime, &
Slide 85: Setting Up for Strong Long-Term Cash Flows In Steelmaking Coal
Setting Up for Strong Long-Term Cash Flows In Steelmaking Coal Strip ratio increase planned in 2019 to Clean Strip Ratio1 12 advance clean coal expansion 10 • Future strip ratio on par with historical 8 average 6 Elkview Operations driving the increase in clean coal strip ratio to advance ability 6
Slide 86: Reinvesting to Maintain Productivities And Manage Costs in Steelmaking Coal
Reinvesting to Maintain Productivities And Manage Costs in Steelmaking Coal Maintaining historical dollar per tonne Cost ofSustaining Sales and Capital, RealizedExcluding Sales Price ($/t) 1 Water Treatment ($/t) sustaining investment levels $14 $12 2010-2016: Average spend of ~$6 per tonne1 • Reinv
Slide 87: Investing In Production Capacity in Steelmaking Coal
Investing In Production Capacity in Steelmaking Coal Major enhancement projects increasing long-term Major Enhancement Capital Expenditures1,2 ($M) production capacity: • SWIFT at Fording River Operations 400 • Baldy Ridge Extension at Elkview Operations 350 • 9 Million project at Elkview Operations
Slide 88: Progress on Reducing Long-Term Water Treatment Costs
Progress on Reducing Long-Term Water Treatment Costs Saturated Rock Fills (SRF) demonstrated Use and Enhancement of Biological Process to be a direct replacement for current Present in Backfill Pits Active Water Treatment Facilities (AWTF), subject to regulatory approval SRF strategy could reduce wa
Slide 89: Water Treatment Capital
Water Treatment Capital Water Capital ($M) Water Capital ($M) Water Capital ($M) Best Case1,2 Previous Guidance1,2 Worst Case1,2 400 400 400 300 300 300 200 200 200 100 100 100 - - - 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 SRF permitted would reduce Previous guidan
Slide 90: Teck's Pricing Mechanisms
Teck’s Pricing Mechanisms Coal sales book generally moves with the market SALES MIX Pricing Mechanisms (%) • ~40% quarterly contract price • ~60% shorter than quarterly pricing mechanisms (including “spot”) 20% Index Linked PRODUCT MIX 80% Fixed • ~75% of production is high-quality HCC Price • ~25%
Slide 91: Quality and Basis Spreads
Quality and Basis Spreads Impact Teck’s average realized steelmaking coal prices HCC / SHCC Prices and Spread1 (US$/t) HCC FOB / CFR Prices and Spread2 (US$/t) 350 100 350 40 300 300 75 20 250 250 200 0 200 50 150 150 -20 100 25 100 50 -40 50 0 0 0 -60 HCC (LHS) SHCC (LHS) HCC / SHCC spread (RHS) HC
Slide 92: ~75 Mtpa of West Coast Port Capacity Planned
~75 Mtpa of West Coast Port Capacity Planned Teck port capacity exceeds current production plans, including Quintette WESTSHORE TERMINALS West Coast Port Capacity (Nominal Mt) • Current capacity 33 Mtpa 40 • ~$275 million upgrade to 35 Mtpa by 2019 • Teck is largest customer at 19 Mtpa 30 • Contract
Slide 93: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 70: Steelmaking Coal Facts 1. Source: IEA. 2. Source: Wood Mackenzie (Long Term Outlook H1 2019). 3. Source: World Coal Association. Assumes all of the steel required is produced by blast furnace-basic oxygen furnace route. 4. Source: The Coal Alliance. Assum
Slide 94: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 83: Long Life with Growth Potential in Steelmaking Coal 1. Subject to market conditions and obtaining relevant permits. Slide 84: Maximizing Cash Flow in Any Steelmaking Coal Market 1. Free cash flow is a non-GAAP measure. See “Non-GAAP Financial Measures” sl
Slide 95: Copper Business Unit & Markets
Copper Business Unit & Markets
Slide 96: Global Copper Mine Production Increasing Slowly
Global Copper Mine Production Increasing Slowly Mine Production Set To Increase 1.9 Mt By 20231 Global Copper Mine Production2 (kt contained) Includes: Mine kmt 22,000 Cobre Panama 370 20,000 Kamoa - Kakula 310 Quellaveco 300 18,000 Quebrada Blanca 300 16,000 Glencore’s African mine restarts 240 PT
Slide 97: Copper Disruptions Return To Impact Mines
Copper Disruptions Return To Impact Mines TC/RCs Spot and BM Falling1 (US$/lb) Disruptions (kt)2 $120 Q2 2005 2007 2009 2011 2013 2015 2017 2019 $110 0 $100 $90 -200 $80 $70 -400 $60 -600 3.0% 2.8% $50 $40 -800 4.5% 3.4% $30 YTD $20 -1,000 Annual/Mid Year Spot -1,200 97
Slide 98: Rapid Growth in Chinese Copper Smelter Capacity
Rapid Growth in Chinese Copper Smelter Capacity Limited domestic mine projects and lots of delays Chinese Copper Mine Growth1 +3.0 Mt of Smelting Projects in the Pipeline2 (kt) (kt blister) 400 400 2019 2020 2020 – 2023 2018/2019 2020 2020 – 2023 49 kt 61 kt 240 kt 2,030 kt 520 kt 480 kt 300 300 200
Slide 99: Copper Supply
Copper Supply Mine production rising and scrap availability falling Sanctioned Projects Since 20171 (kt) China Copper Scrap Imports Decline2 New mines commissioned will (Copper content, kt) 2,000 add 2.5 Mt from 2017-2025 3,000 1,500 2,500 1,000 2,000 500 1,500 0 2013 2014 2015 2016 2017 2018 1,000
Slide 100: Copper Metal Stocks
Copper Metal Stocks Better than expected demand; smelter disruptions • Production cuts at Asian smelters combined with Daily Copper Prices (US$/mt) and Stocks1 (kt) lower scrap availability contributed to a drawdown $12,000 1,800 in cathode stocks 1,600 • Exchange stocks have fallen 379,000 tonnes $
Slide 101: Copper Supply / Demand Balance
Copper Supply / Demand Balance Projects available to fill low demand scenario gap Probable Projects Sufficient Only To Fill Existing and Fully Committed Supply1 (kt) Low Gap Scenario2 (kt) 5,500 28,000 27,000 4,500 26,000 Additional 3,500 gap to high 25,000 demand 2,500 Additional 24,000 gap to base
Slide 102: Long Life and Stable Assets in Copper
Long Life and Stable Assets in Copper Antamina Highland Valley Carmen de Andacollo Quebrada Blanca • H1 copper production of • Higher recoveries driving • June thickener failure • Copper production on track 50,000 tonnes, guidance increased copper impacted Q2 2019 copper with leaching operations mai
Slide 103: Cost Discipline and Improvement Focus in Copper
Cost Discipline and Improvement Focus in Copper Operating Expenses & Productivity Focused Investment Priorities • Cross site sharing in asset management • Numerous projects finishing in 2019 and continues to improve availabilities and early 2020 reduce costs - D3 Ball Mill at HVC, QB1 water • Robust
Slide 104: Major Growth and Life Extension Projects in Copper
Major Growth and Life Extension Projects in Copper Setting up for long-term success Quebrada Blanca • QB2: 316 kt of CuEq production for first 5 years1 - Doubles copper production with low strip ratio and AISC of US$1.38/lb copper2 • QB3: Scoping Study on expansion potential in progress - Mineral re
Slide 105: Notes: Appendix – Copper
Notes: Appendix – Copper Slide 96: 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) 2. Source: Source: Data compiled by Teck based on information from Wood Mackenzie and T
Slide 106: Zinc Business Unit & Markets
Zinc Business Unit & Markets Teck
Slide 107: Environmental Policy Decreasing Chinese Production
Environmental Policy Decreasing Chinese Production Chinese Mine Production Down 2.4% in 20181 Chinese Refined Production Down 3.4% in 20182 (kt Contained) (kt Contained) 5,000 6,500 4,500 6,000 5,500 4,000 5,000 3,500 4,500 3,000 4,000 2,500 3,500 2,000 3,000 2012 2013 2014 2015 2016 2017 2018 2012
Slide 108: Increasing Demand for Zinc Metal Imports
Increasing Demand for Zinc Metal Imports De-stocking Continues More Imported Zinc Metal Chinese Stocks at Record Lows1,2 (kt) Required to Fill the Gap3 (kt) 1,600 1,600 1,440 1,400 1,400 1,242 1,246 1,247 1,200 1,200 1,000 1,000 770 788 800 800 652 600 600 503 400 400 200 200 0 0 2015 2016 2017 2018
Slide 109: Zinc Supply
Zinc Supply Mine production missed forecast in 2018 • Teck originally forecast global mine production Zinc Mine Production1 (kt contained) would grow 7.9% or over 800,000 tonnes in 2018 16,000 ‒ Due to start up of large mines, Dugald River, Gamsberg, New Century and restarts by Glencore 14,000 • Glo
Slide 110: Chinese Zinc Mine Projects Delayed
Chinese Zinc Mine Projects Delayed Impacted by inspections and low zinc ore grades Estimated Chinese Zinc Mine Growth Chinese Mine Growth 2019-2021 Heavily Rarely Achieved1 (Kmt Contained) Dependent On Single Project2 (kt contained) 600 600 400 200 400 360 0 350 270 300 250 237 200 200 180 100 60 62
Slide 111: Zinc Concentrate Treatment Charges
Zinc Concentrate Treatment Charges Treatment Charges1 (USD/dmt) 350 300 250 200 150 100 50 0 Spot TC Benchmark TC 111
Slide 112: Zinc Metal Stocks
Zinc Metal Stocks Consecutive deficits decreasing zinc inventories • Deficits in past 5 years have driven down stocks Daily Zinc Prices1,2 (US$/mt) • LME refined zinc stocks have decreased 67,700 and Stocks1,2 (kmt) tonnes year-to-date in 2019 5,000 2,500 • Less than 62,000 tonnes of refined zinc re
Slide 113: Zinc Supply / Demand Balance
Zinc Supply / Demand Balance Zinc mine production peaks in 2021 Existing and Fully Committed Supply1 (kt) Probable Projects Sufficient To Fill Gap2 (kt) 17,000 Additional gap to 1,500 high demand 16,000 Additional gap to 1,000 base 15,000 demand 500 14,000 Gap to low demand 13,000 0 2019 2020 2021 2
Slide 114: Teck is the Largest Net Zinc Miner
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 0 114
Slide 115: Integrated Zinc Business
Integrated Zinc Business Red Dog Trail Pend Oreille • Strong Q2 2019 production offset • Zinc production impacted by recent • Care and maintenance started in difficult Q1 winter weather conditions electrical equipment failure in refinery August • Higher lead guidance, lower unit costs • Acid Plant #
Slide 116: Cost Discipline and Improvement Focus in Zinc
Cost Discipline and Improvement Focus in Zinc Operating Expenses & Productivity Focused Investment Priorities • Cross site sharing in asset management • Numerous projects finishing in 2019 and continues to improve availabilities and early 2020 reduce costs - VIP2 at Red Dog, Acid Plant #2 at Trail •
Slide 117: Red Dog Sales Seasonality
Red Dog Sales Seasonality • Operates 12 months Zinc Sales 1 (%) 40% 34% 31% • Ships ~ 4 months 30% 21% • Shipments to inventory in Canada 20% 14% 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 (%) 58% o
Slide 118: Red Dog Operating Cost Seasonality
Red Dog Operating Cost Seasonality Significant quarterly variation 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 • Zinc is a by-product credit at Antamina and accounted for in the Copper Bus
Slide 119: Red Dog in Bottom Quartile of Zinc Cost Curves
Red Dog in Bottom Quartile of Zinc Cost Curves 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 RED DOG 60 40 20 0 0% 25% 50% 75% 100% 119
Slide 120: 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 121: Building a Quality Zinc Inventory
Building a Quality Zinc Inventory Potential New GIANT System1 (Contained Zn+Pb in Mt and Grade Zn+Pb in %) GIANT ZINC DEPOSITS (+6 Mt Zn+Pb) 121
Slide 122: Global Context of Teck's Zinc Resources
Global Context of Teck’s Zinc Resources Well positioned; world class 30 Teck’s Zinc Resources1 Qanaiyaq (Resource in Mt and Grade Zn+Pb in %) 25 Red Dog Past Production Aqqaluk Aktigiruq Exploration Target1 20 80-150 Mt Grade Zn+Pb % Anarraaq Paalaaq 16-18% Zn+Pb 15 Rampura Broken Hill Agucha McArth
Slide 123: Notes: Appendix – Zinc
Notes: Appendix – Zinc Slide 107: Environmental Policy Decreasing Chinese Production 1. Source: Data compiled by Teck based on information from BGRIMM, CNIA, Antaike 2. Source: Data compiled by Teck based on information from BGRIMM, CNIA, Antaike Slide 108: Increasing Demand for Zinc Metal Imports 1
Slide 124: Notes: Appendix – Zinc
Notes: Appendix – Zinc Slide 114: Largest Global Net Zinc Mining Companies 1. Source: Data compiled by Teck from information from Wood Mackenzie – Company smelter production netted against company mine production on an equity basis. Slide 117: Red Dog Sales Seasonality 1. Average sales from 2010 to
Slide 125: Energy Business Unit & Markets
Energy Business Unit & Markets
Slide 126: Energy Benchmark Pricing
Energy Benchmark Pricing Calendar NYMEX WTI Price1 and WTI/WCS Basis Differential2/3 (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 Differential at the USGC 1. The WTI CMA is an average of the dail
Slide 127: US Midwest and US Gulf Coast are Key Markets
US Midwest and US Gulf Coast are Key Markets Blended Bitumen Pipelines Edmonton Hardisty TransCanada Keystone, Keystone XL Superior Enbridge/Line 3 Asia Vancouver Montreal TransMountain/TMX In Service Pipeline Steele City Flanagan Proposed Pipeline California Market Hub Cushing Deep Water Port Asia
Slide 128: Export Capacity Needed To Meet Global Demand
Export Capacity Needed To Meet Global Demand Near term (2019-2021): Western Canada Supply & Markets1 (Mbpd) • Canadian export capacity lagging Reliant on rail 2019-2021 • Reliant on rail (400-500 Kbpd) 7.5 7.0 Pipeline development progressing: 6.5 TransMountain • Enbridge: 370 Kbpd (2020-2021) 6.0 T
Slide 129: Lower Carbon Intensity Product at Fort Hills
Lower Carbon Intensity Product at Fort Hills Comparable to the average barrel refined in the U.S. PFT Diluted Bitumen has a Lower Carbon Intensity Than Around Half of the Barrels of Oil Refined in the US, on a Wells-to-Wheels Basis1 (Total carbon intensity - kgCO2e per barrel of refined products) 60
Slide 130: Fort Hills Blend Widely Accepted In Market
Fort Hills Blend Widely Accepted In Market 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 49.5 Kbpd Our sales mix provides diverse market access 10.0 US Gulf Coast: monthly basi
Slide 131: Diverse Portfolio of Sales in Energy
Diverse Portfolio of Sales in Energy Blend Sales By Delivery Point (%) Revenue (US$/bbl) LOCATION NYMEX WTI WESTERN CANADIAN SELECT DIFFERENTIAL BASIS 20% (Pipeline) US Gulf Coast Calendar average Monthly contracted (Pipeline) monthly WTI spot differential at US 60% Gulf Coast 20% (Pipeline) Hardist
Slide 132: Quality Barrels in a Progressive Jurisdiction
Quality Barrels in a Progressive Jurisdiction 4th largest oil sands mining portfolio Fort Hills in operation Alberta, Canada • Teck 21.3% = 0.6 billion barrels1 Frontier in the regulatory phase • Teck 100% = 3.2 billion barrels2 Lease 421: future growth • Teck 50% CNRL Horizon Imperia l Kearl • High
Slide 133: Our Energy Strategy
Our Energy Strategy Maximizing value of Fort Hills • Start-up complete, increase production volumes, lower costs De-risking Frontier & Lease 421 • Frontier regulatory hearing completed in 2018, decision in early 2020 Driving business results through technology & innovation • Safe & reliable producti
Slide 134: Fort Hills is a Modern Mine
Fort Hills is a Modern Mine Built for low cost operations Fort Hills 2018 Production @100% (Barrels per day) 201,000 bpd 250,000 Exit 2018 December 2018 @ 201,000 bpd 200,000 <$23/bbl 150,000 Great start-up adjusted operating costs1 December 2018 100,000 50,000 PFT Product low GHG emissions - Jan Fe
Slide 135: Attractive Debottlenecking Opportunities at Fort Hills
Attractive Debottlenecking Opportunities at Fort Hills To be implemented in two phases Potential capacity increase of PFT Process 20 kbpd to 40 kbpd • Teck’s share of annual production could increase from 14.0 Mbpa to 15.5-17.0 Mbpa • Near term opportunities require little to no capital (phase 1) •
Slide 136: Significant EBITDA Upside Potential in Energy
Significant EBITDA Upside Potential in Energy Providing the basis for strong and steady cash flow for decades Assumptions EBITDA1 Potential – Teck’s share ($ millions) 800 WTI @ WTI @ ASSUMPTIONS 700 US$70/BBL US$60/BBL 600 +$150M WTI-WCS differential US$10.00 US$14.75 500 400 +$100M C$/US$ exchange
Slide 137: Teck's Energy Outlook
Teck’s Energy Outlook $70 million in EBITDA1 generated at Fort Hills in Q2 2019 • Government of Alberta curtailments effective January 1, 2019 • Fort Hills: PRODUCTION ADJUSTED OPERATING COSTS2 CAPITAL 2019 • Expect to be at the low end of our • With the lower production, we expect • C$11.50-$13.50
Slide 138: Notes: Appendix – Energy
Notes: Appendix – Energy Slide 126: Energy Benchmark Pricing 1. The WTI CMA is an average of the daily settle quoted price for WTI prices for future deliveries for the trading days during a calendar month. Source: CME Group. As at October 14, 2019. 2. WCS at Hardisty: an index value determined durin
Slide 139: Energy Business Unit Modelling
Energy Business Unit Modelling
Slide 140: Operating Netback – Q2 2019
Operating Netback – Q2 2019 • Operating netback is a non-GAAP measure, presented on a product and sales barrel basis on page 25 of the Q2 2019 news release. • Derived from the Energy segmented information (P&L), after adjusting for items not directly attributable to the revenues and costs associated
Slide 141: Operating Netback – Q2 2019
Operating Netback – Q2 2019 Fort Hills Mine Terminal Bitumen Price Realized FHELP Managed Transportation Operating Costs East Tank Farm Blending Facility (-) Wood Buffalo Pipeline Norlite Pipeline(-) Wood Buffalo Pipeline Extension Teck Fort Saskatchewan Hardisty Terminal Cavern Storage & Sales – Ha
Slide 142: Operating Netback Reconciliation – Q2 2019
Operating Netback Reconciliation – Q2 2019 Non-GAAP Financial Measures on page 55 of Q2 2019 news release Energy Operating Netback, Bitumen and Blended Bitumen Price Realized Reconciliations1 Three months ended Three months ended (C$ in millions, except where noted) June 30, 2019 June 30, 2019 Reven
Slide 143: Operating Netback Reconciliation – Q2 2019
Operating Netback Reconciliation – Q2 2019 Non-GAAP Financial Measures on page 56 of Q2 2019 news release Blended Bitumen Price Realized Reconciliation Three months ended (C$ in millions, except where noted) June 30, 2019 Revenue as reported $ 295 Less: Non-proprietary product revenue (9) Add back:
Slide 144: Energy EBITDA Reconciliation – Q2 2019
Energy EBITDA Reconciliation – Q2 2019 Non-GAAP Financial Measures on page 49 of Q2 2019 news release Energy Business EBITDA by Entity Three months ended Three months ended Three months ended (C$ in millions) June 30, 2019 June 30, 2018 March 31, 2019 Reported as: Reported as: Reported as: Other Oth
Slide 145: Energy Gross Profit – Q2 2019
Energy Gross Profit – Q2 2019 From Revenue and Gross Profit Table Blended Bitumen Revenue Calculation Q2 2019 news release; page 37 Three months ended CAD$ in millions Three months ended June 30, 2019 CAD$ in millions June 30, 2019 Revenue, as reported (A) $295 Revenue (A) $295 Less: non-proprietary
Slide 146: Modelling Bitumen Price Realized – Q2 2019
Modelling Bitumen Price Realized – Q2 2019 Non-GAAP Financial Measure Bitumen price realized = (blend salesA – diluent expenseB) / bitumen bbls soldC A. Blend sales = blend sales @ Hardisty + blend sales @ U.S. Gulf Coast (USGC) = $290 per “Blended Bitumen Price Realized Reconciliation” and “Reconci
Slide 147: Energy EBITDA Simplified Model
Energy EBITDA Simplified Model Illustrative EBITDA Calculation - Teck Attributable @ 21.3% (14 Mbpd)1 ASSUMPTION TOTAL PER BARREL WTI price US$70.00 Less: Weighted average WTI-WCS differential (US$10.00) Multiplied by: C$/US$ exchange rate @ $1.25 WCS price (WTI price less WTI-WCS differential x C$/
Slide 148: Notes: Appendix – Energy Business Unit Modelling
Notes: Appendix – Energy Business Unit Modelling Slide 147: Energy EBITDA Simplified Model 1. EBITDA is a non-GAAP financial measure. This model is being provided to illustrate how Teck calculates EBITDA for its Energy business unit. The figures included are not forecasts of projected figures of Tec
Slide 149: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 150: Non-GAAP Financial Measures
Non-GAAP Financial Measures Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). This document refers to a number of Non-GAAP Financial Measures, which are not measures recognized under IFRS in Canada and do not have a standardized meaning prescri
Slide 151: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Profit and Adjusted Profit Three months ended (C$ in millions) June 30, 2019 Profit attributable to shareholders $ 231 Add (deduct): Debt prepayment option loss (gain) (26) Debt redemption loss 166 Asset impairment 109 Taxes and other (21) Adjusted profi
Slide 152: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Basic Earnings Per Share Reconciliation of Diluted Earnings Per Share to Adjusted Basic Earnings Per Share to Adjusted Diluted Earnings Per Share Three months ended Three months ended (C$ in millions) June 30, 2019 (C$ in millions) June 30, 2019 Basic ea
Slide 153: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt-to-Adjusted EBITDA Ratio & Net Debt-to-Debt-Plus-Equity Ratio (A) (B) (C) (A-B+C) Twelve months ended Six months ended Six months ended Twelve months ended (C$ in millions) December 31, 2018 June 30, 2018 June 30, 2019 June 30, 2019 EBITDA $ 6,1
Slide 154: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Three months ended (C$ in millions) June 30, 2019 Profit attributable to shareholders $ 231 Finance expense net of finance income 62 Provision for income taxes 120 Depreciation and amortization 395 EBITDA $ 808 Add (deduct): De
Slide 155: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Business EBITDA by Entity Three months ended Three months ended Three months ended (C$ in millions) June 30, 2019 June 30, 2018 March 31, 2019 Reported as: Reported as: Reported as: Other Other Other Energy Fort Hills Energy Energy Fort Hills Energy Energy Fort Hil
Slide 156: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Gross Profit Reconciliation of Gross Profit Margins Before Depreciation and Amortization Before Depreciation Three months ended Three months ended (C$ in millions) June 30, 2019 (C$ in millions) June 30, 2019 Gross profit $ 1,051 Revenue Depreciation and
Slide 157: Non-GAAP Financial Measures
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation Three months ended (C$ in millions, except where noted) June 30, 2019 Cost of sales as reported $ 868 Less: Transportation (250) Depreciation and amortization (199) Adjusted cash cost of sales $ 419 Tonnes sold (millions) 6.4 Per
Slide 158: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Three months ended Three months ended (C$ in millions, except where noted) June 30, 2019 June 30, 2019 Revenue as reported $ 646 US$ AMOUNTS1 By-product revenue (A) (90) Average exchange rate (C$/US$) $ 1.34 Smelter processing charges (B) 4
Slide 159: Non-GAAP Financial Measures
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 Three months ended Three months ended (C$ in millions, except where noted) June 30, 2019 (C$ in millions, except where noted) June 30, 2019 Revenue as reported $ 609 Payable pounds sold (millions) (E) 177.3 Less: Trail Op
Slide 160: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback, Bitumen and Blended Bitumen Price Realized Reconciliations1 Three months ended Three months ended (C$ in millions, except where noted) June 30, 2019 June 30, 2019 Revenue as reported $ 295 Blended bitumen barrels sold (000’s) 4,221 Less: diluent
Slide 161: Non-GAAP Financial Measures
Non-GAAP Financial Measures Blended Bitumen Price Realized Reconciliation Three months ended (C$ in millions, except where noted) June 30, 2019 Revenue as reported $ 295 Less: Non-proprietary product revenue (9) Add back: Crown royalties 4 Blended bitumen revenue (A) $ 290 Blended bitumen barrels so
Slide 162: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA Margin (C$ in millions) Six months ended June 30, 2019 Coal Copper Red Dog Other1 Teck Earnings before taxes per segmented note 1,168 243 287 (345) 1,353 Adjust non-controlling interest (NCI) for earnings attributable to shareholder (23) (10) - -
Slide 163: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Coal Business Unit Reconciliation of Free Cash Flow Adjusted EBITDA 2003 to (C$ in millions) Q2 2019 Cash Flow from Operations $44,743 October 1, 2008 (C$ in millions) to June 30, 2019 Debt interest and finance charges paid (5,290) Gross Profit $ 18,492
Slide 164: Investor Meetings
Investor Meetings October 21, 2019