Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Non-Deal Roadshow (September 2018)
162 slides from Teck Resources Limited Class A's roadshow presentation, Sep 13, 2018
Slide 1: Investor Meetings
Investor Meetings September 13-14, 2018
Slide 2: Forward Looking Information
Forward Looking Information 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 Securities Act (Ontario
Slide 3: Forward Looking Information
Forward Looking Information Management’s expectations of mine life are based on the current planned production rates and assume that all reserves and resources described in this presentation are developed. Certain forward-looking statements are based on assumptions disclosed in footnotes to the rele
Slide 4: Our Value Proposition
Our Value Proposition Strong Execution Solid Financial Position Disciplined Capital Allocation • Premier operating assets • Significant liquidity • Debt reduction • Proven track record • Strong cash flow • Asset portfolio optimization • Enhancing profitability • Strong history of returning cash to s
Slide 5: Value Potential
Value Potential Multiple Normalization Quebrada Blanca 2 Energy Business • Current Teck EV/EBITDA • EBITDA potential of • EBITDA potential at full multiple of 4.4x1 ~US$650M assuming production of ~C$500M at • Historical Teck EV/EBITDA 65% ownership and US$75/bbl WTI and multiple of 5.5-6.5x1 US$3.0
Slide 6: The Right Commodities at the Right Time
The Right Commodities at the Right Time Steelmaking Coal Zinc Copper • Outperforming market expectations Mine production • Steelmaking coal prices trading near the 10-year Structural deficit to peak in 2020 average of US$180/t1 set to continue & structural deficit • Forward curve >US$160/tonne throu
Slide 7: Premier Operating Assets
Premier Operating Assets Steelmaking Coal Zinc Copper Energy Primary Assets: Primary Asset: Primary Assets: Antamina, Primary Asset: Elk Valley mines Red Dog Highland Valley, Carmen de Fort Hills Andacollo • High quality steelmaking • Long life • Long life • Long life coal • Bottom quartile of cost
Slide 8: Proven Track Record
Proven Track Record Delivered Five-Point Plan Driving Industry-Leading Further Enhancing During Downturn Profitability Profitability No equity issued • Strong EBITDA margin3 • Red Dog VIP2 project to No core assets sold 43% 34% 44% increase mill throughput Invested in production • Highland Val
Slide 9: Solid Financial Position
Solid Financial Position Debt Maturity Profile2 • ~$5.5B of liquidity on a pro forma basis1 1,000 US$M • Reflects $1.2B cash from closing of the 500 Waneta Dam transaction on July 26, 2018, and the repurchase of US$1.0B in public 0 notes outstanding on August 14, 2018 2018 2020 2022 2024 2026 2028 2
Slide 10: Balancing Returning Cash to Shareholders and Capex With Prudent Balance Sheet Management
Balance Returning Cash to Shareholders and Capex With Prudent Balance Sheet Management Strategy Capital Allocation • Maintain current production • Significant free cash flow even at lower prices1 Steelmaking • Optimize assets • Cash available to fund growth projects Coal • Neptune Terminals expansio
Slide 11: Strong Track Record of Returning Capital to Shareholders
Strong Track Record of Returning Capital to Shareholders >$5.4 billion returned since 20031 Dividends1 Share Buybacks1 Policy • Regular base annual dividend of $0.20/share, paid quarterly $4.2 billion $1.3 billion • Supplemental dividend since 2003 since 2003 considered each year Return of Capital i
Slide 12: Quebrada Blanca 2
Quebrada Blanca 2 Developing the next major copper producer in Chile Long Life Asset • Initial mine life 25 years using only 25% of reserves and resources1 • Further upside potential in the district Quality Project • Brownfields site, low strip ratio • Very low sustaining capital • Total costs (AISC
Slide 13: Looking Forward
Looking Forward Multiple catalysts / valuation milestones Fort Hills NuevaUnión • Full production by beginning of Q4 2018 • Feasibility Study completion by Q3 2019 Quebrada Blanca 2 San Nicolás • Partnership transaction likely in Q4 2018 • Prefeasibility engineering and SEIA • Sanctioning decision p
Slide 14: Value Potential
Value Potential Multiple Normalization Quebrada Blanca 2 Energy Business • Current Teck EV/EBITDA • EBITDA potential of • EBITDA potential at full multiple of 4.4x1 ~US$650M assuming production of ~C$500M at • Historical Teck EV/EBITDA 65% ownership and US$75/bbl WTI and multiple of 5.5-6.5x1 US$3.0
Slide 15: Teck
Teck Strong Execution • Premier operating assets, a proven track record, and enhancing profitability at our operations. Solid Financial Position • Significant liquidity and strong cash flow. Disciplined Capital Allocation • Our approach balances returning cash to shareholders and capital spending wi
Slide 16: Notes
Notes Diversified Peers are Anglo American, BHP Billiton, Glencore, Rio Tinto, South32 and Vale. North American Peers are Freeport-McMoRan, First Quantum, Lundin and Southern Copper. Slide 5: Value Potential 1. Current multiples are as at September 6, 2018. Historical multiples are for the past ten
Slide 17: Notes
Notes Slide 8: Proven Track Record 1. Achieved US$2.4 billion in debt reduction based on US$7.2 billion of public notes outstanding as at September 30, 2015 to US$4.8B of public notes outstanding on June 30, 2018. 2. Achieved >$1 billion in annualized cost savings from initiatives in 2013 to 2016. 3
Slide 18: Notes
Notes Slide 14: Value Potential 1. Current multiples are as at September 6, 2018. Historical multiples are for the past ten years. Peer multiples are based on a combination of our Diversified Peers and North American Peers. EV/EBITDA multiples are unweighted averages based on data reported by Capita
Slide 19: Appendix
Appendix Teck
Slide 20: Consistent Long-Term Strategy
Consistent Long-Term Strategy Diversification Long life assets Low cost Appropriate scale Low risk jurisdictions 20
Slide 21: Attractive Portfolio of Long-Life Assets
Attractive Portfolio of Long-Life Assets Low risk jurisdictions 21
Slide 22: Global Customer Base
Global Customer Base Revenue contribution from diverse markets Sales Distribution (2017) North Europe China America 18% 17% 19% Asia excl. China and India India 37% Latin 6% America 3% 22
Slide 23: Diverse Pipeline of Growth Options
Diverse Pipeline of Growth Options In Construction Pre-Sanction Medium-Term Future Options Growth Options NuevaUnión Galore Creek Copper HVC D3 Project QB2 HVC Brownfield Schaft Creek Strong platform with substantial Zafranal Mesaba growth options San Nicolás (Cu-Zn) Zinc Trail #2 Acid Plant Antamin
Slide 24: Disciplined Approach to M&A
Disciplined Approach to M&A Recent Transaction History $1,400 Waneta Dam, $1,200M6 Net Proceeds (Cost) (C$M) $1,200 Antamina Silver $1,000 Stream2, $795M $800 $600 CdA Gold Stream1, $400 $206M Project Corridor/ Osisko Royalty Sandstorm Package, Royalty Package3, Wintering Hills, $200 NuevaUnion, $59
Slide 25: Emerged from the Downturn in a Strong Position
Emerged from the Downturn in a Strong Position Teck vs. Peer 5-yr Share Dilution1 Reflects Execution on Increase in number of outstanding shares from 2013 Our Five-Point Plan 50% 50% 1. No equity dilution 40% 40% 2. No core assets sold 30% 30% 3. Invested in production growth from Fort Hills 20% 20%
Slide 26: Higher Operating Cash Flow per Share
Higher Operating Cash Flow per Share Teck is the only company among its peers for which 2017 Indexed for maximum operating cash flow per share 2006-2016 operating cash flow per share exceeds the previous peak year1 140 140 Teck 120 120 100 100 80 80 60 60 40 40 20 20 0 0 2005 2006 2007 2008 2009 201
Slide 27: Production Guidance
Production Guidance 2017 Results 2018 Guidance1 3 Year (2019-2021) Guidance1 Steelmaking Coal 26.6 Mt 26-27 Mt 26.5-27.5 Mt Copper2,3 Concentrate 287 kt 280-290 kt 270-300 kt Highland Valley Concentrate 93 kt 100-105 kt 120-140 kt Antamina Concentrate 95 kt 90-95 kt 90-100 kt Carmen de Andecollo Con
Slide 28: Sales Guidance
Sales Guidance Q3 2018 Q2 2018 Results1 Guidance1 Steelmaking Coal 6.6 Mt 6.8 Mt Zinc Red Dog – Zinc in Concentrate 83.8 kt 160 kt 28
Slide 29: Cost Guidance
Cost Guidance 2017 Results 2018 Guidance1 Steelmaking Coal2 Site costs (A) $52/t $56-60/t Capitalized stripping (B) $19/t $18/t6 Transportation costs (C) $37/t $35-37/t Total cash costs (A+B+C) $108/t $109-115/t US$83/t US$84-88/t Copper3 C1 unit costs (D) US$1.33/lb US$1.30-1.40/lb Capitalized stri
Slide 30: Capital Expenditures Guidance 2018
Capital Expenditures Guidance 2018 Current Previous (Teck’s share 2018 2018 in CAD$ millions) 2017 Guidance1 Guidance Sustaining Steelmaking coal2 $ 112 $ 275 Copper 126 180 Zinc 168 230 Energy3 34 40 Current Previous Corporate 4 5 (Teck’s share 2018 2018 $ 444 $ 730 in CAD$ millions) 2017 Guidance
Slide 31: Sustaining Capex Expected to Peak in 2018
Sustaining Capex Expected to Peak in 2018 Total Capital Expenditures 2012-20181 $3,000 $2,500 New Mine Development $2,000 Major Enhancements $M $1,500 $1,000 Sustaining Capital $500 Capitalized $0 Stripping 2012 2013 2014 2015 2016 2017 2018 Guidance 31
Slide 32: Commodity Price Leverage
Commodity Price Leverage1 Mid-Point of Estimated Effect on Estimated Effect on 2018 Production Change Annualized Profit2 Annualized EBITDA3 Guidance1 $C/$US C$0.01 C$43M /$0.01∆ C$66M /$0.01∆ Coal 26.5 Mt US$1/tonne C$20M /$1∆ C$31M /$1∆ Copper 285 kt US$0.01/lb C$5M /$0.01∆ C$7M /$0.01∆ Zinc 970 kt
Slide 33: Tax-Efficient Earnings in Canada
Tax-Efficient Earnings in Canada ~$4.5 billion in available tax pools1, including: • $3.6B in loss carryforwards • $0.9B in Canadian Development Expenses Applies to: • Cash income taxes in Canada Does not apply to: • Resource taxes in Canada • Cash taxes in foreign jurisdictions 33
Slide 34: Share Structure & Principal Shareholders
Share Structure & Principal Shareholders Teck Resources Limited1 Shares Held Percent Voting Rights Class A Shareholdings Temagami Mining Company Limited 4,300,000 55.4% 32.0% SMM Resources Inc (Sumitomo) 1,469,000 18.9% 10.9% Other 1,999,304 25.7% 14.9% 7,768,304 100.0% 57.9% Class B Shareholdings T
Slide 35: Notes: Appendix - Introduction
Notes: Appendix - Introduction Slide 24: Disciplined Approach to M&A 1. Carmen de Andacollo gold stream transaction occurred in USD at US$162 million. 2. Antamina silver stream transaction occurred in USD at US$610 million. 3. Sandstorm royalty transaction occurred in USD at US$22 million. 4. Teena
Slide 36: Notes: Appendix - Introduction
Notes: Appendix - Introduction Slide 28: Sales Guidance 1. As at July 25, 2018. See Teck’s Q2 2018 press release. 2. Metal contained in concentrate. Slide 29: Cost Guidance 1. As at July 25, 2018. See Teck’s Q2 2018 press release. 2. Steelmaking coal unit costs are reported in Canadian dollars per t
Slide 37: Notes: Appendix - Introduction
Notes: Appendix - Introduction Slide 30: Capital Expenditures Guidance 2018 1. As at July 25, 2018. See Teck’s Q2 2018 press release. 2. For steelmaking coal, sustaining capital includes Teck’s share of water treatment charges of $3 million in 2017. Sustaining capital guidance includes Teck’s share
Slide 38: Sustainability
Sustainability Teck
Slide 39: Sustainability Commitments and Recognition
Sustainability Commitments and Recognition Major Commitments Recent Recognition • International Council on Mining and Metals 10 Principles and Position Statements for Sustainable Development • United Nations Global Compact • Mining Association of Canada Towards Sustainable Mining program • Council f
Slide 40: Sustainability Strategy
Sustainability Strategy • Strong sustainability performance Goals cover the six areas of focus representing the most significant sustainability issues and enabled by a strategy built around opportunities facing our company: developing opportunities and managing risks • Implementing a sustainability
Slide 41: Low Cost, Low Carbon Producer
Low Cost, Low Carbon Producer • Among world’s lowest GHG Figure 1: GHG Emissions Intensity intensity for steelmaking coal and Ranges Among ICMM Members kgCO2e per t product copper production Copper Coal • Fort Hills – one of the lowest carbon intensities among North American oil sands producers • Pr
Slide 42: Reducing Freshwater Use
Reducing Freshwater Use 11% • Water recycled average of 4 times at mining operations • 11% reduction in total water use since 2014 Reduction in water use • Target to reduce freshwater use at Chilean operations by 15% by 2020 4X • Desalinated seawater for Quebrada Blanca Phase 2 project, Average re-
Slide 43: Improving Water Quality in B.C.
Improving Water Quality in B.C. Implementing Elk Valley Water Quality Plan: • Comprehensive water quality plan 11% developed with government, Indigenous Reduction in water use Peoples and communities • Investing $850-900 million between 2018-2022 to construct water treatment 4X Average re- facilitie
Slide 44: Strengthening Relationships with Indigenous Peoples
Strengthening Relationships with Indigenous Peoples • Agreements in place at all mining operations within or adjacent to Indigenous Peoples’ territories • Agreements also in place for major projects, including Frontier and QB2 • Creates a framework for greater cooperation and In June 2018, Teck anno
Slide 45: Progress on Diversity to Date
Progress on Diversity to Date • Inclusion and Diversity Policy launched in 2016 by our 17% 17% women in our Executive Diversity Committee women in our workforce workforce • Women comprised 29% of total hires in 2017 27% 27% women on • Teck-wide Gender Pay Equity women Board of on Board of Directors
Slide 46: Sustainability Information for Investors
Sustainability Information for Investors For reports & more, visit our Disclosure Portal and Sustainability Info for Investors pages 46
Slide 47: Collective Agreements
Collective Agreements Long-term labour agreements in place at all North American operations Operation Expiry Dates Antamina July 31, 2018 January 31, 2019 Quebrada Blanca March 31, 2019 November 30, 2019 Line Creek May 31, 2019 September 30, 2019 Carmen de Andacollo December 31, 2019 Elkview October
Slide 48: Innovation
Innovation Teck
Slide 49: Our Innovation Focus
Our Innovation Focus Productivity Safety Sustainability Growth •Equipment automation •Fatigue monitoring •Ore sorting to reduce •Exploration tech: •Ore sorting technology systems energy use and tailings Hyperspectral core •Collision avoidance •Water management scanning •Digitally-enhanced operator p
Slide 50: Autonomous Haul Trucks
Autonomous Haul Trucks Potential for improved productivity and safety; deploying in 2018 Value potential • Improved safety • Highland Valley Copper (HVC): >$20M annual savings • Teck-wide: >$100M annual savings potential • Potential to steepen pit walls and narrow road widths; reduce environmental f
Slide 51: Smart Shovels
Smart Shovels Shovel-mounted sensors separate ore from waste Value potential • Increased grade to mill • Potential to add significant free cash flow at HVC • Reduced energy use and tailings; improved sustainability performance Real-time Maturity Analysis • Currently being piloted by Teck Low High Or
Slide 52: Blast Movement Monitoring
Blast Movement Monitoring (BMM) Value potential • Reduced processing costs • Improved productivity; at Red Dog alone, BMM savings an estimated $6.5 million annually • Enhanced environmental performance; reduced energy and emissions to air Maturity • Currently being implemented by Teck Milestones • F
Slide 53: Artificial Intelligence
Artificial Intelligence Using AI to predict and prevent maintenance problems Value potential • Machine learning analyzes data streams from each haul truck to predict maintenance issues before they happen • Reduce unplanned maintenance, reduce overall maintenance costs, extend equipment life • Potent
Slide 54: Steelmaking Coal Business Unit & Markets
Steelmaking Coal Business Unit & Markets
Slide 55: Steelmaking Coal Price Exceeding Expectations
Steelmaking Coal Price Exceeding Expectations Coal Price Assessments1 10-year average price of US$180/tonne; US$196/tonne in real terms US$/tonne • Synchronized global growth supports steel demand and pricing • Healthy steel industry stimulates global demand for seaborne coal • Secular demand growth
Slide 56: Steelmaking Coal Facts
Steelmaking Coal Facts Global Coal Production1: 7.5 billion tonnes Steelmaking Coal Production2: ~1,100 million tonnes Export Steelmaking Coal2: ~330 million tonnes Seaborne Steelmaking Coal2: ~285 million tonnes Our Market - Seaborne Hard Coking Coal2: • ~0.7 tonnes of steelmaking coal is used to ~
Slide 57: Synchronized Global Growth
Synchronized Global Growth Strong steel production and improved steel pricing Solid Growth in Crude Steel Production1 2,000 Crude Steel Production2 Global 1,500 July 2018 YTD 2017 Crude Steel Production 1,000 YoY Growth YoY Growth 500 Global 5.0% 5.3% China 6.3% 5.7% Ex. China 3.7% 4.9% Europe 2.3%
Slide 58: Strong Chinese Steel Margins
Strong Chinese Steel Margins Support steelmaking coal prices China Hot Rolled Coil (HRC) Margins and Steelmaking Coal (HCC) Prices1 350 300 250 US$ / tonne 200 150 100 50 0 -50 China HRC Gross Margins China Domestic HCC Price Argus Premium HCC CFR China 58
Slide 59: Growing India Steelmaking Coal Imports
Growing India Steelmaking Coal Imports India plans to achieve 300 Mt of crude steel capacity by 2030-2031 Seaborne Steelmaking Coal Imports India’s Hot Metal Capacity; Forecasted to increase by >20%1 Projects and Operations2 90 80 70 60 50 Mt 40 30 20 10 0 Hot Metal Production Seaborne Steelmaking C
Slide 60: Capacity Reductions in China Support Pricing
Capacity Reductions in China Support Pricing Steel Capacity Reduction Target1 Coal Capacity Reduction Target1 160 900 Coking coal2 140 800 Thermal coal 120 700 100 600 500 Mt 80 Mt 140 400 800 60 300 40 65 200 20 50 290 250 30 100 ~60 ~40 0 ~90 0 ~70 0 2016-2020 2016 2017 2018 2019-2020 2016-2020 20
Slide 61: Chinese Seaborne Steelmaking Coal Imports
Chinese Seaborne Steelmaking Coal Imports Supported by strong steel demand & stable domestic coking coal production Chinese Crude Steel Production (CSP), Hot Metal Production (HMP) and Coal Production1 Chinese Seaborne Coking Coal Imports1 70 1000 520 60 900 60 500 800 50 48 480 Million tonnes 700 M
Slide 62: Large Users in China Increasing Seaborne Imports
Large Users in China Increasing Seaborne Imports >2/3 of China crude steel produced on coast; Projects support imports Zongheng Fengnan Project • Inland plant relocating to coastal area Seaborne Coking Coal Imports1 • Capacity: crude steel 8 Mt 70 • Status: Construction started in 2017; completion i
Slide 63: Chinese Scrap Use to Increase Slowly
Chinese Scrap Use to Increase Slowly EAF share in crude steel production to recover only to 2015’s level China’s Ratio of EAF in CSP Low vs. Other Countries1 China Steel Use By Sector (2000-2017)2 80% 68% 57% 60% 40% 40% 31% 28% 24% Others 20% 9% 15-20% 0% Auto China Japan India United Russia Europe
Slide 64: Steelmaking Coal Supply Growth Forecast
Steelmaking Coal Supply Growth Forecast Key growth comes from recovery in Australia after Cyclone Debbie Seaborne Steelmaking Coal Exports1 310 (Change 2018 vs. 2017) 1 1 305 305 2 10 300 Mt 295 291 290 285 280 2017 Australia USA Mozambique Canada 2018 Includes: • Australia: recovery from Cyclone De
Slide 65: US Coal Producers are Swing Suppliers
US Coal Producers are Swing Suppliers Australian Steelmaking Coal Exports1 US Steelmaking Coal Exports1 200 70 180 60 160 140 50 120 40 100 30 Mt Mt 80 60 20 40 10 20 0 0 65
Slide 66: Seaborne Steelmaking Coal Exports
Seaborne Steelmaking Coal Exports Coal gap developing and market could be short due to typical disruptions Supply & Demand from Existing Mines1 Possible Restarts ~45-65 Mt needed from 355 and Projects1 restarts and projects by 2026 345 80 335 Additional 60 325 gap to high case 40 315 Mt Mt Gap to 30
Slide 67: 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 2015: ~20% ~5% 2013: ~15% India 2017: ~15% 2015: ~20% 2013: ~5% 2017: ~20% 2015: ~5% 2017: ~10% Asia excl. China & India 2013: ~40% Lat
Slide 68: An Integrated Long Life Coal Business
An Integrated Long Life Coal Business Prince Rupert British Columbia Elk Valley Elco • >1 billion tonnes of reserves Quintette Fording support ~27 Mt of production Ridley River Terminal Alberta for many years Prince George Edmonton Greenhills Cardinal River Elkford • Geographically concentrated in t
Slide 69: Maintaining Mt and Growing the Business
Maintaining 27 Mt and Growing the Business Annual Production Upcoming Closure 30 • Coal Mountain closing in 2018 (2.5 Mt capacity) 25 Current Growth • Line Creek investing in a shovel and plant Production (millions tonnes) expansion to build from 4 Mt to ~5 Mt 20 • Elkview investing in Baldy Ridge E
Slide 70: 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 71: 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 72: 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 73: 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 73
Slide 74: 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, $10
Slide 75: High Quality Hard Coking Coal Product
High Quality Hard Coking Coal Product 80 U.S.A. • Around the world, and especially in China, Canada Other Australia Teck HCC (hard coking) blast furnaces are getting larger and 70 Australia and Canada increasing PCI rates Japan Teck HCC South Africa 60 • Coke requirements for stable blast furnace Ja
Slide 76: Teck's Pricing Mechanisms
Teck’s Pricing Mechanisms Coal sales book generally moves with the market Sales Mix Key Factors Impacting Teck’s Average Realized Prices • ~40% quarterly contract price • Variations in our product mix • ~60% shorter than quarterly pricing • Timing of sales mechanisms (including “spot”) • Direction a
Slide 77: Quality and Basis Spreads
Quality and Basis Spreads Impact Teck’s average realized steelmaking coal prices HCC / SHCC Prices and Spread1 HCC FOB / CFR Prices and Spread2 350 100 350 20 300 300 75 US$/t US$/t US$/t US$/t 250 0 250 200 200 50 -20 150 150 100 100 25 -40 50 50 0 0 0 -60 HCC (LHS) HCC FOB Australia (LHS) SHCC (LH
Slide 78: Average Realized Steelmaking Coal Prices
Average Realized Steelmaking Coal Prices Historical Average Realized Prices vs. Quarterly Contract Prices1 Averaged 92% from Q2 2010 350 100% 300 80% 250 US$ / tonne 200 60% 150 40% 100 20% 50 0 0% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 201
Slide 79: ~75 Mt of West Coast Port Capacity Planned
~75 Mt of West Coast Port Capacity Planned Our portion is >40 Mt; exceeds current production plans, including Quintette Westshore Terminals • Teck is largest customer at 19 Mt • Large stockpile area West Coast Port Capacity • Currently 33 Mt 40 • $275M project for expansion to 35 35-36 Mt by 2019 2-
Slide 80: Neptune Facility Upgrade
Neptune Facility Upgrade Optimizing the footprint to allow for >18.5 Mtpa • All permits in place, final project funds sanctioned in Q2 2018, with project completion in H1 2020 • Work has commenced on the overpass and dumper vault; major construction and fabrication contracts awarded • The investment
Slide 81: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 55: Steelmaking Coal Price Exceeding Expectations 1. HCC price is based on the negotiated annual benchmark price from January 1, 2008 to April 13, 2010 and the Argus Premium HCC FOB Australia assessments from April 14, 2010, in US dollars. Steelmaking coal pr
Slide 82: Notes: Appendix – Steelmaking Coal
Notes: Appendix – Steelmaking Coal Slide 63: Chinese Scrap Use to Increase Slowly 1. Source: WSA. 2. Source: China Metallurgy Industry Planning and Research Institute. 3. Source: CRU. Slide 64: Steelmaking Coal Supply Growth Forecast 1. Source: Wood Mackenzie, CRU. Slide 65: US Coal Producers are Sw
Slide 83: Copper Business Unit & Markets
Copper Business Unit & Markets
Slide 84: Copper Content in Electric Vehicles
Copper Content in Electric Vehicles Depends on technology, vehicle size and battery size Copper Content by Type of Electric Vehicle 100 90 80 Kgs of Copper per Vehicle 70 23 40 60 5 5 50 23 9.88 5 40 11 5 30 23 5 5 20 20 40 18 5 10 5 22 5 12 5 0 1 Internal Hybrid Electric Plug In Hybrid Battery Elec
Slide 85: Copper Demand for Electric Vehicles
Copper Demand for Electric Vehicles Electric Vehicles Copper Demand +1.8 Mt 2,000 Thousands of Tonnes of Copper Contained 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Car BEV Car HEV Car PHEV E-Bus Hybrid E-Bus BEV 85
Slide 86: Steady Demand Growth & Increasing Copper Intensity
Steady Demand Growth & Increasing Copper Intensity Chinese Copper Demand to Grow ~3-4%1 Increasing Copper Intensity with Booming 1,000 Electric Vehicles2 12,000 10,000 800 7 million EVs in 2025 Thousand Tonnes 8,000 Thousand Tonnes 600 2 million EVs in 2020 6,000 400 4,000 200 2,000 0 0 2011 2012 20
Slide 87: Global Copper Mine Production Increasing Slowly
Global Copper Mine Production Increasing Slowly Global Copper Mine Production1 23,000 • Mine production set to increase 1.1 Mt by 2023, 22,000 including: ‒ Glencore’s African mine restarts: Thousand tonnes contained 21,000 460 kmt ‒ Cobre Panama 330 kmt ‒ Escondida 20,000 400 kmt 19,000 ‒ Quellaveco
Slide 88: Copper Disruptions Continue into 2018
Copper Disruptions Continue into 2018 ~6-7 Mt of copper production under labour negotiations this year Disruptions1 Spot TC/RCs Rising2 2018 40¢ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 e 0 -200 30¢ Thousand tonnes -400 20¢ -600 3.0% 10¢ -800 -1,000 4.5% 0¢ -1,200 Spot Realis
Slide 89: Rapid Growth in Chinese Copper Smelter Capacity
Rapid Growth in Chinese Copper Smelter Capacity Limited domestic mine growth Chinese Copper Mine Projects1 +2 Mt of Smelting Projects in the Pipeline2 2017 2018 2019 2020 400 2017 2018 2019 400 104 kt 36 kt 123 kt 121 kt 280 kt 1,640 kt 230 kt Thousand Tonnes, Blister 300 300 Thousand Tonnes 200 200
Slide 90: China More Important in Global Copper Market
China More Important in Global Copper Market Buying more copper from the rest of the world Substantial Concentrate Imports Growth1 Continuous Growth of Imported Copper Units2 10,000 45% 12,000 40% 37% 40% 10,000 8,000 33% 35% 29% 30% 8,000 30% Thousand Tonnes 6,000 Thousand Tonnes 24% 22% 25% 6,000
Slide 91: Planned Copper Projects Will Not Meet Demand
Planned Copper Projects Will Not Meet Demand Copper mine production peaks in 2021 Existing and Fully Committed Supply1 Highly Probable + Probable At least 4.4 Mt needed Projects Insufficient to Fill Gap1 5,000 from new projects by 2027 Low Demand (1.5%): 4.9 Mt 4,000 Gap to Base Demand (2.0%): 5.3 M
Slide 92: Growth and Improvement Opportunities
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 93: Growth Potential: QB2, NuevaUnión, Project Satellite
Growth Potential: QB2, NuevaUnión, Project Satellite Potential Production Profile Mine Production 2017 - Copper Only2 On a Copper Equivalent Basis1 800 ~790 Zafranal 2,000 Average Annual CuEq Production (kt) San Nicolás Teck 1,500 Thousand Tonnes 600 Potential #6 NuevaUnión 1,000 680 Teck 400 QB2 Cu
Slide 94: QB2: Potential Tier One Asset
QB2: Potential Tier One Asset Robust Economics & Expansion Optionality Potential top 15 copper producer globally at 300,000 tonnes/year1Cu equivalent production, including 7,700 tonnes/year Mo, in the first five years Long initial life (25 years) with only 25% of resource; life extension and exp
Slide 95: Quebrada Blanca 2
Quebrada Blanca 2 Significant mine and infrastructure development Water Pipeline • 140 kt/d concentrator Concentrate Pipeline Power Line • Tailings facility + transport system Utilities • Concentrate pipeline (164 km) Road • Water pipeline (160 km) • Port (desalination plant, concentrate filtration
Slide 96: Quebrada Blanca 2
Quebrada Blanca 2 Greenfield development, brownfield site Water Pipeline Concentrate Pipeline Key Activities Power Line • Permitting Utilities • Community Engagement/Agreements Road • Advancing Detailed Engineering • Execution Readiness • Operational Readiness Source: “Project location” -20.976693,
Slide 97: QB2: Large Resource Base
QB2: Large Resource Base Great potential to significantly extend mine life 40 Large Resource Base Projects1 35 Billions of Recoverable Pounds 30 25 20 15 10 5 0 97
Slide 98: QB2: Bottom Half of C1+Sustaining Cost Curve
QB2: Bottom Half of C1+Sustaining Cost Curve Expected to generate significant economic returns C1+Sustaining Cost Curve 20171 400 350 QB2: First 5 Years 300 250 QB2: First 10 Years 200 US¢/lb 150 100 Escondida 50 Antamina 0 -50 -100 0% 25% 50% 75% 100% 98
Slide 99: QB2: Competitive Capital Intensity
QB2: Competitive Capital Intensity Projects With >200 kmt/yr Copper1 50,000 45,000 40,000 US $/tpa Cu Equiv 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Completed Greenfield Completed Brownfield Project Greenfield Project Brownfield 99
Slide 100: NuevaUnión (50% Interest)
NuevaUnión (50% Interest) A new, innovative approach to major mine development Water Pipeline Concentrate Pipeline • Addressing community concerns Power Line – Reduced environmental footprint Conveyor / Utilities – Innovative ore transport system Road • Capturing project synergies – One: plant, TMF,
Slide 101: NuevaUnión Prefeasibility Study Results
NuevaUnión Prefeasibility Study Results Phased Development Approach Prefeasibility Study Parameters (100%) Phase 1 Phase 2 Phase 3 Mine Life 36 years Gold Contained in Concentrate 5.9 million oz Relincho La Fortuna Relincho (104 ktpd) (116 ktpd) (208 ktpd) Copper Contained in Concentrate 15.7 billio
Slide 102: Project Satellite
Project Satellite Defining the path to value recognition Disciplined decision making Schaft Creek (75%) Galore Creek (50%) Image Mesaba (100%) placeholder Strategic capital allocation San Nicolás (100%) Commercial, technical and Zafranal (80%) community expertise Attractive, quality assets - Dedicat
Slide 103: Zafranal (80% Interest)
Zafranal (80% Interest) Advancing an attractive copper-gold asset in Peru Long Life Asset • 19 year life of mine1 • Further upside potential in the district Quality Project • Attractive front-end grade profile with rapid payback • Mid range C1 cash costs Stable Jurisdiction • Established mining regi
Slide 104: San Nicolás (100% Interest)
San Nicolás (100% Interest) Unlocking value from a Teck greenfield discovery Long Life Asset • One of the world’s most significant undeveloped VMS deposits1 Quality Project • Expect C1 cash costs in the 1st quartile • Significant co-product Zn, and by-product Au & Ag credits1 Stable Jurisdiction • E
Slide 105: Project Satellite
Project Satellite A path to value recognition Galore Creek (50% Interest) Building momentum on a high-grade copper gold asset • Updating select engineering and technical studies and establishing scope for a new Prefeasibility Study • Pursuing opportunities with experienced development partner Newmon
Slide 106: Notes: Appendix – Copper
Notes: Appendix – Copper Slide 86: Steady Demand Growth & Increasing Copper Intensity 1. Source: NBS, ICA, Wood Mackenzie, CEC, ChinaIOL, Teck. 2. Source: Government plans, CAAM, ICA, Teck. Slide 87: Global Copper Mine Production Increasing Slowly 1. Source: Wood Mackenzie, AME, Teck. Slide 88: Copp
Slide 107: Notes: Appendix – Copper
Notes: Appendix – Copper Slide 93: Growth Potential - QB2, NuevaUnión, Project Satellite 1. Illustrative potential production profiles, including 65% of Quebrada Blanca 2’s first five years of full production, 50% of NuevaUnión’s first ten years of full production, 100% of San Nicolás’ first five ye
Slide 108: Zinc Business Unit & Markets
Zinc Business Unit & Markets Teck
Slide 109: Steady Demand Growth & Increasing Zinc Intensity
Steady Demand Growth & Increasing Zinc Intensity Chinese Zinc Demand to Grow ~2-4%1 More Cars Expected to be Galvanized2 8,000 35,000 45% 7,000 40% 30,000 35% 6,000 25,000 30% Thousand Tonnes 5,000 Thousand Units 20,000 25% 4,000 15,000 20% 3,000 15% 10,000 2,000 10% 1,000 5,000 5% 0 0 0% 2018E 2019
Slide 110: Environmental/Safety Inspections & Depletions
Environmental/Safety Inspections & Depletions Constraining zinc mine production Most Regions Reporting Negative Growth1 Estimated Zinc Mine Growth Rarely Achieved2 600 400 360 350 270 300 +36kt, 250 Thousand Tonnes -43kt, 200 200 180 +6% -22% 100 60 50 Huoshaoyun -50kt, 0 -15% -50 -28kt, -33kt, -200
Slide 111: Zinc Mine Projects Increasingly Delayed
Zinc Mine Projects Increasingly Delayed Impacted by inspections and low zinc ore grades Future Mine Growth Heavily Dependent Mine Depletion & Low Grades of Projects2 On One Single Project1 1000 8 2017 2018 2019-2020 7 800 145 kt 136 kt 886 kt Thousand Tonnes 6 600 Ore Grade, Zinc % 5 400 4 200 3 2 0
Slide 112: China to Require More Zinc Concentrate Imports
China to Require More Zinc Concentrate Imports Concentrate Stocks Rise, China Will Have to Import Seasonal Build Insufficient1 More Zinc in Concentrate2 500 250 1,561 1,600 1,456 1,452 1,447 Thousand Tonnes, Zinc in Concentrates 1,400 400 200 1,200 1,101 TCs on Imports ($/dmt) Thousand dmt 300 150 1
Slide 113: Increasing Demand for Zinc Metal Imports
Increasing Demand for Zinc Metal Imports De-stocking Continues More Imported Zinc Metal 1,600 Chinese Stocks at Record Lows1,2 Required to Fill the Gap3 1,600 1,400 1,382 1,400 1,328 1,261 1,200 1,200 Thousand Tonnes 1,000 1,000 Thousand Tonnes 784 800 800 652 600 600 525 400 400 200 200 0 0 2015 20
Slide 114: Zinc Price Incentivizing New Mines
Zinc Price Incentivizing New Mines Global Zinc Mine Production1 16,000 15,000 • Decline in mine production in 2016 (800 kmt) 14,000 • 2018 increase brings mine production back to 2015 levels ‒ Market living off refined stocks for the past four years 13,000 kmt contained 12,000 • Mine production peak
Slide 115: Zinc Treatment Charges Falling to Record Lows
Zinc Treatment Charges Falling to Record Lows Concentrate Stocks Rising – Still Low1 Smelter Cuts push up TCs – TCs Still Low 2 600 80 250 6,500 70 500 6,000 200 60 Imported TC ($/dmt) Domestic TC (RMB/dmt) 5,500 Thousand dmt 400 Days-of-use 50 150 5,000 300 40 4,500 30 100 200 20 4,000 100 50 TCs ~
Slide 116: Consecutive Deficits Decreasing Zinc Inventory
Consecutive Deficits Decreasing Zinc Inventory 250¢ Daily Zinc Prices & Stocks1 4,000 3,500 Thousand Tonnes 200¢ 3,000 US¢/lb 150¢ 2,500 2,000 100¢ 1,500 1,000 50¢ 500 0¢ 0 LME Stocks Hidden Bonded SHFE Price • Global hidden stocks may have reached ~1.4 Mt in 2012, and total global stocks reached ~3
Slide 117: Zinc Gap Forecast to Continue
Zinc Gap Forecast to Continue Zinc mine production peaks in 2020 Existing and Fully Committed Supply1 Uncommitted Projects At least 5 Mt needed from Insufficient to Fill Gap1 18,000 new projects by 2027 5,000 Low Demand (1.3%): 4.0 Mt 17,000 High Demand (1.8%): 4.7 Mt 4,000 Gap to low demand scenari
Slide 118: Largest Global Net Zinc Mining Companies
Largest Global Net Zinc Mining Companies Teck is the Largest Net Zinc Miner1 Provides Significant Exposure to a Rising Zinc Price 400 350 Teck 300 Public Company Thousand tonnes 250 Private Company 200 150 100 50 0 118
Slide 119: Red Dog Quickly Adapting to New Ore Source
Red Dog Quickly Adapting to New Ore Source Successful Qanaiyaq pit ramp up Significant cost reductions realized - Difficult metallurgy and weathered ore - Significantly improved throughput rates at start from 450 tph to 510 tph - Stockpile blending strategies modified - Optimized use of reagents - A
Slide 120: Red Dog Sales Seasonality
Red Dog Sales Seasonality Zinc Sales1 40% 34% 31% • Operates 12 months 30% 21% 20% 14% • Ships ~ 4 months 10% • Shipments to inventory in Canada 0% and Europe; Direct sales to Asia Q1 Q2 Q3 Q4 • ~65% of zinc sales in second half Lead Sales1 of year 60% 57% 50% 43% • ~100% of lead sales in second 40%
Slide 121: Red Dog Operating Cost Seasonality
Red Dog Operating Cost Seasonality Significant quarterly variation Red Dog Unit Costs1 1.00 Unit Costs (US$/lb) 0.80 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 th
Slide 122: Red Dog in Bottom Quartile of Zinc Cost Curves
Red Dog in Bottom Quartile of Zinc Cost Curves C1 Cost Curve 20181 200 150 100 Red Dog US¢/lb 50 0 -50 0% 25% 50% 75% 100% C1+Sustaining Cost Curve 20181 200 150 100 Red Dog US¢/lb 50 0 -50 0% 25% 50% 75% 100% 122
Slide 123: Strong Zinc Production at Antamina
Strong Zinc Production at Antamina Quarterly Zinc Production 120 Copper & Zinc Production1 25 100 20 Production (kt) Production (kt) 80 15 60 10 40 5 20 - Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 - 2012 2013 2014 2015 201
Slide 124: Resetting the Bar at Trail Operations
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 (kt) 310 #1 Ac
Slide 125: Building a Quality Zinc Inventory
Building a Quality Zinc Inventory Potential New GIANT System1 125
Slide 126: Global Context of Teck's Zinc Resources
Global Context of Teck’s Zinc Resources Well positioned; world class1 30 Qanaiyaq 25 Red Dog Past Production Aktigiruq Exploration Target1 20 Aqqaluk 80-150 Mt Grade Zn+Pb % Anarraaq 16-18% Zn+Pb 15 Paalaaq Rampura Broken Hill Agucha McArthur River Teena 10 Su-Lik Hermosa 5 GIANT ZINC DEPOSITS (+6 M
Slide 127: Teena (100% Interest)
Teena (100% Interest) Greenfield discovery - Right time, right place, right insights Long Life Asset • 58Mt @ 11.1% Zn and 1.5% Pb (Inferred)1 • Most significant Zn-Pb discovery in Australia since 1990 (Century/Cannington) Quality Project • Significant mineralized system • High grade • Premier zinc
Slide 128: Aktigiruq (100% Interest)
Aktigiruq (100% Interest) Uncovering potential in the brownfield environment Long Life Asset • Exploration target of 80-150 Mt @ 16-18% Zn + Pb1 Quality Project • Premier zinc district • Significant mineralized system • High grade Stable Jurisdiction • Operating history • ~12 km from Red Dog operati
Slide 129: Notes: Appendix – Zinc
Notes: Appendix – Zinc Slide 109: Steady Demand Growth & Increasing Zinc Intensity 1. Source: NBS/CNIA, CAAM, ChinaIOL, Wind, CEIC, Teck. 2. Source: Mysteel, Teck. Slide 110: Environmental/Safety Inspections & Depletions Constraining Zinc Mine Production 1. Source: NBS/CNIA. 2. Source: BGRIMM, Antai
Slide 130: Notes: Appendix – Zinc
Notes: Appendix – Zinc Slide 118: Largest Global Net Zinc Mining Companies 1. Source: Wood Mackenzie, 2018. Slide 120: Red Dog Sales Seasonality 1. Average sales from 2010 to 2017. Slide 121: Red Dog Operating Cost Seasonality 1. Average quarterly unit cost (2013-2017) before royalties, based on Tec
Slide 131: Energy Business Unit & Markets
Energy Business Unit & Markets
Slide 132: Quality Barrels in a Progressive Jurisdiction
Quality Barrels in a Progressive Jurisdiction 4th largest oil sands mining portfolio Alberta, Canada Fort Hills is in operation • Teck 21.3% = 0.6 billion barrels1 Frontier is in the regulatory phase • Teck 100% = 3.2 billion barrels2 Lease 421 is a future growth opportunity • Teck 50% • High qualit
Slide 133: Energy Within Teck's Portfolio
Energy Within Teck’s Portfolio Consistent with all our strategic criteria Strategic diversification Long life assets Truck & shovel operations Low unit operating costs Resource quality & scale Stable jurisdiction 133
Slide 134: Our Energy Strategy
Our Energy Strategy Teck as a partner of choice Focus on maximizing value of Fort Hills • Safe and efficient ramp-up, increase production volumes, lower costs De-risk Frontier & Lease 421 • Frontier regulatory hearing scheduled for September 25, 2018 Drive business results through technology & innov
Slide 135: Fort Hills is a Premier Asset
Fort Hills is a Premier Asset Long-life of >45 years with a very low decline rate • Commissioning has exceeded our expectations, and full production expected by Q4 2018 • We won’t rest on our laurels; focus on unit costs & low capital intensity debottlenecking opportunities • Executing our comprehen
Slide 136: 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) 600
Slide 137: A Modern Mine Built for Low Cost Operations
A Modern Mine Built for Low Cost Operations Provides the foundation for our Energy business Safe & efficient operations: • Using leading-edge technology • Learnings from other facilities Operating costs: • Life of mine cash operating costs: C$22-23/bbl1 • Target below C$20 per barrel Capital efficie
Slide 138: Debottlenecking and Expansion Opportunities
Debottlenecking and Expansion Opportunities With significant incremental cash flow potential Potential capacity increase of 20-40 kbpd on a 100% basis • Teck’s 21.3% share of annual production could increase from 14.0 Mbpa to 15.5-17.0 Mbpa • Near term opportunities to achieve some of the increase w
Slide 139: Free Cash Flow for Decades
Free Cash Flow for Decades Providing Teck with steady and reliable cash flow Assumptions WTI price US$75/bbl • Energy EBITDA potential of ~C$500M Weighted average WTI-WCS differential US$15/bbl at full production of 14 Mbpa1 C$/US$ exchange rate 1.25 • Significant upside with debottlenecking Operati
Slide 140: Significant Market Presence
Significant Market Presence Developing a reputation as a preferred counterparty First sales in March 2018 Excellent acceptance of Fort Hills’ product (FRB) in our core markets Teck’s Commercial Activities1 Active purchaser of diluent Bitumen production 38.3 kbpd +Diluent acquisition 11.2 kbpd =Bitum
Slide 141: Executing Our Comprehensive Sales & Logistics Strategy
Executing Our Comprehensive Sales & Logistics Strategy Seeing early returns from diverse market access Sales Mix Our sales mix provides diverse market access1 Monthly basis Long term contracts • 10 kbpd shipped to US Gulf Coast via Keystone at Hardisty at Hardisty pipeline • 39.5 kbpd at Hardisty, a
Slide 142: Frontier is Another Major Resource
Frontier is Another Major Resource 100% Teck Nameplate capacity of 260,000 bpd Resource of 3.2 billion barrels1 >40 year mine life 142
Slide 143: Frontier Hearing Commences September 25, 2018
Frontier Hearing Commences September 25, 2018 Strong community support Provincial Completeness Submitted Project Integrated Joint Update Joint Federal Application JRP JRP JRP Regulatory Submission Regulatory Panel Review Hearing Report Decision November Review Review Appointment Statement June 2015
Slide 144: Notes: Appendix – Energy
Notes: Appendix – Energy Slide 132: Quality Barrels in a Progressive Jurisdiction 1. Proved and probable reserves as at December 31, 2017. See Teck’s annual information form dated February 26, 2018 for further information regarding Fort Hills reserves. 2. Best estimate of unrisked contingent resourc
Slide 145: Energy Business Unit Modelling
Energy Business Unit Modelling
Slide 146: Operating Netback – Q2 2018 (June)
Operating Netback – Q2 2018 (June) • Operating netback is a non-GAAP measure, presented on a product and sales barrel basis on page 22 of the Q2 2018 news release. • Derived from the Energy segmented information (P&L), after adjusting for items not directly attributable to the revenues and costs ass
Slide 147: Operating Netback – Q2 2018 (June)
Operating Netback – Q2 2018 (June) Fort Hills Mine Terminal Legend FHELP Managed Bitumen Price Realized Transportation Operating Costs East Tank Farm Blending Facility (-) Wood Buffalo Pipeline Norlite Pipeline(-) Wood Buffalo Pipeline Extension Teck Fort Saskatchewan Hardisty Terminal Cavern Storag
Slide 148: Operating Netback Reconciliation – Q2 2018 (June)
Operating Netback Reconciliation – Q2 2018 (June) Non-GAAP Financial Measure on page 49 of Q2 2018 news release One month ended One month ended (C$ in millions, except where noted) June 30, 2018 (C$ in millions, except where noted) June 30, 2018 Revenue as reported $ 78 Per barrel amounts (C$/barrel
Slide 149: Energy Gross Profit - Q2 2018 (June)
Energy Gross Profit - Q2 2018 (June) From Revenue and Gross Profit Table Blended Bitumen Revenue Calculation Q2 2018 news release; page 35 CAD$ in millions June 1-30, 2018 CAD$ in millions June 1-30, 2018 Revenue, as reported (A) $78 Revenue (A) $78 Add back: crown royalty (G) – from 3 Gross profit
Slide 150: Modelling Bitumen Price Realized – Q2 2018 (June)
Modelling Bitumen Price Realized – Q2 2018 (June) 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) = $81 per “Blended Bitumen Price Realized Reconciliation” and “R
Slide 151: Energy EBITDA Simplified Model
Energy EBITDA Simplified Model Illustrative EBITDA Calculation - Teck Attributable @ 21.3% (14 Mbpd)1 Assumption Per Barrel Total WTI price US$75.00 Less: Weighted average WTI-WCS differential (US$15.00) Multiplied by: C$/US$ exchange rate @ $1.25 WCS price (WTI price less WTI-WCS differential x C$/
Slide 152: Notes: Appendix – Energy Business Unit Modelling
Notes: Appendix – Energy Business Unit Modelling Slide 151: 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 153: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 154: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA, as disclosed on slides 5, 14, 24, 32, 94, 139 and 151, is profit attributable to shareholders before net finance expense, income and resource taxes, and depreciation and amortization. Adjusted EBITDA, as disclosed on slides 7 and 9, is EBITDA before the pre-tax ef
Slide 155: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Basic Earnings Per Share Reconciliation of EBITDA and Adjusted EBITDA to Adjusted Basic Earnings Per Share Six months ended Six months ended (C$ in millions) June 30, 2018 (C$ in millions) June 30, 2018 Earnings per share $2.43 Profit attributable to sha
Slide 156: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt-to-Adjusted EBITDA Ratio & Net Debt-to-Debt-Plus-Equity Ratio (A) (B) (C) (A-B+C) Twelve months ended Six months ended Six months ended Twelve months ended (C$ in millions) December 31, 2017 June 30, 2017 June 30, 2017 June 30, 2018 Adjusted EBI
Slide 157: Non-GAAP Financial Measures
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation Six months ended (C$ in millions, except where noted) June 30, 2018 Cost of sales as reported $ 1,583 Less: Transportation (470) Depreciation and amortization (373) Adjusted cash cost of sales $ 740 Tonnes sold (millions) 12.7 Per
Slide 158: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Six months ended Six months ended (C$ in millions, except where noted) June 30, 2018 (C$ in millions, except where noted) June 30, 2018 Revenue as reported $ 1,470 US$ AMOUNTS By-product revenue (A)1 (257) Average exchange rate (C$/US$) $ 1
Slide 159: Non-GAAP Financial Measures
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 Six months ended Six months ended (C$ in millions, except where noted) June 30, 2018 (C$ in millions, except where noted) June 30, 2018 Revenue as reported $ 1,390 Payable pounds sold (millions) (C) 389.6 Less: Trail Oper
Slide 160: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Netback Reconciliation One month ended One month ended (C$ in millions, except where noted) June 30, 2018 (C$ in millions, except where noted) June 30, 2018 Revenue as reported $ 78 Blended bitumen barrels sold (000s of barrels) 1,162 Less: Less: diluent barrels
Slide 161: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Coal Business Unit Adjusted EBITDA (C$ in millions) October 1, 2008 to June 30, 2018 Gross Profit $15,594 Add back: Depreciation and amortization 5,980 Gross profit, before depreciation and amortization $21,574 Deduct: Other costs (400) Adjusted EBITDA $
Slide 162: Investor Meetings
Investor Meetings September 13-14, 2018