Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Investor Day (March 2017)
25 slides from Teck Resources Limited Class A's investor day presentation, Mar 30, 2017
Slide 1: Overview and Strategy
Overview and Strategy March 30, 2017 Don Lindsay, President and Chief Executive Officer
Slide 2: Forward Looking Information
Overview and Strategy Forward Looking Information Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) and comparable legislation in other provinces. Forward-looking statements can be identified by the use of words such as “plans”, “expects
Slide 3: Safety at Teck
Overview and Strategy Safety at Teck • Improved performance across safety metrics in 2016 • High Potential Injury frequency reduced by ~50% since 2013 High Potential Incident Frequency 1.2 Frequency (per 200,000 hours worked) 1 0.8 0.6 0.4 0.2 0 2013 2014 2015 2016 Next phase of YTD High Potential I
Slide 4: Sustainability Highlights
Overview and Strategy Sustainability Highlights Indigenous Relations Tailings Management • 25 new agreements in 2016; • Follow industry best practices agreements in place at all operations • Independent tailings review boards for • Major IBA signed with Ktunaxa Nation, all major facilities & project
Slide 5: Senior Management Update
Overview and Strategy Senior Management Update Retiring Joining Greg Waller Fraser Phillips SVP, Investor Relations SVP, Investor Relations & Strategic Analysis & Strategic Analysis 5
Slide 6: Capitalizing on the Turn in the Cycle
Overview and Strategy Capitalizing on the Turn in the Cycle • Record results in Q4 2016 Gross Profit $2.0 billion Cash Flow from Ops $1.5 billion Adjusted Net Profit1 $930 million • Generating significant cash flow • Reducing debt • Dividend review 6 1. Adjusted profit attributable to sharehol
Slide 7: Consistent Long-Term Strategy
Overview and Strategy Consistent Long-Term Strategy Diversified business model Attractive portfolio of long life assets Low half of the cost curve Appropriate scale Low risk jurisdictions 7
Slide 8: Significant Cash Flow Generation
Overview and Strategy Significant Cash Flow Generation Potential EBITDA1 >C$5 Billion • Strong operating margins Zinc • Increasing zinc production Copper • Significant leverage to coal, Steelmaking Coal copper and zinc prices Less: Corporate 2017 Based on Current Prices Energy starts contributing EB
Slide 9: Staged Growth/Value Pipeline
Overview and Strategy Staged Growth/Value Pipeline In Construction Pre-Sanction Medium-Term Future Options Growth Options Galore Creek Copper Schaft Creek Strong platform with substantial QB Phase 2 NuevaUnión Mesaba growth options HVC Brownfield Zafranal Antamina Brownfield San Nicolás (Cu-Zn) Zinc
Slide 10: Quebrada Blanca 2: Potential Tier 1 Asset
Overview and Strategy Quebrada Blanca 2: Potential Tier 1 Asset Top 15 copper producer globally ‒ 300 ktpa copper equivalent production in first 5 years Total costs (AISC) well in low half of cost curve ‒ Exceptionally low strip ratio Initial mine life 25 years with ~25% of reserves & resource
Slide 11: NuevaUnión: A New Approach to Project Development
Overview and Strategy NuevaUnión: A New Approach to Project Development Teck and Goldcorp have combined Relincho & El Morro projects and formed a 50/50 joint venture company • Committed to building strong, mutually beneficial relationships with stakeholders & communities Capital smart partnership •
Slide 12: Satellite Project: Overview
Overview and Strategy Satellite Project: Overview • Situation: Strong base metal (copper, zinc) growth options largely invisible to the market • Objective: To surface the value of Teck’s copper development projects (ex-QB2 & Staged Growth/Value Pipeline NuevaUnión) in 3-5 years Future Options • Rout
Slide 13: Satellite Project: Quality Base Metal Assets
Overview and Strategy Satellite Project: 5 Quality Base Metal Assets Galore Creek (50%) • Rare significant copper-gold-silver deposit in developing district • High average grade; potential for first quartile C1 costs • Substantial design and engineering Mesaba (100%) work completed in 2012 • Very la
Slide 14: Summary
Overview and Strategy Summary • Continuing to execute for higher production per share − No equity dilution − No operating assets sold − Investing in production growth from Fort Hills − Maintaining strong liquidity − Reducing debt & managing maturities • Record quarterly results in Q4 2016 • Generati
Slide 15: Appendix
IX Append Teck
Slide 16: San Nicolás VMS Deposit (Cu-Zn-Ag-Au), Mexico
San Nicolás VMS Deposit (Cu‐Zn‐Ag‐Au), Mexico Teck 79% Goldcorp 21% A unique and high-quality mid-sized base metal development asset with high average copper-zinc grades and low overall project complexity Key Highlights World class copper‐zinc massive sulphide deposit located in an historic and mi
Slide 17: Scoping Study
Scoping Study In October 2016, a scoping study of the San Nicolás project was completed. Key outputs of the study were: The project average life of mine (LOM) production could be 72 ktpa of copper and 82 ktpa of zinc. The capital intensity is very attractive at ~US$8,000/t CuEq. Average C1 cos
Slide 18: Zafranal (Cu-Au), Peru
Zafranal (Cu‐Au), Peru Teck 80% Mitsubishi Materials Corp. 20% A well-advanced mid-sized copper-gold development asset with robust economics at long-term metal prices Key Highlights Highly competitive mid‐sized copper‐gold deposit located in the porphyry Copper Belt of Southern Peru in the Arequip
Slide 19: Zafranal Mineral Resources and Prefeasibility
Mineral Resources Measured and Indicated Resources are 203.8Mt @ 0.40% Cu and 0.07g/t Au and 263.5Mt @ 0.36% Cu and 0.07g/t Au respectively. Measured and Indicated Resources combined total 467.3Mt @ 0.37% Cu and 0.07g/t Au. Inferred Resources are 21.4Mt @ 0.24% Cu and 0.06g/t Au. Within the stated r
Slide 20: Galore Creek Deposit (Cu-Au-Ag), Canada
Galore Creek Deposit (Cu‐Au‐Ag), Canada Teck 50% NOVAGOLD 50% A world class copper-gold ore body with the potential to be one of the largest, highest quality, lowest cost copper producers in Canada Key Highlights Significant copper‐gold‐silver deposit located in a mining friendly and development j
Slide 21: Pre-Feasibility Study
Pre‐Feasibility Study An Advanced Engineering Study (AES) of the Galore Creek Project was completed in March 2012. The AES was aimed at development of the opportunities and enhancements defined in the review phase of the Prefeasibility Study (PFS). Galore Creek is contemplated to be a 95 ktpd open
Slide 22: Schaft Creek Deposit (Cu-Mo-Au-Ag), Canada
Schaft Creek Deposit (Cu‐Mo‐Au‐Ag), Canada Teck 75% Copper Fox 25% A large copper-molybdenum-gold project located in the favourable pro-mining jurisdiction of British Columbia with potential for expansion Key Highlights Large copper‐molybdenum‐gold‐silver deposit in the favourable pro‐mining juris
Slide 23: Feasibility Study
Feasibility Study In February 2013, a NI 43‐101 compliant Feasibility Report on the Schaft Creek Project was released by Copper Fox. The keys findings from the study are highlighted below. Schaft Creek is contemplated as a 130 ktpd open pit mine, with a life‐of‐mine strip ratio of 2.0 to 1, and mi
Slide 24: Mesaba Deposit (Cu-Ni), USA
Mesaba Deposit (Cu‐Ni), USA Teck 100% Potential to be a large, long-lived operation and a major copper-nickel producer in the emerging Duluth Mineral District Key Highlights Very large copper‐nickel sulphide resource located in the emerging Duluth Mineral District in northern Minnesota, USA The
Slide 25: Mineral Deposits
Mineral Deposits No reserves or resources have yet been defined at Mesaba. The deposit is characterized by disseminated sulphide mineralization that occurs most commonly as medium to coarse‐grained disseminations of chalcopyrite, cubanite, pentlandite, and pyrrhotite. Engineering and Development Stu