27 slides from Teck Resources Limited Class A's earnings presentation, Apr 24, 2012
Slide 1: First Quarter 2012 Investor Conference Call and Webcast
First Quarter 2012 Investor Conference Call and Webcast April 24, 2012
Slide 2: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario).
Slide 3: Forward Looking Information
Forward Looking Information The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to differ materially. Factors that may cause actual results to vary include, but are not limited to: adverse developments in business and economic conditions in the pri
Slide 4: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: Q1 2012 Highlights
Q1 2012 Highlights • Record first quarter revenues and gross profits • Coal production 6.3 million tonnes • Cash balance $3.8 billion Subsequent to quarter end: • SilverBirch Energy acquisition closed • Completed Quebrada Blanca phase II feasibility 5
Slide 6: Q1 2012 Highlights: Revenues Up 8%, Adjusted Profit up 12%
Q1 2012 Highlights Revenues Up 8%, Adjusted Profit up 12% Revenues $ 2,547 million Gross Profit* $ 1,131 million (before depreciation & amortization) Profit $ 218 million (attributable to shareholders) Adjusted Profit $ 504 million (attributable to shareholders) EBITDA $ 781 million 6
Slide 7: Adjusted Profit Up 12%
Adjusted Profit Up 12% ($ millions, net of taxes) Q1 ’12 Q1 ’11 Q4 ’11 Profit attributable to $ 218 $ 461 $ 637 Shareholders as reported Derivative (gains) losses (59) 4 (61) Financing & Impairment charges 329 – 23 Other1 16 (15) 14 Adjusted Profit 504 450 613 Adjusted EPS $ 0.86 $ 0.76 $ 1.04 1incl
Slide 8: Coal
Coal Q1 Q1 Q4 Coal - Mt 2012 2011 2011 Production 6.3 4.4 6.7 Sales 5.3 5.0 5.5 Average Realized Price (US$/t) 223 207 253 (C$/t) 226 206 259 Site Costs (C$/t) 70 76 65 Transportation Costs (C$/t) 34 34 33 Financial Results C$ millions Revenue 1,198 1,019 1,434 Gross Profit 645 477 891 (before depre
Slide 9: Coal Production Update
Coal Production Update Ramp Up to 28 Mtpa from Six Existing Mines • Q1 production 6.3Mt – over 25 Mt annualized run-rate • Q1 material movement of 76 MBCM – increase by 15% • Elkview plant upgrade complete • Expanded, larger fleet adding incremental capacity • Quintette feasibility study progressing
Slide 10: Copper
Copper Q1 Q1 Q4 2012 2011 2011 Copper in Concentrate (kt) Production 63 57 69 Sales 65 56 72 Copper Cathode (kt) Production 18 18 20 Sales 18 17 19 Moly in Concentrate (M lbs) Production 3.0 1.9 3.9 Sales 3.1 2.4 4.0 Financial Results C$ millions Revenue 753 773 778 Gross Profit 366 469 339 (before
Slide 11: Copper Business Highlights
Copper Business Highlights • Antamina Expansion project: ‒ Mill throughput up 9% ‒ Q1 mill throughput ~112 ktpd ‒ March throughput ~131 ktpd • Andacollo: ‒ Copper production +8% ‒ Ratified collective labour agreement ‒ 20 ktpa crushing plant commissioning 11
Slide 12: Zinc
Zinc Q1 Q1 Q4 Zinc in Concentrate (kt) 2012 2011 2011 Production 147 166 150 Sales 135 129 209 Refined Zinc (kt) Production 74 72 75 Sales 76 73 75 Lead in Concentrate (kt) Production 23 21 22 Sales – – 32 Refined Lead (kt) Production 21 23 22 Sales 22 20 21 Financial Results C$ millions Revenue 595
Slide 13: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 13
Slide 14: Q1 2012 – Cash Changes
Q1 2012 – Cash Changes $Millions Cash Flow from Operations 995 Working Capital Changes (351) Capital Expenditures, Investments (487) Issuance of debt 983 Debt principal and interest payments (1,426) Dividends and Share repurchase (241) Fx translation & Other (78) Cash & STI decrease (605) Cash at qu
Slide 15: Final Pricing Adjustments
Final Pricing Adjustments Settlement Outstanding at Outstanding at Adjustment (C$ M) March 31, 2012 December 31, 2011 Before Tax* Copper 129 M lbs $3.83 US$/lb 164 M lbs $3.43 US$/lb $ 69 Million Zinc 146 M lbs $0.91 US$/lb 184 M lbs $0.83 US$/lb $ 9 Million Silver $ 12 Million Other (moly, lead, et
Slide 16: Strong Balance Sheet
Strong Balance Sheet March 31, 2012 Net Debt to Net Debt + Equity 14.5% Debt / EBITDA1 1.3x EBITDA / Interest1 9.7x ($millions) Overall Debt Maturity Profile (economic) $1,000 Weighted average term to economic maturity: 14.4 Years Weighted average coupon rate: 6.0% $500 $0 12 13 14 15 16 17 18 19 20
Slide 17: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 17
Slide 18: Project Developments
Project Developments • Quintette Coal Mine Feasibility Study Q2 2012 • Relincho Copper Mine Feasibility study Q1 2013 • Frontier Oil Sands Project 100% owned project in permitting process • Fort Hills Phase I Project sanction decision expected 2013 • Quebrada Blanca Phase II Feasibility study Q2 201
Slide 19: Quebrada Blanca Phase II
Quebrada Blanca Phase II • Estimated capital cost of US$5.6 billion Teck’s share: US$4.75 billion • 200 ktpa copper and 5 ktpa molybdenum, 39 year mine life • 240 ktpa copper and 6 ktpa molybdenum, first 10 years • 250 ktpa copper and 6 ktpa molybdenum, first 5 years • First production expected 20
Slide 20: One of the Largest Undeveloped Copper Resources in the World
One of the Largest Undeveloped Copper Resources in the World Contained Copper Resources Contained Copper Resources of Operating Copper Mines of Undeveloped Projects Million tonnes 0 20 40 60 80 100 0 10 20 30 40 Million tonnes Olympic Dam Pebble Escondida Reko Dik Andina Resolution PT Freeport Quebr
Slide 21: Proven Technology on Existing Minesite
Proven Technology on Existing Minesite Key Design Elements: • 135 ktpd concentrator • Desalinated seawater processing • 165 km pipelines (concentrate delivery and water supply) • Tailings facility: 2 billion tonne capacity • Port facility, includes concentrate filtration, storage and shipping • 3rd
Slide 22: Low Strip, Low Cost
Low Strip, Low Cost Year Year Life of Development Plan Mine and Concentrator Port Facility 1-5 1-10 Mine Tonnes milled (ktpd) 135 135 135 Tailings Facility Pipelines Strip ratio 0.10 0.22 0.48 Copper produced (ktpa) 250 240 200 Moly produced (ktpa) 6 6 5 C1 cash costs1 ($/lb) 1.07 1.12 1.35 Year Yea
Slide 23: Execution Strategy Key to Minimizing Capital Cost
Execution Strategy Key to Minimizing Capital Cost Proven technology minimizes recovery, throughput and permitting risks Desalinated seawater = no exotic materials, quicker and less expensive to build and better metallurgical recoveries Proven process equipment result in quicker start up Conv
Slide 24: Execution Strategy Key to Minimizing Capital Cost
Execution Strategy Key to Minimizing Capital Cost Selection of world-class and experienced engineering contractors minimizes schedule and execution risk Early procurement of long lead equipment accomplishes; o Equipment price certainty o Equipment delivery certainty o Minimizes exposure to cost
Slide 25: Large, low-cost, expandable ore-body, in good jurisdiction
Large, low-cost, expandable ore-body, in good jurisdiction Long life asset in stable jurisdiction • Large Resource: 17 million tonnes contained copper resources • 200 ktpa copper over 39 year design mine life • 240 ktpa copper over first 10 years • 5 ktpa Moly production over design mine life Ri
Slide 26: Summary
Summary Record Q1 revenues and gross profit Increasing coal production Continued strategic liability management SilverBirch Energy acquisition closed QBII – large, long life, low cost, expandable 26
Slide 27: First Quarter 2012 Investor Conference Call and Webcast
First Quarter 2012 Investor Conference Call and Webcast April 24, 2012