42 slides from Teck Resources Limited Class A's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Results
Third Quarter 2022 Results October 27, 2022 Global Metals and Mining Conference 1
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Both these slides and the accompanying oral presentation contain certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to as forward-looking statements). These statements relate
Slide 3: Jonathan Price, Chief Executive Officer
Jonathan Price Chief Executive Officer Global Metals and Mining Conference 3
Slide 4: Driving Long-Term Sustainable Shareholder Value
Driving Long-Term Sustainable Shareholder Value Industry leading Rebalance portfolio copper growth of high-quality assets Long-term to low-carbon metals sustainable shareholder value Balance growth Leadership and cash returns in sustainability to shareholders Global Metals and Mining Conference 4
Slide 5: Priorities for Execution
Priorities for Execution Long-term copper growth strategy, with QB2 as the cornerstone Rebalancing portfolio to low carbon metals Operational excellence Industry-leading sustainability performance Global Metals and Mining Conference 5
Slide 6: Sale of Fort Hills Interest
Sale of Fort Hills Interest • Announced agreement to sell 21.3% interest in Fort Hills to Suncor Energy for gross proceeds of approximately $1 billion in cash on October 26th, 2022 • Sale of our energy assets advances our strategy of pursuing industry leading copper growth and rebalancing our portfo
Slide 7: Q3 2022 Results and Highlights
Q3 2022 Results and Highlights Advanced copper growth • Progressing critical path items for QB2 Gross Profit before D&A Adjusted EBITDA Adjusted Diluted EPS • Announced agreement with PolyMet to advance NorthMet and Mesaba $2.4B $1.9B $1.74 • Announced agreement with Agnico Eagle to advance San Nico
Slide 8: Guidance Update
Guidance Update QB2 • Capital cost guidance to US$7.4–7.75B, from US$6.9–7.0B • QB three-year production to 170–300 kt, from 245–300 kt, with 2023 at the lower end of the guidance range Steelmaking Coal • Three-year production to 25–26 Mt, from 26–27 Mt 2023 Capex Outlook • Still expected to be lowe
Slide 9: Red Conger
Red Conger President and Chief Operating Officer Global Metals and Mining Conference 9
Slide 10: Elkview Plant Outage
Elkview Plant Outage • Structural failure of plant conveyor belt on September 20th, 2022 • No injuries as a result of the incident • Substantially completed the sourcing of materials and labour required to conduct the replacement • Expect to restart production by late November • 2022 coal production
Slide 11: Focused on Managing Controllable Costs
Focused on Managing Controllable Costs • Inflationary pressures increased operating costs by 14% compared to last year, with similar pressures on capital costs • Underlying mining drivers remain relatively stable • Realized tangible cost savings and productivity improvements through continuous impro
Slide 12: Building Capacity for Copper Growth
Building Capacity for Copper Growth • Building organizational capacity ahead of next wave of product delivery • Setting ourselves up with experienced leaders • Appointed Tyler Mitchelson as SVP, Copper Growth, with broad responsibility for the execution of Teck’s worldwide copper development • Effor
Slide 13: Executing our Copper Growth Strategy Through QB2
Executing our Copper Growth Strategy Through QB2 Delivering to key milestones as we drive towards first copper Focus remains on system completion and handover • Completed commissioning of the 220kV transmission line • Well advanced in commissioning of the pre-treatment area and pre-ops testing of th
Slide 14: QB2 Photo Tour
QB2 Photo Tour QB2 Port Area Pretreatment tanks in commissioning at the desalination plant Global Metals and Mining Conference September 2022 14
Slide 15: QB2 Photo Tour
QB2 Photo Tour QB2 Crushing and Conveying Overland conveyor and transfer tower Global Metals and Mining Conference August 2022 15
Slide 16: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Ore stacker structure and stockpile dome with concentrator building in the background Global Metals and Mining Conference August 2022 16
Slide 17: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Grinding mills Global Metals and Mining Conference September 2022 17
Slide 18: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Flotation area Global Metals and Mining Conference September 2022 18
Slide 19: QB2 Photo Tour
QB2 Photo Tour QB2 Concentrator Area Concentrate thickener hydrotesting Global Metals and Mining Conference September 2022 19
Slide 20: QB2 Photo Tour
QB2 Photo Tour QB2 Tailings Management Facility 12km long Tailings Launder completed Global Metals and Mining Conference September 2022 20
Slide 21: Crystal Prystai, Interim Chief Financial Officer
Crystal Prystai Interim Chief Financial Officer Global Metals and Mining Conference 21
Slide 22: Robust Financial Performance
Robust Financial Performance Profitability ($M) Profit(Loss) before Tax Net Finance Expense D&A Adjustments Continued inflationary Non-controllable Controllable cost pressures • 14% increase in 382 (234) operating costs from LY Adjusted (429) 115 EBITDA Adjusted (~50% due to diesel) $2,096 (89) EBIT
Slide 23: Copper Business Unit
Copper Business Unit Operating Metrics Q3 2022 Highlights FY22 Q3 2022 Δ Q3 2021 Guidance • Copper prices remained above historic averages, despite Realized price US$/lb 3.49 (18)% the decline in the quarter Production kt 66 (6)% 273-290 • Lower production at Carmen de Andacollo due to Sales kt 67 (
Slide 24: Zinc Business Unit
Zinc Business Unit Operating Metrics Q3 2022 Highlights FY22 Q3 2022 Δ Q3 2021 Guidance • Zinc prices remained above historic averages, despite Realized price US$/lb 1.44 6% the decline in the quarter Production (concentrate) Kt 158 34% 630-665 • Increased concentrate production at Red Dog Sales (co
Slide 25: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Operating Metrics Q3 2022 Highlights FY22 Q3 2022 Δ Q3 2021 Guidance • Steelmaking coal prices remained well above historic Realized price US$/t 304 28% averages, despite the decline in the quarter Production Mt 5.7 (5)% 22.0-22.5 • Lower production and sales volumes d
Slide 26: Energy Business Unit
Energy Business Unit Operating Metrics Q3 2022 Highlights Q3 2022 Δ Q3 2021 • Significant increase in global benchmark prices Realized price US$/bbl 73.68 21% compared to Q3 2021 Production Mbbl 3.5 84% • Ramp up to two-train operations resulted in higher Production bbl/d 37,736 89% production, sale
Slide 27: Capital Investments
Capital Investments Capital Investments Profile (C$M) QB2 (100%) Growth Capitalized Stripping Sustaining Changes to 2022 Guidance • QB2 revised guidance of US$7.4–7.75B 2,900 to • 2022 capex increased by $100–200M as a 3,000 result of revised QB2 guidance 2,580 Implied QB2 capex of US$0.9–1.3B in 20
Slide 28: Strong Financial Position
Strong Financial Position Strong Balance Sheet Debt Maturity Ladder2 (US$M) Liquidity1 Net Debt to Adjusted EBITDA2 $8.3B 0.5x 537 480 404 399 377 350 Returns to Shareholders and Debt Repaid in Q3 2022 Share Buybacks Dividends Debt Repayment 108 $730M $64M $42M 2022 2023 2024 2025 2026 2027 2028 202
Slide 29: Jonathan Price, Chief Executive Officer
Jonathan Price Chief Executive OfficerGlobal Metals and Mining Conference 29
Slide 30: Industry Leading Copper Growth Pipeline
Industry Leading Copper Growth Pipeline Potential to add ~5x of current copper equivalent production Potential Annual Copper Equivalent Production Growth (kt)1 Unrivaled suite of options diversified Near Term (2023-2028) Medium Term (2029-2033) Future Potential (2034+) by geography, scale, time to d
Slide 31: Copper Growth: Our Investment Proposition
Copper Growth Our investment proposition Industry Rebalance portfolio Balance growth Leadership leading of high-quality assets and cash returns in sustainability Long-term copper growth to low-carbon metals to shareholders sustainable • QB2 expected to double • Proven operational • Investment grade
Slide 32: Appendix
Appendix Global Metals and Mining Conference 32
Slide 33: Production Guidance
Production Guidance Production (000’s tonnes except as noted) Previous Current Previous 3-Year Current 3-Year 2021 Actual 2022 Guidance 2022 Guidance1 Guidance (2023-2025) Guidance1 (2023-2025) Copper2,3,4 Highland Valley 130.8 127-133 127-133 130-160 110-170 Antamina 100.2 91-96 91-96 90-95 90-95 C
Slide 34: Sales and Unit Cost Guidance
Sales and Unit Cost Guidance Sales Unit Costs Q3 2022 Q4 2022 Previous Current Actual Guidance1 2021 Actual 2022 Guidance 2022 Guidance1 Zinc in concentrate Copper2 (US$/lb) Red Dog (kt) 235 130-150 Total cash unit costs 1.80 1.93-2.03 1.93-2.03 Steelmaking coal (Mt) 5.6 5.0-5.4 Net cash unit costs
Slide 35: Capital Expenditures Guidance
Capital Expenditures Guidance Teck’s share in C$ millions, except as noted Sustaining and Growth Capital Sustaining and Growth Capital (cont.) Previous 2022 Current 2022 Previous 2022 Current 2022 2021 Actual Guidance Guidance1 2021 Actual Guidance Guidance1 Sustaining Total sustaining and growth $
Slide 36: Water Treatment Guidance
Water Treatment Guidance Steelmaking Coal Capital Expenditures and Operating Costs Related to Water Treatment 3-Year Long-Term 2021 Previous 2022 Current 2022 Guidance1 Guidance1,3 (C$ millions, unless otherwise noted) Actual Guidance Guidance1 (2022-2024) (C$/tonne) Capital Expenditures Sustaining
Slide 37: Sensitivities
Sensitivities Sensitivity of our Annualized Profit Attributable to Shareholders and EBITDA1 Estimated Effect of Change on Estimated Effect 2022 Mid-Range Profit Attributable to Shareholders3 on EBITDA3 Production Estimates2 Changes ($ in millions) ($ in millions) US$ exchange C$0.01 $ 67 $ 103 Coppe
Slide 38: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model for Base Metals (Pre-tax settlement pricing adjustment in C$M) Quarterly Outstanding at Outstanding at Pricing September 30, 2022 June 30, 2022 Adjustments Mlbs US$/lb Mlbs US$/lb C$M Copper 196 $ 3.46 174 $ 3.75 $ (66) Zi
Slide 39: Endnotes
Endnotes Slide 28: Strong Financial Position Slide 35: Capital Expenditures Guidance 1. As at October 26, 2022. 1. As at October 26, 2022. See Teck’s Q3 2022 press release for further details. 2. As at September 30, 2022. 2. Steelmaking coal 2022 sustaining capital guidance includes $200 million of
Slide 40: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Global Metals and Mining Conference 40
Slide 41: Non-GAAP Financial Measures and Ratios
Non-GAAP Financial Measures and Ratios Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This presentation includes reference to certain non-GAAP financial measures and non-GAAP ratios,
Slide 42: Reconciliation of Segment EBITDA
Reconciliation of Segment EBITDA Reconciliation between Segmented Profit and Segmented EBITDA1 Steelmaking 3 months ending September 30, 2022 Copper Zinc Coal Energy Corporate Total Profit (Loss) before Taxes $M (55) 275 1,040 (1,160) (176) (76) Net finance expense $M 89 8 21 6 (73) 51 Depreciation