29 slides from Teck Resources Limited Class A's investor presentation, Sep 30, 2024
Slide 1: Investor Presentation
Photo to be replaced INVESTOR PRESENTATION September 30, 2024
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: Leading Energy-Transition Metals Company
LEADING ENERGY-TRANSITION METALS COMPANY Focused on responsibly providing metals essential to economic development and the energy transition Premium portfolio with high-quality operations in stable and well-understood jurisdictions and significant near-term copper growth potential Copper Operations
Slide 4: Responsible Growth and Value Creation
RESPONSIBLE Driven by our purpose and values, we will grow to become one of the world’s leading providers of GROWTH AND responsibly-produced energy transition metals VALUE CREATION Balancing growth with cash returns to shareholders Our strategy is focused around four pillars: METALS FOR THE VALUE-DR
Slide 5: Transformed into a Pure-Play Energy Transition Metals Company
TRANSFORMED INTO A PURE-PLAY ENERGY TRANSITION METALS COMPANY February 2023 February 2023 April 2023 May 2023 March 2024 July 2024 Sold our Formed Formed Implemented Completed Completed interest in NewRange San Nicolás sunset for QB2 sale of Fort Hills Cu-Ni JV Cu-Zn JV Class A shares construction s
Slide 6: Completed the Steelmaking Coal Sale
COMPLETED THE STEELMAKING COAL SALE Achieved a full and direct separation that positions Teck for its next phase of responsible growth and value creation • Announced the sale of the steelmaking coal business, Elk Valley Resources (EVR), in November 2023 • Completed the sale of a 23% minority interes
Slide 7: Capital Allocation Framework Guides Use of Proceeds
CAPITAL ALLOCATION FRAMEWORK GUIDES USE OF PROCEEDS Commitment to return 30-100% of available cash flow to shareholders* Balancing growth with cash returns to shareholders while maintaining a strong balance sheet Cash Flow Sustaining Base Supplemental from Operations Capital Dividend Shareholder aft
Slide 8: Use of Steelmaking Coal Sale Proceeds
USE OF STEELMAKING COAL SALE PROCEEDS • Cash returns to shareholders: ~C$3.5B authorized in total − Share buyback of up to C$2.75B plus previously authorized C$500M share buyback − Supplemental dividend of ~C$250 million or C$0.50/share • Debt reduction: up to US$2.0B − Completed an upsized cash ten
Slide 9: Resilient Balance Sheet
RESILIENT BALANCE SHEET US$1.4B in notes tendered; now in a net cash position NET CASH TERM NOTES CREDIT CASH as at July 23, 2024 POSITION OUTSTANDING RATINGS as at July 23, 2024 as at July 23, 2024 as at July 23, 2024 Investment $8.7B $2.9B US$1.1B grade Notes Outstanding as at June 30, 2024 (US$M)
Slide 10: Portfolio Transformation
PORTFOLIO TRANSFORMATION 10
Slide 11: Premium Base Metals Portfolio
PREMIUM BASE METALS PORTFOLIO Our commodity mix is now 100% base metals Illustrative Annual Operating EBITDA* (C$B) +$0.5 US$5.00/lb Cu Potential to generate >$5B 2022A 2025 +$0.4 of annual base metals Revenue Consensus Revenue1 (%) US$4.50/lb Cu operating EBITDA* Energy QB2 Capital requirements $2.
Slide 12: Industry-Leading Copper Growth
INDUSTRY-LEADING COPPER GROWTH Pathway to increase copper production by a further 30% starting as early as 2028 Copper Operations Zinc Operations 2025 Guidance: 550-620 kt2 2025 Guidance: 555-615 kt2 30% growth to ~8001 ktpa Quebrada Blanca Red Dog (Cu-Mo-Ag | Chile | 60%) (Zn-Pb-Ag | USA | 100%) Wi
Slide 13: Value-Accretive Near-Term Copper Projects
VALUE-ACCRETIVE NEAR-TERM COPPER PROJECTS Well-funded, low capital-intensity projects with sanctioning as early as 2025 QB Optimization Highland Valley Zafranal San Nicolás & Debottlenecking Mine Life Extension (Cu-Mo-Ag | Brownfield | Tarapacá | 60%) (Cu-Mo | Brownfield | British Columbia | 100%) (
Slide 14: Continuing to Create Value for Shareholders
CONTINUING TO CREATE VALUE FOR SHAREHOLDERS Transformed portfolio to focus on energy transition metals Driving best-in-class performance and project delivery capability Expanding and optimizing high-quality operating assets Focusing on value creation through disciplined capital allocation Executing
Slide 15: Appendix
APPENDIX 15
Slide 16: Copper Overview
COPPER OVERVIEW Raw material supply constrained as smelter capacity growing; Consumer demand supportive as energy transition pushes ahead • Mine production expected to • Smelter capacity increases • Risk for ex-China recession • Decarbonization growth peak in 2028, later and lower commissioning in C
Slide 17: Copper Mine Outlook
COPPER MINE OUTLOOK New mine production required but no appetite for investment • Concentrate market is forecast to remain in deficit Copper Mine Production and Demand1 (kt) moving forward 35,000 Thousand Tonnes Contained 11.5 Mt 30,000 ‒ Addressing the long-term projected deficit will 25,000 mine s
Slide 18: Long-Term Copper Market Fundamentals
LONG-TERM COPPER MARKET FUNDAMENTALS Significant demand growth; constrained supply; higher prices • Copper exploration spending under pressure for Long-Term Total Copper Demand2 (Mt) last 10 years, 2023 a 4-year low point Non-Energy Transition Specific Energy Transition • Near-term quality mine proj
Slide 19: Zinc Overview
ZINC OVERVIEW Supply1 - Raw material supply at risk; Demand1 - Consumer demand pauses; smelters risk feed shortage decarbonization pushes ahead • Low zinc prices have put mines at • European market remains lower on • European consumer market • Decarbonization to drive further risk of closure. Nearly
Slide 20: Global Zinc Supply and Demand Dynamic
GLOBAL ZINC SUPPLY AND DEMAND DYNAMIC Forecasted supply deficit • Zinc demand is expected to experience annual growth Global Zinc Supply vs. Demand1 (kt) from 2025 to 2040+ Secondary Base Case Mines Potential Extensions • As assets in the production phase close or decline in Probable Projects Demand
Slide 21: Zinc Treatment Charges
ZINC TREATMENT CHARGES Increased Chinese concentrate imports and decreased treatment charges • TCs dropped ~97% from Dec 2022 – July 2024 Spot and Annual Treatment Charges1 (US$/t) with numerous qualities trading for negative Spot TC Annual TC values since June 380 • Chinese smelters profits in 2023
Slide 22: Copper Guidance
COPPER GUIDANCE Includes Quebrada Blanca Copper in Concentrate Production1,2 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Quebrada Blanca Highland Valley Antamina (22.5%) Carmen de Andacollo 1.90-2.30 550-620 550-620 530-600 (was 1.85-2.25) 435-500 1.87 (was 465-540) 50-60 50-60 45-55 80-90 90-100 85-95 1
Slide 23: Zinc Guidance
ZINC GUIDANCE Zinc in Concentrate Production1,2 (kt) Net Cash Unit Costs*,1,3 (US$/lb) Red Dog Sales1,4 (kt) Red Dog Antamina (22.5%) 0.55-0.65 250-290 644 0.55 565-630 555-615 104 45-60 0.44 465-525 95-105 55-65 400-445 540 520-570 35-45 460-510 410-460 365-400 54 2023 2024E 2025E 2026E 2027E 2022
Slide 24: Sensitivities
SENSITIVITIES Estimated Effect of Changes on our Annualized Profitability1 ($M) Estimated Effect on 2024 Adjusted Profit (Loss) Mid-Range from Continuing Operations Estimated Effect on Production Attributable to Shareholders3 Adjusted EBITDA*, 3 Estimates2 Changes ($ in millions) ($ in millions) US$
Slide 25: Modelling Guidance for EVR Sale: Balance Sheet
MODELLING GUIDANCE FOR EVR SALE Balance Sheet Assets Liabilities Add: Add: • EVR cash proceeds • Transaction tax liability to be paid in Q1 2025 Subtract: Subtract: • EVR property, plant and equipment • Provisions and other liabilities • Other assets, including net working capital and ‒ Decommission
Slide 26: Modelling Guidance for EVR Sale: Income and Cash Flow
MODELLING GUIDANCE FOR EVR SALE Income Statement Cash Flow Statement • Q3 EVR results to closing date reflected on the • Q3 EVR results to closing date reflected on the cash income statement as profit from discontinued flow statement as net cash from discontinued operations activities • Expect incre
Slide 27: Endnotes
ENDNOTES SLIDE 11: PREMIUM BASE METALS PORTFOLIO SLIDE 23: ZINC GUIDANCE 1. Revenue for 2025 based on consensus estimates from 16 analyst models taken in May 2024. 1. As at July 23, 2024. See Teck’s Q2 2024 press release for further details. 2. QB illustrative EBITDA at midpoint of 2025-2027 product
Slide 28: Non-GAAP Financial Measures and Ratios
NON-GAAP FINANCIAL Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International MEASURES Accounting Standards Board. This presentation includes reference to certain non-GAAP financial measures and non-GAAP ratios, which are n
Slide 29: Investor Presentation
Photo to be replaced INVESTOR PRESENTATION September 30, 2024