Teck Resources Q1 2025 Earnings Report

Teck Resources EPS Results

• Actual EPS: $0.42
• Consensus EPS: $0.24
• Beat/Miss: Beat by +$0.18
• One Year Ago EPS: $0.75

Teck Resources Revenue Results

• Actual Revenue: $1.60 billion
• Expected Revenue: $2.19 billion
• Beat/Miss: Missed by -$594.67 million
• YoY Revenue Growth: +41.40%

Teck Resources Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 11:00AM ET

Teck Resources (NYSE:TECK) engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. The company operates through Steelmaking Coal, Copper, Zinc, and Energy segments. Its principal products include copper, zinc, steelmaking coal, and blended bitumen. The company also produces lead, silver, and molybdenum; and various specialty and other metals, chemicals, and fertilizers. In addition, it explores for gold. The company was formerly known as Teck Cominco Limited and changed its name to Teck Resources Limited in April 2009. The company was founded in 1913 and is headquartered in Vancouver, Canada.

Teck Resources Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Welcome to Teck's First Quarter twenty twenty five Results Release Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. This conference call is being recorded on Thursday, 04/24/2025. I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations.

[Operator]

Please go ahead.

[Emma Chapman, Vice President, Investor Relations at Teck Resources]

Thank you, operator. Good morning, everyone, and thank you for joining us for Teck's first quarter twenty twenty five conference call. Today's call contains forward looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward looking statements.

[Emma Chapman, Vice President, Investor Relations at Teck Resources]

Please refer to Slide two for the assumptions underlying our forward looking statements. We will reference non GAAP measures throughout this presentation. Explanations and reconciliations are in our MD and A and the latest press release on our website. Jonathan Price, our CEO, will start with an overview of our first quarter. Crystal Prestai, our CFO, will follow with a financial and operational review.

[Emma Chapman, Vice President, Investor Relations at Teck Resources]

Jonathan will conclude with closing remarks followed by a Q and A session. I will now turn the call over to Jonathan.

[Jonathan Price, President and CEO at Teck Resources]

Thanks, Emma, and good morning, everyone. Now before we get into the quarter, I want to take a moment to acknowledge the current macro environment on Slide four. As we all know, the past few months have been marked by volatility and uncertainty. Factors like the threat of a global economic downturn, geopolitical tensions, inflation and supply chain disruptions have created an uncertain and challenging global business landscape. Despite these headwinds, we believe that the fundamentals for our key metals, copper and zinc, are robust over the medium and long term as several macro factors continue to drive demand.

[Jonathan Price, President and CEO at Teck Resources]

These metals are essential for global manufacturing and development, industrial policy and national security, electrification infrastructure, as well as the growth of the digital economy. On the supply side, the industry continues to face constraints. At the same time, new demand opportunities are emerging as many economies seek to revitalize their industrial sector. For example, defense spending may be significantly broadened to include areas central to economic resilience, such as upgrades to and expansion of electricity grids, which remain central to copper demand. We see this providing a medium term boost to metals demand, as the world enters into a state backed more capital intensive phase of growth.

[Jonathan Price, President and CEO at Teck Resources]

And even in the short term, we continue to see extreme tightness in the concentrate markets that make up nearly 90% of our revenue, with benchmark treatment charges for copper and zinc at historically low levels. In this environment, Teck is well positioned for continued value creation. We are growing copper production and improving margins through disciplined operational performance. In addition, we have an active share buyback program, a portfolio of value accretive copper growth projects, an agile commercial strategy and a strong balance sheet. Together, these underpin the resilience of our business, which is a competitive advantage for Teck, enabling us to navigate uncertainty, while continuing to deliver value through our strategy of balancing disciplined copper growth with returns to shareholders.

[Jonathan Price, President and CEO at Teck Resources]

So turning to slide five, we are closely monitoring the potential impact of tariffs and retaliatory trade measures between the countries we trade with and the risks of wider macroeconomic uncertainty. Although the situation is fluid and evolving rapidly, we do not expect announced tariffs to materially impact our business. That said, the global trade war could weigh on global economic growth with potential implications for metals demand. Today, we are continuing to see strong demand for our copper and zinc concentrates and we are working closely with our customers with limited impact so far. Our copper and zinc concentrate sales are not exposed to U.

[Jonathan Price, President and CEO at Teck Resources]

S. Tariffs as we primarily sell to Asia and Europe with no sales to The U. S. On the other hand, Chinese tariffs, if maintained, are expected to apply to our sales of Red Dog concentrate to China, which represent less than 20% of our zinc and lead concentrate sales. However, over past few years, we have successfully developed a regionally diverse customer base, which gives us greater optionality while trade negotiations are ongoing.

[Jonathan Price, President and CEO at Teck Resources]

Red Dog is a highly valued concentrate in the zinc market and we have several long standing customers for this product. We also have other options available, including trail feed integration, delivery outside the Red Dog shipping season and product swaps, all options that support continuity of sales. Turning to trail and our metal sales, refined zinc, lead and specialty metals such as germanium, indium and sulfur products are sold into The U. S, but they are exempt from U. S.

[Jonathan Price, President and CEO at Teck Resources]

Tariffs as they are compliant with the USMCA. Overall, Teck has a strong business with diversified products and operations and agile commercial strategy and strong logistics capabilities. This enables us to quickly adapt and respond to changing market conditions to mitigate any potential impact on our business. Turning now to highlights from the first quarter of twenty twenty five on Slide six, Our profitability improved significantly compared to last year, driven by higher commodity prices and copper sales volumes. Our adjusted EBITDA more than doubled to $927,000,000 The ramp up of QB operations continues and we are seeing performance improvements in key areas such as average daily mill throughput.

[Jonathan Price, President and CEO at Teck Resources]

Production was impacted in the quarter by additional shutdowns and I will provide more detail on this later in the presentation. During the quarter, QB successfully achieved the completion testing requirements under the US2.5 billion dollars project finance facility. This is a significant milestone that provides independent verification confirming the robustness of the construction and the capacity of the asset to operate at design levels, providing further confidence in the ramp up to steady state by the end of the year. In the first quarter, we had strong operational performance across our established operations, particularly Highland Valley and Carmen De Andacollo. Trail operations generated strong profit in the quarter following the successful implementation of a range of initiatives to improve profitability and cash flow generation.

[Jonathan Price, President and CEO at Teck Resources]

Our annual guidance is unchanged across all operations. Our balance sheet remains strong and resilient. We ended the quarter in a net cash position of $764,000,000 and as of yesterday, our liquidity is $10,000,000,000 Finally, we continue to return cash to shareholders through share buybacks and dividends totaling $568,000,000 year to date. So turning to our ongoing commitment to safety and sustainability on Slide seven. Our safety performance was strong in the first quarter.

[Jonathan Price, President and CEO at Teck Resources]

Our high potential incident frequency rate across the operations we control remained low at 0.05. I would like to take a moment to acknowledge the fatality that occurred at Antamina, in which Teck holds a non operating interest earlier this week. We are deeply saddened by this event and we offer our condolences to the family, friends and colleagues of the deceased. As ever, we will support the Antamina team with the investigation and ensure that lessons are both learned and shared. In March, we released our twenty fourth annual sustainability report, which details last year's environmental and social performance, including key areas such as health and safety, support for communities, indigenous peoples, diversity and climate.

[Jonathan Price, President and CEO at Teck Resources]

Copy of the report is available on our website. So coming back to QB ramp up on Slide eight, as I just mentioned, the successful achievements of completion testing under the QB project finance facility is a significant milestone. It comprised several independently verified operational and technical tests that validate the robustness of the design, construction and operational performance of QB. This demonstrates QB's ability to generate strong cash flows. We've made significant progress in the ramp up of QB, as you can see on the left hand side of the slide.

[Jonathan Price, President and CEO at Teck Resources]

We have a plan to consistently achieve design throughput and recoveries and have several data points showing that we can and have already operated at these levels. That said, first quarter production was impacted for two reasons. First, the previously disclosed eighteen day extended shutdowns conduct maintenance and reliability work and progress tailings development. And second, external factors that included a nationwide power outage in Chile in February, leaving the site without power, which affected production for several days and challenging weather. In particular, challenging weather impacted the rate of material movement for tailings lifts required for the development of the tailings management facility, which was also impacted by slower than expected sand drainage times.

[Jonathan Price, President and CEO at Teck Resources]

The result of this slower than planned TMF development is that additional mechanical movement is required prior to installation of the permanent infrastructure and we expect to extend planned maintenance shutdowns in Q2 and Q3 to complete this work. This is expected to impact production in the short term only and there are no issues with dam integrity. Once this phase of TMF development is complete, we will be on track for full production ramp up by year end and steady state operation into the future. Moving to Slide 9, QB's plant performance continues to improve. In the first quarter, the average daily throughput, excluding the extended and unplanned shutdowns increased compared to the fourth quarter, demonstrating continued improvement in operational stability.

[Jonathan Price, President and CEO at Teck Resources]

Higher levels of transitional were mined, leading to lower recoveries as expected, and higher grade ore mined in March increased the average grade for the quarter. For the remainder of the year, we will continue to drive operational performance and expect to achieve higher throughput rates and higher recoveries in line with design. We continue to expect to achieve our production guidance for QB, albeit at the lower end of our previously disclosed range of two and thirty thousand to 270,000 tonnes. And we continue to expect QB net cash unit costs to be between US180 dollars and US215 dollars per pound for the full year, although commensurate with production, we expect this to be towards the higher end of guidance. Turning to Slide 10, we expect significant growth in our copper production with improving margins this year.

[Jonathan Price, President and CEO at Teck Resources]

Our copper EBITDA margin increased last year from 33% to 42%. This year, current consensus estimates show further improvement to 51%. We continue to expect our copper production to grow to between four and ninety thousand to five and sixty five thousand tonnes for the full year from 446,000 tonnes in 2024, reflecting the ongoing ramp up of QB and improved grades and throughput at Highland Valley. We also expect a significant reduction in our copper net cash unit costs to US165 dollars to US195 dollars per pound from US220 dollars per pound in 2024, reflecting an increase in copper and molybdenum production, as well as continued cost discipline across our operations. Slide 11 outlines our ongoing growth trajectory, underpinned by our existing portfolio of operating mines, coupled with our well funded value accretive near term copper projects, including the mine life extension at Highland Valley in British Columbia, and our high returning greenfield projects at Zafranal in Peru and San Nicolas in Mexico.

[Jonathan Price, President and CEO at Teck Resources]

Compared to QB, these greenfield projects are significantly less complex and smaller in scope with lower capital intensities. We are also working to define the most capital efficient and value accretive path for further growth of QB through optimization of the mill and low capital debottlenecking opportunities that could increase throughput by 15% to 25%. With these projects, we have a clear path to increase our annual copper production to approximately 800,000 tonnes before the end of the decade. Now on Slide 12, I will cover the key progress updates and major future milestones as we work to bring these near term projects to potential sanctioning this year. An independent review of the mine life extension project to Highland Valley was completed in the first quarter and confirmed construction readiness of the project.

[Jonathan Price, President and CEO at Teck Resources]

This means we should be positioned for a potential sanction decision after we receive the necessary permits, which potentially could be in mid-twenty twenty five. At Zafranal, the project is progressing as scheduled and we received the advanced works permit on April 10. We aim to submit the construction permit in Q2 and the project could be ready for a potential sanction decision in late twenty twenty five. At San Nicolas, engagement with government authorities and other stakeholders is ongoing to support our permit application. We expect to complete the feasibility study in the second half of twenty twenty five, positioning the project for a potential sanction decision following the receipt of necessary permits.

[Jonathan Price, President and CEO at Teck Resources]

At QB, our focus is to ramp up to steady state. At the same time, optimization is progressing and detailed planning for debottlenecking is underway, which should enable us to submit the declaration of environmental impact or DEA permit application in the second half of the year. We look forward to progressing these well funded near term projects to sanction and launching the next phase of Teck's copper growth. I'll now hand over to Crystal to provide further details on our first quarter results.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Thanks, Jonathan, good morning, everyone. I will start with our first quarter twenty twenty five financial performance on Slide 14. We more than doubled our adjusted EBITDA in the quarter compared to a year ago to $927,000,000 This was primarily driven by higher copper and zinc prices and increased copper sales volumes due to strong production performance across our established operations. We generated increased revenue and profit from byproducts, including molybdenum from QB and Highland Valley as well as silver, germanium and other critical metals from Trail. We also benefited from a weaker Canadian dollar as we converted U.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

S. Dollar denominated revenue into Canadian dollars. Our results reflect positive pricing adjustments of $106,000,000 primarily as a result of higher copper prices. Our finance income increased significantly to $91,000,000 compared with $27,000,000 a year ago as our investment income increased due to our balance since the sale of the steelmaking coal business last year. In February, we paid a final $20.24 Canadian income tax of $330,000,000 primarily related to earnings and the proceeds from the sale of the steelmaking coal business.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

And importantly, we continue to return cash to shareholders throughout the quarter with $568,000,000 returned year to date. Turning to Slide 15, which summarizes the key drivers of our financial performance in the first quarter compared to the same period in 2024. Our adjusted EBITDA increased by 127% in the first quarter as a result of strong base metals prices, higher copper and zinc and concentrate sales volumes and the positive impact of a weaker Canadian dollar. Copper sales volumes increased by 11% from Q1 of last year, reflecting higher volumes from Highland Valley and Carmen de Andacollo. Zinc and concentrate sales volumes increased by 10% due to the timing of sales from Red Dog and increased volumes from Antamina.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Our strong adjusted EBITDA also reflects improved copper and zinc unit costs, reflecting cost discipline across our business. This was partially offset by an increase in royalties, primarily as a result of increased profitability at Red Dog. Now looking at each of our reporting segments in greater detail and starting with copper on Slide 16. In Q1 twenty twenty five, gross profit before depreciation and amortization from our copper segment increased 90% to $7.00 $4,000,000 compared with the same period last year, primarily due to higher copper prices and sales volumes and increased by product revenues from molybdenum and zinc. This reflects strong performance across our established copper operations.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Copper production increased by 57%.

[Operator]

Just a moment. I'm going to, turn the hold music on for just a moment and check the volume with the backup line.

Operator,

it's Bruce. I'll get the line back on.

[Operator]

It wasn't good.

It's fine. Let me get it back to slide 16.

The operator, can you hear me on the backup line? Hi,

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Yes, We can hear you. Do you know where we cut off?

Just a few seconds before I interrupted. So I would go back a paragraph.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Okay.

Okay?

Believe my parents will be back to

you soon. The old music, I'll cut the music. Okay. Turn you back in now.

[Operator]

You for your patience.

[Operator]

We have reconnected with the presenters.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Hi, everyone. Sorry about the technical difficulties. I'm going to start back at the beginning of Slide sixteen and get going again. In Q1 twenty twenty five, gross profit before depreciation and amortization from our copper segment increased 90% to $7.00 $4,000,000 compared with the same period last year, primarily due to higher copper prices and sales volumes and increased by product revenues from molybdenum and zinc. This reflects strong performance across our established copper operations.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Copper production increased by 7% to 106,000 tonnes, driven by increased grades and mill throughput at Highland Valley and Carmen De Andacollo. Production significantly improved at Highland Valley as we advanced mining in the higher grade Lornex pit, which has softer ore leading to increased mill throughput. Carmen De Andacollo also had improved mill throughput as a result of increased water availability compared to the same period last year, which was affected by drought conditions. Antamina performed in line with expectations. Our net cash unit costs improved by $0.32 per pound to $2.04 per pound as a result of higher copper production, increased by product credits, reduced smelter processing charges and lower transportation costs at QB.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

This strong performance led to an improvement in our gross profit margin before depreciation and amortization of 13% to 47% compared to the same period last year. On April 9, QB's third and final labor union ratified a new three year collective bargaining agreement. This completes all labor negotiations for QB's workforce with labor agreements now in place through 2028. Looking forward to the rest of this year, we expect to see QB continue to ramp up to steady state by year end as well as increased quarterly copper production at Highland Valley as we process increasing proportions of higher grade Lornax ore through 2025. For the full year, as Jonathan mentioned, we continue to expect growth in our copper production with improving margins in line with our guidance of four and ninety thousand to 565,000 tonnes at a net cash unit cost of between US1.65 dollars and US1.95 dollars per pound.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Turning now to our zinc segment on Slide 17. Our profitability in zinc improved significantly in the first quarter with a 79% increase in gross profit before depreciation and amortization to $225,000,000 This increase was due to higher zinc prices, strong sales volumes at Red Dog and improved profitability at our Trail operations. Our Red Dog zinc and concentrate sales of 91,000 tonnes were higher than our guidance range for the quarter of 75,000 to 90,000 tonnes due to the timing of sales. Red Dog production was impacted by lower grades as expected in the mine plan. Our net cash unit costs improved to US0.59 per pound from US0.67 dollars per pound in the same period last year, driven by reduced smelter processing charges and partially offset by the impact of lower production levels.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

At Trail Operations, we generated strong profitability in the quarter, reflecting increased production of byproducts such as silver, germanium and other critical metals as well as the successful implementation of initiatives to improve profitability and cash flow generation at Trail. Looking forward to the second quarter, we expect zinc and concentrate sales from Red Dog of 25,000 to 35,000 tonnes, reflecting the normal seasonality of sales. Our full year production and unit cost guidance for our zinc segment is unchanged. Our guidance for zinc and concentrate production remains at five and twenty five thousand to 575,000 tonnes, and we continue to expect refined zinc production of 190,000 to 230,000 tonnes for the year. Net cash unit costs are expected to be between $0.45 and $0.55 per pound.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Turning to our balance sheet on Slide 18. Our balance sheet remains strong and resilient. We were in a net cash position of $764,000,000 at March 31. And as of yesterday, our liquidity was $10,000,000,000 including $5,800,000,000 of cash. Our cash balance decreased in the first quarter, primarily due to continued return to shareholders through dividends and share buybacks, the final 2024 tax payment relating to the earnings and sale of the steelmaking coal business and the seasonally larger royalty payment to Nana in respect of Red Dog's strong Q4 twenty twenty four performance.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Our remaining outstanding term notes of USD 1,000,000,000 are long dated. We will continue to deleverage as we make semiannual repayments on the QB project finance facility through 02/1931. With the achievement of the QB project financing completion testing requirements, Teck and the other sponsor guarantees of the project finance facility have been released. Our balance sheet strength and investment grade credit ratings enable continued value creation in current market conditions. On Slide 19, we remain committed to our disciplined capital allocation framework, which balances investment and value accretive growth with returns to shareholders while maintaining a strong balance sheet through the cycle.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Our capital allocation framework and project sanction requirements ensure the prudent deployment of capital. All growth projects must meet stringent criteria delivering attractive risk adjusted returns and competing for capital. We are continuing to execute on our $3,250,000,000 authorized share buyback and we are committed to returning between 30100% of available cash flows to our shareholders. Looking at our cash returns now on Slide 20. We continue to build on our strong history of cash returns to shareholders, which currently total approximately $5,400,000,000 since 2020.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

We are in the market daily, actively buying back our shares under the $3,250,000,000 share buyback announced last year with more than half of the buyback now complete.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

We

[Crystal Prystai, Executive VP & CFO at Teck Resources]

have increased the daily number of shares

Operator, the quality of your backup line has deteriorated to a point where we're not really able to hear you. I'd like to suggest that we pause for a moment and reconnect your main line, and I will put hold music on again. Apologize. I I really don't think that we should proceed when we can't hear what's being

said. Hold music back on.

I hope you logged into a private conference. If we could reconnect the main line, I will put this line on hold, and we'll go back to the main line. Looks like we're reconnected, maybe.

Oh, it's up.

Actually, I'm still I'm still throwing it in. I'll be right back. Gonna put the shipping box.

Caitlin, it's Bruce. I'm trying to get to the 844 number, and I'm getting a busy signal.

I'm sorry. I'm not able to hear you.

I'm trying to get to the 844 number, and I'm getting a busy signal. Okay. So that's a choice of the sound is fine.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

We're also hearing, Gaylene. Gaylene, we're also hearing that the audio is fine for those listening.

Alright. One sec.

Oh, alright.

[Operator]

If you want, I can join you back in or if you could kindly dial out the 604 number that would show displayed on the screen for the for the Everdell presenters line.

Okay. Alina, can you give me a number to call me up?

Okay.

60246499886677.

Wait. As you're speaking, I'm not hearing it.

66046499886677. Can you hear us on this side?

[Operator]

They'll not be able to hear you. Is there any way that somebody can type the number into the q and a chat if you can hear Bruce? And I know you're connected. I think,

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Galen Gaylene, everyone on the line can still hear us. So we're just gonna continue on and proceed with the the rest of the call. Apologies again, everyone on the line. I'm just gonna jump. We are we are getting feedback that people that are listening on the line can hear what's going on in the room, so we wanna just continue.

[Operator]

Possibly hear what's going on in the room because your room line is not connected to end the call, but I will join you back in if that's your choice and cut the whole music. Joining you back in now.

You are now rejoining the main conference.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Sorry,

[Crystal Prystai, Executive VP & CFO at Teck Resources]

everyone. I'm going to jump back in here still on Slide 20. As of yesterday, we've executed $1,750,000,000 of the $3,250,000,000 authorization under our normal course issuer bid, including over $500,000,000 year to date. This leaves approximately $1,500,000,000 of our authorized share buybacks remaining to further improve our per share value. And with the strong cash flow generation potential of our business, we could see further cash returns to shareholders in line with our capital allocation framework.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Turning to our near term growth now on Slide 21. Our value accretive near term copper projects are well funded. While the project capital attributable to these growth projects remains unsanctioned and uncommitted, we continue to expect to deploy between US3.2 billion dollars and US3.9 billion dollars over the next four years for our near term copper projects. And we will continue to be disciplined in our assessment and progression of these projects to ensure value accretive growth. As we continue to balance our growth in copper with cash return to shareholders, we can continue to significantly impact the accretive growth potential of our metrics on a per share basis, as shown on Slide 22.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Last year, with the ramp up of QB and with a significant portion of our 3,250,000,000.00 share buyback completed, we increased our copper production per share by 54% compared to the prior year. And by 2026, as we stabilize QB at full production and complete the remaining authorized share buyback, our copper production per share could increase by a further 34% to 51%. Beyond that, our copper production per share could increase substantially as we bring our near term value accretive growth projects online. And this does not consider the impact of any further share buybacks that could be authorized under our capital allocation framework as a result of the strong cash flow generation potential of our business. Through the end of the decade, our copper production has the potential to increase rapidly on a per share basis.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

With that, I'll now turn it back over to Jonathan.

[Jonathan Price, President and CEO at Teck Resources]

Thanks, Crystal. So turning to Slide 24, we remain focused on our priorities to create value for our shareholders. Completing the QB ramp up to steady state operations, continuing to drive operational excellence across our portfolio of high quality copper and zinc operations and projects, growing our copper production and improving our margins, remaining committed to returning cash to our shareholders by continuing to execute our authorized share buyback program and paying our base dividend progressing our value accretive near term copper projects to possible sanction decisions in 2025 positioning us for our next phase of copper growth and maintaining the resilience of our business to navigate uncertainty and create value, leveraging our agile commercial strategy and strong balance sheet. So to wrap up on Slide 25, our strategy remains delivering growth and creating value in a responsible and disciplined way. We will continue to balance investment in growth with returns to shareholders.

[Jonathan Price, President and CEO at Teck Resources]

We have the resilience to successfully navigate the current environment, as well as potentially exploring evolving opportunities. As a pure play energy transition metals company, Teck is uniquely positioned to deliver significant value to shareholders through the execution of our copper growth strategy. Apologies again for the disruption on the line during that portion of the call. Hopefully, you can hear us clearly now. So with that, operator, please open the line for questions.

[Operator]

You will hear a tone acknowledging your request. If you wish to remove your question, please press then 2. The first question is from Mark

[Operator]

Wachita with Scotiabank. Please go ahead.

[Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank]

Hi, good morning. Questions on it sounds like you're pushing back the target for sustainable full production of the operation from midyear to end of year, yet the guidance is unchanged. What can you give us a sense of how long these extended maintenance outages related to the tailings facility are supposed to impact Q2 and Q3?

[Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank]

And I'm curious like what gives you confidence at this point, given the pretty weak Q1, you could still make even the low end of the range for the year?

[Jonathan Price, President and CEO at Teck Resources]

Hi, Orest. Thank you for the questions. Look, we'd always expected 2025 to be a build of production throughout the year and achieving steady state operations towards the end of the year rather than in the first part of the year. And I think that's no different with what guided to today. We still expect to deliver the guidance of 230,000 to 270,000 tonnes this year, albeit now towards the bottom end of that range.

[Jonathan Price, President and CEO at Teck Resources]

And yes, there's some additional work we have to do here around the tailings facility. We're making good progress. We're implementing measures to complete that work quickly and that includes initiatives, which will allow us to speed up sand drainage and deposition of material at the dam. Look, as we said, completing this work will require some additional downtime in Q2 and Q3, which is why we anticipate being at that lower end. But once we get through this phase of the transition from the starter dam to regular ongoing sand lifts, which is essentially a one time event, we can then operate at steady state for the life of the facility.

[Jonathan Price, President and CEO at Teck Resources]

So that's the phase of work we're going through this quarter and next quarter. That's why we have confidence that we can end the year running at steady state. And that's why we believe that we will continue to deliver within the guidance range that we've set out for 2025. Knowing that this was a ramp up year for the operation, we reflected in that guidance range, the uncertainty with operations in this phase of the life of a project. And that's what you're seeing in our disclosures today, I think critical that we remain confident of delivering production within that range.

[Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank]

And sorry, can you give us detail how long are the expected outages?

[Jonathan Price, President and CEO at Teck Resources]

Well, that will be a function of the things to be done, Orest, which will be determined by the operations team and will be a function of the improvements that we make in the pace of material deposition at the dam. So it's not possible to be precise on what those, the number of days that we will need to achieve that this year at this point in time. But I can tell you that the range of outcomes that we expect to be likely in terms of are reflected in the guidance and are reflected in the fact that we continue to hold that guidance, yet we are pointing towards the lower end of that range.

[Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank]

And do you see anything at this point that impact the guidance range for '26 to 02/2003, I think it's three ten based on what you're seeing for all these issues expected to be solved by year end?

[Jonathan Price, President and CEO at Teck Resources]

Yes. So the short answer is no, Orest. We don't expect to see any change due to the guidance for 2026 or beyond. The work that's required here on the tailings to transition into steady state, we expect to be finished in the third quarter of this year. So therefore, as we move into 2026 and beyond, we don't see any ongoing impact of the works that we're undertaking today.

[Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank]

Thank you.

[Jonathan Price, President and CEO at Teck Resources]

Thanks, Orest.

[Operator]

Next question is from Leipzat Tatzbank with Deutsche Bank. Please go ahead. The next question is from Liam Fitzpatrick with Deutsche Bank. Please go ahead.

[Liam Fitzpatrick, Managing Director, Head of European Metals & Mining at Deutsche Bank]

Okay. All right. Yes. My question is just around the next crop of projects that you're highlighting now. First of all, would you realistically improve something like ZAPRA now in the current macro environment?

[Liam Fitzpatrick, Managing Director, Head of European Metals & Mining at Deutsche Bank]

Or would you like to greater clarity around, you know, straight policy in general? So and then it also seems that three or four of your projects are all in version to the decision within the next six to twelve months or so. Can you talk about management bandwidth to manage multiple projects, sticking off the still ramping up and how you're thinking about project phasing with all of these options that people have mentioned?

[Jonathan Price, President and CEO at Teck Resources]

Yes, thanks for the question, Liam. Now, of course, as we look at the projects that we have in the portfolio here, what we're focused on is the long term perspective for the fundamentals of the commodities associated with those projects. And we see nothing at this point in time that changes our view or our conviction on the long term fundamentals for both copper and zinc being the key components of growth with copper being the primary target. So there's nothing in respect that causes us to sort of take a pause in that regard. The growth projects that we have in the portfolio are critical to the long term strategy.

[Jonathan Price, President and CEO at Teck Resources]

As I mentioned in the call, these are projects that are smaller in scope, lower in complexity than QB, for example, with low capital intensities, which should be very competitive projects and should deliver strong returns. So from that perspective, no change. Of course, we always continue to evaluate those things. And when we take our projects forward for sanction, we always look at a range of forward pricing scenarios to ensure that those economics and returns will be robust. Just in terms of your comments on organizational bandwidth, just to put these projects into context.

[Jonathan Price, President and CEO at Teck Resources]

So Highland Valley Mine Life Extension is a brownfield project at a site where we've been operating since the 60s and we've undertaken numerous previous brownfield expansions of that site. The team is all in place, is ready to go. And as I mentioned, we had a very positive independent review of our construction readiness for that project. So we've got a good level of confidence moving forward with that. The other greenfield project that we would deliver and then Teck would take the lead on is Zafaranal, because of course we're 80 of that project.

[Jonathan Price, President and CEO at Teck Resources]

So that's where we would be delivering. Again, we've been building a very strong team over an extended period of time now, coupled with our EPC partners. So we're well set up, subject to sanction and permits, of course, for construction and delivery of that project. San Nicolas is somewhat different, because of course that is an incorporated joint venture with Agnico, which doesn't mean tech is taking the lead on delivering that project, it's actually the joint venture that does that work. So of course, we'll be very closely involved in a range of ways in support of that project and in particular, really taking a lead on the commercial aspects of that project when it comes to the marketing and sales of copper and zinc.

[Jonathan Price, President and CEO at Teck Resources]

But that's necessarily by virtue of the way that that's been set up is a lower lift on the organization here. So we do believe that this is manageable, Liam. We've been preparing for this for a number of years in terms of systems, processes, procedures, etcetera, but most importantly, bringing in the talent, developing the teams and getting ourselves set up for success in execution. Thanks, Liam.

[Operator]

With Morgan Stanley. Please go ahead.

[Carlos de Alba, Analyst at Morgan Stanley]

Yes. Thank you very much. Good morning. I would like to check if received any feedback or suggestion for potential improvement on the completed QB independent testing that you successfully did recently, which, again, conversations on that. But I am interested to know if there was any suggestion for potential improvement that they provided?

[Jonathan Price, President and CEO at Teck Resources]

Look, I think in short answer is no. That's

[Jonathan Price, President and CEO at Teck Resources]

not

[Jonathan Price, President and CEO at Teck Resources]

really the way that process works. There's a series of tests that have to be achieved based on performance and those tests were achieved and independently validated and certified. But it's not really an improvement focused process, Carlos.

[Carlos de Alba, Analyst at Morgan Stanley]

What can be shut down after we spoke to the power outages? I think it's a little bit you have several days, but it would be helpful for the analysis if we had a bit of more precise number of days.

[Jonathan Price, President and CEO at Teck Resources]

Yes. So Carlos, we were sort of directly shut down for a couple of days, and then it took us a couple of days to get back up and running to full rates again. So broadly speaking, four days, half of which was downtime and then half of which was recovery. Of course, it's the first time at QB that we've had to deal with one of these events and get the sites back up and running to full capacity. So that's a learning experience.

[Jonathan Price, President and CEO at Teck Resources]

Perhaps in future, we'll be able to come back online more quickly, but we have to be prudent first time out dealing with an event like this at that site. Thanks, Carlos.

[Operator]

The next question is from Craig Hutchinson with TD Cowen. Please go ahead.

[Craig Hutchison, Analyst at TD Cowen]

Hi there. Good morning. Just wanted to ask about the same business. Think in your opening remarks, you said that about twenty percent of sales of Red Dog is going to China. It's a big concern, they remain in place.

[Craig Hutchison, Analyst at TD Cowen]

Any indications or whether the concerns of sales right now with the kind of the direct material? And I guess just on the flip side, are you purchasing materials for Red Dog from China that are subject to tariff?

[Jonathan Price, President and CEO at Teck Resources]

Thanks. Yes. Thanks, Craig, for those questions. Look, the outbound, as I mentioned, given the levels of tariffs being placed on imports from The U. S.

[Jonathan Price, President and CEO at Teck Resources]

Into China, that creates challenges with supply at the moment. Fortunately, at this time of the year, given the shipping seasons at Red Dog, we're not moving material from the site in any event. So we're pretty well covered at present. The commercial team is working very hard, as I mentioned on the call as a range of options and alternatives here, which could see us placing material elsewhere through this period of time. The bottom line is, Craig, that we don't expect to face a material impact here as the result of tariffs between China and The U.

[Jonathan Price, President and CEO at Teck Resources]

S. And as I said, we've got a number of months up our sleeve here to resolve any issues that might arise. There is no risk the other way around. We're not exposed on the inbound here in terms of imports of goods from China into U. S.

[Jonathan Price, President and CEO at Teck Resources]

Or into Red Dog, so no risk there.

[Craig Hutchison, Analyst at TD Cowen]

Okay.

[Jonathan Price, President and CEO at Teck Resources]

Yes. Look, as I said, tragic events, we will work very closely as we always do with the Antamina team here to understand what's happened and to look at learnings for the future and learnings not just for Antamina, of course, but for the industry more generally. Our understanding is that the site will be returning to operations today. So, think back up and running. Thank you, Greg.

[Operator]

Alka with UBS. Please go ahead.

[Myles Allsop, Research Analyst at UBS Group]

Plan, when should you get the licenses to be able to just leave us about 343,000 tons a day, this remodel kind of optimization debottleneck?

[Jonathan Price, President and CEO at Teck Resources]

Yes, mean, think there's a level of optimization that's allowed under the current permits, Myles, as we have it today, which is essentially a 10% allowance from nameplate. So that's something we already have in hand. In terms of the submission of the deal, let's say that goes in July of this year, we would expect to have an approval on that twelve months subsequent. So that would be July of the following year, which fits very well with the timeframe we have for the debottlenecking. So the existing permit really allows for the optimization that we've been talking about and this year or amendment to the permit allows for the debottlenecking.

[Jonathan Price, President and CEO at Teck Resources]

So we can get the optimization with what we have now and with the deer we can unlock the debottlenecking. Yes, look, so we are going through engagements with various of the indigenous government organizations surrounding Highland Valley and those, a number of those parties, two of those parties in fact have initiated dispute resolution processes under the Environmental Assessment Act. That's not unusual for these sorts of processes. It's the way in which they engage with the province, essentially around the terms of the permit. Ultimately, we stay very close to this, of course, you can imagine we're very close with the indigenous government organizations, we're very close with the province here in British Columbia, who have this as a priority project for them.

[Jonathan Price, President and CEO at Teck Resources]

So they're working very hard on this. Of course, we continue to assess the project plan and schedule as these processes unfold. And while we can't guarantee time for permitting, you never can with any project, we are optimistic that we will have a resolution in the middle of this year. So we'll continue to progress the project. As I said, the work we've done on construction readiness looks very good, that's been independently verified and we'll continue to move project forward this year.

[Jonathan Price, President and CEO at Teck Resources]

So yes, we've got to get through those engagements and ultimately get the permits issued, but we're hopeful that the middle of this year is still the timeframe that we're working to.

[Myles Allsop, Research Analyst at UBS Group]

Are you comfortable now, we're not going see any more down Brexit to production like for 'twenty five?

[Jonathan Price, President and CEO at Teck Resources]

Yes. Look, what we know about the site, what we see in the operation of the mine, of the concentrator, of the port and our view now on the work that is required to progress the tailings facility from today into steady state operations, all of those factors are considered in guidance range. So of course, we are looking at guidance all the time to ensure it's appropriate and representative of what we expect to do at the asset. We've communicated two thirty to two seventy again today, because we have confidence in delivering within that range, albeit at the lower end.

[Operator]

The next question is from Matthew Murphy with BMO Capital Markets. Jonathan,

[Matt Murphy, MD - Equity Research at BMO Capital Markets]

just would like to dig a little deeper on the understanding the tailings issue. Is sand drainage, is that referring to like how wet the sand is?

[Jonathan Price, President and CEO at Teck Resources]

Well, it's essentially referring to how long it's taking that sand to dry might be a better way of thinking about it. But yes, it is to do with the moisture in the sand and the time that it's taking for those moisture levels to reduce.

[Matt Murphy, MD - Equity Research at BMO Capital Markets]

Okay.

[Jonathan Price, President and CEO at Teck Resources]

it's really a separate issue there. I mean, ultimately, you need to be able to do is to compact the sand and to compact the sand, need it to drain.

[Jonathan Price, President and CEO at Teck Resources]

We think the source of some of these slower drainage times has been a function of clay and fines in the sand, which have to be separated. That separation happens through the cyclones. And we've recently made some modifications to those cyclones and the initial results from those modifications are positive. Again, which is part of what gives us confidence that we move through this issue by the third quarter of the year.

[Matt Murphy, MD - Equity Research at BMO Capital Markets]

Okay. That's a lot the need to take maintenance shutdown. Is it because you're currently constrained on tailings capacity? So you're, like, waiting for these lifts to be ready to let the mill go, see what it can do or is part of the shutdown also on the mill?

[Jonathan Price, President and CEO at Teck Resources]

So we have our regular shutdowns on the mill for mill relining and other works. So there's nothing different at the mill over and above what we would consider to be our sort of routine quarterly work. The reason that we point towards the low end of the guidance range is that the work we have to do on the tailings facility does create a constraint to production. But again, factoring in the range of outcomes there that we can foresee for this year, we maintain the range of two thirty to two seventy. Thank you very much, Matt.

[Operator]

Question is from Wanda Victor with Bank of America Securities. Please go ahead.

[Lawson Winder, Analyst at Bank of America]

Operator, thank you very much. Morning, Jonathan and Steven. Thank you for the update today. Maybe I'll ask again about QB2 and just going back to one of the challenges that was experienced last year, that was the stabilization of the mix of clay and the seed. Is the asset now on track to be able to deliver that consistency in the second half?

[Lawson Winder, Analyst at Bank of America]

And then and then also on that g geotechnical issue, the the fall is in the slope on the ramp. Is that the work to date in the mind now considering that that was in fact globalized?

[Jonathan Price, President and CEO at Teck Resources]

Yes. So there's no ongoing manifestation of that geotechnical issue. That's very much behind us, Lawson. In terms of the clays, as we go through this year, we started the year processing a lot of transition ores, which is why you've seen some lower recoveries in the first quarter. As the year progresses, we expect to have less transition ore and therefore less clay and therefore better recoveries.

[Jonathan Price, President and CEO at Teck Resources]

All of those things are connected. That's been in the plan for this year. It's why we've expected or partly at least why we've expected to see quarter over quarter improvements through the year. But nothing different from what we've communicated previously there, Lawson.

[Lawson Winder, Analyst at Bank of America]

The guidance suggests that grade would improve in the second half, but actually, I mean, you guys have really solid grades at QVC rates. I think it was about 0.61%. And I thought you're guiding to a 0.6% average grade. I mean, is there some room in there for grade to potentially do better than part of what's driving your confidence in staying within the guidance range?

[Jonathan Price, President and CEO at Teck Resources]

No, look, we still expect grade for the full year to be approximately 0.6. With the mine plan, we ended up processing a little bit of higher grade in March that was previously expected to come through in April. So there's always a few sort of puts and takes in this. But as we look at this for the year as a whole, the average of 0.6 is still the right number. So we're not relying on Gray to deliver the guidance, if that's the question, Lawson.

[Lawson Winder, Analyst at Bank of America]

Yes, no, that was it. Perfect. Thanks very much, Jonathan.

[Jonathan Price, President and CEO at Teck Resources]

Thank you, Lawson.

[Operator]

The next question is from Bill Peterson with JP Morgan. Please go ahead.

[Bill Peterson, Equity Research at JP Morgan]

Yes. Hi, good morning and thanks for taking the question. I'm thinking, I guess, on Trail, specifically, nice down on profitability. I guess, how should we think about the profitability in second quarter and back half of the year? Yes, it's going be due to byproducts to repeat in the quick quarters.

[Bill Peterson, Equity Research at JP Morgan]

And maybe beyond that, like what initiatives do you have to maybe continue driving profitability for further improvements there?

[Jonathan Price, President and CEO at Teck Resources]

Yes. Thanks for that, Bill. I'll ask Crystal to just respond on the outlook for trial for the balance of the year.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Thanks, Bill. Nice to hear from you. Look, in Q1, as you mentioned, we had very strong performance at Trail. We generated $80,000,000 of gross profit before depreciation and amortization. That was really the result of that implementation of initiatives to improve cash flows.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

Those have been fully embedded now, and we expect those to continue through the rest of the year, and we'll continue to realize the benefit of those. And then in terms of the contribution from byproducts

[Crystal Prystai, Executive VP & CFO at Teck Resources]

such

[Crystal Prystai, Executive VP & CFO at Teck Resources]

as silver, germanium and indium, and then obviously, the FX rate has an impact. We built up a stockpile of materials during the period when we had the kids at boiler under repair in 2023. We are progressing treating those materials, which is where you're seeing the benefit of some of those metals coming through and supporting the profitability. So we expect that to continue through this year. But of course, that's not a long term solution.

[Crystal Prystai, Executive VP & CFO at Teck Resources]

The TC environment for trails continues to be challenging, but the cost structure changes that we've made there have been have led to some improvements that we're seeing come through, and we expect that to continue.

[Bill Peterson, Equity Research at JP Morgan]

And then I guess for sort of analysts out of the border, I guess, any thoughts on the upcoming presidential election, any potential impact to the industry, if Canada researched for Italy or basically FDI?

[Jonathan Price, President and CEO at Teck Resources]

Look, nothing in particular. I mean, there's obviously an election early next week. We will know who the Prime Minister will be at that point in time. I think what we can say is that both sides of politics here are very, very supportive of the resources industry. That's been a key part of their platforms, whether that's about deregulation and simplification, whether that's about actually putting in place investment vehicles to help with the developments of the industry here.

[Jonathan Price, President and CEO at Teck Resources]

I think there's a lot of support for resources, Canada recognizing that as a real potential competitive advantage and a great lever through which to engage with The U. S. On something that's clearly very important to them. So we hope to see that progress Bill in the weeks and months ahead. But I think however the election works out, Canada will remain very focused on its mining industry, its critical minerals and then we do expect to see supportive legislation to help ease doing business essentially in the country.

[Jonathan Price, President and CEO at Teck Resources]

So I think the outlook is positive from that perspective.

[Jonathan Price, President and CEO at Teck Resources]

Thanks,

[Jonathan Price, President and CEO at Teck Resources]

Bill.

[Operator]

We are out of time for further questions. I'd now like to hand the call back over to Jonathan Price for closing remarks.

[Jonathan Price, President and CEO at Teck Resources]

Yes. Thank you, operator. Apologies once again for the issues with the call today. I hope you were able to hear everything you needed to hear. If not, as ever, please follow-up with Emma and the Investor Relations team.

[Jonathan Price, President and CEO at Teck Resources]

I would just close off by saying the business is in really good shape. We are very resilient. We're managing very well through these turbulent times, both through our commercial strategy and through the strong balance sheet we have. We will continue returning capital to our shareholders per our commitment of balancing that with growth. And we've discussed QB extensively on this call.

[Jonathan Price, President and CEO at Teck Resources]

We will get past this tailings situation by the third quarter of this year, move on to steady state operations. And as I said, we see no changes to guidance this year or in the coming years. So thank you very much for joining us all today and enjoy the rest of your day.

Participants

Executives

• Emma Chapman, Vice President, Investor Relations
• Jonathan Price, President and CEO
• Crystal Prystai, Executive VP & CFO

Analysts

• Orest Wowkodaw, Managing Director, Senior Research Analyst, Metals and Mining at Scotiobank
• Liam Fitzpatrick, Managing Director, Head of European Metals & Mining at Deutsche Bank
• Carlos de Alba, Analyst at Morgan Stanley
• Craig Hutchison, Analyst at TD Cowen
• Myles Allsop, Research Analyst at UBS Group
• Matt Murphy, MD - Equity Research at BMO Capital Markets
• Lawson Winder, Analyst at Bank of America
• Bill Peterson, Equity Research at JP Morgan