What Teck Resources (TECK) Said on Its Q3 Earnings Call

Key Points

• Third-quarter results surged: Adjusted EBITDA doubled year over year to C$2.3 billion and operating cash flow rose to C$1.6 billion, driven by record copper prices, higher copper production and lower processing charges.
• Production increased despite weather disruptions: Copper output rose 11% to 116,000 tonnes, while Teck maintained its full-year Quebrada Blanca production outlook and lowered copper and zinc unit-cost guidance.
• Teck’s financial position strengthened: Net cash reached C$1.9 billion, while the company said its Anglo American merger remains on track pending Chinese regulatory approval. A strike at Highland Valley Copper is reducing operations, but is not expected to materially delay the mine-life extension project.

Teck Resources NYSE: TECK reported sharply higher third-quarter earnings and operating cash flow as record copper prices, increased copper production and lower processing charges offset severe weather disruptions across parts of its copper portfolio.

Adjusted EBITDA doubled from a year earlier to C$2.3 billion, while cash flow from operations rose to C$1.6 billion from C$647 million in the prior-year quarter. CFO Crystal Prystai said the company’s adjusted EBITDA margin increased to 51% from 35% a year earlier, supported by higher copper and zinc prices, stronger by-product revenue and lower smelter processing charges.

Copper averaged a record US$6.40 per pound during the quarter, according to Prystai. Higher commodity prices added just over C$1 billion to adjusted EBITDA compared with the prior year, while higher co-product and by-product prices, primarily silver, contributed another C$198 million.

Production rises despite severe weather

Teck produced 116,000 tonnes of copper in the third quarter, an 11% increase from a year earlier. Production rose at Quebrada Blanca, Highland Valley Copper and Antamina, while Carmen de Andacollo experienced an extended suspension because of extreme weather.

CEO Jonathan Price said operations faced torrential rain and flooding at Carmen de Andacollo and Quebrada Blanca, as well as heavy snow and sustained winds at QB. Highland Valley Copper also faced drought conditions and an extended wildfire season. Carmen de Andacollo returned to full operations by the end of September.

At QB, severe weather in August caused intermittent power outages and shutdowns affecting the concentrator, dewatering systems and other equipment. Flooding reduced access to higher-grade ore and constrained mine productivity into September. The mine completed its final planned maintenance shutdown of 2026 in September.

QB produced 47,000 tonnes of copper in the quarter. Asset utilization was 79%, throughput averaged 117,000 tonnes per day and recoveries were slightly above 81%. Teck maintained its full-year QB production outlook of 200,000 to 235,000 tonnes, with Price saying year-to-date operating metrics remain consistent with assumptions underpinning guidance.

The company expects additional mining phases to open through the fourth quarter and into 2027, providing more flexibility in ore sourcing and blending. QB’s next maintenance shutdown is scheduled for the first quarter of 2027, and Teck expects three major shutdowns at the operation next year.

Cost guidance lowered

Teck lowered its full-year net cash unit-cost guidance for both copper and zinc, citing operating discipline and stronger by-product pricing. Copper net cash unit costs are now expected to be between US$1.80 and US$2.00 per pound, compared with prior guidance of US$1.85 to US$2.20 per pound.

Third-quarter copper net cash unit costs fell 15% year over year to US$1.77 per pound. The copper segment generated C$1.6 billion in gross profit before depreciation and amortization, more than double the prior-year level, with a 65% margin.

For zinc, Teck reduced total cash unit-cost guidance to US$0.70 to US$0.80 per pound from US$0.80 to US$0.90 per pound. Net cash unit-cost guidance was cut to US$0.30 to US$0.40 per pound from US$0.65 to US$0.75 per pound.

Zinc production at Red Dog declined 13% to 107,000 tonnes, as planned due to lower grades. Antamina zinc production fell 70% because of a lower ratio of copper-zinc ore in line with the mine plan. Meanwhile, refined zinc output at Trail Operations increased 18% to 62,000 tonnes.

Trail Operations recorded C$169 million of gross profit before depreciation and amortization, up from C$54 million a year earlier, aided by its optimized feed strategy and commodity prices. Teck also recorded a pre-tax impairment reversal of C$888 million at Trail, reflecting higher long-term commodity-price expectations, stronger strategic-metals market fundamentals and expected cash flow from the optimized feed strategy.

Balance sheet strengthens as merger work continues

Teck ended September with C$1.9 billion in net cash, an increase of C$655 million during the quarter and C$1.7 billion year to date. Liquidity totaled C$10.9 billion, including C$6.7 billion of cash and an undrawn C$3 billion sustainability-linked revolving credit facility. The company paid its regular quarterly dividend of C$0.125 per share, returning C$61 million to shareholders.

The company reiterated that its merger of equals with Anglo American is progressing as planned. Teck continues to seek the final required regulatory approval from China’s State Administration for Market Regulation. Price said discussions with the regulator are constructive but declined to provide details, adding that Teck remains confident the transaction can close within 12 to 18 months of its September 2025 announcement.

Price said the companies have established Anglo Teck’s future executive leadership team and are advancing day-one readiness, business-continuity planning and integration work. Completion is expected about 11 trading days after the remaining closing conditions are fulfilled or waived.

Project updates and labor action

Construction of Highland Valley Copper’s mine-life extension is more than 25% complete. The project is intended to sustain operations through 2046 and support average annual copper production of about 132,000 tonnes. Teck invested C$230 million in project capital during the third quarter and C$672 million year to date, while maintaining total project capital guidance of C$2.1 billion to C$2.4 billion.

A strike began at Highland Valley on Oct. 24, and the operation is continuing at reduced capacity. Teck said the production impact will depend on the duration of the labor action, though it does not expect a significant effect on construction timelines for the mine-life extension.

Teck also said QB’s tailings management facility development remains on track. Construction of Rock Bench 6 began during the quarter, and the company expects to complete the secondary cyclone system, Rock Bench 6 and permanent pipeline infrastructure during the first quarter of 2027.

About Teck Resources (NYSE:TECK)

Teck Resources Limited is a Canadian mining and mineral development company focused primarily on copper and zinc, commodities used in electrification, infrastructure, manufacturing and other industrial applications. The company explores for, develops and operates mines, mineral processing facilities and related infrastructure.

Teck's copper assets include Highland Valley Copper in British Columbia, Canada; Carmen de Andacollo in Chile; and Quebrada Blanca in northern Chile. Its zinc operations include the Red Dog mine in Alaska and the Trail Operations metallurgical complex in British Columbia, which produces refined metals, alloys and other related products.

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