Teck Resources Limited Q3 FY2025 earnings call

• Merger with Anglo American: Announced a merger of equals agreement, creating a global leader in critical minerals and top five copper producer, expected to generate significant value, with $800 million recurring annual synergies and a strong balance sheet.
• Operational Review: Completed comprehensive operational review with updated risk-adjusted operational plans, QB action plan to address tailings management facility constraints, expecting TMF development work to no longer constrain the mill from 2027.
• Financial Performance: Adjusted EBITDA improved to $1.2 billion in Q3 2025, established operations performed well, balance sheet remains strong with $9.5 billion liquidity including $5.3 billion in cash.
• Safety and Sustainability: Year-to-date high potential incident frequency rate at Teck Resources Limited controlled operations was 0.06, Chilean operations reached 100% renewable power on Oct 1.
• Highland Valley: Mine life extension entered execution phase, extending production to 2046.

Copper

• In the third quarter, gross profit before depreciation and amortization from the copper segment improved 23% to $740 million compared to the same period last year, primarily due to higher base metals prices and lower smelter processing charges. QB production was constrained by TMF development work, but excluding QB, copper production increased from the same period last year. Copper net cash unit costs improved by $0.16 U.S. per pound despite higher operating costs at QB. For 2025, the company expects annual copper production of 415,000 to 465,000 tons and copper net cash unit costs of $2.05 to $2.30 per pound.

Zinc

• Gross profit before depreciation and amortization from the zinc segment improved 27% to $454 million compared to the same period last year, driven by higher byproduct revenues, higher zinc prices, and lower zinc treatment charges. Red Dog and Trail Operations performed well. Zinc net cash unit costs improved by $0.08 per pound. For 2025, due to Red Dog's strong year-to-date performance, Red Dog zinc production is expected towards the top end of the 430,000 to 470,000 tons guidance range, total zinc is expected to be 525,000 to 575,000 tons including Antamina, and zinc net cash unit costs are expected to be $0.45 to $0.55 per pound.

• Merger: Advancing approvals for the merger, expected completion within 12 to 18 months from announcement, shareholder votes on Dec 9.
• QB: Progressing action plan, TMF development work with initial improvements in sand drainage, aiming to run at steady state from 2027.
• Highland Valley: Mine life extension project in execution phase, progressing early works.

• Regulatory Approvals: Need for Investment Canada Act, antitrust, and global regulatory approvals to be obtained.
• Merger Integration: Challenges in integrating operations and capturing $800 million recurring annual synergies.
• QB Operational: Continued risk of TMF constraints impacting production if not resolved effectively.

Q: On QB Koyawasi synergies and whether preliminary discussions with Glencore have started, and on guidance trending.

A: Discussed QB Koyawasi synergies, commercial agreements ahead, and guidance within reasonable ranges.

Q: On QB ownership and joint venture requirements.

A: Joint venture requires all party agreements, cross-ownership from merger de-risks the capture of synergies.

Q: On QB sand drainage rates.

A: Changes in cyclone technology and operational practices showing initial improvements in sand drainage but too early to quantify magnitude.

Q: On merger engagement with Investment Canada.

A: Ongoing collaborative discussions with Canadian government, commitments to Canada made.

Q: On QB Koyawasi JV economics.

A: Commercial agreements ahead, all parties motivated to capture value for shareholders.