Teck Resources Ltd

Welcome to TEC's second quarter 2022 earnings release conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. This conference call is being recorded on Wednesday, July 27, 2022. I would like to turn the conference call over to Frazier Phillips, Senior Vice President, Investor Relations and Strategic Analysis. Please go ahead.

Thanks Patrick. Good morning everyone and thank you for joining us for Tech's second quarter 2022 results conference call. Please note today's call contains forward looking statements. Various risks and uncertainties may cause actual results to vary. Tech does not assume the obligation to update any forward looking statements. Please refer to slide two for the assumptions underlying our forward looking statements. In addition, we will reference various non gap measures throughout this call. Explanations and reconciliations regarding these measures could be found at our MD&A and the latest press release on our website. Today's conference call is not quite an ordinary call. Not only have we reported our fourth consecutive quarter of record setting profitability, so as you know, we've announced President and CEO succession. So our format will be slightly different today. To begin, Dawn and then Jonathan will make some opening comments. They will then take us through our regular quarterly results presentation, followed by Q&A. We'll then end with Don's closing remarks. With that, for one last time, I will hand the call over to Don Lindsay, our president and CEO.

Well, thank you very much, Fraser, and good morning, everyone. Welcome to the second quarter call. As I guess you all know, yesterday I announced my retirement from tech. This will officially be the 71st quarterly earnings call that I've led since 2005. and my final one with tech. And as such, I'm going to make a few opening comments about my decision and the transition, and then a little bit of reflection about my last 17 plus years in the industry and the tech. And then I'll turn it over to Jonathan Price, our new CEO elect, for him to make some remarks. And when we get to the Q&A today, since this is my last time, you're welcome to ask me anything. This is your ask me anything moment, and I will try to answer. Though, as you will understand, I may be precluded from answering some questions. So it's tough to say goodbye to a company and to a team that you've been a part of this long and that you admire so much. And there is no perfect time. The fact is, a lot of planning and preparation have all led up to this point. The board, in fact, established a succession committee two and a half years ago. And as you know, from a big picture point of view at Tech, we are reshaping and rebalancing our portfolio to have a bigger focus on copper and less on carbon. And with that shift to a new phase of growth for tech, it is important to shareholders in particular that the strategy is owned and led by the CEO who will be around and accountable for it in the longer term. And I clearly wasn't going to be the one to be around. I will be 64 later this year. So I knew that this was the right time to make this decision to get the new team in place and to just get on with it. Board and I have been working closely together on transition planning for several years with the goal of having a seamless transition as possible. We're also, of course, drawing close to completion of QB2 and first copper. We're all very excited about it. And that marks a major shift in tech's trajectory towards becoming a major global copper player. And it isn't just QB2. We have not one, not two, but four projects that could be in production as early as 2026. This announcement also comes as we mark our fourth consecutive record-setting quarter in a row, $3.3 billion in EBITDA, $1.8 billion in adjusted earnings, and in the last 12 months, we've reported $5.7 billion in earnings. These results really speak to the strength of not just Texas assets and certainly commodity prices with a big contributor, but also to the strength of the incredible team of people that we have here. Now, looking back, when I joined Tech on January 1st, 2005, my initial focus was on rejuvenating our resource base to ensure that we could maintain production over the long term and to position us for future growth. We were, I would say at the time, resource challenged. In fact, Highland Valley Copper was scheduled to close forever in 2008, just as an example. So the early years were all about getting a hold of resources. We delivered on that through some key acquisitions, such as ore resources, global copper, Fort Hills, and ultimately the full ownership of the Ford and Coal Trust, in addition to investing year in, year out in exploration. And ore resources, of course, gave us QB. In QB at the time, we knew about eight deep drill holes below the oxides that suggested that sulfides would be there. But they might not have been. It was a bit of a risk. But by the end of this year, we are on track to report 11 billion tons of resources, and that is one of the top 10 resources in the world. As a result, TEC's total reserves and resources across all commodities on a copper equivalent basis have increased over three and a half times since 2005. So today, we are resource rich, and the new team has a lot to work with. Next, we transitioned into converting those resources into production and cash flow to realize that potential. through the construction of key projects like the Highland Valley Mill Optimization, which, combined with various pushbacks, have to extend the life out to 2027 and will extend it again out past 2040. The VIP2 project at Red Dog, which meant that instead of the production dropping from 550,000 tons to something starting with a three, it stayed over 500,000. So it was like building a whole new zinc mine. There was the construction of Port Hills, rebuilding key assets to trail the two acid plants which were so important and helped actually increase production, there was rejuvenating the Elk Valley steelmaking coal operations to drop them from the high third quartile, in fact, edging into the fourth quartile in the cost curve, right down to the second quartile. And then, of course, commencing construction of QB2. With the upcoming completion of QB2, consolidated copper production capacity will double, and we are uniquely positioned to double again. And that includes the planned QB mill expansion, which could add a further 150,000 tons of production. And we have numerous other assets through Project Satellite, including the Advanced Saffron L and St. Nicholas projects and our recently announced Masaba Polymet joint venture with Polymet backed by Glencore. Together, these projects could add five times the amount of our current copper equivalent production and make tech a very significant copper producer. At the same time as we did all this, we worked hard to foster a culture of safety and sustainability in every corner of the company, including reducing total recordable injury frequency by 80% compared to 2005 and reducing high potential incident frequency by 90% since 2010. Our people really live those values day in and day out, demonstrating that it truly is possible to provide essential metals and minerals with the smallest footprint possible all the while creating jobs and prosperity for people and communities. I am very proud of how far we've come and where this company is today. Tech is in an enviable position in our industry with unparalleled copper growth optionality, strong production from world-class operations, leading sustainability performance, and a purpose- and values-driven employee culture that is second to none. I'm looking forward to supporting the transition to Jonathan and Red's leadership over the next few months, I'll also be staying on to support them in an advisory capacity in the role of Executive Vice Chair into the second quarter of 2023. But most of all, I'm very much looking forward to seeing tech transition into this next phase of growth and value creation, and very importantly, listen carefully, and returning substantial capital to shareholders. With that, I'll pass it to Jonathan for comment, and then we'll move on to the actual earnings presentation and Q&A. Jonathan, over to you.