Teck Resources Ltd

Ladies and gentlemen, thank you for standing by. Welcome to TEC's third quarter 2024 earnings release conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. To join the question queue, press star then one on your touchtone phone. Should anyone need assistance during the conference call, they may signal an operator by pressing star then zero. This conference call is being recorded on Thursday, October the 24th, 2024. I would now like to turn the conference over to Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis. Please go ahead.

Thanks, Gaylene. Good morning, everyone, and thank you for joining us for Tech's third quarter 2024 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-GAAP measures throughout this call. Explanations and reconciliations regarding these measures can be found in our MD&A and the latest press release on our website. Turning to the agenda on slide three, Jonathan Price, our CDO, will begin today's call with an overview of our third quarter results. Crystal Presti, our CFO, will follow with additional call around the quarter. Then Jonathan will conclude today's session with closing remarks followed by a Q&A session. With that, over to you, Jonathan. Thank you, Fraser, and good morning, everyone.

Starting on slide five, our shift to a pure clay energy transition metals company was marked by the close of the sale of our remaining interest in the steelmaking coal business. on July 11th. At that time, we received U.S. $7.3 billion in cash and announced our planned use of proceeds, including the largest cash return to shareholders in the company's history. Through the remainder of the third quarter, we progressed deployment of those proceeds as we returned $720 million to shareholders through dividends and share buybacks in the quarter and over $1.3 billion in returns to shareholders year-to-date as of yesterday. reduced debt by US $1.5 billion, putting us in a net cash position of $1.8 billion as of September 30th, and retained funding for our value-accreted near-term projects in preparation for our next phase of copper growth. We also achieved several operational highlights in the quarter. We continue to grow our copper production and set another consecutive record quarter copper production as QB continues to ramp up. and our operational focus resulted in higher zinc and concentrate production of Red Dog compared to the same period last year. We are now nearing the final stages of the QB ramp-up. We completed the QB2 project in the quarter and demobilized the construction workforce. Substantially, all our claims were closed out and accrued for within our project capital guidance range of U.S. $8.6 to $8.8 billion. At the same time, we continue to progress our well-funded, capital-efficient copper growth portfolio, moving our near-term projects towards potential sanction in 2025. Overall, we made significant progress in the delivery of our value-driven strategy. On to slide six, we continue our focus on safety, health, and sustainability leadership. We are deeply saddened by an employee fatality in Tanzania during container assembly in the warehouse area on July 24th. In response, the joint venture management team at Antamina, supported by the joint venture partners, including tech, conducted a thorough investigation to identify root causes and implement any required actions, and to share learnings across the industry to help prevent future incidents. Over the third quarter, our high potential incident frequency rate remained low at 0.10, which is a 33% reduction from the same period last year. We continue to progress the rollout of mental health first aid training for frontline leaders across our operations towards our targets of 50% completion by year end and full completion by the end of next year. And earlier this month, we were recognized on the Forbes list of the world's best employers 2024. It's meaningful as it's an employee driven ranking of multinational companies and institutions from over 50 countries worldwide. Turning now to an update on the ramp-up of QB operations on slide 7. Proper production at QB improved quarter-over-quarter to 52,500 tonnes from 51,300 tonnes in Q2. However, production was impacted by lower-grade ore mines as expected, following the geotechnical issues that restricted our access to higher-grade materials. If the grade has been consistent with prior quarters at 0.58%, and based on the throughput and recovery that we achieved, our production would have been 56,000 tons. The localized geotechnical issue that we had identified and disclosed last quarter has now been resolved with controls in place, and we're continuing to advance the mine plan. We expect higher grades in the fourth quarter, and going forward, normal grade variability is expected within any given period. Mill throughput rates increased quarter over quarter, confirming the robustness of our plant design. As you can see in the chart on the left, throughput has been ramping up steadily quarter over quarter towards nameplate capacity and is currently near design throughput rates. We expect to achieve design throughput rates by the end of this year. We've also seen evidence of our ability to operate above design throughput rates. We're working hard on mill optimization to push performance past mainplate and on our plans for de-bottlemaking. Recoveries also continue to improve, as shown in the chart on the right, with an increased quarter-over-quarter and increasing stability. However, our monthly copper production did decline marginally in September, primarily the result of additional planned and unplanned maintenance. We've proactively taken downtime in readiness for planned test work on the grinding and flotation circuits to ensure improved continuity during the test period. The tests were successful, and we've seen improved grind size coupled with selected reagents that enhance processing of ore in the transition zone between the supergene and hypergene mineralization, which has higher clay content. As a result, we expect improved recovery going forward. We also have unplanned downtime on a thickener and premature failure of the mill feed conveyor, reducing our son's mill. Our focus remains on improving recovery and increasing online time. We expect to see progress following the completion of the test work, along with minor equipment modifications to improve reliability scheduled for the first half of 2025. This is expected to gradually improve molybdenum recovery, copper plant stability, and equipment reliability through the first half of 2025. Overall, as we close out the QB project and look towards completing the ramp-up of QB operations to design throughput rates, we expect to generate significant cash flows in 2025 and beyond. We have updated certain guidance items for 2024, which are summarized on slide 8. We have improved our net cash unit cost guidance range by $0.10 per pound to $0.45 to $0.55 per pound, reflecting the results of strong operational performance for Red Dog. Fortunately, this reduction was driven by improved operating costs, which allowed us to also improve our total cash unit costs for zinc by $0.05 per pound to $0.65 to $0.75 per pound. There is no change to Red Dog production guide. We've lowered our refined zinc guidance for trial operations to 240,000 to 250,000 tons due to a localized fire at one of the units in the electrolytic zinc plant in late September. We are looking at operating the other sections in a manner that would allow us to recover some of the production loss. However, this evaluation is still underway. In copper, our total production guidance range was lowered and narrowed. with the bottom end of the range reduced by 15,000 tonnes due to lower expected production from Highland Valley. Our revised guidance is now 420,000 to 455,000 tonnes from 435,000 to 500,000 tonnes previously. Production guidance for Antemina, Kamla and Okoio are both unchanged. At QB, reflecting the slower ramp-up this year, we have narrowed our QB production guidance to 200,000 to 210,000 tons for 2024 from 200 to 235,000 tons. We've revised our 2025 production guidance around QB to 240 to 280,000 tons from 280 to 310,000 tons, reflecting planned activities to improve copper recovery and equipment reliability scheduled to run through the first half of 2025. Bullion production at Highland Valley is now expected to be between 97,000 to 105,000 tonnes, from 112,000 to 125,000 tonnes, due to the delay in accessing the higher-grade LawnX pit in Q3. From Lindenham, our production guidance is reduced to 3,000 to 4,000 tonnes, from 4.3 to 5.5 thousand tonnes, in line with the changes to our copper production guidance. We have reduced our QB molybdenum production guidance to 0.8 to 1.2 thousand tons for 2024, and to 4 to 5.5 thousand tons for 2025, from 1.8 to 2.4 thousand tons, and 5 to 6.4 thousand tons, respectively. Despite the lower total moly in the production guidance, our total copper unit cost guidance is unchanged, demonstrating our focus on managing costs across our operation. Turning to slide 9, as we continue to progress on the ESM copper projects for potential sanctioning in 2025, all subject to permitting and other works. At QB, the ramp-up continues, and we are progressing the work on defining ESM opportunities for optimization, debottlenecking, and de-insisting assets to achieve improved throughput and recovery. Our revised environmental assessment and permit application for the mine life extension was accepted in July, and we continue to progress through the permitting process. We expect substantial completion of engineering and project execution planning in Q2 2025, and the project could be ready for a sanctioned decision at that time permits are received. The Joint Venture of San Nicolas continues the permit application process. and engagement with governments and stakeholders is ongoing. Project function decision is anticipated to follow completion of the feasibility study and receipt of necessary permits in the second half of 2025. Of course, we are closely monitoring the evolving political situation in Mexico. And that's that for now. Whilst we have received the main environmental permit required, we are being disciplined in advancing works and progressing detailed engineering. which gives more clarity on construction and associated capital before we sanction the project. We continue with the construction permit application development through Q3 2025. The project could be ready for sanctioning in late 2025, following receipt of construction permits and completion of detailed engineering. We look forward to creating a digital value for our shareholders through these low capital intensities, high return in copper projects. I'll now hand over the call to Crystal to provide further details on our third quarter results.