Teck Resources Ltd

Ladies and gentlemen, thank you for standing by. Welcome to Tech's second quarter 2025 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, you may press star then one on your touchstone phone. Should anyone need assistance during the conference call, they may signal an operator by pressing star then zero on the telephone. This conference call is being recorded on Thursday, July 24th, 2025. I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for Texas Second Quarter 2025 Conference Call. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. PEC does not assume the obligation to update any forward-looking statements. 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&A and the latest press release on our website. On today's call, Jonathan Price, our CEO, will start with highlights from our PEC supporter. review of the quarter. Jonathan will then wrap up with closing remarks and a Q&A session. With that, over to you, Jonathan.

Thank you, Emma, and good morning, everyone. Now, before we get into the quarter, I would like to take a moment to acknowledge the incident earlier on Tuesday at one of our peers' operations in the northwest of our home province of British Columbia. Our thoughts are with the three workers that remain in the underground work area, as well as their families, friends and colleagues and the emergency response teams. we hope for their safe and speedy rescue so turning to our second quarter 2025 results starting with highlights on slide four overall we were advancing our strategy proper growth while returning cash to shareholders our profitability improved compared to the same period last year 722 million dollars of adjusted EBITDA we had strong performance in our zinc segments with Red Dog sales above our guidance range and a significant improvement in our zinc net cash unit costs, as well as another quarter of profitability and cash generation and trail. Across our established operations, production is on track to meet our annual guidance. At QB, we had previously noted that we would be at the lower end of our guidance of around 230,000 tons for the year. While the team is working hard to achieve this, we acknowledge that there could be risk from possible external factors or, of course, any delay from the TMF development work. As a result, we've revised our outlook for QB to 210,000 to 230,000 tons for the year, but continue to target design rates by year end. Earlier today, we announced that the board has sanctioned the Highland Valley Copper Mine Life Extension project in British Columbia for construction. end of the decade. Given the strong demand for copper as an energy transition metal, the project will generate compelling returns with an IRR far surpassing our cost of capital and secure access to this critical mineral for the next two decades. The project extends a core asset to 2046 with average annual copper production of 132,000 tons over the life of mine. We are continuing to return significant cash to shareholders with elevated daily share buying levels in the quarter, resulting in a total of $487 million, or 9.8 million Class B shares. Here to date, we have returned a total of $1.1 billion to our shareholders through dividends and share buybacks, and we have completed approximately 70% of our authorized $3.25 billion buyback, which is the equivalent of $2.2 billion. Finally, we are maintaining the resilience of the business, including through our strong balance sheet, which enables us to navigate uncertainty and continue to create value. We currently have $8.9 billion in liquidity, including $4.8 billion in cash. Turning to slide five, we continue to be committed to safety and sustainability. Across the operations that we control, our high potential incident frequency rate remains low for the first half of the year at 0.09, below our 2024 performance of 0.12. I would like to take a moment to acknowledge the fatality occurred on April 22nd at Antamina, in which tech holds a non-controlling interest. We are deeply saddened by this event and offer our condolences to the families, friends, and colleagues of the deceased. DEC fully participated in the investigation, which was led by the team at Antamina, and learnings will be shared across our company and across the sector. We were honoured to be named as one of Corporate Nights 2025 Best 50 Corporate Citizens in Canada. It's the 19th consecutive year that we've received this recognition, which is based on an evaluation of up to 25 sustainability indicators, including board diversity, resource efficiency, financial management, sustainable revenue, So now turning to QB on slide six. QB's second quarter performance was impacted by the ongoing TMF development work. We're advancing multiple TMF development initiatives to improve sand drainage rates and accelerate mechanical movements of sand to achieve steady state operation. This work impacted mill online time in the quarter as previously disclosed. The plan post QB2 construction phase of TMF development was based on design assumptions for sand drainage rates that have subsequently proven unachievable. Modifications to cyclones alone, while showing an improvement in sand drainage rates, were not sufficient to allow us to fully catch up on TMF development work in the quarter. As a result, we are implementing a range of additional measures to improve sand drainage rates and accelerate the mechanical movement of sand, including enhanced sand placement techniques and optimization of the grind size of the concentrator. Importantly, the TMF development work and the transition from starter down to regular ongoing sand lifts is a one-time milestone related to the ramp up of the operation. When it is completed, the TMF development work will be behind us for the life of the facility. While the TMF development work will continue in Q3, we continue to target design rates by the end of the year. Throughput increased from the prior quarter, and we expect to see consistent grades of approximately 0.61% in the second half of the year. Work is ongoing to improve recoveries by year end, which will also be helped by more consistent mill runtime. The outage of the shiploader at QB's port facility announced on June 2nd is expected to be extended into the first half of 2026. We have been successfully shipping concentrate through our alternative port arrangements and have maximized shipments to local customers, so there has been no production impact. Alternative sales logistics have had some incremental impact on our net cash unit costs, which is expected to be approximately 10 US cents per pound. We had a good step up in molybdenum production as a result of some key process improvement initiatives implemented during the quarter. We expect to continue to see molybdenum production improvements and we continue to target design throughput and recoveries of the MOLLE plants by year end. Once we have completed the TMF development work, QB will be able to run at steady state, showcasing it as a Tier 1 asset that will be a cornerstone of Tech's portfolio for generations. We continue to work on defining the most capital efficient and value accretive path for future growth of QB. through optimization of the mill and low capital debottle making opportunities that could collectively increase throughput by a further 50 to 25%. The foundation of QB is its large long life deposit that can support multiple expansions and it offers multiple potential paths to create value for our shareholders including assessing adjacencies or synergies with Coyote. The operation also has the advantage of a very low strip ratio which enables competitive all-in sustaining costs. We successfully achieved completion testing requirements under QB's $2.5 billion project finance facility earlier this year, which provides independent verification, confirming the robustness of design, construction, and operational capacity. And we have a taxability agreement in place through 2037. Taking all these factors into account, we are well-positioned to generate significant future cash flows from this Tier 1 asset, for decades to come. Returning to the MyLife Extension at Highland Valley on slide seven. Highland Valley is Canada's largest copper mine and a core asset in our portfolio. And we are excited to announce the sanctions of the Highland Valley Copper MyLife Extension or HPC MLE project. This is a lower risk and lower complexity brownfield project that is 100% owned by tech. The MLE is an extension of the operation to 2046 and proper per annum on average over the life of mine. Based on additional technical and engineering work, we have the project. As a result, this capital estimate sanction is 2.1 to 2.4 billion Canadian dollars in nominal terms. Compared with our prior estimates of 1.8 to 2 billion Canadian dollars, it now includes project level contingencies, accounts for inflation, input cost escalation, and the impact of potential tariffs on construction materials, and reflects the accelerated procurement of mobile equipment originally planned for later project phases. It also incorporates additional scope and indirect contract requirements identified through ongoing project requirements. The MLE project consists of development of site infrastructure and facilities, grinding circuit upgrades, increased sailing storage capacity and enhancements to power and water systems as well as the mine pushback that requires additional waste stripping to access high quality resources within the valley pit. The project economics are attractive including generating a robust internal rate of return that is significantly above our cost of capital and a project net present value using an eight percent sorry a positive net present value using an eight percent discount rate. The capital intensity of the project is expected to be low at 11,500 to 13,200 US dollars per ton of copper on an annualized basis. Overall, we expect to generate significant EBITDA and cash flows over the life of mine. We have operated Highland Valley for decades and have successfully executed several mine life extensions there. And importantly, project readiness for construction has been confirmed through independent assurance activities including an external construction readiness assessment and a review of the technical scope, capital cost estimate and execution strategy and planning. We are well positioned for solid project execution of the Highland Valley Mine Life Extension with a strong and experienced team in place. All major permitting complete, engineering nearly 70% complete and all contracting and permitting well advanced. Construction mobilization is underway delivering on this value accrued project. We have summarized the changes to our guidance on slide 8. Production changes are driven by the revised outlook to QB based on the TMF development work. We had previously noted that we would be at the lower end of our guidance of around 230,000 cents for the year. While this is still possible, we acknowledge that there could be risk from possible external factors or from any delay to the TMF development work. As a result, we have revised our outlook for QB to 210 to 230,000 tons for the year, but continue to target design rates by year end. Production guidance for all other operations is maintained. As such, the impact of the revised QB outlook is the only driver of flow-through changes to total copper production, moly production, and therefore net unit cash costs. We have also incorporated the increase in copper production in 2028 and the start of the growth capital investment associated with the sanction of the Highland Valley Copper Mine Life Extension Project. Please refer to the MD&A for further details. Turning to the Neotium growth on slide nine. Our ongoing growth trajectory is underpinned by our established portfolio of operating mines. The sanction of the HBC MLE project is foundational to our copper growth strategy and a significant milestone in the growth of TEX copper production in the future. Our high-returning greenfield projects at Zafranal in Peru and San Nicolas in Mexico are progressing as planned, and we are targeting sanction readiness by year end. At Zafranal, we initiated advanced early works in May, following receipt of the advanced works permit in April. This will enable construction to start immediately following project sanctions. We are targeting receipt of the construction permit of stage 8 approval, first of two approvals required in Q3, San Nicolas, engagement with government authorities and other stakeholders is ongoing to support our permit applications. We plan to complete the feasibility study in the fourth quarter, which is the earliest stage of the project to be positioned for a potential sanctioned decision following the receipt of necessary permits. These projects are significantly less complex and smaller in scope than QV, with lower capital intensities, attractive project economics, and well-balanced risk return profiles. In addition, we are working to define the most capital-efficient and value-accreted path for further growth of QB through optimization of the mill and low capital debottlenecking opportunities that could increase throughput by 15% to 25%. Our priority at QB remains completing the rampart, but optimization plans are also progressing. Detailed planning for debottlenecking is underway. This should enable us to submit the Declaration of Environmental Impact or deer permit application in the second half of the year. All of our growth projects must meet stringent criteria, delivering attractive risk-adjusted returns and competing for capital in alignment with our capital allocation framework. Overall, we expect to be able to double copper production by the end of the decade, with a path to annual copper production of up to 800,000 tons through these near-term projects. With that, I will now hand the call over to Crystal.