Teck Announces Completion of Comprehensive Operational Review and Updated Outlook

Executive Summary

• Teck Resources provided an update on the Quebrada Blanca (QB) Action Plan and revised its 2025–2028 production and cost guidance for QB, Highland Valley Copper (HVC), Red Dog, and Trail operations following a Comprehensive Operations Review.
• QB production guidance was significantly lowered for 2025–2028 due to constraints from Tailings Management Facility (TMF) development, specifically slow sand drainage and required concentrator downtime; steady-state TMF operation is not expected until 2027.
• HVC guidance was reduced for 2025 and 2026 due to lower grades and unplanned maintenance, while Red Dog guidance was lowered for 2026–2028 due to grade reductions and pit slippage near the end of mine life.
• The company reported Q3 2025 production volumes, noting strong performance at Red Dog and Trail, but missed expectations at QB and HVC. Copper segment net cash unit cost guidance for 2025 was increased.

Key Details

• Quebrada Blanca (QB) Guidance Revisions:
  • 2025 Copper Production: Revised down to 170,000–190,000 tonnes (previously 210,000–230,000 tonnes).
  • 2025 Molybdenum Production: Unchanged at 1,700–2,500 tonnes.
  • 2025 Net Cash Unit Costs: Revised up to US$2.65–$3.00/lb (previously US$2.25–$2.45/lb).
  • 2026 Copper Production: Revised down to 200,000–235,000 tonnes (previously 280,000–310,000 tonnes).
  • 2026 Molybdenum Production: Revised down to 2,800–3,400 tonnes (previously 6,400–7,600 tonnes).
  • 2026 Net Cash Unit Costs: Expected US$2.25–$2.70/lb.
  • 2026 Capital Expenditures: $420 million allocated to TMF development.
  • 2027 Copper Production: Revised down to 240,000–275,000 tonnes (previously 280,000–310,000 tonnes).
  • 2027 Molybdenum Production: Revised down to 4,700–5,600 tonnes (previously 7,000–8,000 tonnes).
  • 2028 Copper Production: Revised down to 220,000–255,000 tonnes (previously 270,000–300,000 tonnes).
  • 2028 Molybdenum Production: Revised down to 5,300–6,300 tonnes (previously 6,000–7,000 tonnes).
  • Operational Constraints: Production constrained by TMF crest height raising and slow sand drainage due to ultra-fines. September 2025 production was 5,800 tonnes, impacted by 20 days of downtime. Shiploader repair expected to complete Q1 2026.
  • Recovery Targets: Design recovery rates of 86–92% remain achievable, though current guidance assumes 82–85%.
• Highland Valley Copper (HVC) Guidance Revisions:
  • 2025 Copper Production: Revised down to 120,000–130,000 tonnes (previously 135,000–150,000 tonnes) due to lower grades and reduced mill online time.
  • 2026 Copper Production: Revised down to 115,000–135,000 tonnes (previously 130,000–150,000 tonnes).
  • 2027 Copper Production: Revised up to 135,000–155,000 tonnes (previously 120,000–140,000 tonnes).
  • 2028 Copper Production: Revised up to 100,000–120,000 tonnes (previously 90,000–110,000 tonnes).
  • Issues: Lornex pit fault characterization varied from block model, lowering grades; fault expected to be mined through by Q1 2026.
• Red Dog Guidance Revisions:
  • 2025 Zinc in Concentrate: Expected at high end of 430,000–470,000 tonnes.
  • 2026 Zinc in Concentrate: Revised down to 375,000–415,000 tonnes (previously 410,000–460,000 tonnes).
  • 2027 Zinc in Concentrate: Revised down to 330,000–370,000 tonnes (previously 365,000–400,000 tonnes).
  • 2028 Zinc in Concentrate: Revised down to 230,000–270,000 tonnes (previously 290,000–320,000 tonnes).
  • Issues: Grade reduction as operation nears end of mine life (2032); slippage in Aqqaluk pit due to precipitation.
• Trail Operations:
  • 2025 Refined Zinc: Expected at high end of 190,000–230,000 tonnes.
  • 2026 Refined Zinc: Revised down to 190,000–230,000 tonnes (previously 260,000–300,000 tonnes) to prioritize profitability via residue processing over maximizing production.
  • 2027–2028 Refined Zinc: Assumed return to full production of 260,000–300,000 tonnes.
• Copper Segment Unit Cost Guidance:
  • 2025 Net Cash Unit Costs: Revised up to US$2.05–$2.30/lb (previously US$1.90–$2.05/lb).
  • 2026 Net Cash Unit Costs: Expected US$1.85–$2.20/lb.
• Zinc Segment Unit Cost Guidance:
  • 2025 Net Cash Unit Costs: Unchanged at US$0.45–$0.55/lb.
  • 2026 Net Cash Unit Costs: Expected US$0.65–$0.75/lb.
• Q3 2025 Production Highlights:
  • QB: 39,600 tonnes copper production, 43,900 tonnes sales.
  • HVC: 28,100 tonnes copper production.
  • Red Dog: 122,000 tonnes zinc in concentrate production, 272,800 tonnes sales.
  • Trail: 52,600 tonnes refined zinc production.
• Corporate Actions: Senior Vice Presidents of Operations for Latin America and North America now report directly to the President and CEO.

Notable Quotes

• "Our Comprehensive Operations Review, launched in August, focused on improving performance through a detailed QB Action Plan, identifying opportunities to enhance operating practices and setting out plans that are reasonable and achievable."
• "Ultimately, a sand wedge will be constructed using hydraulically placed sand, which will enable steady-state TMF operation... It is currently expected that from 2027 onwards, the TMF development should no longer be a constraint on throughput levels that are able to be achieved."
• "Despite the changes to guidance, the underlying potential of QB remains intact, and the design, construction and operational capability of the plant is robust."