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VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited

Teck Resources Limited · Apr 23, 2015 · 46 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 1
    Vancouver Investors Luncheon April 23, 2015 Don Lindsay, President & Chief Executive Officer
  2. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 2
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 3
  3. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 3
    Overview & Strategy Protecting & Building Shareholder Value Executing our long-term strategy Well-positioned for improving commodity markets Benefiting from low oil prices & weak Canadian dollar Controlling the controllable…
  4. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 4
    Overview & Strategy Canadas Largest Diversified Resources Company 1 Producer of steelmaking coal in North America Top ten copper miner in the 2 Seaborne exporter of Americas steelmaking coal globally 3 zinc miner in the…
  5. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 5
    Overview & Strategy Attractive Portfolio Of Long-Life Assets & Resources Focused on the Americas & Low Risk, Stable Jurisdictions Strong Reserve & Resource Position1 With Sustainable Long-Life Assets Coal Resources 100 years…
  6. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 6
    Overview & Strategy Long-Term Strategy Unchanged Diversification to expand opportunity set Long-life assets Low half of the cost curve Appropriate scale Low risk jurisdictions 7
  7. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 7
    Overview & Strategy The Value of Our Diversified Business Model Cash Operating Profit 2014 2015 Leverage to Strong Commodities Production Unit of Estimated Estimated Guidance1 Change Profit 2 EBITDA2 Coal 27 Mt US1/tonne 21M /1…
  8. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 8
    Overview & Strategy External Recognition Best 50 Corporate One of top 100 most On the Dow Jones Citizens in Canada sustainable companies Sustainability World Index 2014 in the world and one of five years in a row Canadas most…
  9. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 9
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 10
  10. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 10
    Finance Strong Balance Sheet & Liquidity Liquidity of C5B, including unused US3B line of credit Investment Grade Rating 3,000 Debt-to-debt-plus-equity of 33% US300M of notes due to end of 2016 Weighted average maturity 14 years…
  11. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 11
    Finance Investment Grade Credit Rating Tecks 10-Year Bond Spreads 500 Teck 3.75% 02/23 400 300 bps 200 Jan 30th: S&P rating BBB- stable outlook 100 October 1, 2014 April 17, 2015 0 Ten-year bond spreads…
  12. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 12
    Finance Dividend Reflects Current Markets Change in Product Prices and Business Unit Margins since Q4 2012 10% US prices down by average of 24% Since dividend set in Q4 2012 0% - Prices down 24% US dollar terms -10% -20% -…
  13. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 13
    Finance Fort Hills Capex Well Covered Effect of Disclosed Sensitivities 2014A Estimated On Free Cash Flow1 (before Fort Hills Capex)2 Sensitivity 2014A Current3 to Spot EBITDA1 1600 CAD/USD 1.10 1.26 0.16 52M /0.01 1400 +236…
  14. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 14
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 15
  15. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 15
    Energy Business Unit & Marketing Building a Valuable Energy Business Improving oil market balance post-2016 Fort Hills economics robust Diversified approach to market access Establishing terminal and pipeline commitments 16
  16. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 16
    Energy Business Unit & Marketing Good Long Term Oil Price Fundamentals Swift Response To Lower Prices World Liquid Fuels Significant reductions in capital spending Production and Consumption Balance North America active oil rig counts…
  17. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 17
    Energy Business Unit & Marketing Fort Hills Economics Robust1 70 WTI & 90 WTI & Fort Hills Free Cash Flow Yield4 Potential Contribution 0.80 0.90 from Fort Hills CAD/USD CAD/USD Sensitivity to WTI Price Tecks share of annual…
  18. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 18
    Energy Business Unit & Marketing Committed Logistics Solutions in Alberta Nominal Teck Pipeline Operator Capacity Capacity Status (kbpd) (kbpd) Northern Courier Hot Bitumen TransCanada 202 40.4 Construction East Tank Farm -…
  19. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 19
    Energy Business Unit & Marketing Strategy for Diversified Market Access Teck Marketing Plan for Terminal Service & Storage 50 kbpd Diluted Bitumen Blend Securing up to 450,000 barrels of dedicated storage at Hardisty Kitimat…
  20. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 20
    Fort Hills Update Strong Project Execution All critical milestones being met Enhanced ability to deliver on time / on budget Staged execution strategy 21
  21. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 21
    Fort Hills Update Staged Execution Strategy Key Elements Staging the engineering release of the various project areas Capturing global expertise through engineering & fabrication Developed a logistics plan for off-shore module…
  22. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 22
    Fort Hills Update Lower Oil Price Environment Provides Opportunities Major projects in construction such as Fort Hillswill move forward as planned and take full advantage of the current economic environment. These are long-term…
  23. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 23
    Fort Hills Update Overall Site Photo River Water Intake Ore Prep Plant Robson Lodge Admin Complex Utilities & Cogen Primary Extraction Secondary Extraction Tailings Area Construction Trailers Flare Area 24
  24. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 24
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 25
  25. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 25
    Operations Overview Controlling the Controllable Staying true to Tecks values Delivering results Building operational excellence Disciplined capital spending Staged growth pipeline 26
  26. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 26
    Operations Overview Achieving Continual Reduction In Incidents Recordable REPLACE WITH Incident GRAPH ONFrequency DownINJURY RECORDABLE 40% FREQUENCY In 5 Years 2.0 Frequency (per 200,000 hrs) 1.5 1.0 0.5 0.0 2010 2011…
  27. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 27
    Operations Overview Delivering Results in Unit Cost Management Steelmaking Coal All-In Costs1 Copper Cash Costs3 90 2.50 80 70 2.00 60 US/lb 50 1.50 C/t 40 1.00 30 20 0.50 10 0 0.00 2012 2013 2014 2015 2012 2013…
  28. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 28
    Operations Overview Disciplined Project Execution Highland Valley Mill Optimization Project New Acid Plant at Trail Recent Projects Steelmaking Coal: Line Creek Water Treatment Plant Copper: Highland Valley Mill Optimization…
  29. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 29
    Operations Overview Disciplined Capital Allocation Sustaining Capital Growth Capital* 1400 1400 1200 1200 1000 1000 800 800 M M 600 600 400 400 200 200 0 0 2010 2011 2012 2013 2014 2015E 2010 2011 2012 2013 2014…
  30. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 30
    Operations Overview Staged Growth Pipeline Completed In Construction Pre-Sanction Growth Options Relincho Copper Galore/Schaft Creek Strong platform Mesaba HVC Mill Optimization QB Phase 2 with substantial Zafranal growth options…
  31. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 31
    Coal Operations Significant Long-Term Coal Growth Potential Potential Production Increase Scenarios Tecks large resource base 50 supports several options for growth: 40 Quintette restart (up to 4 Mtpa) fully permitted…
  32. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 32
    Copper Long-Life Copper Assets, with Growth Operating assets with lives capable of multiple price cycles Strong resource base to leverage - Opportunities at existing operations to extend mine lives significantly - Deep greenfield…
  33. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 33
    Copper Continuing to Advance QB2 QB2 Remains a Priority Project 39-year mine life Average of 240 ktpa for first 10 years Low C1 cash costs, due to low strip ratio Permitting & Project Timeline SEIA expected to be resubmitted once…
  34. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 34
    Zinc World Class Zinc Business Red Dog (Alaska, USA) worlds second largest zinc mine Trail Smelter (BC, Canada) first quartile conversion cost integrated zinc/lead smelter Pend Oreille (Washington, USA) all of concentrates are…
  35. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 35
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 36
  36. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 36
    Coal Markets Market Slowly Rebalancing Good demand and stable growth Prices remain at unsustainable levels Production cuts are taking hold; Additional cuts continue to be announced USA production under most pressure Lower…
  37. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 37
    Coal Markets Met Coal Market Slowly Rebalancing; Benefiting from Higher Prices in C Terms Coal Prices By Currency Argus FOB Australia 30 Mt cutbacks announced, slowly 160.00 being implemented 150.00 Require additional cutbacks…
  38. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 38
    Coal Markets Steelmaking Coal Market Curtailments Curtailments Production Curtailments Cumulative Production Curtailments By Region Mt 0 5 10 15 20 35 Australia 30 25 USA 20 Mt Canada 15 New 10 Zealand 5 Others 0…
  39. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 39
    Base Metals Markets Solid Long-Term Market Fundamentals Demand growth remains strong Challenges are on the supply side Recent price volatility not a result of market fundamentals 40
  40. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 40
    Base Metals Markets - Copper Significant Chinese Demand Remains Annual Growth Rate of Chinese Copper But Will Add Significantly Consumption to Slow Dramatically in Additional Tonnage Terms 1,400 30% Annual Avg. 13% 1,200 25% Annual…
  41. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 41
    Base Metals Markets - Copper Long-Term Mine Production Still Needed Forecast Copper Refined Balance At 2.7% global demand growth, 500 680,000t of new supply needed each year 0 Post 2016, production falls at (500) 280,000t per…
  42. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 42
    Base Metals Markets - Zinc Chinese Demand to Outpace Supply China Zinc Demand 2014 Galvanized Steel as % Crude Production USA 20% 19% Other 18% 5% 16% Construction Infrastructure 14% 15% + 2.1 million 30% 12% tonnes of zinc…
  43. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 43
    Base Metals Markets - Zinc Committed Supply Insufficient for Demand Forecast Zinc Refined Balance We expect mine supply increases to allow for growth in 500 refined supply of 1.3 million 0 tonnes between 2014 and 2020 Over this…
  44. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 44
    Agenda Overview & Strategy Finance Energy & Fort Hills Operations Markets Summary 45
  45. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 45
    Summary Protecting & Building Shareholder Value Executing our long-term strategy Well-positioned for improving commodity markets Benefiting from low oil prices & weak Canadian dollar Controlling the controllable Building an…
  46. VANCOUVER INVESTORS LUNCHEON – Teck Resources Limited – slide 46
    Vancouver Investors Luncheon April 23, 2015 Don Lindsay, President & Chief Executive Officer

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