Ladies and gentlemen, thank you for standing by. Welcome to Teck Resources Limited's Fourth 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 touch-tone phone. This conference call is being recorded on Thursday, February 20, 2025. I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone, and thank you for joining us for Teck Resources Limited's fourth quarter 2024 conference call. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck Resources Limited 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, and explanations and reconciliations are in our MD&A and the latest press release on our website. Jonathan Price, our CEO, will start with an overview of our fourth quarter and full-year results, Crystal Prystai, our CFO, will follow with the financial and operational review, and Jonathan will conclude with closing remarks followed by a Q&A session. With that, I'll hand the call over to Jonathan.

Thank you, Emma, and good morning, everyone. I'll start with highlights from 2024 on slide four. Last year was a transformational year for Teck Resources Limited. We made significant advancements in our value creation strategy. We completed the sale of our steelmaking coal business for value, enabling Teck Resources Limited to reposition as a pure-play energy transition metals company focused on copper and zinc. With the $8.6 billion in proceeds from the transaction, we announced the largest cash return to shareholders in our history and began executing the return immediately. In 2024, we returned $1.8 billion in cash to shareholders, including $514 million in dividends, or approximately $1 per share, and $1.25 billion in share buybacks. We also enhanced our resilience by further strengthening our industry-leading balance sheet, reducing our debt by $2.5 billion, and retaining funding for our near-term value-accretive growth projects. We currently have $11.3 billion in liquidity, including $7.1 billion in cash. This includes our sustainability-linked revolving credit facility, which we've recently reduced by $1 billion to $3 billion and extended for a five-year term to October 2029. We were in a net cash position of $2.1 billion as of December 31, 2024. We generated $2.9 billion in adjusted EBITDA, more than double the prior year. We set a record for annual copper production, with a 50% increase from the prior year to 446,000 tons. In zinc, Red Dog had strong performance, increasing zinc in concentrate production while improving our net cash unit costs by 16 US cents per pound. We continue to have a strong focus on cost management and managing the controllable costs across our business. We are starting to see the positive impact of the structural cost reductions we have implemented across our business following the sale of the steelmaking coal business in July.…

Thanks, Jonathan. Good morning, everyone. I will start with our financial performance in Q4 and for the full year on slide eleven. Our adjusted EBITDA more than doubled in 2024 to $2.9 billion and increased by 160% to $835 million in the fourth quarter. We had strong cash flow generation of $1.3 billion in the quarter, benefiting from the working capital release at Red Dog and QB. Over the full year, we reduced our corporate costs by 21% or $88 million compared with 2023. This reflects our strong cost focus and structural cost reductions that we implemented across our business following the sale of the steelmaking coal business. We expect to reduce our corporate costs further in 2025, as reflected in our annual guidance. We returned a total of $1.8 billion in cash to shareholders in 2024, including $549 million in the fourth quarter. We also reduced our debt by $2.5 billion in 2024, including $275 million in the fourth quarter, with the scheduled semiannual repayment on the QB project finance facility and other debt reductions. The chart on slide twelve summarizes the key drivers of our financial performance in the fourth quarter as compared to the same period last year. As a result of the completion of the sale, the steelmaking coal business last July, our results are presented as discontinued operations for all periods reported in our Q4 financial statements and MD&A. Our adjusted EBITDA increased by 160% in the fourth quarter, driven by strong base metals prices and higher copper and zinc sales volumes, reflecting the ramp-up of QB and strong sales from Red Dog. Copper and zinc sales volumes each increased by 24% from Q4 of 2023. Our strong adjusted EBITDA also reflects improved zinc unit costs driven by our rigorous approach to cost discipline, as…

Thanks, Crystal. So as we look forward, I want to take a moment to acknowledge the economic and political backdrop in which we are operating on slide twenty-two. Globally, we are witnessing a period of significant economic uncertainty and change that will alter trade flows and potentially impact global supply chains and market dynamics. In this context, the outlook for our commodities remains robust, driven by the underlying demand factors of economic growth and urbanization, electrification to ensure energy security, and growth in the digital economy. These secular tailwinds underpin significant demand for both copper and zinc, and when coupled with supply-side constraints, underline the strength in our strategy as a pure-play base metals company with a deep pipeline of copper growth opportunities. Turning to slide twenty-three, we are closely monitoring the potential impact of tariffs and other restrictions between the US and Canada, which is a fluid and rapidly evolving situation. Teck Resources Limited has a resilient business driven by the diversification of our product and operations, coupled with an agile and sophisticated commercial strategy and a very strong balance sheet. To put the potential tariffs into context, any imposed tariffs by the US are not expected to have a material impact on our business. Our copper and zinc concentrate sales would not be impacted as we primarily sell to Asia and Europe and not into the US. Trail's refined zinc, lead, and specialty metals such as germanium, indium, and sulfur products are sold into the US. But in the event that tariffs are imposed, we expect trade flows to adjust. While Teck Resources Limited produces a large proportion of the China supply for this diverse group of metals, they comprise less than 15% of our revenues. We actively monitor and respond to the situation and potential impacts. We…

Certainly. We ask that you limit yourself to one question and one follow-up. If you're using a speakerphone, please ensure you lift your handset before pressing any keys. If you wish to withdraw your question, press star then two. The first question is from Orest Wowkodaw with Scotiabank. Please go ahead.

Hi. Good morning. I'm wondering if we can get a bit more color on the QB2 ramp. Obviously, really strong performance in November, December. January was impacted by the extended 18-day shutdown. What's the performance been like since it restarted? And do you think QB2 is on track to reach that sort of steady-state full nameplate by midyear? I'm wondering if anything's come out of the shutdown that may perhaps either advance that or delay that.

Hi, Orest. Thank you very much for that question. Look, overall, I would say the ramp-up is progressing well and it continues to be in line with what we would call normal course or benchmark ramp-up timetables. We have planned quarterly shutdowns that are embedded in our operating plans, and we've communicated that previously. As you highlighted, we did have an extended shutdown for 18 days in January to conduct maintenance reliability work and to complete some tailings lift as part of the operational ramp-up. That 18-day shutdown is fully reflected in the guidance range of 230 to 270 thousand tons for 2025. Post that shutdown, the plant and the operation more generally have been running very much in line with our underlying operational plans. So we do have good confidence in achieving the guidance range that we've set out. As you've seen, we've mentioned a few things, for example, having lower grades towards the start of the year and higher grades towards the back end of the year, and processing some more transition ores at the front end of the year, which can lead to lower recoveries. But all of that is fully accounted for in the guidance range that we put forward, and we're very pleased with the way that the plant and the operation as a whole is operating today.

Thanks. And just as a follow-up, what is the planned cadence for future maintenance shutdowns at QB2 for the rest of the year? Like, is it sort of like a week, a quarter now starting in Q2, or just what's the plan?

Yeah. Look, that's a reasonable assumption. Overall, the offline time for the plant is expected to be around 92%. That does imply a shutdown of around seven days in every quarter. As we did last year, we've typically been having those shutdowns in the first month of each quarter, and going forward in 2025, we expect to maintain a similar cadence.

Okay. So no longer shutdowns currently planned beyond what we saw in January.

That's correct.

Okay. Thank you very much.

Thanks, Orest. The next question is from Carlos De Alba with Morgan Stanley. Please go ahead.

Yeah. Thank you. Good morning, everyone. The balance sheet is undeniably strong. How should we reconcile, Jonathan, your capital allocation framework with the fact that under our estimates and consensus outside estimates, you're going to generate anywhere between $1 billion to $2 billion Canadian or more per year in the coming years of free cash flow? How do we reconcile this strong balance sheet, your capital allocation framework, returning money to shareholders, and a potential M&A where Teck Resources Limited goes and buys smaller projects or smaller companies, even though it does have a very robust pipeline of projects? Or maybe we just see more outsized returns to shareholders as you have done in the last few years. This is a key question that we are discussing with investors, and clearly, as you know, the potential for M&A and I'll say, risk in a way is something that we would like to see how you, from your perspective and the board's perspective, are looking at this.

Yeah, Carlos, thanks very much for that question. It was a fairly broad one. Look, the capital allocation approach that we take here in the business is very much focused on value creation for our shareholders. We do have a very strong balance sheet, as Crystal outlined. We reduced debt quite significantly last year, and we are currently running a net cash position on that balance sheet. Also, we do still have a very significant outstanding authorization of share buybacks that we will continue to execute through the course of this year. That's in the range of $1.8 billion of cash still to be deployed through the buyback of our shares. As Crystal mentioned, we're in the market executing on that every day in addition to the base dividend that we have and that we've maintained through this year. We've always said that if we continue to generate cash in excess of the needs of the business, that will make its way through the capital allocation framework. Under that framework, we do have the potential to return a further 30% or 100% of cash that's in excess of our needs. As you know, we also have a stable of projects in the portfolio. When we went through the use of proceeds from the sale of EBR last year, one of the things we said we would do is reserve some cash for the development of what we consider to be low capital-intensive and high-returning projects that we have in the portfolio. One of those being the Highland Valley copper mine life extension and the greenfield being the San Nicolas project in Mexico. We continue to focus on organic growth in the business because we see that as being the most value-accretive path for our shareholders. We are, of course, very aware of the M&A activity in the sector that is spoken about. From Teck Resources Limited's perspective, our focus remains on creating as much value as we can for our shareholders. We believe that the projects we have in the portfolio are a great way to achieve that. So it's a good position to be in. It gives us resilience, it gives us options, but we will maintain our focus on creating value for shareholders and executing on the plans that I think we've clearly set out.

Great. Thank you. And just a very short follow-up. Is Zafranal now arguably the greenfield project that is up next?

So we are quite advanced on Zafranal, as you know, in terms of having the environmental permit associated with that. As you see from our disclosures around our copper growth spend this year, we are increasing the spend there, reflective of a project that is close to a sanction decision. We continue to work very hard on San Nicolas as well. We see that as a very attractive option. Ultimately, the economics of those projects, the progress of the other permits that are required to actually take a project through into execution, and the completion of the right level of engineering work that needs to be done prior to sanction will determine which of those projects is up for sanction first. I think you can see from our disclosures that Zafranal today is in a very strong position.

Thank you, Jonathan.

Thanks, Carlos. The next question is from Liam Fitzpatrick with Deutsche Bank. Please go ahead.

Hi, Jonathan. Two questions from me on QB. The first one is on the topic of a potential tie-up, some sort of JV with Collahuasi. We've seen an interesting deal announced today by Anglo and Codelco, and it would seem that from a value unlock perspective, this is a fairly obvious area for Teck Resources Limited and the other companies involved. Can you give any color on where the discussions are and other reasons why this isn't being looked at or pursued more aggressively? And my second question is on QB costs. Just looking at the absolute costs in Q4, they did go up quite significantly. Is there anything in there that you can talk to that should unwind? Because looking at it, it seems that there's a lot of cost that has to come out through 2025 for you to hit the unit cost guidance. Thank you.

Liam, yeah, thank you for those questions. I'll, in a moment, hand the second question over to Crystal. But just starting with your question on QB, Collahuasi, and as we've discussed before, we do recognize the potential value of some form of tie-up between those two operations, and it's something that we've done a good deal of work on to understand the various ways in which that value could be unlocked. As we've also consistently said, our number one focus remains on optimizing value for Teck Resources Limited shareholders, and we look at all the decisions we made through that lens. Right now, our focus remains on the ramp-up of QB to full production and steady state. As we've spoken about previously, the optimization and debottlenecking of that plant will be some of the most capital-efficient unlocks of tons that we have anywhere in the portfolio. So that remains a key focus for us. We have, as you would expect, had a level of engagement around the opportunities with Collahuasi with the partners on the other side, but as you'd appreciate, those discussions are confidential in nature, and, of course, we can't say anything more about those at this point in time. Other than to reaffirm that we recognize the value potential there, and we will always act in the best interest of Teck Resources Limited shareholders in terms of how we maximize value from the portfolio that we have. With that, I'll hand over to Crystal on the cost question.

Hi, Liam. Thanks for your question. I think you've drawn out the key point just in the context of, as we look forward, expecting significant reductions in QB costs as we move to more stabilized production levels through 2025 and we complete the demobilization of contractors that supported the ramp-up through 2024. In the fourth quarter, of course, we saw an increase in volume that does drive a modest increase in operating costs as we have higher electricity and supplies. When you balance that over higher production, that should normalize. There were also some one-time costs that we incurred in the fourth quarter. We mentioned the settlement of two of three of our labor contracts, which were, of course, a good outcome. Those lead to bonuses paid to those unions as we resolved those contracts. We do continue to expect a decline in our unit cost for QB and for the copper business as we move into 2025 and we see an uptick in our production levels, as well as in the molybdenum credits we expect in 2025.

Okay. Thank you, both.

Thanks, Liam. The next question is from Craig Hutchinson with TD Securities. Please go ahead.

Hi. Good morning, guys. Just a question on the Highland Valley life extension. There's a note in your MD&A just saying that there's been a challenge by one indigenous government organization that's delayed the approval process of the EA. Does that have to be resolved before the EA can be issued, or can you get the EA and then resolve these issues after the fact? And I guess just maybe as a follow-up, do you have an anticipated timeline for solving it or getting any additional impact benefit agreements with those that don't have them already?

Yeah. Great. Thank you for that question. It's a good one, and as you can imagine, it's a file we're working very hard on at the moment. We are in the final phases of the EA process for the mine life extension. The dispute process that we referenced is a formal established part of that environmental assessment process, which is designed to resolve issues. As noted, we have secured agreements with other indigenous government organizations that are involved in the approval process for the Highland Valley mine life extension, and we got those coming through in December and January. We do continue to engage with SSN, who are the party that has disputed the approval of this project. We have a very long track record of working successfully with indigenous nations and sharing the benefits of the operation and future growth with those nations, and we do remain confident in our ability to move forward successfully. We also have a good track record of permitting here specifically in British Columbia. It's worth noting that the province of British Columbia recently announced that they would be working to fast-track permitting on this project. So we do have a lot of support with respect to this, and we remain confident in getting this done and getting the approvals we need. It's a project that we believe has compelling returns, and we do expect to be in a position to sanction it this year.

Okay. Great. And maybe just a follow-up question. You guys mentioned you got the permit for the road exploration of Red Dog. The step-up in growth capital this year versus last, does that include spending on the road this year, or is that a separate line item?

Yes. It does include that, Craig. You're exactly right.

Okay. Great. Thanks.

Okay. The next question is from Lawson Winder with Bank of America Securities. Please go ahead.

Thank you, operator. Good morning, Jonathan and Crystal. Thanks for the update. I wanted to ask about capital allocation and zinc. So just pointing to zinc showing some signs of life in 2024 and Teck Resources Limited having a range of projects in zinc. Also noting that to maintain the current zinc business, it will require significant investment. When you think about allocating capital to various projects, are the zinc and copper segments separate buckets, or could there be a situation where zinc price points to higher IRRs and as a result, you deemphasize copper growth?

Look, I think we look at capital allocation holistically across the entire organization. We're not contemplating that separately for copper and zinc. Everything has to compete for the capital we have and compete on the range of metrics that we've spoken about before, particularly returns on growth. Look, I think we see the fundamentals for zinc to be attractive. There is strong demand for zinc, and perhaps the demand growth outlook is not as compelling as it is for copper, but we've seen a dearth of new supply in zinc for many, many years. No major zinc projects coming through. At Red Dog, of course, we have a world-class tier-one operation, and while that comes to the end of current life around 2031, we have a couple of very high-quality ore bodies nearby, and that is where the spending is being directed today to understand the potential future of Red Dog and the potential for a significant life extension there. Based on those fundamentals, based on the quality of the project we have at Red Dog, we continue to see that as a core part of the portfolio. Of course, in addition to Red Dog, we do get zinc concentrate from Antamina. In the future, in the event we sanction San Nicolas, that will be a further source of zinc concentrate for us. So we hold a strong position in that market right now. Provided the fundamentals remain intact, we would continue to want to maintain a strong position in that market into the future.

Okay. Thanks, Jonathan. And then just looking at another asset that has a significant zinc component, your Mexican asset, has the political situation in Mexico evolved any more favorably at this point? And what are you thinking in terms of actually making a decision to invest capital into San Nicolas? Thank you.

Yeah. So we remain highly interested in the San Nicolas project. It's a relatively small, simple flow sheet. It will have a low capital intensity. It's very high grade, which means it will deliver strong margins through its life. We're closely monitoring the mining environment in Mexico. We met with President Sheinbaum and talked to her about San Nicolas and about mining more generally. While at the present time, it doesn't appear to be a priority for this legislation on mining, given it has its hands full with its neighbor to the north, we do see longer-term a focus there on foreign direct investment, a focus on building critical minerals supply chain and capability. I would say the signals we get from the administration are encouraging, particularly given the commodities that San Nicolas will be producing and particularly given the track record of being responsible in our approach to developing and operating mines that both ourselves and Agnico Eagle bring to the table. We don't see any negative immediate impacts in relation to San Nicolas, so we continue to do our study work. But it would be fair to say, of course, that we won't make a sanction decision and we won't commit significant dollars to further investments on the ground in Mexico until such time as we have certainty of permitting and the support of the government, but we remain optimistic.

Fantastic. Thanks, Jonathan.

Thank you, Lawson. The next question is from Myles Allsop with UBS. Please go ahead.

Hi, Jonathan. Maybe just on QB. Could you remind us how much you're capitalizing at the moment? Is it just interest, or is it into other costs as well? And when will you stop capitalizing those? And then maybe second on Trail, it should be free cash flow negative last year. It's likely to be more cash flow negative this year. What does it take to decide to close Trail? I know you said it's strategically important, but it's burning cash. How long do you maintain that view of strategic importance?

I'll come back to your second question on Trail in a moment. Over to Crystal for the first question on QB cost.

Yeah. Thank you. Maybe just a bit of clarification there. When I mentioned that we were capitalizing ramp-up costs associated with QB, that was in Q4 of 2023. Through 2024, we have not been capitalizing interest on the project. Of course, construction was complete in the first quarter with the port and molybdenum plant in the second quarter. So no longer capitalizing interest, depreciating the assets there, and we haven't been capitalizing ramp-up costs in 2024. The only capitalization you're seeing at QB is in relation to sustaining capital costs and, to a very minor extent, capitalized stripping.

Thanks, Crystal. Moving on to Trail, Myles, a couple of comments there. We've been very focused on profitability and cash generation at Trail, and we've made a number of changes to support that. We've implemented cost reductions at the site in relation to maintenance and non-routine work. We've reduced headcount at the site, and with new leadership there, worked on a whole series of cost reduction opportunities across the operation. We have reduced our refined zinc production this year in the context of the TC environment. That again will directly improve Trail's profitability and cash generation. The Kivset plant that we did a significant amount of maintenance on is now operating very well. Our production of lead, in particular, is very strong. We do also have the option at Trail to sell excess power to generate cash flows as needed. We've taken a very commercial focus on the way that we're operating Trail right now. I'm very pleased with the early results that we are seeing there, and I think Trail is doing the things it needs to do to continue to earn its place in the portfolio from a profitability and cash flow generation perspective. The other comments I would make on Trail are that it really is, particularly in the current context, quite a strategic asset. It's key to our portfolio, particularly that integration with the Red Dog mine. It gives us optimal market access for the Red Dog concentrate. Importantly, though, it produces a number of metals that have become quite strategic and important in the current context of the relationship between Canada and the US. We estimate that Trail would be the fourth largest producer of germanium in the world and the only primary producer of germanium in North America. This is at a time when China has cut off or restricted supplies of germanium into the US, and it's a critical component for defense spending, for example, and goes directly to that national security agenda. So foundationally, it's absolutely critical that we achieve profitability and cash flow generation from Trail, and I'm confident that we're on the right path there. Secondly, there's a compelling strategic overlay with Trail being part of an integrated flow sheet we have with Red Dog.

How much revenue do you get from germanium and the smaller metals? Is that becoming a meaningful stream that will surprise the upside given what's happening?

Yeah. So it's relatively small in terms of the direct revenue and cash flow profitability impact of the business. It has, I think, a lot of ancillary strategic benefits from a relationship perspective in a period of time where trade relations are strained. That flows all the way back upstream to the output for the Red Dog mine, which of course is in the US in Alaska. As we look forward to the future expansions of Red Dog, the proportion of specialty metals in that concentrate will actually increase. So we think it's interesting for a number of reasons, but again, just on Trail, the core focus there is on profitability and cash generation. We're in good shape there with a number of the changes that have recently been made and the new operating strategy that the team has put in place for 2025.

Right. Thank you.

Thanks, Myles. The next question is from Bill Peterson with JPMorgan. Please go ahead.

Yeah. Hi. Good morning. Thanks for taking the questions. Maybe on the growth projects, you spoke to the EA assessment of Highland Valley and a little bit on Mexico. But when we think about higher level, I guess at this stage for 2025, can you go through each project in terms of what's in your control versus local authorities? What should we be looking out for next steps? And I guess on Zafranal in particular, you discussed the potential sanction decision. What are the key requirements you're looking for? Whether it be market-related or expectations on cost or IRRs you're looking forward to potentially sanction by year-end?

Look. I mean, I think, as ever, the things that are in our control remain the studies and the completion of those studies. There remain the engineering work that we're undertaking and, of course, there remains the engagement with vendors and contractors that ultimately will support the project. As is the case with any project, to a certain extent, permitting is beyond our control, but, of course, it's something that we engage on very heavily, and it's something where we work very closely with the regulators in a collaborative fashion through that process. I think all of these projects will have to earn their place in the portfolio and earn their place in terms of capital allocation. Of course, we have a view that that is the case, which is why we are pursuing them as near-term priorities, and the economics that we see associated with these projects are compelling, offering a combination of strong IRRs, strong cash flow generation, strong EBITDA contribution to the group, and a meaningful contribution to our product base. So all of those things must be true ultimately for a project to be sanctioned and for the risks to be appropriately managed. So we're comfortable with the portfolio that we have. HBC being a brownfield mine life extension here in BC, and then two greenfield projects with Zafranal in Peru being one that Teck Resources Limited will construct and operate, and then San Nicolas in Mexico under that 50/50 joint venture with Agnico Eagle, which will be constructed and ultimately operated by the joint venture company. So we're very happy with the shape of that portfolio. We'll continue to progress these projects to sanction decisions, and as I said, provided the financial metrics are there, we expect to sanction them and see them in their place in our portfolio going forward.

Yeah. Thanks for that. And then I wanted to ask about cost maybe in a slightly different way than the prior question. First, you talked about the union. Two out of three being negotiated, one more to go. I guess, how should we think about a run rate impact to the model and cost? And then I guess tying it one step further on the cost trajectory for QB2. As we think about the exit rate, cost per pound given the expected output increases throughout the year.

Yeah. I mean, I think in the context of sort of run rate cost, of course, Emma and the team can take you through more of the details. But I think in terms of labor costs, you can continue to assume sort of lower single-digit inflation. I'll get Emma to follow up with you offline. In terms of sort of run rate, I think in the way that we've talked about production escalating as we go through the year to more stable run rates at QB, I think you can think about the cost in the same way as we've established our guidance with a lower end and a higher end, and we've continued to disclose that unit cost per QB to give you that indication. So I think I would see that as sort of a tale of two halves of the year similar to production.

Thank you, Jonathan and Crystal.

Thanks for those questions, Bill. That's all the time we have for questions today. I will now hand the call back over to Jonathan Price for closing remarks.

Thank you, operator, and thanks again to everyone for joining us today. Before we sign off, I did want to note that it is Fraser Phillips' last quarterly conference call with Teck Resources Limited before his retirement. I'd like to sincerely thank Fraser for his many contributions to Teck Resources Limited over the past eight years and wish him and his wife Kimberly all the very best for their next chapter. Meanwhile, we look forward to seeing many of you in person at a major mining conference we are attending. If you have any further questions, please reach out to Emma Chapman and our IR team. Enjoy the rest of your day.

This concludes today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.