TECK — Teck Resources Limited

Summary of Teck Resources Limited Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted EBITDA: More than doubled to $2.1 billion, with margins expanding to 53% from 40% year-over-year.
• Cash Flow from Operations: Strong at $1 billion, contributing to a $338 million increase in net cash position, now at $488 million.
• Liquidity: Current liquidity stands at $9.8 billion.
• Copper Sales: Record quarterly sales volumes, with average copper prices reaching $5.83 per pound.
• Production: Copper production increased by 32% year-over-year to 140,000 tonnes.

2. Strategic Updates and Business Highlights

• Merger with Anglo American: Regulatory approval received from South Korea; integration planning is underway, with expectations to close the transaction within 12 to 18 months.
• Operational Performance: Consistent performance at QB, with production in line with Q4 2025 and record copper sales of 70,000 tonnes.
• Tailings Management Facility (TMF): Significant progress made, including completion of Rock Bench 4, with expectations to achieve steady-state operations by year-end.
• Highland Valley Mine Life Extension Project: Detailed engineering over 90% complete, with capital expenditure guidance unchanged at $900 million to $1.2 billion for the year.

3. Forward Guidance and Outlook

• Copper Production Guidance: Expected to grow to 455,000 to 530,000 tonnes in 2026.
• Zinc Production Guidance: Unchanged, with expectations of 410,000 to 460,000 tonnes in concentrate production.
• Net Cash Unit Costs: Guidance for copper remains at $1.85 to $2.20 per pound; for zinc, it is $0.65 to $0.75 per pound.
• Cash Flow Potential: If copper prices average $5.50 per pound for the rest of the year, EBITDA could reach $6.6 billion.

4. Bad News, Challenges, or Points of Concern

• Inflationary Risks: Current geopolitical tensions in the Middle East may lead to inflationary pressures, particularly on diesel prices, which could impact operational costs.
• Zinc Production: Lower grades at Red Dog may affect production levels, with anticipated sales for Q2 expected to be between 30,000 and 40,000 tonnes.
• Capacity Concerns: Potential bottlenecks in tailings capacity were raised, although management indicated no risk to production guidance.

5. Notable Q&A Insights

• Merger Progress: Discussions with Chinese regulators are proceeding normally, with no requests for asset divestitures reported.
• Trail Operations: Future profitability will depend on commodity prices, TC environment, and FX rates, with a focus on optimizing feedstock.
• Tailings Dam Capacity: Management expects to complete Rock Bench 5 by Q2, allowing operations to continue without constraints for the remainder of 2026.
• Future Joint Ventures: Ongoing discussions regarding potential synergies between QB and Collahuasi, with no concrete announcements yet.

Overall, Teck Resources demonstrated a strong financial performance in Q1 2026, with significant operational achievements and strategic initiatives, particularly regarding the merger with Anglo American and ongoing projects. However, they face challenges related to inflationary pressures and production variability that could impact future performance.