• Cash Received from Sale: USD 7.3 billion from the sale of the steelmaking coal business.

• Shareholder Returns: USD 720 million returned in Q3 through dividends and share buybacks; over USD 1.3 billion year-to-date.

• Adjusted EBITDA: More than doubled compared to the same period last year.

• Adjusted EPS: Nearly quadrupled compared to the same period last year.

• Copper Production: 52,500 tonnes in Q3; guidance for 2024 revised to 420,000 to 455,000 tonnes.

• Zinc Net Cash Unit Cost Guidance: Improved by USD 0.10 per pound to USD 0.45 to USD 0.55 per pound.

• Debt Reduction: USD 1.5 billion reduced, including a cash tender offer and repayment of short-term loans.

• Net Cash Position: CAD 1.8 billion as of September 30.

• Cash Balance: CAD 7.8 billion as of September 30.

• Share Buyback Program: USD 3.25 billion authorized by the Board.

• Warning! GuruFocus has detected 6 Warning Sign with TECK.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Teck Resources Ltd (NYSE:TECK) successfully completed the sale of its steelmaking coal business, receiving USD 7.3 billion in cash.

• The company returned $720 million to shareholders through dividends and share buybacks in the third quarter, totaling over $1.3 billion year-to-date.

• Teck Resources Ltd (NYSE:TECK) achieved a consecutive record quarter in copper production, with QB operations ramping up.

• The company improved its zinc net cash unit cost guidance by $0.10 per pound, reflecting strong operational performance.

• Teck Resources Ltd (NYSE:TECK) was recognized on the Forbes list of the World’s Best Employers 2024, highlighting its positive workplace environment.

Negative Points

• Teck Resources Ltd (NYSE:TECK) experienced a fatality at its Antamina operation, prompting a thorough investigation and safety review.

• The company lowered its copper production guidance for 2024 and 2025 due to lower expected production from Highland Valley and QB operations.

• Teck Resources Ltd (NYSE:TECK) recorded a non-cash after-tax impairment charge of $828 million on its Trail operations due to challenging market conditions.

• The company faced operational challenges at QB, including lower grade ore and unplanned maintenance, impacting production.

• Teck Resources Ltd (NYSE:TECK) is closely monitoring the political situation in Mexico, which could affect its San Nicolas project.

Q & A Highlights

Q: What gives you confidence in achieving the 2025 guidance numbers after consecutive guidance cuts for 2024? A: Jonathan Price, CEO, explained that the design at QB is robust, with improvements in mill throughput expected to reach design rates by the end of 2024. The focus is on maximizing online time and improving recovery rates through testing and adjustments. The 2025 guidance range reflects some uncertainty due to the ongoing ramp-up phase, but the company is confident in achieving these targets.

Q: Is the design recovery rate of 86% to 92% for QB a revised assumption? A: Jonathan Price, CEO, confirmed that there is no revision to the design recovery rate, and it remains achievable. The company is benchmarking its ramp-up performance against other major projects and is confident in improving recoveries through ongoing testing and adjustments.

Q: What is the current status of the San Nicolas project in Mexico, and is there a possibility of reconsidering it as an underground operation? A: Jonathan Price, CEO, stated that the company is monitoring the situation in Mexico and believes that an open cut mine will deliver the best returns. The company continues to engage with authorities and stakeholders, hoping for a resolution that allows open cut mining.

Q: How will the additional work required for QB in 2025 impact costs, and is project CapEx now complete? A: Jonathan Price, CEO, confirmed that project CapEx is complete, and any additional work in 2025 will be minor and not significantly impact costs. These are preventive maintenance and minor improvements, with no significant additional capital or cost expected.

Q: Will the ramp-up delay at QB affect the timing of sanctioning other projects? A: Jonathan Price, CEO, mentioned that the remaining work at QB is expected to be completed in the first half of 2025. The company plans to sanction other projects in the second half of 2025, assuming permits and studies are completed on time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.