Mr. Fraser Phillips reports

TECK ANNOUNCES 2023 PRODUCTION AND 2024 GUIDANCE UPDATE

Teck Resources Ltd. has provided select unaudited fourth quarter 2023 production and sales volumes, and annual production volumes for 2023, as well as operational and capital guidance for 2024 and production guidance for 2025 to 2027.

Its fourth quarter 2023 financial results are scheduled for release on Feb. 21, 2024.

2023 production results

The attached table shows a summary of Teck's share of unaudited production and sales of principal products for the fourth quarter of 2023 and 2023 annual production as compared with its previously disclosed annual guidance. Its 2023 annual production was impacted by a number of challenges across its operations through the year, as outlined herein. In its steelmaking coal business unit, production was higher than its previously disclosed guidance. Production in its base metal business was lower than the bottom end of its previously disclosed guidance ranges.

• Copper production of 296,500 tonnes was impacted by a slower ramp-up at QB2, as well as a localized geotechnical fault at Highland Valley Copper in August that has been stabilized.
• Zinc in concentrate production of 644,000 tonnes was marginally below the low end of guidance as a result of weather-related issues in the first quarter, and equipment failures at Red Dog.
• Refined zinc production of 266,600 tonnes was slightly below guidance due to weather-related impacts in the first quarter, as well as concentrate supply issues in the third quarter and the beginning of the fourth quarter.
• Steelmaking coal production of 23.7 million tonnes was higher than the top end of guidance due to strong performance in the fourth quarter as improvements in plant performance led to an increase in production.

Guidance

Its production, unit cost and capital expenditure guidance for 2024, and annual production guidance for 2025 to 2027, is outlined in the attached tables. The guidance ranges reflect its operating plans, which include known risks and uncertainties. Events such as extreme weather, unplanned operational shutdowns and other disruptions could impact actual results beyond these estimates. Its unit costs are calculated based on production volumes, and any variances from estimated production ranges will impact unit costs.

It has included range-based guidance for all categories of guidance disclosed and has provided further annual detail for its three-year production guidance to outline expected production fluctuations within that period.

Annual 2024 guidance and three-year production guidance have been provided for its steelmaking coal business. The guidance is on a 100-per-cent basis and reflects the exchange of minority interests by NSC of 2.5 per cent in Elkview operations and by Posco of 2.5 per cent in Elkview operations and 20 per cent in the Greenhills joint venture. Closing of the sale of the remaining interest (77 per cent) in Elk Valley Resources to Glencore PLC is expected to occur in the third quarter of 2024, subject to the satisfaction of customary conditions, including receipt of approval under the Investment Canada Act and competition approvals in several jurisdictions.

It remains highly focused on managing its controllable operating expenditures. However, in line with the broader mining industry, it continues to face inflationary cost pressures across its business, which have increased its operating costs and capital expenditure compared with prior years. While its underlying key mining drivers such as strip ratios and haul distances remain relatively stable, inflationary pressures on key input costs are expected to persist through 2024. Pressures on the cost of certain key supplies, including mining equipment, labour and contractors, as well as energy costs in Chile and changing diesel prices, are reflected in its capital expenditure and annual unit cost guidance for 2024.

Production guidance

An attached table shows Teck's share of unaudited production of its principal products in 2023 and its guidance for 2024 and the next three years.

Sales guidance

An attached table shows its sales guidance for the first quarter of 2024 for select products.

Copper

Total copper production in 2024 is expected to significantly increase to between 465,000 and 540,000 tonnes, compared with the 296,500 tonnes produced in 2023.

QB was operating near design throughput capacity at the end of 2023, and this has continued into 2024. Recoveries have generally been in line with expectations, and head grades remain within expected levels. The operation will focus on reliability, consistency and increasing availability, and it expects to produce between 230,000 and 275,000 tonnes in 2024. This is slightly lower than its previous three-year production guidance as that guidance assumed that all typical ramp-up reliability issues would be addressed in 2023. Due to the delay in construction, some of these issues are expected to be resolved in the first half of 2024. The company expects QB to operate at design throughput in 2025 through 2027, with annual production guidance increasing to between 280,000 and 310,000 tonnes.

Highland Valley Copper production is expected to increase in 2024 as it moves into the Lornex pit, which is higher grade, and as a result of improved mill availability. Strong production is expected to continue into 2025 to 2027 with higher ore grade and throughput from treating Lornex material during this period.

Its share (22.5 per cent) of copper production at Antamina remains stable and consistent with its previously disclosed guidance in 2024 and the following three years.

Carmen de Andacollo continues to face extreme drought conditions, causing water restrictions, which impact production, with 2024 production expected to be similar to 2023. Steps are being taken to mitigate these risks, with a solution likely to be in place in 2025. As a result and with the benefit of higher-grade ore, production is expected to increase between 2025 and 2027, compared with 2024.

Copper net cash unit costs after byproduct credits, including QB, are expected to be between $1.85 (U.S.) and $2.25 (U.S.) per pound in 2024. This is higher than its 2023 guidance as a result of continuing inflationary impacts on the cost of certain key supplies, including mining equipment, tires, labour and contractors persisting into 2024 and now embedded in its key supply contracts.

QB net cash unit costs after byproduct credits are expected to be $1.95 (U.S.) to $2.25 (U.S.) per pound in 2024. Unit costs are expected to remain elevated in 2024, especially in the first half of 2024, due to alternative logistics costs required as a result of the delay in port construction into the first half of this year, no molybdenum production in the first quarter due to delay in the molybdenum plant construction and lower copper production driven by the final required shutdowns during the first quarter. Compared with previous guidance, QB has experienced inflationary pressures, including increased pass-through costs from the Chilean energy grid regulator. Once QB is at steady state of operation, it will provide additional unit cost guidance.

Zinc

Total zinc in concentrate production in 2024 is expected to be between 565,000 and 630,000 tonnes, compared with 644,000 tonnes in 2023. Production over the next three-year period is expected to decrease due to declining grades at Red Dog and lower zinc production at Antamina.

Red Dog is expected to produce between 520,000 and 570,000 tonnes in 2024. Annual production from Red Dog is expected to decrease between 2025 and 2027 due to declining grades as it enters the later stages of the current mine life at Red Dog.

Its share (22.5 per cent) of zinc production at Antamina is expected to be between 45,000 and 60,000 tonnes in 2024, compared with 104,200 tonnes in 2023. Based on Antamina's mine plan, the ore processed in 2024 delivers higher copper production and lower zinc production compared with that of 2023. The mine plan over 2025 to 2027 produces more zinc in 2025 with a reduction in line with the long-term mine plan in 2026 and 2027.

Refined zinc production is expected to be between 275,000 and 290,000 tonnes in 2024, compared with 266,600 tonnes in 2023. Production is expected to increase in 2024 as a result of improved concentrate availability. The previously disclosed Kivcet boiler replacement at its Trail operations will progress in second quarter 2024, primarily impacting the lead circuit and with minimal impact in the zinc circuit.

Zinc net cash unit costs after byproducts in 2024 are expected to be 55 U.S. cents to 65 U.S. cents per pound, slightly higher than its 2023 guidance as a result of continuing inflationary impacts on the cost of certain key supplies.

Steelmaking coal

Steelmaking coal production in 2024 is expected to be between 24.0 million and 26.0 million tonnes compared with 23.7 million tonnes produced in 2023. Production is expected to remain at these levels throughout 2025 to 2027.

It expects its 2024 steelmaking coal adjusted site cash cost of sales in 2024 to be between $95 and $110 per tonne. Relative to 2023, it anticipates continuing inflationary cost impacts of certain key supplies to persist into 2024, including higher energy and maintenance parts, as well as higher contractor and labour costs. Transportation unit costs are expected to be $47 to $51 per tonne in 2024.

Capital expenditure guidance

Its 2024 capital expenditures are expected to significantly decrease from 2023 guidance levels, primarily driven by lower spending on QB2 development capital, as it nears completion of the project.

At QB2, the construction of the molybdenum plant was substantially completed in December, 2023, and commissioning has commenced. Ramp-up of the molybdenum plant is expected to be completed by the end of the second quarter of 2024. Construction of the port offshore facilities is progressing to plan and is expected to be completed by the end of the first quarter of 2024. The last jetty pile was completed in December, representing a major milestone in the port construction. Its previously disclosed QB2 project capital cost guidance is unchanged at $8.6-billion (U.S.) to $8.8-billion (U.S.), with $500-million (U.S.) to $700-million (U.S.) expected to be spent in first half 2024. There are no further capitalized ramp-up costs expected in 2024.

Sustaining capital expenditure in 2024 is expected to increase marginally above 2023 guidance levels both in its zinc business unit as it completes boiler repairs at its Trail operations and in its steelmaking coal business as the Elkview operations' administration and maintenance complex project reaches the peak of its execution plan.

Capitalized stripping costs in 2024 are expected to decrease from 2023 guidance levels, which were a notable peak period of capitalized stripping to advance the development of mine pits to support future production in its steelmaking coal business.

Growth capital, excluding QB2 development capital, is prioritized on its copper growth projects and as it focuses on completing feasibility studies, advancing detailed engineering work, project execution planning and progressing permitting, particularly at the Highland Valley Copper life extension project (previously, HVC2040), San Nicolas and Zafranal. In addition, it will work to define the most capital efficient and value-adding pathway for the expansion of QB based on the performance of the existing asset base. It also expects to continue to progress its medium- to long-term portfolio options with prudent investments to advance the path to value.

As previously disclosed, it does not expect to sanction any growth projects in 2024, and it is focused on advancing near-term projects for possible sanctioning in 2025. Growth projects are required to deliver an attractive risk-adjusted return and will compete for capital in line with Teck's capital allocation framework.

An attached table shows its capital expenditure guidance for 2023 and 2024.

About Teck Resources Ltd.

As one of Canada's leading mining companies, Teck is committed to responsible mining and mineral development with major business units focused on copper, zinc and steelmaking coal. Copper, zinc and high-quality steelmaking coal are required for the transition to a low-carbon world. Headquartered in Vancouver, Canada, Teck has shares listed on the Toronto Stock Exchange under the symbols TECK.A and TECK.B and on the New York Stock Exchange under the symbol TECK.

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