Teck Resources Ord Shs Class A TECK

Primary Symbol: T.TECK.A Alternate Symbol(s): T.TECK.B | TCKRF

Metals & Mining Industrial Metals & Minerals

Teck Resources Limited is a Canadian resource company. The Company operates a portfolio of copper and zinc operations across North and South America. The Company’s operations and projects include Antamina, Cardinal River, Galore Creek Project, Carmen de Andacollo, Highland Valley Copper, Trail Operations, Quebrada Blanca, Carmen de Andacollo, HVC Mine Life Extension Project, Galore Creek Project, NorthMet Project, Mesaba Project, NuevaUnion Project, Red Dog, Sullivan Mine and Trail Operations. The Antamina mine is a copper and zinc mine, located in the Andes Mountain range, 270 kilometers north of Lima, Peru. The deposit is located at an average elevation of 4,200 meters. Its Carmen de Andacollo is located in the Coquimbo Region of central Chile at an elevation of 1,000 meters, approximately 350 kilometers north of Santiago. Its Galore Creek is located within the territory of the Tahltan in northwestern British Columbia, approximately 150 kilometers northwest of Stewart.

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Teck Resources Ord Shs Class A

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Post by retiredcfon Jan 31, 2022 8:35am

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Post# 34377702

TD

Teck Resources Ltd.

(TECK.B-T, TECK-N) C$40.68 | US$31.89

Updated Q4/21, 2022 and QB2 Capex Guidance Event

Teck provided updated Q4/21 coal and copper sales and cost guidance, updated 2022 coal sales guidance and updated COVID-19-related cost guidance for the QB2 project. In our view, management had telegraphed many of the changes to guidance, as a result, we expect investor should not be overly surprised by the update. We have summarized the changes to guidance below.

Impact: MIXED

Coal Business

Record high clean coal inventories at the mines are expected to result in sales exceeding production by 1.2-1.5 million tonnes in 2022.
Q4/21 steelmaking coal sales were 5.1 million tonnes, slightly below the low end of the previously revised guidance of 5.2-5.7 million tonnes.
Logistics challenges and inflationary pressures drove higher Q4/21 adjusted site cash cost of sales and transportation costs of $72 and $49 per tonne, respectively. 2021 unaudited site cash cost of sales and transportation costs are $65 and $44 per tonne, within the previous guidance ranges of $64-$66 and $44-$46 per tonne, respectively.
Realized steelmaking coal prices in Q4/21 averaged US$351 per tonne. The increase in steelmaking coal prices from Q3/21 further resulted in positive pricing adjustments of approximately $70 million.

Copper Business/QB2 Project

Inflationary pressures and workers’ participation related to strong copper prices resulted in Q4/21 net cash unit costs of US$1.52/lb for the copper business unit.
Management now assume that the impacts of COVID-19 will not end prior to the completion of construction of the QB2 project, as a result, the COVID-19-related cost estimate for the project has been raised to a range of US$900 million to US $1.1 billion (previously US$600 million).
As previously guided, the base capex estimate for QB2 is expected to increase by ~5% from the current US$5.26 billion forecast.

TD Investment Conclusion

We are maintaining our ACTION LIST BUY recommendation. Our target price has declined to $55.00 (from $56.00)