Teck Resources Limited
(Registrant)
|
|||
Date: October 27, 2020
|
By:
|
/s/ Amanda R. Robinson | |
Amanda R. Robinson | |||
Corporate Secretary | |||
Exhibit Number
|
Description
|
99.1
|
|
99.2 |
For Immediate Release
20-51-TR
|
Date:
|
October 26, 2020
|
• |
Adjusted profit attributable to shareholders(1) (2) in Q3 2020 of $130 million or $0.24 per share.
|
• |
Adjusted EBITDA(1) (2) in Q3 2020 of $638 million.
|
• |
Adjusted site cash cost of sales(1) (2) in our steelmaking coal business is expected to be below $60 per tonne by year end.
|
• |
Neptune Bulk Terminals upgrade project is progressing in line with budget and schedule. The five-month planned shutdown concluded in September, having delivered the expected benefits for safe and productive construction work on
the upgrade project. All major equipment has been delivered to site.
|
• |
QB2 construction activities are safely ramping back up towards full construction levels with over 7,000 people currently on site and the project is expected to be approximately 40% complete
by year end.
|
• |
Approximately $270 million in operating cost reductions and $550 million in capital cost reductions have been achieved to date from expected spending contemplated at the end of June 2019.
|
• |
We continue to manage through the challenges presented by COVID-19 to protect the safety and health of our employees, contractors and communities in which we operate.
|
1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Financial Metrics
(CAD$ in millions, except per share data)
|
Q3 2020
|
Q3 2019
|
||||||
Revenues
|
$
|
2,291
|
$
|
3,035
|
||||
Gross profit before depreciation and amortization1 2
|
$
|
703
|
$
|
1,223
|
||||
Gross profit
|
$
|
291
|
$
|
787
|
||||
EBITDA1 2
|
$
|
519
|
$
|
1,036
|
||||
Adjusted EBITDA1 2
|
$
|
638
|
$
|
1,064
|
||||
Profit attributable to shareholders
|
$
|
61
|
$
|
369
|
||||
Adjusted profit attributable to shareholders1 2
|
$
|
130
|
$
|
389
|
||||
Basic earnings per share
|
$
|
0.11
|
$
|
0.66
|
||||
Diluted earnings per share
|
$
|
0.11
|
$
|
0.66
|
||||
Adjusted basic earnings per share1 2
|
$
|
0.24
|
$
|
0.70
|
||||
Adjusted diluted earnings per share1 2
|
$
|
0.24
|
$
|
0.69
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
• |
Steelmaking coal adjusted site cash cost of sales(1) (2) decreased in the third quarter to $67 per tonne. Adjusted site cash cost of sales(1) (2) are expected to decrease over the remainder of 2020 and we expect to exit the year below $60 per tonne due to:
|
o |
Declining strip ratios, as planned;
|
o |
Elkview plant expansion and the closure of our higher cost Cardinal River Operations; and
|
o |
Benefits of our cost reduction and RACE21TM programs.
|
• |
We are nearing completion of construction of our Fording River South Active Water Treatment Facility (completion expected near the end of Q1 2021) and the Elkview saturated rock fill will be commissioned in Q4 2020, ahead of
schedule and under budget.
|
1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
• |
The Neptune Bulk Terminals upgrade project remains in line with the previously announced capital estimate and schedule.
|
• |
To date, COVID-19 related issues have not substantially impacted works on the critical path.
|
• |
The five-month planned shutdown at Neptune Bulk Terminals concluded in September, having delivered the expected benefits for safe and productive construction work on the upgrade project. Construction is progressing according to
plan, with completion expected in Q1 2021.
|
• |
Major equipment deliveries are complete with all equipment on site, concluding with the new shiploader arrival at the terminal on October 8. Click here for photos and video of delivery
and installation of the new shiploader at Neptune Bulk Terminals.
|
• |
Operational readiness efforts are well underway with commissioning on major pieces of equipment including the single dumper and stacker reclaimer proceeding according to, or ahead of, plan.
|
• |
Through Q3, the project continued its staged ramp up of the construction workforce towards pre-COVID-19 levels in line with our plans developed in Q2.
|
o |
Currently over 7,000 people on site and planning to continue ramp up through Q4, targeting over 9,000 people by the end of the year;
|
o |
All major contractors remobilized and work is progressing well across the project in line with our ramp-up plan;
|
o |
The construction of the additional camp space is progressing well and will provide additional capacity as this begins to come on line in Q4; and
|
o |
Aiming to achieve overall project progress of approximately 40% by the end of the year.
|
• |
First production is expected in the second half of 2022, but is dependent on our continued ability to successfully manage through COVID-19 going forward. The cost and schedule impact of the temporary suspension due to COVID-19 is
estimated as follows:
|
o |
In Q3, we expensed approximately $107 million of costs associated with the QB2 project suspension and remobilization and $23 million of interest that would
have otherwise been capitalized for the project;
|
o |
As at the end of Q3 2020, due to the suspension, we have expensed total costs of $272 million and $103 million of interest that would have otherwise been capitalized for the project;
|
o |
The estimated impact from the suspension, including expensed costs, is expected to be approximately US$350 to $400 million (excluding interest) with a
schedule delay of approximately five to six months; and
|
o |
In addition, we are in the process of constructing more camp space at an incremental cost of US$45 million that would not have been required absent COVID-19.
|
• |
Click here for photos of construction progress on QB2.
|
• |
We have US$3.8 billion available on our US$4.0 billion revolving credit facility and our US$1.0 billion revolving credit facility is undrawn as at October 26, 2020. These facilities are committed to November 2024 and June 2022,
respectively. Neither facility has an earnings or cash flow based financial covenant, a credit rating trigger or a general material adverse effect borrowing condition.
|
• |
Since the launch of our cost reduction program at the beginning of Q4 2019, we have realized approximately $270 million in operating cost reductions and $550 million in capital cost reductions. These reductions are against our
expected spending that was contemplated at the end of June 2019.
|
• |
Our global workforce and contractors continue to work safely and productively as we deal with the challenges associated with the COVID-19 pandemic. Our ability to minimize the spread of the virus amongst our employees and
surrounding communities has been critical.
|
• |
Protocols remain in place with a continued focus on preventative measures, controls and compliance, and the integration into our “new normal” of operations and planning.
|
• |
All of our mines have recovered from COVID-19 production disruptions in the second quarter. Labour intensive activities such as maintenance, mine operations, and projects continue to be impacted by COVID-19 safety protocols.
|
• |
We expensed $130 million in costs in the quarter relating to the temporary suspension and remobilization of our QB2 project after suspension due to COVID-19 in March 2020.
|
• |
Year-to-date High Potential Incident Frequency (HPIF) (those incidents that have the ability to result in serious or fatal injuries) per million hours worked of 1.1, 31% lower than the same period in 2019.
|
• |
Entered into a long-term power purchase agreement to provide 100% renewable power for Carmen de Andacollo Operations, eliminating approximately 200,000 tonnes of greenhouse gas (GHG) emissions annually.
|
• |
As of the end of the third quarter, Teck is the top-ranked mining company for ESG performance by Sustainalytics, Vigeo Eiris, the Dow Jones Sustainability Index and FTSE4Good; is ranked in the top 10% of mining companies by ISS
ESG; and has an ‘A’ rating from MSCI.
|
• |
We have reduced our capital expenditures, capitalized stripping and zinc unit cost guidance for the second half of 2020 (H2 2020). At the same time, we have lowered our H2 2020 copper production guidance range by 5,000 tonnes
based on changes at Highland Valley Copper. Our remaining guidance for H2 2020 is unchanged from our previous disclosures
|
• |
Summary guidance is outlined below and our usual guidance tables can be found on pages 36 - 39 of Teck’s full third quarter results for 2020 at the link below.
|
2020 Guidance – Summary
|
||||
Production Guidance – H2 2020
|
||||
Steelmaking coal (million tonnes)
|
11 – 12
|
|||
Copper (000’s tonnes)
|
140 – 155
|
|||
Zinc (000’s tonnes)
|
315 – 345
|
|||
Refined zinc (000’s tonnes)
|
155 – 165
|
|||
Bitumen (million barrels)
|
3.6 – 4.4
|
|||
Sales Guidance – Q4 2020
|
||||
Steelmaking coal sales (million tonnes)
|
5.8 – 6.2
|
|||
Red Dog zinc in concentrate sales (000’s tonnes)
|
145 – 155
|
|||
Unit Cost Guidance – H2 2020
|
||||
Steelmaking coal adjusted site cash cost of sales (CAD$/tonne)
|
$
|
60 – 64
|
||
Steelmaking coal transportation costs (CAD$/tonne)
|
$
|
39 – 42
|
||
Copper total cash unit costs (US$/lb.)
|
$
|
1.45 – 1.55
|
||
Copper net cash unit costs (US$/lb.)
|
$
|
1.20 – 1.30
|
||
Zinc total cash unit costs (US$/lb.)
|
$
|
0.55 – 0.60
|
||
Zinc net cash unit costs (US$/lb.)
|
$
|
0.30 – 0.40
|
||
Bitumen adjusted operating costs (CAD$/barrel)
|
$
|
35 – 38
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss) attributable to shareholders
|
$
|
61
|
$
|
369
|
$
|
(400
|
)
|
$
|
1,230
|
|||||||
Add (deduct) on an after-tax basis:
|
||||||||||||||||
Asset impairment
|
–
|
–
|
474
|
109
|
||||||||||||
COVID-19 costs
|
64
|
–
|
233
|
–
|
||||||||||||
Environmental costs
|
27
|
26
|
9
|
80
|
||||||||||||
Inventory write-downs (reversals)
|
11
|
6
|
76
|
7
|
||||||||||||
Share-based compensation
|
18
|
(20
|
)
|
13
|
(1
|
)
|
||||||||||
Commodity derivative losses (gains)
|
(26
|
)
|
(8
|
)
|
(31
|
)
|
(14
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(77
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
8
|
166
|
||||||||||||
Taxes and other
|
(25
|
)
|
16
|
(69
|
)
|
(26
|
)
|
|||||||||
Adjusted profit attributable to shareholders1
|
$
|
130
|
$
|
389
|
$
|
313
|
$
|
1,474
|
||||||||
Adjusted basic earnings per share1 2
|
$
|
0.24
|
$
|
0.70
|
$
|
0.58
|
$
|
2.62
|
||||||||
Adjusted diluted earnings per share1 2
|
$
|
0.24
|
$
|
0.69
|
$
|
0.58
|
$
|
2.59
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Per share amounts)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Basic earnings (loss) per share
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.19
|
|||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
0.88
|
0.19
|
||||||||||||
COVID-19 costs
|
0.12
|
–
|
0.43
|
–
|
||||||||||||
Environmental costs
|
0.05
|
0.05
|
0.02
|
0.14
|
||||||||||||
Inventory write-downs (reversals)
|
0.02
|
0.01
|
0.14
|
0.01
|
||||||||||||
Share-based compensation
|
0.04
|
(0.04
|
)
|
0.03
|
–
|
|||||||||||
Commodity derivative losses (gains)
|
(0.05
|
)
|
(0.01
|
)
|
(0.06
|
)
|
(0.02
|
)
|
||||||||
Debt prepayment option loss (gain)
|
–
|
–
|
–
|
(0.13
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
0.01
|
0.29
|
||||||||||||
Taxes and other
|
(0.05
|
)
|
0.03
|
(0.12
|
)
|
(0.05
|
)
|
|||||||||
Adjusted basic earnings per share
|
$
|
0.24
|
$
|
0.70
|
$
|
0.58
|
$
|
2.62
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Per share amounts)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Diluted earnings (loss) per share
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.16
|
|||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
0.88
|
0.19
|
||||||||||||
COVID-19 costs
|
0.12
|
–
|
0.43
|
–
|
||||||||||||
Environmental costs
|
0.05
|
0.04
|
0.02
|
0.14
|
||||||||||||
Inventory write-downs (reversals)
|
0.02
|
0.01
|
0.14
|
0.01
|
||||||||||||
Share-based compensation
|
0.04
|
(0.04
|
)
|
0.03
|
–
|
|||||||||||
Commodity derivative losses (gains)
|
(0.05
|
)
|
(0.01
|
)
|
(0.06
|
)
|
(0.02
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(0.13
|
)
|
|||||||||||
Debt redemption loss
|
–
|
–
|
0.01
|
0.29
|
||||||||||||
Taxes and other
|
(0.05
|
)
|
0.03
|
(0.12
|
)
|
(0.05
|
)
|
|||||||||
Adjusted diluted earnings per share
|
$
|
0.24
|
$
|
0.69
|
$
|
0.58
|
$
|
2.59
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss)
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Finance expense net of finance income
|
63
|
56
|
224
|
172
|
||||||||||||
Provision for (recovery of) income taxes
|
19
|
171
|
(116
|
)
|
630
|
|||||||||||
Depreciation and amortization
|
412
|
436
|
1,104
|
1,204
|
||||||||||||
EBITDA
|
519
|
1,036
|
741
|
3,273
|
||||||||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
647
|
171
|
||||||||||||
COVID-19 costs
|
107
|
–
|
336
|
–
|
||||||||||||
Environmental costs
|
37
|
35
|
12
|
112
|
||||||||||||
Inventory write-downs (reversals)
|
18
|
7
|
111
|
9
|
||||||||||||
Share-based compensation
|
25
|
(27
|
)
|
18
|
(2
|
)
|
||||||||||
Commodity derivative losses (gains)
|
(35
|
)
|
(11
|
)
|
(42
|
)
|
(19
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(105
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
11
|
224
|
||||||||||||
Taxes and other
|
(33
|
)
|
24
|
(103
|
)
|
25
|
||||||||||
Adjusted EBITDA
|
$
|
638
|
$
|
1,064
|
$
|
1,731
|
$
|
3,688
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Gross profit
|
$
|
291
|
$
|
787
|
$
|
828
|
$
|
2,880
|
||||||||
Depreciation and amortization
|
412
|
436
|
1,104
|
1,204
|
||||||||||||
Gross profit before depreciation and amortization
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
||||||||
Reported as:
|
||||||||||||||||
Steelmaking coal
|
$
|
120
|
$
|
628
|
$
|
761
|
$
|
2,456
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
121
|
107
|
291
|
278
|
||||||||||||
Antamina
|
173
|
136
|
356
|
450
|
||||||||||||
Carmen de Andacollo
|
31
|
30
|
107
|
103
|
||||||||||||
Quebrada Blanca
|
11
|
(6
|
)
|
18
|
10
|
|||||||||||
Other
|
–
|
2
|
–
|
–
|
||||||||||||
336
|
269
|
772
|
841
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
14
|
2
|
38
|
10
|
||||||||||||
Red Dog
|
255
|
284
|
529
|
627
|
||||||||||||
Pend Oreille
|
–
|
(3
|
)
|
–
|
(4
|
)
|
||||||||||
Other
|
14
|
(6
|
)
|
31
|
13
|
|||||||||||
283
|
277
|
598
|
646
|
|||||||||||||
Energy
|
(36
|
)
|
49
|
(199
|
)
|
141
|
||||||||||
Gross profit before depreciation and amortization
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Cost of sales as reported
|
$
|
762
|
$
|
852
|
$
|
2,273
|
$
|
2,546
|
||||||||
Less:
|
||||||||||||||||
Transportation costs
|
(221
|
)
|
(237
|
)
|
(660
|
)
|
(727
|
)
|
||||||||
Depreciation and amortization
|
(183
|
)
|
(203
|
)
|
(520
|
)
|
(585
|
)
|
||||||||
Inventory (write-down) reversal
|
(18
|
)
|
(4
|
)
|
(45
|
)
|
(4
|
)
|
||||||||
Labour settlement
|
–
|
–
|
(4
|
)
|
–
|
|||||||||||
Adjusted site cash cost of sales
|
$
|
340
|
$
|
408
|
$
|
1,044
|
$
|
1,230
|
||||||||
Tonnes sold (millions)
|
5.1
|
6.1
|
15.8
|
18.7
|
||||||||||||
Per unit amounts – CAD$/tonne
|
||||||||||||||||
Adjusted site cash cost of sales
|
$
|
67
|
$
|
67
|
$
|
66
|
$
|
66
|
||||||||
Transportation costs
|
43
|
39
|
42
|
39
|
||||||||||||
Inventory write-downs
|
3
|
1
|
3
|
–
|
||||||||||||
Unit costs – CAD$/tonne
|
$
|
113
|
$
|
107
|
$
|
111
|
$
|
105
|
||||||||
US$ amounts1
|
||||||||||||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
$
|
1.35
|
$
|
1.33
|
||||||||
Per unit amounts – US$/tonne
|
||||||||||||||||
Adjusted site cash cost of sales
|
$
|
50
|
$
|
51
|
$
|
49
|
$
|
50
|
||||||||
Transportation costs
|
32
|
29
|
31
|
29
|
||||||||||||
Inventory write-downs
|
3
|
1
|
2
|
–
|
||||||||||||
Unit costs – US$/tonne
|
$
|
85
|
$
|
81
|
$
|
82
|
$
|
79
|
1. |
Average period exchange rates are used to convert to US$/tonne equivalent.
|
For Immediate Release
20-51-TR
|
Date:
|
October 26, 2020
|
• |
Adjusted profit attributable to shareholders(1) (2) in Q3 2020 of $130 million or $0.24 per share.
|
• |
Adjusted EBITDA(1) (2) in Q3 2020 of $638 million.
|
• |
Adjusted site cash cost of sales(1) (2) in our steelmaking coal business is expected to be below $60 per tonne by year end.
|
• |
Neptune Bulk Terminals upgrade project is progressing in line with budget and schedule. The five-month planned shutdown concluded in September, having delivered the expected benefits for safe and productive construction work on
the upgrade project. All major equipment has been delivered to site.
|
• |
QB2 construction activities are safely ramping back up towards full construction levels with over 7,000 people currently on site and the project is expected to be approximately 40%
complete by year end.
|
• |
Approximately $270 million in operating cost reductions and $550 million in capital cost reductions have been achieved to date from expected spending contemplated at the end of June 2019.
|
• |
We continue to manage through the challenges presented by COVID-19 to protect the safety and health of our employees, contractors and communities in which we operate.
|
1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Reference:
|
Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis
|
604.699.4621
|
Marcia Smith, Senior Vice President, Sustainability and External Affairs
|
604.699.4616
|
• |
Liquidity of $6.8 billion as at October 26, 2020.
|
Financial Metrics
(CAD$ in millions, except per share data)
|
Q3 2020
|
Q3 2019
|
||||||
Revenues
|
$
|
2,291
|
$
|
3,035
|
||||
Gross profit before depreciation and amortization1 2
|
$
|
703
|
$
|
1,223
|
||||
Gross profit
|
$
|
291
|
$
|
787
|
||||
EBITDA1 2
|
$
|
519
|
$
|
1,036
|
||||
Adjusted EBITDA1 2
|
$
|
638
|
$
|
1,064
|
||||
Profit attributable to shareholders
|
$
|
61
|
$
|
369
|
||||
Adjusted profit attributable to shareholders1 2
|
$
|
130
|
$
|
389
|
||||
Basic earnings per share
|
$
|
0.11
|
$
|
0.66
|
||||
Diluted earnings per share
|
$
|
0.11
|
$
|
0.66
|
||||
Adjusted basic earnings per share1 2
|
$
|
0.24
|
$
|
0.70
|
||||
Adjusted diluted earnings per share1 2
|
$
|
0.24
|
$
|
0.69
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
• |
Steelmaking coal adjusted site cash cost of sales(1) (2) decreased in the third quarter to $67 per tonne. Adjusted site cash cost of sales(1) (2) are expected to decrease over the remainder of 2020 and we expect to exit the year below $60 per tonne due to:
|
o |
Declining strip ratios, as planned;
|
o |
Elkview plant expansion and the closure of our higher cost Cardinal River Operations; and
|
o |
Benefits of our cost reduction and RACE21TM programs.
|
• |
We are nearing completion of construction of our Fording River South Active Water Treatment Facility (completion expected near the end of Q1 2021) and the Elkview saturated rock fill will be commissioned in Q4 2020, ahead of
schedule and under budget.
|
• |
The Neptune Bulk Terminals upgrade project remains in line with the previously announced capital estimate and schedule.
|
• |
To date, COVID-19 related issues have not substantially impacted works on the critical path.
|
• |
The five-month planned shutdown at Neptune Bulk Terminals concluded in September, having delivered the expected benefits for safe and productive construction work on the upgrade project. Construction is progressing according to
plan, with completion expected in Q1 2021.
|
1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
• |
Major equipment deliveries are complete with all equipment on site, concluding with the new shiploader arrival at the terminal on October 8. Click here for photos and video of
delivery and installation of the new shiploader at Neptune Bulk Terminals.
|
• |
Operational readiness efforts are well underway with commissioning on major pieces of equipment including the single dumper and stacker reclaimer proceeding according to, or ahead of, plan.
|
• |
Through Q3, the project continued its staged ramp up of the construction workforce towards pre-COVID-19 levels in line with our plans developed in Q2.
|
o |
Currently over 7,000 people on site and planning to continue ramp up through Q4, targeting over 9,000 people by the end of the year;
|
o |
All major contractors remobilized and work is progressing well across the project in line with our ramp-up plan;
|
o |
The construction of the additional camp space is progressing well and will provide additional capacity as this begins to come on line in Q4; and
|
o |
Aiming to achieve overall project progress of approximately 40% by the end of the year.
|
• |
First production is expected in the second half of 2022, but is dependent on our continued ability to successfully manage through COVID-19 going forward. The cost and schedule impact of the temporary suspension due to COVID-19
is estimated as follows:
|
o |
In Q3, we expensed approximately $107 million of costs associated with the QB2 project suspension and remobilization and $23 million of interest that
would have otherwise been capitalized for the project;
|
o |
As at the end of Q3 2020, due to the suspension, we have expensed total costs of $272 million and $103 million of interest that would have otherwise been capitalized for the project;
|
o |
The estimated impact from the suspension, including expensed costs, is expected to be approximately US$350 to $400 million (excluding interest) with a
schedule delay of approximately five to six months; and
|
o |
In addition, we are in the process of constructing more camp space at an incremental cost of US$45 million that would not have been required absent COVID-19.
|
• |
Click here for photos of construction progress on QB2.
|
• |
We have US$3.8 billion available on our US$4.0 billion revolving credit facility and our US$1.0 billion revolving credit facility is undrawn as at October 26, 2020. These facilities are committed to November 2024 and June 2022,
respectively. Neither facility has an earnings or cash flow based financial covenant, a credit rating trigger or a general material adverse effect borrowing condition.
|
• |
Since the launch of our cost reduction program at the beginning of Q4 2019, we have realized approximately $270 million in operating cost reductions and $550 million in capital cost reductions. These reductions are against our
expected spending that was contemplated at the end of June 2019.
|
• |
Our global workforce and contractors continue to work safely and productively as we deal with the challenges associated with the COVID-19 pandemic. Our ability to minimize the spread of the virus amongst our employees and
surrounding communities has been critical.
|
• |
Protocols remain in place with a continued focus on preventative measures, controls and compliance, and the integration into our “new normal” of operations and planning.
|
• |
All of our mines have recovered from COVID-19 production disruptions in the second quarter. Labour intensive activities such as maintenance, mine operations, and projects continue to be impacted by COVID-19 safety protocols.
|
• |
We expensed $130 million in costs in the quarter relating to the temporary suspension and remobilization of our QB2 project after suspension due to COVID-19 in March 2020.
|
• |
Year-to-date High Potential Incident Frequency (HPIF) (those incidents that have the ability to result in serious or fatal injuries) per million hours worked of 1.1, 31% lower than the same period in 2019.
|
• |
Entered into a long-term power purchase agreement to provide 100% renewable power for Carmen de Andacollo Operations, eliminating approximately 200,000 tonnes of greenhouse gas (GHG) emissions annually.
|
• |
As of the end of the third quarter, Teck is the top-ranked mining company for ESG performance by Sustainalytics, Vigeo Eiris, the Dow Jones Sustainability Index and FTSE4Good; is ranked in the top 10% of mining companies by ISS
ESG; and has an ‘A’ rating from MSCI.
|
• |
We have reduced our capital expenditures, capitalized stripping and zinc unit cost guidance for the second half of 2020 (H2 2020). At the same time, we have lowered our H2 2020 copper production guidance range by 5,000 tonnes
based on changes at Highland Valley Copper. Our remaining guidance for H2 2020 is unchanged from our previous disclosures.
|
• |
Summary guidance is outlined below and our usual guidance tables can be found on pages 36 — 39.
|
2020 Guidance – Summary
|
||||
Production Guidance – H2 2020
|
||||
Steelmaking coal (million tonnes)
|
11 – 12
|
|||
Copper (000’s tonnes)
|
140 – 155
|
|||
Zinc (000’s tonnes)
|
315 – 345
|
|||
Refined zinc (000’s tonnes)
|
155 – 165
|
|||
Bitumen (million barrels)
|
3.6 – 4.4
|
|||
Sales Guidance – Q4 2020
|
||||
Steelmaking coal sales (million tonnes)
|
5.8 – 6.2
|
|||
Red Dog zinc in concentrate sales (000’s tonnes)
|
145 – 155
|
|||
Unit Cost Guidance – H2 2020
|
||||
Steelmaking coal adjusted site cash cost of sales (CAD$/tonne)
|
$
|
60 – 64
|
||
Steelmaking coal transportation costs (CAD$/tonne)
|
$
|
39 – 42
|
||
Copper total cash unit costs (US$/lb.)
|
$
|
1.45 – 1.55
|
||
Copper net cash unit costs (US$/lb.)
|
$
|
1.20 – 1.30
|
||
Zinc total cash unit costs (US$/lb.)
|
$
|
0.55 – 0.60
|
||
Zinc net cash unit costs (US$/lb.)
|
$
|
0.30 – 0.40
|
||
Bitumen adjusted operating costs (CAD$/barrel)
|
$
|
35 – 38
|
• |
Our profitability in the third quarter declined from a year ago, primarily as a result of significant decreases in steelmaking coal and blended bitumen prices compared to the same period last year, partially offset by an
increase in copper prices as shown in the table below.
|
Average Prices and Exchange Rates
|
Three months
ended September 30,
|
Change
|
||||||||||
2020
|
2019
|
|||||||||||
Steelmaking coal (realized US$/tonne)
|
$
|
102
|
$
|
156
|
(35
|
%)
|
||||||
Copper (LME cash – US$/pound)
|
$
|
2.96
|
$
|
2.63
|
13
|
%
|
||||||
Zinc (LME cash – US$/ pound)
|
$
|
1.06
|
$
|
1.07
|
(1
|
%)
|
||||||
Blended bitumen (realized US$/barrel)
|
$
|
33.09
|
$
|
45.26
|
(27
|
%)
|
||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
1
|
%
|
• |
A decrease in sales volumes of our principal products, most significantly for steelmaking coal, also negatively impacted our profitability in the third quarter. We had planned mining and production outages at our steelmaking
coal operations in the third quarter to correspond with anticipated reduced demand related to COVID-19 and in light of the this, we reduced logistics capacity through the five-month planned Neptune Bulk Terminals shutdown.
|
• |
Our steelmaking coal sales in the quarter were 5.1 million tonnes and our adjusted site cash cost of sales(1) (2) was $67 per tonne. We expect
December 2020 adjusted site cash cost of sales(1) (2) to be below $60 per tonne, supported by the changes in the cost structure of our steelmaking
coal business unit. See page 14 for details.
|
• |
Construction of the Neptune Bulk Terminals upgrade is progressing in accordance with plans and construction is expected to be completed in the first quarter of 2021. See page 15 for details.
|
• |
We suspended construction on our QB2 Project in March 2020 in light of COVID-19 and construction activities have been ramping up in accordance with our restart plan with over 7,000 people currently on site. A more detailed
update, including the impacts of COVID-19 on the QB2 project, is included in the Copper business unit section. See page 22 for details.
|
1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
• |
Since the launch of our cost reduction program at the beginning of Q4 2019, we have realized approximately $270 million in operating cost reductions and $550 million in capital cost reductions. These reductions are against our
expected spending that was contemplated at the end of June 2019.
|
• |
COVID-19 continues to be the most critical health and safety issue facing Teck. All of our mines are currently operating and we continue to act to protect the safety and health of our employees, contractors and the communities
in which we operate in accordance with guidance from governments and public health authorities. We expensed $130 million in QB2 costs as a result of the project suspension and ramp-up in the third quarter, of which $23 million
relates to borrowing costs that would otherwise have been capitalized for QB2. See page 9 for details.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss) attributable to shareholders
|
$
|
61
|
$
|
369
|
$
|
(400
|
)
|
$
|
1,230
|
|||||||
Add (deduct) on an after-tax basis:
|
||||||||||||||||
Asset impairment
|
–
|
–
|
474
|
109
|
||||||||||||
COVID-19 costs
|
64
|
–
|
233
|
–
|
||||||||||||
Environmental costs
|
27
|
26
|
9
|
80
|
||||||||||||
Inventory write-downs
|
11
|
6
|
76
|
7
|
||||||||||||
Share-based compensation
|
18
|
(20
|
)
|
13
|
(1
|
)
|
||||||||||
Commodity derivative gains
|
(26
|
)
|
(8
|
)
|
(31
|
)
|
(14
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(77
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
8
|
166
|
||||||||||||
Other
|
(25
|
)
|
16
|
(69
|
)
|
(26
|
)
|
|||||||||
Adjusted profit attributable to shareholders1
|
$
|
130
|
$
|
389
|
$
|
313
|
$
|
1,474
|
||||||||
Adjusted basic earnings per share1 2
|
$
|
0.24
|
$
|
0.70
|
$
|
0.58
|
$
|
2.62
|
||||||||
Adjusted diluted earnings per share1 2
|
$
|
0.24
|
$
|
0.69
|
$
|
0.58
|
$
|
2.59
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Financial Statement Category
(CAD$ in millions)
|
COVID-19 costs – Adjusted Earnings
|
Three months ended September 30, 2020
|
Nine months ended September 30, 2020
|
|||
Cost of sales
|
COVID-19 costs at operating sites including:
• Labour costs for idle employees at sites with temporary shutdowns due to COVID-19
|
$ –
|
$ 41
|
|||
Other operating
income (expense)
|
COVID-19 costs including:
• QB2 demobilization, remobilization and care and maintenance costs
• Antamina care and maintenance and labour costs during temporary mine closure
• COVID-19 fund donations
|
$ 107
|
$ 290
|
|||
Finance expense
|
Borrowing costs that would have been capitalized for QB2 if the project was not suspended
|
$ 23
|
$ 103
|
|||
Total COVID-19 costs
|
$ 130
|
$ 434
|
||||
Total COVID-19 costs
(after-tax and non-
controlling interests)
|
$ 64
|
$ 233
|
FINANCIAL OVERVIEW
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
||||||||||||||
(CAD$ in millions, except per share data)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenues and profit
|
||||||||||||||||
Revenues
|
$
|
2,291
|
$
|
3,035
|
$
|
6,388
|
$
|
9,279
|
||||||||
Gross profit before depreciation and amortization1
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
||||||||
Gross profit
|
$
|
291
|
$
|
787
|
$
|
828
|
$
|
2,880
|
||||||||
EBITDA1
|
$
|
519
|
$
|
1,036
|
$
|
741
|
$
|
3,273
|
||||||||
Profit (loss) attributable to shareholders
|
$
|
61
|
$
|
369
|
$
|
(400
|
)
|
$
|
1,230
|
|||||||
Cash flow
|
||||||||||||||||
Cash flow from operations
|
$
|
390
|
$
|
1,062
|
$
|
969
|
$
|
2,702
|
||||||||
Property, plant and equipment expenditures
|
$
|
589
|
$
|
824
|
$
|
2,199
|
$
|
1,905
|
||||||||
Capitalized stripping costs
|
$
|
110
|
$
|
159
|
$
|
379
|
$
|
528
|
||||||||
Investments
|
$
|
54
|
$
|
43
|
$
|
135
|
$
|
123
|
||||||||
Balance Sheet
|
||||||||||||||||
Cash balances
|
$
|
403
|
$
|
1,619
|
||||||||||||
Total assets
|
$
|
40,267
|
$
|
41,817
|
||||||||||||
Debt and lease liabilities, including current portion
|
$
|
6,612
|
$
|
4,929
|
||||||||||||
Per share amounts
|
||||||||||||||||
Profit (loss) attributable to shareholders
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.19
|
|||||||
Dividends declared
|
$
|
0.05
|
$
|
0.05
|
$
|
0.15
|
$
|
0.15
|
||||||||
PRODUCTION, SALES AND PRICES
|
||||||||||||||||
Production (000’s tonnes, except
steelmaking coal and bitumen)
|
||||||||||||||||
Steelmaking coal (million tonnes)
|
5.1
|
6.5
|
15.1
|
19.0
|
||||||||||||
Copper2
|
68
|
79
|
198
|
226
|
||||||||||||
Zinc in concentrate
|
160
|
172
|
408
|
491
|
||||||||||||
Zinc – refined
|
76
|
72
|
225
|
221
|
||||||||||||
Bitumen (million barrels)2
|
1.5
|
3.1
|
6.1
|
9.1
|
||||||||||||
Sales (000’s tonnes, except steelmaking coal
and blended bitumen)
|
||||||||||||||||
Steelmaking coal (million tonnes)
|
5.1
|
6.1
|
15.8
|
18.7
|
||||||||||||
Copper2
|
69
|
75
|
197
|
226
|
||||||||||||
Zinc in concentrate
|
202
|
190
|
462
|
457
|
||||||||||||
Zinc – refined
|
77
|
74
|
227
|
224
|
||||||||||||
Blended bitumen (million barrels)2
|
2.0
|
4.3
|
8.6
|
12.2
|
||||||||||||
Average prices and exchange rates
|
||||||||||||||||
Steelmaking coal (realized US$/tonne)
|
$
|
102
|
$
|
156
|
$
|
116
|
$
|
175
|
||||||||
Copper (LME cash – US$/pound)
|
$
|
2.96
|
$
|
2.63
|
$
|
2.65
|
$
|
2.74
|
||||||||
Zinc (LME cash – US$/ pound)
|
$
|
1.06
|
$
|
1.07
|
$
|
0.97
|
$
|
1.18
|
||||||||
Blended bitumen (realized US$/barrel)
|
$
|
33.09
|
$
|
45.26
|
$
|
25.83
|
$
|
46.44
|
||||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
$
|
1.35
|
$
|
1.33
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information and a reconciliation to GAAP measures.
|
2. |
We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, even though we do not own 100% of these operations, because we fully
consolidate their results in our financial statements. We include 22.5% and 21.3% of production and sales from Antamina and Fort Hills, respectively, representing our proportionate ownership interest in these operations.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenues
|
||||||||||||||||
Steelmaking coal
|
$
|
699
|
$
|
1,277
|
$
|
2,514
|
$
|
4,417
|
||||||||
Copper
|
624
|
601
|
1,599
|
1,877
|
||||||||||||
Zinc
|
874
|
902
|
1,961
|
2,223
|
||||||||||||
Energy
|
94
|
255
|
314
|
762
|
||||||||||||
Total
|
$
|
2,291
|
$
|
3,035
|
$
|
6,388
|
$
|
9,279
|
||||||||
Gross profit (loss) before depreciation
and amortization1 2
|
||||||||||||||||
Steelmaking coal
|
$
|
120
|
$
|
628
|
$
|
761
|
$
|
2,456
|
||||||||
Copper
|
336
|
269
|
772
|
841
|
||||||||||||
Zinc
|
283
|
277
|
598
|
646
|
||||||||||||
Energy
|
(36
|
)
|
49
|
(199
|
)
|
141
|
||||||||||
Total
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
||||||||
Gross profit (loss)
|
||||||||||||||||
Steelmaking coal
|
$
|
(63
|
)
|
$
|
425
|
$
|
241
|
$
|
1,871
|
|||||||
Copper
|
232
|
143
|
491
|
487
|
||||||||||||
Zinc
|
184
|
207
|
376
|
481
|
||||||||||||
Energy
|
(62
|
)
|
12
|
(280
|
)
|
41
|
||||||||||
Total
|
$
|
291
|
$
|
787
|
$
|
828
|
$
|
2,880
|
||||||||
Gross profit (loss) margins before depreciation1 2
|
||||||||||||||||
Steelmaking coal
|
17
|
%
|
49
|
%
|
30
|
%
|
56
|
%
|
||||||||
Copper
|
54
|
%
|
45
|
%
|
48
|
%
|
45
|
%
|
||||||||
Zinc
|
32
|
%
|
31
|
%
|
30
|
%
|
29
|
%
|
||||||||
Energy
|
(38
|
)%
|
19
|
%
|
(63
|
)%
|
19
|
%
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Steelmaking coal price (realized US$/tonne)
|
$
|
102
|
$
|
156
|
$
|
116
|
$
|
175
|
||||||||
Steelmaking coal price (realized CAD$/tonne)
|
$
|
135
|
$
|
206
|
$
|
157
|
$
|
233
|
||||||||
Production (million tonnes)
|
5.1
|
6.5
|
15.1
|
19.0
|
||||||||||||
Sales (million tonnes)
|
5.1
|
6.1
|
15.8
|
18.7
|
||||||||||||
Gross profit before depreciation and amortization1 2
|
$
|
120
|
$
|
628
|
$
|
761
|
$
|
2,456
|
||||||||
Gross profit (loss)
|
$
|
(63
|
)
|
$
|
425
|
$
|
241
|
$
|
1,871
|
|||||||
Property, plant and equipment expenditures
|
$
|
234
|
$
|
184
|
$
|
673
|
$
|
481
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Gross Profit Before Depreciation and Amortization1 2 (CAD$ in millions)
|
Three months
ended September 30,
|
|||
As reported in third quarter of 2019
|
$
|
628
|
||
Increase (decrease):
|
||||
Steelmaking coal price realized
|
(370
|
)
|
||
Sales volumes
|
(93
|
)
|
||
Operating costs
|
6
|
|||
Transportation
|
(20
|
)
|
||
Poscan royalty
|
(23
|
)
|
||
Inventory write-downs
|
(14
|
)
|
||
Foreign exchange
|
6
|
|||
Net decrease
|
(508
|
)
|
||
As reported in current quarter
|
$
|
120
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(amounts reported in CAD$ per tonne)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Adjusted site cash cost of sales1
|
$
|
67
|
$
|
67
|
$
|
66
|
$
|
66
|
||||||||
Transportation costs
|
43
|
39
|
42
|
39
|
||||||||||||
Inventory write-down
|
3
|
1
|
3
|
–
|
||||||||||||
Unit costs1
|
$
|
113
|
$
|
107
|
$
|
111
|
$
|
105
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information and reconciliation to GAAP measures.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(amounts reported in US$ per tonne)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Adjusted site cash cost of sales1
|
$
|
50
|
$
|
51
|
$
|
49
|
$
|
50
|
||||||||
Transportation costs
|
32
|
29
|
31
|
29
|
||||||||||||
Inventory write-down
|
3
|
1
|
2
|
–
|
||||||||||||
Unit costs1
|
$
|
85
|
$
|
81
|
$
|
82
|
$
|
79
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information and reconciliation to GAAP measures.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Copper price (realized – US$/pound)
|
$
|
3.00
|
$
|
2.62
|
$
|
2.66
|
$
|
2.74
|
||||||||
Production (000’s tonnes)3
|
68
|
79
|
198
|
226
|
||||||||||||
Sales (000’s tonnes)3
|
69
|
75
|
197
|
226
|
||||||||||||
Gross profit, before depreciation and amortization1 2
|
$
|
336
|
$
|
269
|
$
|
772
|
$
|
841
|
||||||||
Gross profit
|
$
|
232
|
$
|
143
|
$
|
491
|
$
|
487
|
||||||||
Property, plant and equipment expenditures
|
$
|
280
|
$
|
505
|
$
|
1,281
|
$
|
1,085
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
3. |
We include 22.5% of production and sales from Antamina, representing our proportionate ownership interest in this operation. We include 100% of production and sales from our Quebrada Blanca and Carmen de
Andacollo mines in our production and sales volumes, even though we do not own 100% of these operations, because we fully consolidate their results in our financial statements.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Gross Profit Before Depreciation and Amortization1 2 (CAD$ in millions)
|
Three months
ended September 30,
|
|||
As reported in the third quarter of 2019
|
$
|
269
|
||
Increase (decrease):
|
||||
Copper price realized
|
69
|
|||
Sales volumes
|
(21
|
)
|
||
Unit operating costs
|
6
|
|||
Co-product and by-product contribution
|
(6
|
)
|
||
Inventory write-down and labour settlement (2019)
|
15
|
|||
Foreign exchange (CAD$/US$)
|
4
|
|||
Net increase
|
67
|
|||
As reported in current quarter
|
$
|
336
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine month
ended September 30,
|
|||||||||||||||
(amounts reported in US$ per pound)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Adjusted cash cost of sales1 2
|
$
|
1.39
|
$
|
1.43
|
$
|
1.38
|
$
|
1.53
|
||||||||
Smelter processing charges
|
0.18
|
0.19
|
0.18
|
0.19
|
||||||||||||
Total cash unit costs1 2
|
$
|
1.57
|
$
|
1.62
|
$
|
1.56
|
$
|
1.72
|
||||||||
Cash margin for by-products1 2
|
(0.32
|
)
|
(0.31
|
)
|
(0.27
|
)
|
(0.32
|
)
|
||||||||
Net cash unit costs1 2
|
$
|
1.25
|
$
|
1.31
|
$
|
1.29
|
$
|
1.40
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Zinc price (realized – US$/pound)
|
$
|
1.05
|
$
|
1.07
|
$
|
0.98
|
$
|
1.15
|
||||||||
Production (000’s tonnes)
|
||||||||||||||||
Refined zinc
|
76
|
72
|
225
|
221
|
||||||||||||
Zinc in concentrate1
|
133
|
156
|
345
|
441
|
||||||||||||
Sales (000’s tonnes)
|
||||||||||||||||
Refined zinc
|
77
|
74
|
227
|
224
|
||||||||||||
Zinc in concentrate1
|
175
|
174
|
402
|
408
|
||||||||||||
Gross profit before depreciation and amortization2 3
|
$
|
283
|
$
|
277
|
$
|
598
|
$
|
646
|
||||||||
Gross profit
|
$
|
184
|
$
|
207
|
$
|
376
|
$
|
481
|
||||||||
Property, plant and equipment expenditures
|
$
|
61
|
$
|
83
|
$
|
155
|
$
|
184
|
1. |
Represents production and sales from Red Dog and Pend Oreille (closed in July 2019). Excludes co-product zinc production from our 22.5% proportionate interest in Antamina.
|
2. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
3. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Gross Profit Before Depreciation and Amortization1 2 (CAD$ in millions)
|
Three months
ended September 30,
|
|||
As reported in the third quarter of 2019
|
$
|
277
|
||
Increase (decrease):
|
||||
Zinc price realized
|
(4
|
)
|
||
Sales volumes
|
8
|
|||
Unit operating costs
|
7
|
|||
Co-product and by-product contribution
|
6
|
|||
Royalties
|
(11
|
)
|
||
Net increase
|
6
|
|||
As reported in current quarter
|
$
|
283
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(amounts reported in US$ per pound)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Adjusted cash cost of sales1 2
|
$
|
0.28
|
$
|
0.30
|
$
|
0.26
|
$
|
0.31
|
||||||||
Smelter processing charges
|
0.29
|
0.24
|
0.25
|
0.20
|
||||||||||||
Total cash unit costs1 2
|
$
|
0.57
|
$
|
0.54
|
$
|
0.51
|
$
|
0.51
|
||||||||
Cash margin for by-products1 2
|
(0.39
|
)
|
(0.37
|
)
|
(0.18
|
)
|
(0.18
|
)
|
||||||||
Net cash unit costs1 2
|
$
|
0.18
|
$
|
0.17
|
$
|
0.33
|
$
|
0.33
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Blended bitumen price (realized US$/bbl)2 3
|
$
|
33.10
|
$
|
45.26
|
$
|
25.83
|
$
|
46.44
|
||||||||
Bitumen price (realized CAD$/bbl)2 3
|
$
|
34.89
|
$
|
52.61
|
$
|
21.45
|
$
|
54.69
|
||||||||
Operating netback (CAD$/bbl)2 3
|
$
|
(22.08
|
)
|
$
|
14.33
|
$
|
(23.60
|
)
|
$
|
15.32
|
||||||
Production (million bitumen barrels)
|
1.5
|
3.1
|
6.1
|
9.1
|
||||||||||||
Production (average barrels per day)
|
16,702
|
33,674
|
22,308
|
33,247
|
||||||||||||
Sales (million blended bitumen barrels)
|
2.0
|
4.3
|
8.6
|
12.2
|
||||||||||||
Gross profit (loss) before depreciation and amortization3
|
$
|
(36
|
)
|
$
|
49
|
$
|
(199
|
)
|
$
|
141
|
||||||
Gross profit (loss)
|
$
|
(62
|
)
|
$
|
12
|
$
|
(280
|
)
|
$
|
41
|
1. |
Fort Hills figures presented at our ownership interest of 21.3%.
|
2. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
3. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Gross Profit (Loss) Before Depreciation and Amortization1 2
(CAD$ in millions)
|
Three months
ended September 30,
|
|||
As reported in third quarter of 2019
|
$
|
49
|
||
Increase (decrease):
|
||||
Bitumen price realized
|
(28
|
)
|
||
Sales volumes
|
(47
|
)
|
||
Unit operating costs
|
(19
|
)
|
||
Crown royalties
|
6
|
|||
Transportation costs and other
|
3
|
|||
Net decrease
|
(85
|
)
|
||
As reported in current quarter
|
$
|
(36
|
)
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Amounts reported in CAD$ per barrel of bitumen sold)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Bitumen price realized1 2 3
|
$
|
34.89
|
$
|
52.61
|
$
|
21.45
|
$
|
54.69
|
||||||||
Crown royalties4
|
(0.23
|
)
|
(1.81
|
)
|
(0.54
|
)
|
(1.58
|
)
|
||||||||
Transportation costs for FRB5
|
(15.56
|
)
|
(9.16
|
)
|
(12.25
|
)
|
(9.59
|
)
|
||||||||
Adjusted operating costs1 2 6
|
(41.18
|
)
|
(27.31
|
)
|
(32.26
|
)
|
(28.20
|
)
|
||||||||
Operating netback1 2
|
$
|
(22.08
|
)
|
$
|
14.33
|
$
|
(23.60
|
)
|
$
|
15.32
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
3. |
Bitumen price realized represents the realized petroleum revenue (blended bitumen sales revenue) net of diluent expense, expressed on a per barrel basis. Blended bitumen sales revenue represents revenue
from our share of the heavy crude oil blend known as Fort Hills Reduced Carbon Life Cycle Dilbit Blend (FRB), sold at the Hardisty and U.S. Gulf Coast market hubs.
|
4. |
The royalty rate applicable to pre-payout oil sands operations starts at 1% of gross revenue and increases for every dollar by which the WTI crude oil price in Canadian dollars exceeds $55 per barrel, to
a maximum of 9% when the WTI crude oil price is $120 per barrel or higher. Fort Hills is currently in the pre-payout phase.
|
5. |
Transportation costs represent pipeline and storage costs downstream of the East Tank Farm blending facility. We use various pipeline and storage facilities to transport and sell our blend to customers
throughout North America. Sales to the U.S. markets require additional transportation costs, but realize higher selling prices.
|
6. |
Adjusted operating costs represent the costs to produce a barrel of bitumen from the Fort Hills mining and processing operation and exclude inventory write-downs.
|
Outstanding at
|
Outstanding at
|
|||||||||||||||
September 30, 2020
|
June 30, 2020
|
|||||||||||||||
(payable pounds in millions)
|
Pounds
|
US$/lb.
|
Pounds
|
US$/lb.
|
||||||||||||
Copper
|
111
|
3.03
|
81
|
2.73
|
||||||||||||
Zinc
|
208
|
1.10
|
117
|
0.93
|
September 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Unsecured term notes
|
$
|
3,478
|
$
|
3,209
|
||||
US$5 billion of revolving credit facilities
|
129
|
–
|
||||||
QB2 US$2.5 billion limited recourse project finance facility
|
779
|
–
|
||||||
Lease liabilities
|
563
|
518
|
||||||
Antamina loans
|
62
|
23
|
||||||
Other
|
2
|
3
|
||||||
Less unamortized fees and discounts
|
(56
|
)
|
(31
|
)
|
||||
Debt (US$ in millions)
|
$
|
4,957
|
$
|
3,722
|
||||
Debt (Canadian $ equivalent)1 (A)
|
$
|
6,612
|
$
|
4,834
|
||||
Less cash balances
|
(403
|
)
|
(1,026
|
)
|
||||
Net debt2 (B)
|
$
|
6,209
|
$
|
3,808
|
||||
Equity (C)
|
$
|
21,506
|
$
|
22,074
|
||||
Net-debt to net-debt-plus-equity ratio2 (B/(B+C))
|
22
|
%
|
15
|
%
|
||||
Net debt to adjusted EBITDA ratio2 3
|
2.5
|
x
|
0.9
|
x
|
||||
Weighted average coupon rate on the term notes
|
5.5
|
%
|
5.6
|
%
|
1. |
Translated at period end exchange rates.
|
2. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
3. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
(1) |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(2) |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
($ in millions)
|
Sustaining
|
Growth
|
RACE21TM
|
QB2 Project
|
Sub-total
|
Capitalized Stripping
|
Total
|
|||||||||||||||||||||
Steelmaking coal
|
$
|
426
|
$
|
229
|
$
|
18
|
$
|
–
|
$
|
673
|
$
|
241
|
$
|
914
|
||||||||||||||
Copper
|
95
|
24
|
2
|
1,160
|
1,281
|
99
|
1,380
|
|||||||||||||||||||||
Zinc
|
150
|
1
|
4
|
–
|
155
|
39
|
194
|
|||||||||||||||||||||
Energy
|
77
|
1
|
–
|
–
|
78
|
–
|
78
|
|||||||||||||||||||||
Corporate
|
9
|
–
|
3
|
–
|
12
|
–
|
12
|
|||||||||||||||||||||
$
|
757
|
$
|
255
|
$
|
27
|
$
|
1,160
|
$
|
2,199
|
$
|
379
|
$
|
2,578
|
2020 Mid-Range
|
Change
|
Estimated
|
Estimated
|
||||||||||
Production
|
Effect of Change
|
Effect on
|
|||||||||||
Estimates1 4
|
On Profit2
|
EBITDA2
|
|||||||||||
($ in millions)
|
($ in millions)
|
||||||||||||
US$ exchange
|
CAD$0.01
|
$
|
31
|
$
|
46
|
||||||||
Steelmaking coal
(million tonnes)
|
21.5
|
US$1/tonne
|
$
|
17
|
$
|
26
|
|||||||
Copper
(000’s tonnes)
|
280.0
|
US$0.01/lb.
|
$
|
5
|
$
|
8
|
|||||||
Zinc (000’s tonnes)3
|
890.0
|
US$0.01/lb.
|
$
|
9
|
$
|
12
|
|||||||
WCS (million bbl)4
|
8.6
|
US$1/bbl
|
$
|
8
|
$
|
11
|
|||||||
WTI5
|
US$1/bbl
|
$
|
5
|
$
|
6
|
1. |
All production estimates are subject to change based on market and operating conditions.
|
2. |
The effect on our profit attributable to shareholders and on EBITDA of commodity price and exchange rate movements will vary from quarter to quarter depending on sales volumes. Our estimate of the
sensitivity of profit and EBITDA to changes in the U.S. dollar exchange rate is sensitive to commodity price assumptions.
|
3. |
Zinc includes 310,000 tonnes of refined zinc and 580,000 tonnes of zinc contained in concentrate.
|
4. |
Bitumen volumes from our energy business unit. Estimated profit and EBITDA sensitivities are based on Fort Hills’ production levels of approximately 120,000 barrels per day and not based on 2020
mid-range production estimate of 8.6 million barrels of bitumen.
|
5. |
Our WTI oil price sensitivity takes into account our interest in Fort Hills for respective change in revenue, partially offset by the effect of the change in diluent purchase costs as well as the effect
on the change in operating costs across our business units, as our operations use a significant amount of diesel fuel.
|
Units in 000’s tonnes (excluding steelmaking coal, molybdenum, refined silver and bitumen)
|
2019
|
Actuals H1 2020
|
Previous Guidance
H2 2020
|
Change
|
Current
Guidance
H2 2020
|
Three-Year Guidance
2021 – 2023
|
||||||||||||||||||
PRINCIPAL PRODUCTS
|
||||||||||||||||||||||||
Steelmaking coal (million tonnes)
|
25.7
|
10.0
|
11 – 12
|
–
|
11 – 12
|
26 – 27
|
||||||||||||||||||
–
|
||||||||||||||||||||||||
Copper1 2 3
|
||||||||||||||||||||||||
Highland Valley Copper
|
121.3
|
56.4
|
70 – 75
|
(5)
|
)(5)
|
65 – 70
|
145 – 165
|
|||||||||||||||||
Antamina
|
100.9
|
35.1
|
45 – 50
|
–
|
45 – 50
|
90
|
||||||||||||||||||
Carmen de Andacollo
|
54.0
|
31.5
|
27 – 30
|
–
|
27 – 30
|
50 – 55
|
||||||||||||||||||
Quebrada Blanca 5
|
21.1
|
6.8
|
3 – 5
|
–
|
3 – 5
|
–
|
||||||||||||||||||
297.3
|
129.8
|
145 – 160
|
(5)
|
)(5)
|
140 – 155
|
285 – 310
|
||||||||||||||||||
Zinc1 2 4
|
||||||||||||||||||||||||
Red Dog
|
552.4
|
212.3
|
260 – 285
|
–
|
260 – 285
|
500 – 540
|
||||||||||||||||||
Antamina
|
68.3
|
36.0
|
55 – 60
|
–
|
55 – 60
|
90 – 100
|
||||||||||||||||||
Pend Oreille
|
19.4
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||
640.1
|
248.3
|
315 – 345
|
–
|
315 – 345
|
590 – 640
|
|||||||||||||||||||
Refined zinc
|
||||||||||||||||||||||||
Trail Operations
|
287.4
|
148.7
|
155 – 165
|
–
|
155 – 165
|
305 – 315
|
||||||||||||||||||
–
|
||||||||||||||||||||||||
Bitumen (million barrels)2 6
|
–
|
|||||||||||||||||||||||
Fort Hills
|
12.3
|
4.6
|
3.6 – 4.4
|
–
|
3.6 – 4.4
|
10 – 14
|
||||||||||||||||||
OTHER PRODUCTS
|
||||||||||||||||||||||||
–
|
||||||||||||||||||||||||
Lead1
|
||||||||||||||||||||||||
Red Dog
|
102.8
|
44.8
|
45 – 50
|
–
|
45 – 50
|
80 – 90
|
||||||||||||||||||
–
|
||||||||||||||||||||||||
Refined lead
|
–
|
|||||||||||||||||||||||
Trail Operations
|
69.0
|
36.9
|
30 – 35
|
–
|
30 – 35
|
65 – 70
|
||||||||||||||||||
–
|
||||||||||||||||||||||||
Molybdenum (million pounds)1 2
|
||||||||||||||||||||||||
Highland Valley Copper
|
6.6
|
2.2
|
1.2 – 2.0
|
–
|
1.2 – 2.0
|
3.0 – 4.5
|
||||||||||||||||||
Antamina
|
1.8
|
1.1
|
1.0 – 1.0
|
–
|
1.0 – 1.0
|
2.0 – 3.0
|
||||||||||||||||||
8.4
|
3.3
|
2.2 – 3.0
|
–
|
2.2 – 3.0
|
5.0 – 7.5
|
|||||||||||||||||||
Refined silver (million ounces)
|
–
|
|||||||||||||||||||||||
Trail Operations
|
14.0
|
6.2
|
5 – 6
|
–
|
5 – 6
|
N/A
|
1. |
Metal contained in concentrate.
|
2. |
We include 100% of production and sales from our Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, even though we do not own 100% of these operations, because we fully
consolidate their results in our financial statements. We include 22.5% and 21.3% of production and sales from Antamina and Fort Hills, respectively, representing our proportionate ownership interest in these operations.
|
3. |
Copper production includes cathode production at Quebrada Blanca and Carmen de Andacollo.
|
4. |
Total zinc includes co-product zinc production from our 22.5% proportionate interest in Antamina.
|
5. |
Excludes production from QB2 for three-year guidance 2021–2023.
|
6. |
The 2021–2023 bitumen production guidance assumes lower production in 2021 and that Fort Hills is fully operational by 2023. The Fort Hills Partners continue to monitor market conditions and may adjust
the operating plan accordingly.
|
Q3 2020
|
Guidance
Q4 2020
|
|||||||
Steelmaking coal (million tonnes)
|
5.1
|
5.8 – 6.2
|
||||||
Zinc (000’s tonnes)1
|
||||||||
Red Dog
|
175
|
145 – 155
|
1. |
Metal contained in concentrate.
|
2019
|
Actuals
H1 2020
|
Previous Guidance
H2 2020
|
Change
|
Guidance
H2 2020
|
||||||||||||||||
Steelmaking coal1
|
||||||||||||||||||||
Adjusted site cash cost of sales5
|
$
|
65
|
$
|
66
|
$
|
60 – 64
|
$
|
–
|
$
|
60 – 64
|
||||||||||
Transportation costs
|
39
|
41
|
39 – 42
|
–
|
39 – 42
|
|||||||||||||||
Inventory write-down
|
1
|
3
|
–
|
2
|
2
|
|||||||||||||||
Unit costs5 – CAD$/tonne
|
$
|
105
|
$
|
110
|
$
|
99 – 106
|
$
|
2
|
$
|
101 – 108
|
||||||||||
Copper2
|
||||||||||||||||||||
Total cash unit costs5 (US$/lb.)
|
$
|
1.68
|
$
|
1.56
|
$
|
1.45 – 1.55
|
$
|
–
|
$
|
1.45 – 1.55
|
||||||||||
Net cash unit costs3 5 (US$/lb.)
|
1.39
|
1.31
|
1.20 – 1.30
|
$
|
–
|
1.20 – 1.30
|
||||||||||||||
–
|
||||||||||||||||||||
Zinc4
|
||||||||||||||||||||
Total cash unit costs5 (US$/lb.)
|
$
|
0.51
|
$
|
0.46
|
$
|
0.60 – 0.65
|
$
|
(0.05
|
)
|
$
|
0.55 – 0.60
|
|||||||||
Net cash unit costs3 5 (US$/lb.)
|
0.34
|
0.44
|
0.40 – 0.50
|
(0.10
|
)
|
0.30 – 0.40
|
||||||||||||||
–
|
||||||||||||||||||||
Bitumen
|
||||||||||||||||||||
Adjusted operating costs5 (CAD$/barrel)
|
$
|
29.24
|
$
|
29.54
|
$
|
35 – 38
|
$
|
–
|
$
|
35 – 38
|
1. |
Steelmaking coal unit costs are reported in Canadian dollars per tonne.
|
2. |
Copper unit costs are reported in U.S. dollars per payable pound of metal contained in concentrate. Copper net cash unit costs include adjusted cash cost of sales and smelter processing charges, less
cash margins for by-products including co-products. Guidance for H2 2020 assumes a zinc price of US$1.04 per pound, a molybdenum price of US$8 per pound, a silver price of US$26 per ounce, a gold price of US$1,925 per ounce and a
Canadian/U.S. dollar exchange rate of $1.33.
|
3. |
After co-product and by-product margins.
|
4. |
Zinc unit costs are reported in U.S. dollars per payable pound of metal contained in concentrate. Zinc net cash unit costs are mine costs including adjusted cash cost of sales and smelter processing
charges, less cash margins for by-products. Guidance for H2 2020 assumes a lead price of US$0.86 per pound, a silver price of US$26 per ounce and a Canadian/U.S. dollar exchange rate of $1.33. By-products include both by-products
and co-products.
|
5. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
(Teck’s share in CAD$ millions)
|
2019
|
Previous Guidance 2020
|
Change
|
Guidance
2020
|
||||||||||||
Sustaining
|
||||||||||||||||
Steelmaking coal1
|
$
|
558
|
$
|
630
|
$
|
(10
|
)
|
$
|
620
|
|||||||
Copper
|
230
|
160
|
(20
|
)
|
140
|
|||||||||||
Zinc
|
228
|
180
|
10
|
190
|
||||||||||||
Energy
|
150
|
85
|
–
|
85
|
||||||||||||
Corporate
|
16
|
10
|
–
|
10
|
||||||||||||
$
|
1,182
|
$
|
1,065
|
$
|
(20
|
)
|
$
|
1,045
|
||||||||
Growth
|
–
|
|||||||||||||||
Steelmaking coal
|
$
|
192
|
$
|
360
|
(25
|
)
|
$
|
335
|
||||||||
Copper3
|
115
|
35
|
–
|
35
|
||||||||||||
Zinc
|
32
|
5
|
(5
|
)
|
–
|
|||||||||||
Energy
|
41
|
–
|
–
|
–
|
||||||||||||
RACE21TM 2
|
6
|
65
|
–
|
65
|
||||||||||||
$
|
386
|
$
|
465
|
$
|
(30
|
)
|
$
|
435
|
||||||||
Total
|
–
|
|||||||||||||||
Steelmaking coal
|
$
|
750
|
$
|
990
|
$
|
(35
|
)
|
$
|
955
|
|||||||
Copper
|
345
|
195
|
(20
|
)
|
175
|
|||||||||||
Zinc
|
260
|
185
|
5
|
190
|
||||||||||||
Energy
|
191
|
85
|
–
|
85
|
||||||||||||
Corporate
|
16
|
10
|
–
|
10
|
||||||||||||
RACE21TM
|
6
|
65
|
–
|
65
|
||||||||||||
$
|
1,568
|
$
|
1,530
|
$
|
(50
|
)
|
$
|
1,480
|
||||||||
–
|
||||||||||||||||
QB2 capital expenditures
|
$
|
1,220
|
$
|
1,820
|
$
|
(170
|
)
|
$
|
1,650
|
|||||||
Total before SMM and SC contributions
|
2,788
|
3,350
|
(220
|
)
|
3,130
|
|||||||||||
Estimated SMM and SC contributions
to capital expenditures4
|
(1,035
|
)
|
(660
|
)
|
–
|
(660
|
)
|
|||||||||
Estimated QB2 project financing draw
to capital expenditures
|
–
|
(1,160
|
)
|
170
|
(990
|
)
|
||||||||||
Total, net of partner contributions
and project financing
|
$
|
1,753
|
$
|
1,530
|
$
|
(50
|
)
|
$
|
1,480
|
1) |
Steelmaking coal sustaining capital guidance includes $285 million of water treatment capital. 2019 includes $176 million of water treatment capital.
|
2) |
RACE21TM capital expenditures for 2020 include $50 million relating to steelmaking coal, $5
million relating to copper, $5 million relating to zinc and the remainder relating to corporate projects. We also expect to spend approximately $130 million
on RACE21TM for research and innovation expenses and intangible assets in 2020.
|
3) |
Copper growth guidance for 2020 includes studies for QB3, Zafranal, San Nicolás and Galore Creek.
|
4) |
Total SMM and SC contributions were $1.7 billion.
|
(Teck’s share in CAD$ millions)
|
2019
|
Previous Guidance 2020
|
Change
|
Guidance
2020
|
||||||||||||
Steelmaking coal
|
$
|
443
|
$
|
340
|
$
|
(15
|
)
|
$
|
325
|
|||||||
Copper
|
192
|
150
|
(10
|
)
|
140
|
|||||||||||
Zinc
|
45
|
50
|
–
|
50
|
||||||||||||
$
|
680
|
$
|
540
|
$
|
(25
|
)
|
$
|
515
|
2020
|
2019
|
2018
|
||||||||||||||||||||||||||||||||||
(in millions, except for share data)
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
|||||||||||||||||||||||||||
Revenue
|
$
|
2,291
|
$
|
1,720
|
$
|
2,377
|
$
|
2,655
|
$
|
3,035
|
$
|
3,138
|
$
|
3,106
|
$
|
3,247
|
$
|
3,209
|
||||||||||||||||||
Gross profit
|
291
|
139
|
398
|
460
|
787
|
1,051
|
1,042
|
1,011
|
1,009
|
|||||||||||||||||||||||||||
EBITDA (loss)1 2
|
519
|
177
|
45
|
(1,904
|
)
|
1,036
|
827
|
1,410
|
1,164
|
2,073
|
||||||||||||||||||||||||||
Profit (loss) attributable to
shareholders
|
61
|
(149
|
)
|
(312
|
)
|
(1,835
|
)
|
369
|
231
|
630
|
433
|
1,281
|
||||||||||||||||||||||||
Basic earnings (loss) per share
|
$
|
0.11
|
$
|
(0.28
|
)
|
$
|
(0.57
|
)
|
$
|
(3.33
|
)
|
$
|
0.66
|
$
|
0.41
|
$
|
1.11
|
$
|
0.75
|
$
|
2.23
|
|||||||||||||||
Diluted earnings (loss) per share
|
$
|
0.11
|
$
|
(0.28
|
)
|
$
|
(0.57
|
)
|
$
|
(3.33
|
)
|
$
|
0.66
|
$
|
0.41
|
$
|
1.10
|
$
|
0.75
|
$
|
2.20
|
|||||||||||||||
Cash flow from operations
|
$
|
390
|
$
|
300
|
$
|
279
|
$
|
782
|
$
|
1,062
|
$
|
1,120
|
$
|
520
|
$
|
1,337
|
$
|
877
|
1. |
Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
|
2. |
See “Use of Non-GAAP Financial Measures” section for reconciliation.
|
a) |
Assessment of Impairment Indicators
|
a) |
COVID-19 Economic Uncertainty
|
b) |
Impairment Testing
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Teck’s share in CAD$ millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
REVENUES
|
||||||||||||||||
Steelmaking coal
|
$
|
699
|
$
|
1,277
|
$
|
2,514
|
$
|
4,417
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
239
|
264
|
657
|
745
|
||||||||||||
Antamina
|
245
|
192
|
540
|
646
|
||||||||||||
Carmen de Andacollo
|
109
|
106
|
319
|
357
|
||||||||||||
Quebrada Blanca
|
31
|
39
|
83
|
129
|
||||||||||||
624
|
601
|
1,599
|
1,877
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
441
|
456
|
1,288
|
1,423
|
||||||||||||
Red Dog
|
569
|
571
|
990
|
1,146
|
||||||||||||
Pend Oreille
|
–
|
9
|
–
|
56
|
||||||||||||
Other
|
3
|
2
|
7
|
6
|
||||||||||||
Intra-segment revenues
|
(139
|
)
|
(136
|
)
|
(324
|
)
|
(408
|
)
|
||||||||
874
|
902
|
1,961
|
2,223
|
|||||||||||||
Energy
|
94
|
255
|
314
|
762
|
||||||||||||
TOTAL REVENUES
|
$
|
2,291
|
$
|
3,035
|
$
|
6,388
|
$
|
9,279
|
||||||||
GROSS PROFIT (LOSS)
|
||||||||||||||||
Steelmaking coal
|
$
|
(63
|
)
|
$
|
425
|
$
|
241
|
$
|
1,871
|
|||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
86
|
55
|
188
|
126
|
||||||||||||
Antamina
|
125
|
94
|
244
|
336
|
||||||||||||
Carmen de Andacollo
|
12
|
9
|
50
|
44
|
||||||||||||
Quebrada Blanca
|
9
|
(17
|
)
|
9
|
(19
|
)
|
||||||||||
Other
|
–
|
2
|
–
|
–
|
||||||||||||
232
|
143
|
491
|
487
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
(7
|
)
|
(20
|
)
|
(28
|
)
|
(53
|
)
|
||||||||
Red Dog
|
177
|
237
|
373
|
528
|
||||||||||||
Pend Oreille
|
–
|
(4
|
)
|
–
|
(7
|
)
|
||||||||||
Other
|
14
|
(6
|
)
|
31
|
13
|
|||||||||||
184
|
207
|
376
|
481
|
|||||||||||||
Energy
|
(62
|
)
|
12
|
(280
|
)
|
41
|
||||||||||
TOTAL GROSS PROFIT
|
$
|
291
|
$
|
787
|
$
|
828
|
$
|
2,880
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Teck’s share in CAD$ millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
OPERATING COSTS
|
||||||||||||||||
Steelmaking coal
|
$
|
357
|
$
|
408
|
$
|
1,086
|
$
|
1,217
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
110
|
145
|
341
|
435
|
||||||||||||
Antamina
|
57
|
46
|
153
|
162
|
||||||||||||
Carmen de Andacollo
|
72
|
69
|
195
|
234
|
||||||||||||
Quebrada Blanca
|
20
|
44
|
64
|
117
|
||||||||||||
Other
|
–
|
(2
|
)
|
–
|
–
|
|||||||||||
259
|
302
|
753
|
948
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
123
|
126
|
377
|
389
|
||||||||||||
Red Dog
|
137
|
123
|
235
|
209
|
||||||||||||
Pend Oreille
|
–
|
11
|
–
|
58
|
||||||||||||
Other
|
(11
|
)
|
8
|
(24
|
)
|
(7
|
)
|
|||||||||
249
|
268
|
588
|
649
|
|||||||||||||
Energy
|
62
|
91
|
252
|
266
|
||||||||||||
Total operating costs
|
$
|
927
|
$
|
1,069
|
$
|
2,679
|
$
|
3,080
|
||||||||
TRANSPORTATION COSTS
|
||||||||||||||||
Steelmaking coal
|
$
|
221
|
$
|
237
|
$
|
660
|
$
|
727
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
8
|
12
|
25
|
32
|
||||||||||||
Antamina
|
9
|
7
|
20
|
20
|
||||||||||||
Carmen de Andacollo
|
6
|
7
|
17
|
20
|
||||||||||||
Quebrada Blanca
|
–
|
1
|
1
|
2
|
||||||||||||
23
|
27
|
63
|
74
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
37
|
40
|
112
|
114
|
||||||||||||
Red Dog
|
46
|
48
|
88
|
100
|
||||||||||||
Pend Oreille
|
–
|
–
|
–
|
1
|
||||||||||||
83
|
88
|
200
|
215
|
|||||||||||||
Energy
|
26
|
30
|
85
|
88
|
||||||||||||
Total transportation costs
|
$
|
353
|
$
|
382
|
$
|
1,008
|
$
|
1,104
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Teck’s share in CAD$ millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
RAW MATERIAL PURCHASES
|
||||||||||||||||
Zinc concentrate purchases
|
||||||||||||||||
Trail Operations
|
$
|
267
|
$
|
288
|
$
|
761
|
$
|
910
|
||||||||
Intra-segment purchases
|
(139
|
)
|
(136
|
)
|
(324
|
)
|
(408
|
)
|
||||||||
128
|
152
|
437
|
502
|
|||||||||||||
Energy (diluent and non-proprietary blend purchases)
|
42
|
85
|
176
|
267
|
||||||||||||
Total raw material purchases
|
$
|
170
|
$
|
237
|
$
|
613
|
$
|
769
|
||||||||
ROYALTY COSTS
|
||||||||||||||||
Steelmaking coal
|
$
|
1
|
$
|
4
|
$
|
7
|
$
|
17
|
||||||||
Copper
|
||||||||||||||||
Antamina
|
6
|
3
|
11
|
14
|
||||||||||||
Zinc
|
||||||||||||||||
Red Dog
|
131
|
116
|
138
|
210
|
||||||||||||
Pend Oreille
|
–
|
1
|
–
|
1
|
||||||||||||
131
|
117
|
138
|
211
|
|||||||||||||
Total royalty costs
|
$
|
138
|
$
|
124
|
$
|
156
|
$
|
242
|
||||||||
DEPRECIATION AND AMORTIZATION
|
||||||||||||||||
Steelmaking coal
|
$
|
183
|
$
|
203
|
$
|
520
|
$
|
585
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
35
|
52
|
103
|
152
|
||||||||||||
Antamina
|
48
|
42
|
112
|
114
|
||||||||||||
Carmen de Andacollo
|
19
|
21
|
57
|
59
|
||||||||||||
Quebrada Blanca
|
2
|
11
|
9
|
29
|
||||||||||||
104
|
126
|
281
|
354
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
21
|
22
|
66
|
63
|
||||||||||||
Red Dog
|
78
|
47
|
156
|
99
|
||||||||||||
Pend Oreille
|
–
|
1
|
–
|
3
|
||||||||||||
99
|
70
|
222
|
165
|
|||||||||||||
Energy
|
26
|
37
|
81
|
100
|
||||||||||||
Total depreciation and amortization
|
$
|
412
|
$
|
436
|
$
|
1,104
|
$
|
1,204
|
||||||||
TOTAL COST OF SALES
|
$
|
2,000
|
$
|
2,248
|
$
|
5,560
|
$
|
6,399
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Teck’s share in CAD$ millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Steelmaking coal
|
$
|
62
|
$
|
104
|
$
|
241
|
$
|
362
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
16
|
25
|
59
|
70
|
||||||||||||
Antamina
|
13
|
20
|
34
|
71
|
||||||||||||
Carmen de Andacollo
|
2
|
2
|
6
|
6
|
||||||||||||
31
|
47
|
99
|
147
|
|||||||||||||
Zinc
|
||||||||||||||||
Red Dog
|
17
|
8
|
39
|
19
|
||||||||||||
Total
|
$
|
110
|
$
|
159
|
$
|
379
|
$
|
528
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Steelmaking coal
|
||||||||||||||||
Waste production (million BCM’s)
|
53.7
|
72.3
|
175.8
|
218.2
|
||||||||||||
Clean coal production (million tonnes)
|
5.1
|
6.5
|
15.1
|
19.0
|
||||||||||||
Clean coal strip ratio (waste BCM’s/coal tonnes)
|
10.5:1
|
11.1:1
|
11.7:1
|
11.5:1
|
||||||||||||
Sales (million tonnes)
|
5.1
|
6.1
|
15.8
|
18.7
|
Tonnes mined (000's)
|
23,691
|
26,122
|
75,151
|
79,827
|
||||||||||||
Tonnes milled (000's)
|
11,454
|
12,825
|
35,016
|
38,227
|
||||||||||||
Copper
|
||||||||||||||||
Grade (%)
|
0.29
|
0.30
|
0.28
|
0.28
|
||||||||||||
Recovery (%)
|
86.8
|
82.4
|
86.0
|
82.7
|
||||||||||||
Production (000's tonnes)
|
29.0
|
31.6
|
85.4
|
87.8
|
||||||||||||
Sales (000's tonnes)
|
27.6
|
32.9
|
83.3
|
90.5
|
||||||||||||
Molybdenum
|
||||||||||||||||
Production (million pounds)
|
0.6
|
1.2
|
2.8
|
5.2
|
||||||||||||
Sales (million pounds)
|
0.7
|
2.1
|
3.0
|
5.3
|
Tonnes mined (000's)
|
45,458
|
59,299
|
112,305
|
176,193
|
||||||||||||
Tonnes milled (000's)
|
||||||||||||||||
Copper-only ore
|
7,150
|
8,031
|
18,216
|
21,283
|
||||||||||||
Copper-zinc ore
|
6,053
|
5,091
|
14,628
|
16,168
|
||||||||||||
13,203
|
13,122
|
32,844
|
37,451
|
|||||||||||||
Copper1
|
||||||||||||||||
Grade (%)
|
0.94
|
0.99
|
0.91
|
1.02
|
||||||||||||
Recovery (%)
|
85.9
|
88.4
|
86.1
|
88.5
|
||||||||||||
Production (000's tonnes)
|
106.4
|
115.8
|
262.2
|
337.1
|
||||||||||||
Sales (000's tonnes)
|
103.9
|
101.8
|
254.8
|
315.0
|
||||||||||||
Zinc1
|
||||||||||||||||
Grade (%)
|
2.47
|
1.75
|
2.27
|
1.64
|
||||||||||||
Recovery (%)
|
87.7
|
84.3
|
87.1
|
84.7
|
||||||||||||
Production (000's tonnes)
|
120.8
|
71.9
|
280.8
|
224.3
|
||||||||||||
Sales (000's tonnes)
|
115.0
|
70.9
|
264.9
|
219.9
|
||||||||||||
Molybdenum
|
||||||||||||||||
Production (million pounds)
|
1.8
|
2.6
|
6.6
|
4.3
|
||||||||||||
Sales (million pounds)
|
2.6
|
1.1
|
7.6
|
3.7
|
1. |
Copper ore grades and recoveries apply to all of the processed ores. Zinc ore grades and recoveries apply to copper-zinc ores only.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Carmen de Andacollo
|
||||||||||||||||
Tonnes mined (000’s)
|
7,088
|
6,284
|
20,154
|
17,899
|
||||||||||||
Tonnes milled (000’s)
|
4,031
|
4,597
|
13,486
|
12,944
|
||||||||||||
Copper
|
||||||||||||||||
Grade (%)
|
0.33
|
0.39
|
0.36
|
0.39
|
||||||||||||
Recovery (%)
|
83.1
|
88.9
|
85.0
|
88.9
|
||||||||||||
Production (000’s tonnes)
|
11.2
|
15.9
|
41.6
|
44.7
|
||||||||||||
Sales (000’s tonnes)
|
14.0
|
14.4
|
43.7
|
47.3
|
||||||||||||
Copper cathode
|
||||||||||||||||
Production (000’s tonnes)
|
0.4
|
0.8
|
1.5
|
2.0
|
||||||||||||
Sales (000’s tonnes)
|
0.4
|
0.8
|
1.7
|
2.0
|
||||||||||||
Gold1
|
||||||||||||||||
Production (000’s ounces)
|
9.7
|
14.1
|
37.2
|
40.4
|
||||||||||||
Sales (000’s ounces)
|
13.1
|
14.1
|
41.0
|
46.3
|
1. |
100% of the gold produced is for the account of Royal Gold, Inc. until 900,000 ounces have been delivered, and 50% thereafter.
|
Production (000's tonnes)
|
3.3
|
4.8
|
10.1
|
15.9
|
||||||||||||
Sales (000's tonnes)
|
3.5
|
4.9
|
10.5
|
15.8
|
||||||||||||
Trail Operations
|
||||||||||||||||
Concentrate treated (000’s tonnes)
|
||||||||||||||||
Zinc
|
151
|
135
|
424
|
418
|
||||||||||||
Lead
|
28
|
27
|
90
|
87
|
||||||||||||
Metal production
|
||||||||||||||||
Zinc (000's tonnes)
|
76.4
|
71.9
|
225.1
|
220.5
|
||||||||||||
Lead (000's tonnes)
|
18.2
|
17.1
|
55.1
|
52.0
|
||||||||||||
Silver (million ounces)
|
2.6
|
3.5
|
8.8
|
10.3
|
||||||||||||
Gold (000's ounces)
|
5.6
|
8.8
|
23.0
|
26.5
|
||||||||||||
Metal sales
|
||||||||||||||||
Zinc (000's tonnes)
|
77.5
|
74.4
|
227.3
|
224.0
|
||||||||||||
Lead (000's tonnes)
|
16.7
|
17.9
|
52.9
|
52.1
|
||||||||||||
Silver (million ounces)
|
2.6
|
3.5
|
9.0
|
10.3
|
||||||||||||
Gold (000's ounces)
|
6.6
|
8.5
|
22.8
|
25.4
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Red Dog
|
||||||||||||||||
Tonnes mined (000's)
|
3,056
|
2,741
|
8,533
|
7,000
|
||||||||||||
Tonnes milled (000's)
|
1,091
|
1,169
|
3,086
|
3,253
|
||||||||||||
Zinc
|
||||||||||||||||
Grade (%)
|
14.3
|
15.4
|
13.7
|
15.3
|
||||||||||||
Recovery (%)
|
84.5
|
85.3
|
81.5
|
84.5
|
||||||||||||
Production (000's tonnes)
|
132.3
|
153.1
|
344.6
|
421.3
|
||||||||||||
Sales (000's tonnes)
|
175.3
|
170.9
|
402.0
|
387.6
|
||||||||||||
Lead
|
||||||||||||||||
Grade (%)
|
4.0
|
4.5
|
4.0
|
4.3
|
||||||||||||
Recovery (%)
|
60.8
|
55.2
|
58.0
|
54.9
|
||||||||||||
Production (000's tonnes)
|
26.3
|
28.9
|
71.1
|
76.8
|
||||||||||||
Sales (000's tonnes)
|
73.3
|
64.0
|
76.1
|
64.0
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss) attributable to shareholders
|
$
|
61
|
$
|
369
|
$
|
(400
|
)
|
$
|
1,230
|
|||||||
Add (deduct) on an after-tax basis:
|
||||||||||||||||
Asset impairment
|
–
|
–
|
474
|
109
|
||||||||||||
COVID-19 costs
|
64
|
–
|
233
|
–
|
||||||||||||
Environmental costs
|
27
|
26
|
9
|
80
|
||||||||||||
Inventory write-downs (reversals)
|
11
|
6
|
76
|
7
|
||||||||||||
Share-based compensation
|
18
|
(20
|
)
|
13
|
(1
|
)
|
||||||||||
Commodity derivative losses (gains)
|
(26
|
)
|
(8
|
)
|
(31
|
)
|
(14
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(77
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
8
|
166
|
||||||||||||
Taxes and other
|
(25
|
)
|
16
|
(69
|
)
|
(26
|
)
|
|||||||||
Adjusted profit attributable to shareholders1
|
$
|
130
|
$
|
389
|
$
|
313
|
$
|
1,474
|
||||||||
Adjusted basic earnings per share1 2
|
$
|
0.24
|
$
|
0.70
|
$
|
0.58
|
$
|
2.62
|
||||||||
Adjusted diluted earnings per share1 2
|
$
|
0.24
|
$
|
0.69
|
$
|
0.58
|
$
|
2.59
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Per share amounts)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Basic earnings (loss) per share
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.19
|
|||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
0.88
|
0.19
|
||||||||||||
COVID-19 costs
|
0.12
|
–
|
0.43
|
–
|
||||||||||||
Environmental costs
|
0.05
|
0.05
|
0.02
|
0.14
|
||||||||||||
Inventory write-downs (reversals)
|
0.02
|
0.01
|
0.14
|
0.01
|
||||||||||||
Share-based compensation
|
0.04
|
(0.04
|
)
|
0.03
|
–
|
|||||||||||
Commodity derivative losses (gains)
|
(0.05
|
)
|
(0.01
|
)
|
(0.06
|
)
|
(0.02
|
)
|
||||||||
Debt prepayment option loss (gain)
|
–
|
–
|
–
|
(0.13
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
0.01
|
0.29
|
||||||||||||
Taxes and other
|
(0.05
|
)
|
0.03
|
(0.12
|
)
|
(0.05
|
)
|
|||||||||
Adjusted basic earnings per share
|
$
|
0.24
|
$
|
0.70
|
$
|
0.58
|
$
|
2.62
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(Per share amounts)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Diluted earnings (loss) per share
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.16
|
|||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
0.88
|
0.19
|
||||||||||||
COVID-19 costs
|
0.12
|
–
|
0.43
|
–
|
||||||||||||
Environmental costs
|
0.05
|
0.04
|
0.02
|
0.14
|
||||||||||||
Inventory write-downs (reversals)
|
0.02
|
0.01
|
0.14
|
0.01
|
||||||||||||
Share-based compensation
|
0.04
|
(0.04
|
)
|
0.03
|
–
|
|||||||||||
Commodity derivative losses (gains)
|
(0.05
|
)
|
(0.01
|
)
|
(0.06
|
)
|
(0.02
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(0.13
|
)
|
|||||||||||
Debt redemption loss
|
–
|
–
|
0.01
|
0.29
|
||||||||||||
Taxes and other
|
(0.05
|
)
|
0.03
|
(0.12
|
)
|
(0.05
|
)
|
|||||||||
Adjusted diluted earnings per share
|
$
|
0.24
|
$
|
0.69
|
$
|
0.58
|
$
|
2.59
|
(A)
Twelve
months ended
December 31, 2019
|
(B)
Nine Months
ended
September 30,
2019
|
(C)
Nine months ended
September 30,
2020
|
(A-B+C)
Twelve months
ended
September 30,
2020
|
||||||||||||||
Profit (loss)
|
$
|
(588
|
)
|
$
|
1,267
|
$
|
(471
|
)
|
$
|
(2,326
|
)
|
||||||
Finance expense net
of finance income
|
218
|
172
|
224
|
270
|
|||||||||||||
Provision for (recovery of)
income taxes
|
120
|
630
|
(116
|
)
|
(626
|
)
|
|||||||||||
Depreciation and
amortization
|
1,619
|
1,204
|
1,104
|
1,519
|
|||||||||||||
EBITDA
|
$
|
1,369
|
$
|
3,273
|
$
|
741
|
$
|
(1,163
|
)
|
||||||||
Add (deduct):
|
|||||||||||||||||
Asset impairment
|
2,678
|
171
|
647
|
3,154
|
|||||||||||||
COVID-19 costs
|
–
|
–
|
336
|
336
|
|||||||||||||
Environmental costs
|
197
|
112
|
12
|
97
|
|||||||||||||
Inventory write-downs
(reversals)
|
60
|
9
|
111
|
162
|
|||||||||||||
Share-based compensation
|
4
|
(2
|
)
|
18
|
24
|
||||||||||||
Commodity derivative losses
(gains)
|
(17
|
)
|
(19
|
)
|
(42
|
)
|
(40
|
)
|
|||||||||
Debt prepayment option
gain
|
(105
|
)
|
(105
|
)
|
–
|
–
|
|||||||||||
Loss on debt redemption
or purchase
|
224
|
224
|
11
|
11
|
|||||||||||||
Taxes and other
|
51
|
25
|
(103
|
)
|
(77
|
)
|
|||||||||||
Adjusted EBITDA
|
$
|
4,461
|
(D)
|
$
|
3,688
|
$
|
1,731
|
$
|
2,504
|
(E)
|
|||||||
Total debt at period end
|
$
|
4,834
|
(F)
|
$
|
6,612
|
(G)
|
|||||||||||
Less: cash and cash
equivalents at period end
|
(1,026
|
)
|
)
|
(403
|
)
|
||||||||||||
Net debt
|
$
|
3,808
|
(H)
|
$
|
6,209
|
(I)
|
|||||||||||
Debt to adjusted
EBITDA ratio
|
1.1
|
(F/D)
|
2.6
|
(G/E)
|
|||||||||||||
Net Debt to adjusted
EBITDA ratio
|
0.9
|
(H/D)
|
2.5
|
(I/E)
|
|||||||||||||
Equity attributable to
shareholders of
the company
|
21,304
|
(J)
|
20,778
|
(K)
|
|||||||||||||
Net debt to
capitalization ratio
|
0.15
|
(H/(F+J))
|
0.23
|
(I/(G+K))
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss)
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Finance expense net of finance income
|
63
|
56
|
224
|
172
|
||||||||||||
Provision for (recovery of) income taxes
|
19
|
171
|
(116
|
)
|
630
|
|||||||||||
Depreciation and amortization
|
412
|
436
|
1,104
|
1,204
|
||||||||||||
EBITDA
|
519
|
1,036
|
741
|
3,273
|
||||||||||||
Add (deduct):
|
||||||||||||||||
Asset impairment
|
–
|
–
|
647
|
171
|
||||||||||||
COVID-19 costs
|
107
|
–
|
336
|
–
|
||||||||||||
Environmental costs
|
37
|
35
|
12
|
112
|
||||||||||||
Inventory write-downs (reversals)
|
18
|
7
|
111
|
9
|
||||||||||||
Share-based compensation
|
25
|
(27
|
)
|
18
|
(2
|
)
|
||||||||||
Commodity derivative losses (gains)
|
(35
|
)
|
(11
|
)
|
(42
|
)
|
(19
|
)
|
||||||||
Debt prepayment option gain
|
–
|
–
|
–
|
(105
|
)
|
|||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
11
|
224
|
||||||||||||
Taxes and other
|
(33
|
)
|
24
|
(103
|
)
|
25
|
||||||||||
Adjusted EBITDA
|
$
|
638
|
$
|
1,064
|
$
|
1,731
|
$
|
3,688
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Gross profit
|
$
|
291
|
$
|
787
|
$
|
828
|
$
|
2,880
|
||||||||
Depreciation and amortization
|
412
|
436
|
1,104
|
1,204
|
||||||||||||
Gross profit before depreciation and amortization
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
||||||||
Reported as:
|
||||||||||||||||
Steelmaking coal
|
$
|
120
|
$
|
628
|
$
|
761
|
$
|
2,456
|
||||||||
Copper
|
||||||||||||||||
Highland Valley Copper
|
121
|
107
|
291
|
278
|
||||||||||||
Antamina
|
173
|
136
|
356
|
450
|
||||||||||||
Carmen de Andacollo
|
31
|
30
|
107
|
103
|
||||||||||||
Quebrada Blanca
|
11
|
(6
|
)
|
18
|
10
|
|||||||||||
Other
|
–
|
2
|
–
|
–
|
||||||||||||
336
|
269
|
772
|
841
|
|||||||||||||
Zinc
|
||||||||||||||||
Trail Operations
|
14
|
2
|
38
|
10
|
||||||||||||
Red Dog
|
255
|
284
|
529
|
627
|
||||||||||||
Pend Oreille
|
–
|
(3
|
)
|
–
|
(4
|
)
|
||||||||||
Other
|
14
|
(6
|
)
|
31
|
13
|
|||||||||||
283
|
277
|
598
|
646
|
|||||||||||||
Energy
|
(36
|
)
|
49
|
(199
|
)
|
141
|
||||||||||
Gross profit before depreciation and amortization
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenues
|
||||||||||||||||
Steelmaking coal (E)
|
$
|
699
|
$
|
1,277
|
$
|
2,514
|
$
|
4,417
|
||||||||
Copper (F)
|
624
|
601
|
1,599
|
1,877
|
||||||||||||
Zinc (G)
|
874
|
902
|
1,961
|
2,223
|
||||||||||||
Energy (H)
|
94
|
255
|
314
|
762
|
||||||||||||
Total
|
$
|
2,291
|
$
|
3,035
|
$
|
6,388
|
$
|
9,279
|
||||||||
Gross profit (loss), before
depreciation and amortization
|
||||||||||||||||
Steelmaking coal (A)
|
$
|
120
|
$
|
628
|
$
|
761
|
$
|
2,456
|
||||||||
Copper (B)
|
336
|
269
|
772
|
841
|
||||||||||||
Zinc (C)
|
283
|
277
|
598
|
646
|
||||||||||||
Energy (D)
|
(36
|
)
|
49
|
(199
|
)
|
141
|
||||||||||
Total
|
$
|
703
|
$
|
1,223
|
$
|
1,932
|
$
|
4,084
|
||||||||
Gross profit margins before depreciation
|
||||||||||||||||
Steelmaking coal (A/E)
|
17
|
%
|
49
|
%
|
30
|
%
|
56
|
%
|
||||||||
Copper (B/F)
|
54
|
%
|
45
|
%
|
48
|
%
|
45
|
%
|
||||||||
Zinc (C/G)
|
32
|
%
|
31
|
%
|
30
|
%
|
29
|
%
|
||||||||
Energy (D/H)
|
(38
|
)%
|
19
|
%
|
(63
|
)%
|
19
|
%
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Cost of sales as reported
|
$
|
762
|
$
|
852
|
$
|
2,273
|
$
|
2,546
|
||||||||
Less:
|
||||||||||||||||
Transportation costs
|
(221
|
)
|
(237
|
)
|
(660
|
)
|
(727
|
)
|
||||||||
Depreciation and amortization
|
(183
|
)
|
(203
|
)
|
(520
|
)
|
(585
|
)
|
||||||||
Inventory (write-down) reversal
|
(18
|
)
|
(4
|
)
|
(45
|
)
|
(4
|
)
|
||||||||
Labour settlement
|
–
|
–
|
(4
|
)
|
–
|
|||||||||||
Adjusted site cash cost of sales
|
$
|
340
|
$
|
408
|
$
|
1,044
|
$
|
1,230
|
||||||||
Tonnes sold (millions)
|
5.1
|
6.1
|
15.8
|
18.7
|
||||||||||||
Per unit amounts – CAD$/tonne
|
||||||||||||||||
Adjusted site cash cost of sales
|
$
|
67
|
$
|
67
|
$
|
66
|
$
|
66
|
||||||||
Transportation costs
|
43
|
39
|
42
|
39
|
||||||||||||
Inventory write-downs
|
3
|
1
|
3
|
–
|
||||||||||||
Unit costs – CAD$/tonne
|
$
|
113
|
$
|
107
|
$
|
111
|
$
|
105
|
||||||||
US$ amounts1
|
||||||||||||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
$
|
1.35
|
$
|
1.33
|
||||||||
Per unit amounts – US$/tonne
|
||||||||||||||||
Adjusted site cash cost of sales
|
$
|
50
|
$
|
51
|
$
|
49
|
$
|
50
|
||||||||
Transportation costs
|
32
|
29
|
31
|
29
|
||||||||||||
Inventory write-downs
|
3
|
1
|
2
|
–
|
||||||||||||
Unit costs – US$/tonne
|
$
|
85
|
$
|
81
|
$
|
82
|
$
|
79
|
1. |
Average period exchange rates are used to convert to US$/tonne equivalent.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenue as reported
|
$
|
624
|
$
|
601
|
$
|
1,599
|
$
|
1,877
|
||||||||
By-product revenue (A)
|
(78
|
)
|
(79
|
)
|
(196
|
)
|
(243
|
)
|
||||||||
Smelter processing charges (B)
|
36
|
41
|
100
|
126
|
||||||||||||
Adjusted revenue
|
$
|
582
|
$
|
563
|
$
|
1,503
|
$
|
1,760
|
||||||||
Cost of sales as reported
|
$
|
392
|
$
|
458
|
$
|
1,108
|
$
|
1,390
|
||||||||
Less:
|
||||||||||||||||
Depreciation and amortization
|
(104
|
)
|
(126
|
)
|
(281
|
)
|
(354
|
)
|
||||||||
Inventory (write-downs) provision reversal
|
–
|
(7
|
)
|
–
|
(4
|
)
|
||||||||||
Labour settlement
|
–
|
(8
|
)
|
–
|
(13
|
)
|
||||||||||
By-product cost of sales (C)
|
(17
|
)
|
(12
|
)
|
(42
|
)
|
(39
|
)
|
||||||||
Adjusted cash cost of sales (D)
|
$
|
271
|
$
|
305
|
$
|
785
|
$
|
980
|
||||||||
Payable pounds sold (millions) (E)
|
146.8
|
162.2
|
419.0
|
483.2
|
||||||||||||
Per unit amounts – CAD$/pound
|
||||||||||||||||
Adjusted cash cost of sales (D/E)
|
$
|
1.85
|
$
|
1.88
|
$
|
1.87
|
$
|
2.03
|
||||||||
Smelter processing charges (B/E)
|
0.24
|
0.25
|
0.24
|
0.26
|
||||||||||||
Total cash unit costs – CAD$/pound
|
$
|
2.09
|
$
|
2.13
|
$
|
2.11
|
$
|
2.29
|
||||||||
Cash margin for by-products – ((A – C)/E)
|
(0.42
|
)
|
(0.41
|
)
|
(0.37
|
)
|
(0.42
|
)
|
||||||||
Net cash unit costs – CAD$/pound
|
$
|
1.67
|
$
|
1.72
|
$
|
1.74
|
$
|
1.87
|
||||||||
US$ amounts1
|
||||||||||||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
$
|
1.35
|
$
|
1.33
|
||||||||
Per unit amounts – US$/pound
|
||||||||||||||||
Adjusted cash cost of sales
|
$
|
1.39
|
$
|
1.43
|
$
|
1.38
|
$
|
1.53
|
||||||||
Smelter processing charges
|
0.18
|
0.19
|
0.18
|
0.19
|
||||||||||||
Total cash unit costs – US$/pound
|
$
|
1.57
|
$
|
1.62
|
$
|
1.56
|
$
|
1.72
|
||||||||
Cash margin for by-products
|
(0.32
|
)
|
(0.31
|
)
|
(0.27
|
)
|
(0.32
|
)
|
||||||||
Net cash unit costs – US$/pound
|
$
|
1.25
|
$
|
1.31
|
$
|
1.29
|
$
|
1.40
|
1. |
Average period exchange rates are used to convert to US$ per pound equivalent.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenue as reported
|
$
|
874
|
$
|
902
|
$
|
1,961
|
$
|
2,223
|
||||||||
Less:
|
||||||||||||||||
Trail Operations revenues as reported
|
(441
|
)
|
(456
|
)
|
(1,288
|
)
|
(1,423
|
)
|
||||||||
Other revenues as reported
|
(3
|
)
|
(2
|
)
|
(7
|
)
|
(6
|
)
|
||||||||
Add back: Intra-segment revenues as reported
|
139
|
136
|
324
|
408
|
||||||||||||
$
|
569
|
$
|
580
|
$
|
990
|
$
|
1,202
|
|||||||||
By-product revenues (A)
|
(230
|
)
|
(215
|
)
|
(242
|
)
|
(231
|
)
|
||||||||
Smelter processing charges (B)
|
129
|
105
|
259
|
209
|
||||||||||||
Adjusted revenue
|
$
|
468
|
$
|
470
|
$
|
1,007
|
$
|
1,180
|
||||||||
Cost of sales as reported
|
$
|
690
|
$
|
695
|
$
|
1,585
|
$
|
1,742
|
||||||||
Less:
|
||||||||||||||||
Trail Operations cost of sales as reported
|
(448
|
)
|
(476
|
)
|
(1,316
|
)
|
(1,476
|
)
|
||||||||
Other cost of sales as reported
|
11
|
(8
|
)
|
24
|
7
|
|||||||||||
Add back: Intra-segment purchases as reported
|
139
|
136
|
324
|
408
|
||||||||||||
$
|
392
|
$
|
347
|
$
|
617
|
$
|
681
|
|||||||||
Less:
|
||||||||||||||||
Depreciation and amortization
|
(78
|
)
|
(48
|
)
|
(156
|
)
|
(102
|
)
|
||||||||
Severance charge
|
–
|
–
|
–
|
(4
|
)
|
|||||||||||
Royalty costs
|
(131
|
)
|
(117
|
)
|
(138
|
)
|
(211
|
)
|
||||||||
By-product cost of sales (C)
|
(59
|
)
|
(51
|
)
|
(61
|
)
|
(51
|
)
|
||||||||
Adjusted cash cost of sales (D)
|
$
|
124
|
$
|
131
|
$
|
262
|
$
|
313
|
||||||||
Payable pounds sold (millions) (E)
|
334.3
|
332.0
|
758.6
|
769.2
|
||||||||||||
Per unit amounts – CAD$/pound
|
||||||||||||||||
Adjusted cash cost of sales (D/E)
|
$
|
0.37
|
$
|
0.39
|
$
|
0.35
|
$
|
0.41
|
||||||||
Smelter processing charges (B/E)
|
0.39
|
0.32
|
0.34
|
0.27
|
||||||||||||
Total cash unit costs – CAD$/pound
|
$
|
0.76
|
$
|
0.71
|
$
|
0.69
|
$
|
0.68
|
||||||||
Cash margin for by-products – ((A - C)/E)
|
(0.51
|
)
|
(0.49
|
)
|
(0.24
|
)
|
(0.24
|
)
|
||||||||
Net cash unit costs – CAD$/pound
|
$
|
0.25
|
$
|
0.22
|
$
|
0.45
|
$
|
0.44
|
||||||||
US$ amounts2
|
||||||||||||||||
Average exchange rate (CAD$ per US$1.00)
|
$
|
1.33
|
$
|
1.32
|
$
|
1.35
|
$
|
1.33
|
||||||||
Per unit amounts – US$/pound
|
||||||||||||||||
Adjusted cash cost of sales
|
$
|
0.28
|
$
|
0.30
|
$
|
0.26
|
$
|
0.31
|
||||||||
Smelter processing charges
|
0.29
|
0.24
|
0.25
|
0.20
|
||||||||||||
Total cash unit costs – US$/pound
|
$
|
0.57
|
$
|
0.54
|
$
|
0.51
|
$
|
0.51
|
||||||||
Cash margin for by-products
|
(0.39
|
)
|
(0.37
|
)
|
(0.18
|
)
|
(0.18
|
)
|
||||||||
Net cash unit costs – US$/pound
|
$
|
0.18
|
$
|
0.17
|
$
|
0.33
|
$
|
0.33
|
1. |
Red Dog and Pend Oreille (closed in July 2019).
|
2. |
Average period exchange rates are used to convert to US$ per pound equivalent.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenue as reported
|
$
|
94
|
$
|
255
|
$
|
314
|
$
|
762
|
||||||||
Less:
|
||||||||||||||||
Cost of diluent for blending
|
(33
|
)
|
(79
|
)
|
(163
|
)
|
(242
|
)
|
||||||||
Non-proprietary product revenue
|
(9
|
)
|
(7
|
)
|
(17
|
)
|
(24
|
)
|
||||||||
Add back: crown royalties (D)
|
–
|
6
|
3
|
15
|
||||||||||||
Adjusted revenue (A)
|
$
|
52
|
$
|
175
|
$
|
137
|
$
|
511
|
||||||||
Cost of sales as reported
|
$
|
156
|
$
|
243
|
$
|
594
|
$
|
721
|
||||||||
Less:
|
||||||||||||||||
Depreciation and amortization
|
(26
|
)
|
(37
|
)
|
(81
|
)
|
(100
|
)
|
||||||||
Inventory write-down
|
–
|
–
|
(46
|
)
|
–
|
|||||||||||
Cash cost of sales
|
$
|
130
|
$
|
206
|
$
|
467
|
$
|
621
|
||||||||
Less:
|
||||||||||||||||
Cost of diluent for blending
|
(33
|
)
|
(79
|
)
|
(163
|
)
|
(242
|
)
|
||||||||
Cost of non-proprietary product purchased
|
(9
|
)
|
(5
|
)
|
(13
|
)
|
(24
|
)
|
||||||||
Transportation for non-proprietary product
purchased3
|
(3
|
)
|
(30
|
)
|
(7
|
)
|
(89
|
)
|
||||||||
Transportation for costs FRB (C)
|
(23
|
)
|
(1
|
)
|
(78
|
)
|
(2
|
)
|
||||||||
Adjusted operating costs (E)
|
$
|
62
|
$
|
91
|
$
|
206
|
$
|
264
|
||||||||
Blended bitumen barrels sold (000’s)
|
1,940
|
4,240
|
8,585
|
12,186
|
||||||||||||
Less diluent barrels included in blended
bitumen (000’s)
|
(443
|
)
|
(932
|
)
|
(2,188
|
)
|
(2,864
|
)
|
||||||||
Bitumen barrels sold (000’s) (B)
|
1,497
|
3,308
|
6,397
|
9,322
|
||||||||||||
Per barrel amounts – CAD$
|
||||||||||||||||
Bitumen price realized (A/B)2
|
$
|
34.89
|
$
|
52.61
|
$
|
21.45
|
$
|
54.69
|
||||||||
Crown royalties (D/B)
|
(0.23
|
)
|
(1.81
|
)
|
(0.54
|
)
|
(1.58
|
)
|
||||||||
Transportation costs for FRB (C/B)
|
(15.56
|
)
|
(9.16
|
)
|
(12.25
|
)
|
(9.59
|
)
|
||||||||
Adjusted operating costs (E/B)
|
(41.18
|
)
|
(27.31
|
)
|
(32.26
|
)
|
(28.20
|
)
|
||||||||
Operating netback – CAD$ per barrel
|
$
|
(22.08
|
)
|
$
|
14.33
|
$
|
(23.60
|
)
|
$
|
15.32
|
1. |
Calculated per unit amounts may differ due to rounding.
|
2. |
Bitumen price realized represents the realized petroleum revenue (blended bitumen sales revenue) net of diluent expense, expressed on a per barrel basis. Blended bitumen sales revenue represents revenue
from our share of the heavy crude oil blend known as Fort Hills Reduced Carbon Life Cycle Dilbit Blend (FRB), sold at the Hardisty and U.S. Gulf Coast market hubs. FRB is comprised of bitumen produced from Fort Hills blended with
purchased diluent. The cost of blending is affected by the amount of diluent required and the cost of purchasing, transporting and blending the diluent. A portion of diluent expense is effectively recovered in the sales price of
the blended product. Diluent expense is also affected by Canadian and U.S. benchmark pricing and changes in the value of the Canadian dollar relative to the U.S. dollar.
|
3. |
Reflects adjustments for costs not directly attributed to the production of Fort Hills bitumen, including transportation for non-proprietary product purchased.
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions, except where noted)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenue as reported
|
$
|
94
|
$
|
255
|
$
|
314
|
$
|
762
|
||||||||
Less: non-proprietary product revenue
|
(9
|
)
|
(7
|
)
|
(17
|
)
|
(24
|
)
|
||||||||
Add back: crown royalties
|
–
|
6
|
3
|
15
|
||||||||||||
Blended bitumen revenue (A)
|
$
|
85
|
$
|
254
|
$
|
300
|
$
|
753
|
||||||||
Blended bitumen barrels sold (000’s) (B)
|
1,940
|
4,240
|
8,585
|
12,186
|
||||||||||||
Blended bitumen price realized –
(CAD$/barrel) (A/B) = D1
|
$
|
44.07
|
$
|
59.78
|
$
|
34.97
|
$
|
61.73
|
||||||||
Average exchange rate (CAD$ per US$1.00) (C)
|
1.33
|
1.32
|
1.35
|
1.33
|
||||||||||||
Blended bitumen price realized –
(US$/barrel) (D/C)1
|
$
|
33.10
|
$
|
45.26
|
$
|
25.83
|
$
|
46.44
|
1. |
Calculated per unit amounts may differ due to rounding.
|
Teck Resources Limited
Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2020
|
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
||||||||||||||
(CAD$ in millions, except for share data)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Revenues (Note 3)
|
$
|
2,291
|
$
|
3,035
|
$
|
6,388
|
$
|
9,279
|
||||||||
Cost of sales
|
(2,000
|
)
|
(2,248
|
)
|
(5,560
|
)
|
(6,399
|
)
|
||||||||
Gross profit
|
291
|
787
|
828
|
2,880
|
||||||||||||
Other operating income (expenses)
|
||||||||||||||||
General and administration
|
(26
|
)
|
(35
|
)
|
(81
|
)
|
(118
|
)
|
||||||||
Exploration
|
(12
|
)
|
(20
|
)
|
(35
|
)
|
(50
|
)
|
||||||||
Research and innovation
|
(15
|
)
|
(24
|
)
|
(51
|
)
|
(45
|
)
|
||||||||
Asset impairment (Note 4)
|
–
|
–
|
(647
|
)
|
(171
|
)
|
||||||||||
Other operating income (expense) (Note 5)
|
(127
|
)
|
(107
|
)
|
(426
|
)
|
(320
|
)
|
||||||||
Profit (loss) from operations
|
111
|
601
|
(412
|
)
|
2,176
|
|||||||||||
Finance income
|
2
|
9
|
9
|
41
|
||||||||||||
Finance expense (Note 6)
|
(65
|
)
|
(65
|
)
|
(233
|
)
|
(213
|
)
|
||||||||
Non-operating income (expense) (Note 7)
|
(3
|
)
|
1
|
53
|
(105
|
)
|
||||||||||
Share of loss of associates and joint ventures
|
(1
|
)
|
(2
|
)
|
(4
|
)
|
(2
|
)
|
||||||||
Profit (loss) before taxes
|
44
|
544
|
(587
|
)
|
1,897
|
|||||||||||
Recovery of (provision for) income taxes
|
(19
|
)
|
(171
|
)
|
116
|
(630
|
)
|
|||||||||
Profit (loss) for the period
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Profit (loss) attributable to:
|
||||||||||||||||
Shareholders of the company
|
$
|
61
|
$
|
369
|
$
|
(400
|
)
|
$
|
1,230
|
|||||||
Non-controlling interests
|
(36
|
)
|
4
|
(71
|
)
|
37
|
||||||||||
Profit (loss) for the period
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Earnings (loss) per share
|
||||||||||||||||
Basic
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.19
|
|||||||
Diluted
|
$
|
0.11
|
$
|
0.66
|
$
|
(0.75
|
)
|
$
|
2.16
|
|||||||
Weighted average shares outstanding (millions)
|
531.0
|
556.7
|
535.5
|
562.5
|
||||||||||||
Weighted average diluted shares outstanding
(millions)
|
534.6
|
561.9
|
535.5
|
568.5
|
||||||||||||
Shares outstanding at end of period (millions)
|
531.1
|
554.1
|
531.1
|
554.1
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Profit (loss) for the period
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Other comprehensive income (loss) for the period
|
||||||||||||||||
Items that may be reclassified to profit (loss)
|
||||||||||||||||
Currency translation differences
(net of taxes of $(14), $6, $12, and $(16))
|
(138
|
)
|
81
|
193
|
(179
|
)
|
||||||||||
Change in fair value of debt securities
(net of taxes of $nil, $nil, $nil and $nil)
|
–
|
–
|
–
|
1
|
||||||||||||
(138
|
)
|
81
|
193
|
(178
|
)
|
|||||||||||
Items that will not be reclassified to profit (loss)
|
||||||||||||||||
Change in fair value of marketable equity securities
(net of taxes $(2), $nil, $(2), and $nil)
|
13
|
1
|
14
|
3
|
||||||||||||
Remeasurements of retirement benefit plans
(net of taxes of $(12), $(2), $18, and $(17))
|
29
|
7
|
(34
|
)
|
55
|
|||||||||||
42
|
8
|
(20
|
)
|
58
|
||||||||||||
Total other comprehensive income (loss)
for the period
|
(96
|
)
|
89
|
173
|
(120
|
)
|
||||||||||
Total comprehensive income (loss) for the period
|
$
|
(71
|
)
|
$
|
462
|
$
|
(298
|
)
|
$
|
1,147
|
||||||
Total other comprehensive income
(loss) attributable to:
|
||||||||||||||||
Shareholders of the company
|
$
|
(76
|
)
|
$
|
92
|
$
|
144
|
$
|
(109
|
)
|
||||||
Non-controlling interests
|
(20
|
)
|
(3
|
)
|
29
|
(11
|
)
|
|||||||||
$
|
(96
|
)
|
$
|
89
|
$
|
173
|
$
|
(120
|
)
|
|||||||
Total comprehensive income (loss) attributable to:
|
||||||||||||||||
Shareholders of the company
|
$
|
(15
|
)
|
$
|
461
|
$
|
(256
|
)
|
$
|
1,121
|
||||||
Non-controlling interests
|
(56
|
)
|
1
|
(42
|
)
|
26
|
||||||||||
$
|
(71
|
)
|
$
|
462
|
$
|
(298
|
)
|
$
|
1,147
|
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
||||||||||||||||
Operating activities
|
||||||||||||||||
Profit (loss) for the period
|
$
|
25
|
$
|
373
|
$
|
(471
|
)
|
$
|
1,267
|
|||||||
Depreciation and amortization
|
412
|
436
|
1,104
|
1,204
|
||||||||||||
Provision for (recovery of) income taxes
|
19
|
171
|
(116
|
)
|
630
|
|||||||||||
Asset impairment
|
–
|
–
|
647
|
171
|
||||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
11
|
224
|
||||||||||||
Gain on debt prepayment option
|
–
|
–
|
–
|
(105
|
)
|
|||||||||||
Net finance expense
|
63
|
56
|
224
|
172
|
||||||||||||
Income taxes paid
|
(55
|
)
|
(150
|
)
|
(155
|
)
|
(524
|
)
|
||||||||
Remeasurement of decommissioning and
restoration provisions for closed operations
|
28
|
2
|
(1
|
)
|
53
|
|||||||||||
Other
|
(28
|
)
|
(15
|
)
|
(137
|
)
|
(20
|
)
|
||||||||
Net change in non-cash working capital items
|
(74
|
)
|
189
|
(137
|
)
|
(370
|
)
|
|||||||||
|
390
|
1,062
|
969
|
2,702
|
||||||||||||
Investing activities
|
||||||||||||||||
Expenditures on property, plant and equipment
|
(589
|
)
|
(824
|
)
|
(2,199
|
)
|
(1,905
|
)
|
||||||||
Capitalized production stripping costs
|
(110
|
)
|
(159
|
)
|
(379
|
)
|
(528
|
)
|
||||||||
Expenditures on investments and other assets
|
(54
|
)
|
(43
|
)
|
(135
|
)
|
(123
|
)
|
||||||||
Proceeds from investments and assets
|
68
|
20
|
138
|
66
|
||||||||||||
|
(685
|
)
|
(1,006
|
)
|
(2,575
|
)
|
(2,490
|
)
|
||||||||
Financing activities
|
||||||||||||||||
Proceeds from debt
|
1,406
|
–
|
4,536
|
–
|
||||||||||||
Redemption or purchase and repayment of debt
|
(866
|
)
|
–
|
(2,888
|
)
|
(835
|
)
|
|||||||||
Repayment of lease liabilities
|
(41
|
)
|
(37
|
)
|
(124
|
)
|
(107
|
)
|
||||||||
QB2 advances from SMM/SC
|
–
|
–
|
24
|
913
|
||||||||||||
QB2 equity contributions by SMM/SC
|
–
|
406
|
–
|
797
|
||||||||||||
QB2 partnering and financing transaction costs paid
|
–
|
(37
|
)
|
(8
|
)
|
(103
|
)
|
|||||||||
Interest and finance charges paid
|
(104
|
)
|
(104
|
)
|
(291
|
)
|
(315
|
)
|
||||||||
Issuance of Class B subordinate voting shares
|
–
|
2
|
–
|
10
|
||||||||||||
Purchase and cancellation of
Class B subordinate voting shares
|
–
|
(180
|
)
|
(207
|
)
|
(513
|
)
|
|||||||||
Dividends paid
|
(27
|
)
|
(28
|
)
|
(80
|
)
|
(84
|
)
|
||||||||
Distributions to non-controlling interests
|
–
|
(6
|
)
|
–
|
(21
|
)
|
||||||||||
|
368
|
16
|
962
|
(258
|
)
|
|||||||||||
|
||||||||||||||||
Effect of exchange rate changes on cash and
cash equivalents
|
(6
|
)
|
18
|
21
|
(69
|
)
|
||||||||||
Increase (decrease) in cash and cash equivalents
|
67
|
90
|
(623
|
)
|
(115
|
)
|
||||||||||
|
||||||||||||||||
Cash and cash equivalents at beginning of period
|
336
|
1,529
|
1,026
|
1,734
|
||||||||||||
Cash and cash equivalents at end of period
|
$
|
403
|
$
|
1,619
|
$
|
403
|
$
|
1,619
|
(CAD$ in millions)
|
September 30,
2020
|
December 31,
2019
|
||||||
|
||||||||
ASSETS
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
403
|
$
|
1,026
|
||||
Current income taxes receivable
|
45
|
95
|
||||||
Trade and settlement receivables
|
1,075
|
1,062
|
||||||
Inventories
|
1,898
|
1,981
|
||||||
Prepaids and other current assets
|
354
|
331
|
||||||
|
3,775
|
4,495
|
||||||
|
||||||||
Financial and other assets
|
1,264
|
1,109
|
||||||
Investments in associates and joint ventures
|
1,114
|
1,079
|
||||||
Property, plant and equipment
|
32,792
|
31,355
|
||||||
Deferred income tax assets
|
211
|
211
|
||||||
Goodwill
|
1,111
|
1,101
|
||||||
|
$
|
40,267
|
$
|
39,350
|
||||
|
||||||||
LIABILITIES AND EQUITY
|
||||||||
|
||||||||
Current liabilities
|
||||||||
Trade accounts payable and other liabilities
|
$
|
2,508
|
$
|
2,498
|
||||
Current portion of debt (Note 8)
|
83
|
29
|
||||||
Current portion of lease liabilities
|
143
|
160
|
||||||
Current income taxes payable
|
81
|
89
|
||||||
|
2,815
|
2,776
|
||||||
|
||||||||
Debt (Note 8)
|
5,778
|
4,133
|
||||||
Lease liabilities
|
608
|
512
|
||||||
QB2 advances from SMM/SC
|
962
|
912
|
||||||
Deferred income tax liabilities
|
5,573
|
5,902
|
||||||
Retirement benefit liabilities
|
556
|
505
|
||||||
Provisions and other liabilities
|
2,469
|
2,536
|
||||||
|
18,761
|
17,276
|
||||||
Equity
|
||||||||
Attributable to shareholders of the company
|
20,778
|
21,304
|
||||||
Attributable to non-controlling interests
|
728
|
770
|
||||||
|
21,506
|
22,074
|
||||||
|
$
|
40,267
|
$
|
39,350
|
|
Nine months
ended September 30,
|
|||||||
(CAD$ in millions)
|
2020
|
2019
|
||||||
|
||||||||
Class A common shares
|
$
|
6
|
$
|
6
|
||||
Class B subordinate voting shares
|
||||||||
Beginning of period
|
6,323
|
6,595
|
||||||
Share repurchases
|
(190
|
)
|
(204
|
)
|
||||
Issued on exercise of options
|
–
|
13
|
||||||
End of period
|
6,133
|
6,404
|
||||||
Retained earnings
|
||||||||
Beginning of period
|
14,447
|
15,495
|
||||||
IFRS 16 transition adjustment on January 1, 2019
|
–
|
(43
|
)
|
|||||
Profit (loss) for the period attributable to shareholders of the company
|
(400
|
)
|
1,230
|
|||||
Dividends paid
|
(80
|
)
|
(84
|
)
|
||||
Share repurchases
|
(17
|
)
|
(300
|
)
|
||||
Adjustment from SMM/SC transaction
|
–
|
4
|
||||||
Remeasurements of retirement benefit plans
|
(34
|
)
|
55
|
|||||
End of period
|
13,916
|
16,357
|
||||||
Contributed surplus
|
||||||||
Beginning of period
|
219
|
204
|
||||||
Share option compensation expense
|
17
|
14
|
||||||
Transfer to Class B subordinate voting shares on exercise of options
|
–
|
(3
|
)
|
|||||
End of period
|
236
|
215
|
||||||
Accumulated other comprehensive income attributable
to shareholders of the company
|
||||||||
Beginning of period
|
309
|
584
|
||||||
Other comprehensive income (loss)
|
144
|
(109
|
)
|
|||||
Less remeasurements of retirement benefit plans recorded in retained earnings
|
34
|
(55
|
)
|
|||||
|
||||||||
End of period
|
487
|
420
|
||||||
Non-controlling interests
|
||||||||
Beginning of period
|
770
|
134
|
||||||
Profit (loss) for the period attributable to non-controlling interests
|
(71
|
)
|
37
|
|||||
Other comprehensive income (loss) attributable to non-controlling interests
|
29
|
(11
|
)
|
|||||
Adjustments from SMM/SC transaction
|
–
|
675
|
||||||
Distributions
|
–
|
(21
|
)
|
|||||
End of period
|
728
|
814
|
||||||
Total equity
|
$
|
21,506
|
$
|
24,216
|
1. |
BASIS OF PREPARATION
|
2. |
AREAS OF JUDGMENT AND ESTIMATION UNCERTAINTY
|
2. |
AREAS OF JUDGMENT AND ESTIMATION UNCERTAINTY, continued
|
3. |
REVENUES
|
(CAD$ in millions)
|
Three months ended September 30, 2020
|
|||||||||||||||||||
Steelmaking Coal
|
Copper
|
Zinc
|
Energy
|
Total
|
||||||||||||||||
Steelmaking coal
|
$
|
699
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
699
|
||||||||||
Copper
|
–
|
546
|
–
|
–
|
546
|
|||||||||||||||
Zinc
|
–
|
52
|
587
|
–
|
639
|
|||||||||||||||
Blended bitumen
|
–
|
–
|
–
|
94
|
94
|
|||||||||||||||
Silver
|
–
|
10
|
168
|
–
|
178
|
|||||||||||||||
Lead
|
–
|
2
|
183
|
–
|
185
|
|||||||||||||||
Other
|
–
|
14
|
75
|
–
|
89
|
|||||||||||||||
Intra-segment
|
–
|
–
|
(139
|
)
|
–
|
(139
|
)
|
|||||||||||||
$
|
699
|
$
|
624
|
$
|
874
|
$
|
94
|
$
|
2,291
|
(CAD$ in millions)
|
Three months ended September 30, 2019
|
|||||||||||||||||||
Steelmaking Coal
|
Copper
|
Zinc
|
Energy
|
Total
|
||||||||||||||||
Steelmaking coal
|
$
|
1,277
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
1,277
|
||||||||||
Copper
|
–
|
522
|
–
|
–
|
522
|
|||||||||||||||
Zinc
|
–
|
35
|
614
|
–
|
649
|
|||||||||||||||
Blended bitumen
|
–
|
–
|
–
|
255
|
255
|
|||||||||||||||
Silver
|
–
|
6
|
128
|
–
|
134
|
|||||||||||||||
Lead
|
–
|
2
|
209
|
–
|
211
|
|||||||||||||||
Other
|
–
|
36
|
87
|
–
|
123
|
|||||||||||||||
Intra-segment
|
–
|
–
|
(136
|
)
|
–
|
(136
|
)
|
|||||||||||||
$
|
1,277
|
$
|
601
|
$
|
902
|
$
|
255
|
$
|
3,035
|
3. |
REVENUES, continued
|
(CAD$ in millions)
|
Nine months ended September 30, 2020
|
|||||||||||||||||||
Steelmaking Coal
|
Copper
|
Zinc
|
Energy
|
Total
|
||||||||||||||||
Steelmaking coal
|
$
|
2,514
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
2,514
|
||||||||||
Copper
|
–
|
1,403
|
–
|
–
|
1,403
|
|||||||||||||||
Zinc
|
–
|
112
|
1,450
|
–
|
1,562
|
|||||||||||||||
Blended bitumen
|
–
|
–
|
–
|
314
|
314
|
|||||||||||||||
Silver
|
–
|
23
|
321
|
–
|
344
|
|||||||||||||||
Lead
|
–
|
3
|
273
|
–
|
276
|
|||||||||||||||
Other
|
–
|
58
|
241
|
–
|
299
|
|||||||||||||||
Intra-segment
|
–
|
–
|
(324
|
)
|
–
|
(324
|
)
|
|||||||||||||
$
|
2,514
|
$
|
1,599
|
$
|
1,961
|
$
|
314
|
$
|
6,388
|
(CAD$ in millions)
|
Nine months ended September 30, 2019
|
|||||||||||||||||||
Steelmaking Coal
|
Copper
|
Zinc
|
Energy
|
Total
|
||||||||||||||||
Steelmaking coal
|
$
|
4,417
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
4,417
|
||||||||||
Copper
|
–
|
1,634
|
–
|
–
|
1,634
|
|||||||||||||||
Zinc
|
–
|
125
|
1,802
|
–
|
1,927
|
|||||||||||||||
Blended bitumen
|
–
|
–
|
–
|
762
|
762
|
|||||||||||||||
Silver
|
–
|
17
|
270
|
–
|
287
|
|||||||||||||||
Lead
|
–
|
4
|
295
|
–
|
299
|
|||||||||||||||
Other
|
–
|
97
|
264
|
–
|
361
|
|||||||||||||||
Intra-segment
|
–
|
–
|
(408
|
)
|
–
|
(408
|
)
|
|||||||||||||
$
|
4,417
|
$
|
1,877
|
$
|
2,223
|
$
|
762
|
$
|
9,279
|
4. |
ASSET IMPAIRMENT
|
4. |
ASSET IMPAIRMENT, continued
|
a) |
Key Assumptions
|
March 31, 2020
|
|
WCS heavy oil prices
|
Current price used in initial year, increased to a real long-term price in 2024 of US$50 per barrel
|
Discount rate
|
5.4%
|
Long-term foreign exchange rate
|
1 U.S. to 1.30 Canadian dollars
|
Inflation rate
|
2%
|
4. |
ASSET IMPAIRMENT, continued
|
b) |
Sensitivity Analysis
|
5. |
OTHER OPERATING INCOME (EXPENSE)
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Settlement pricing adjustments
|
$
|
32
|
$
|
(50
|
)
|
$
|
(26
|
)
|
$
|
(41
|
)
|
|||||
Share-based compensation (Note 9(a))
|
(25
|
)
|
27
|
(18
|
)
|
2
|
||||||||||
Environmental costs and remeasurement of
decommissioning and restoration provisions
for closed operations
|
(37
|
)
|
(35
|
)
|
(12
|
)
|
(112
|
)
|
||||||||
Care and maintenance costs
|
(15
|
)
|
(13
|
)
|
(37
|
)
|
(25
|
)
|
||||||||
Social responsibility and donations
|
(4
|
)
|
(1
|
)
|
(14
|
)
|
(7
|
)
|
||||||||
Gain on sale of assets
|
47
|
1
|
55
|
3
|
||||||||||||
Commodity derivatives
|
35
|
11
|
42
|
19
|
||||||||||||
Take or pay contract costs
|
(26
|
)
|
(29
|
)
|
(76
|
)
|
(93
|
)
|
||||||||
COVID-19 costs
|
(107
|
)
|
–
|
(282
|
)
|
–
|
||||||||||
Other
|
(27
|
)
|
(18
|
)
|
(58
|
)
|
(66
|
)
|
||||||||
$
|
(127
|
)
|
$
|
(107
|
)
|
$
|
(426
|
)
|
$
|
(320
|
)
|
6. |
FINANCE EXPENSE
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Debt interest
|
$
|
72
|
$
|
61
|
$
|
202
|
$
|
216
|
||||||||
Interest on advances from SMM/SC
|
9
|
12
|
34
|
28
|
||||||||||||
Interest on lease liabilities
|
10
|
9
|
28
|
30
|
||||||||||||
Letters of credit and standby fees
|
11
|
14
|
35
|
37
|
||||||||||||
Net interest expense on retirement benefit plans
|
1
|
2
|
3
|
5
|
||||||||||||
Accretion on decommissioning and restoration provisions
|
28
|
29
|
84
|
83
|
||||||||||||
Other
|
2
|
6
|
8
|
11
|
||||||||||||
133
|
133
|
394
|
410
|
|||||||||||||
Less capitalized borrowing costs
|
(68
|
)
|
(68
|
)
|
(161
|
)
|
(197
|
)
|
||||||||
$
|
65
|
$
|
65
|
$
|
233
|
$
|
213
|
7. |
NON-OPERATING INCOME (EXPENSE)
|
Three months
ended September 30,
|
Nine months
ended September 30,
|
|||||||||||||||
(CAD$ in millions)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Foreign exchange gains (losses)
|
$
|
(2
|
)
|
$
|
1
|
$
|
8
|
$
|
(12
|
)
|
||||||
Gain on debt prepayment option
|
–
|
–
|
–
|
105
|
||||||||||||
Loss on debt redemption or purchase
|
–
|
–
|
(11
|
)
|
(224
|
)
|
||||||||||
Other
|
(1
|
)
|
–
|
56
|
26
|
|||||||||||
$
|
(3
|
)
|
$
|
1
|
$
|
53
|
$
|
(105
|
)
|
8. |
DEBT
|
($ in millions)
|
September 30, 2020
|
December 31, 2019
|
||||||||||||||||||||||
Face
|
Carrying
|
Fair
|
Face
|
Carrying
|
Fair
|
|||||||||||||||||||
Value
|
Value
|
Value
|
Value
|
Value
|
Value
|
|||||||||||||||||||
(US$)
|
(CAD$)
|
(CAD$)
|
(US$)
|
(CAD$)
|
(CAD$)
|
|||||||||||||||||||
4.5% notes due January 2021 (b)
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
117
|
$
|
152
|
$
|
155
|
||||||||||||
4.75% notes due January 2022 (b)
|
150
|
199
|
204
|
202
|
262
|
273
|
||||||||||||||||||
3.75% notes due February 2023 (b)
|
108
|
146
|
151
|
220
|
289
|
298
|
||||||||||||||||||
3.9% notes due July 2030 (a)
|
550
|
723
|
770
|
–
|
–
|
–
|
||||||||||||||||||
6.125% notes due October 2035
|
609
|
801
|
979
|
609
|
779
|
932
|
||||||||||||||||||
6.0% notes due August 2040
|
490
|
652
|
739
|
490
|
634
|
712
|
||||||||||||||||||
6.25% notes due July 2041
|
795
|
1,049
|
1,227
|
795
|
1,021
|
1,187
|
||||||||||||||||||
5.2% notes due March 2042
|
399
|
525
|
552
|
399
|
512
|
537
|
||||||||||||||||||
5.4% notes due February 2043
|
377
|
497
|
530
|
377
|
484
|
520
|
||||||||||||||||||
3,478
|
4,592
|
5,152
|
3,209
|
4,133
|
4,614
|
|||||||||||||||||||
QB2 project financing (c)
|
779
|
1,014
|
1,016
|
–
|
–
|
–
|
||||||||||||||||||
Revolving credit facilities (d)
|
129
|
172
|
172
|
–
|
–
|
–
|
||||||||||||||||||
Antamina term loans (e)
|
62
|
83
|
83
|
23
|
29
|
29
|
||||||||||||||||||
$
|
4,448
|
$
|
5,861
|
$
|
6,423
|
$
|
3,232
|
$
|
4,162
|
$
|
4,643
|
|||||||||||||
Less current portion of debt
|
(62
|
)
|
(83
|
)
|
(83
|
)
|
(23
|
)
|
(29
|
)
|
(29
|
)
|
||||||||||||
|
$
|
4,386
|
$
|
5,778
|
$
|
6,340
|
$
|
3,209
|
$
|
4,133
|
$
|
4,614
|
a)
|
Notes Issued
|
8. |
DEBT, continued
|
b) |
Note Purchases
|
c) |
QB2 Project Financing
|
d) |
Revolving Facilities
|
8. |
DEBT, continued
|
e) |
Antamina Loan Facilities
|
9. |
EQUITY
|
a) |
Share-Based Compensation
|
b) |
Accumulated Other Comprehensive Income
|
|
September 30,
|
September 30,
|
||||||
(CAD$ in millions)
|
2020
|
2019
|
||||||
Currency translation differences
|
$
|
492
|
$
|
443
|
||||
Loss on marketable equity and debt securities (net of tax of $2 and $4)
|
(4
|
)
|
(22
|
)
|
||||
Share of other comprehensive loss of associates and joint ventures
|
(1
|
)
|
(1
|
)
|
||||
|
$
|
487
|
$
|
420
|
9. |
EQUITY, continued
|
c) |
Dividends
|
d) |
Normal Course Issuer Bids
|
10. |
SEGMENTED INFORMATION
|
Three months ended September 30, 2020
|
||||||||||||||||||||||||
(CAD$ in millions)
|
Steelmaking
Coal
|
Copper
|
Zinc
|
Energy
|
Corporate
|
Total
|
||||||||||||||||||
Segment revenues
|
$
|
699
|
$
|
624
|
$
|
1,013
|
$
|
94
|
$
|
–
|
$
|
2,430
|
||||||||||||
Less: Intra-segment revenues
|
–
|
–
|
(139
|
)
|
–
|
–
|
(139
|
)
|
||||||||||||||||
Revenues
|
699
|
624
|
874
|
94
|
–
|
2,291
|
||||||||||||||||||
Cost of sales
|
(762
|
)
|
(392
|
)
|
(690
|
)
|
(156
|
)
|
–
|
(2,000
|
)
|
|||||||||||||
Gross profit (loss)
|
(63
|
)
|
232
|
184
|
(62
|
)
|
–
|
291
|
||||||||||||||||
Other operating income (expense)
|
(35
|
)
|
(104
|
)
|
(7
|
)
|
3
|
(37
|
)
|
(180
|
)
|
|||||||||||||
Profit (loss) from operations
|
(98
|
)
|
128
|
177
|
(59
|
)
|
(37
|
)
|
111
|
|||||||||||||||
Net finance income (expense)
|
(15
|
)
|
(34
|
)
|
(12
|
)
|
(6
|
)
|
4
|
(63
|
)
|
|||||||||||||
Non-operating income (expense)
|
–
|
(9
|
)
|
(3
|
)
|
–
|
9
|
(3
|
)
|
|||||||||||||||
Share of loss of associates and
joint ventures
|
–
|
(1
|
)
|
–
|
–
|
–
|
(1
|
)
|
||||||||||||||||
Profit (loss) before taxes
|
(113
|
)
|
84
|
162
|
(65
|
)
|
(24
|
)
|
44
|
|||||||||||||||
Capital expenditures
|
296
|
311
|
78
|
10
|
4
|
699
|
10. |
SEGMENTED INFORMATION, continued
|
Three months ended September 30, 2019
|
||||||||||||||||||||||||
(CAD$ in millions)
|
Steelmaking
Coal
|
Copper
|
Zinc
|
Energy
|
Corporate
|
Total
|
||||||||||||||||||
Segment revenues
|
$
|
1,277
|
$
|
601
|
$
|
1,038
|
$
|
255
|
$
|
–
|
$
|
3,171
|
||||||||||||
Less: Intra-segment revenues
|
–
|
–
|
(136
|
)
|
–
|
–
|
(136
|
)
|
||||||||||||||||
Revenues
|
1,277
|
601
|
902
|
255
|
–
|
3,035
|
||||||||||||||||||
Cost of sales
|
(852
|
)
|
(458
|
)
|
(695
|
)
|
(243
|
)
|
–
|
(2,248
|
)
|
|||||||||||||
Gross profit
|
425
|
143
|
207
|
12
|
–
|
787
|
||||||||||||||||||
Other operating expense
|
(23
|
)
|
(66
|
)
|
(20
|
)
|
(9
|
)
|
(68
|
)
|
(186
|
)
|
||||||||||||
Profit (loss) from operations
|
402
|
77
|
187
|
3
|
(68
|
)
|
601
|
|||||||||||||||||
Net finance income (expense)
|
(15
|
)
|
(36
|
)
|
(11
|
)
|
(5
|
)
|
11
|
(56
|
)
|
|||||||||||||
Non-operating income (expense)
|
3
|
6
|
(1
|
)
|
–
|
(7
|
)
|
1
|
||||||||||||||||
Share of loss of associates and
joint ventures
|
–
|
(1
|
)
|
–
|
–
|
(1
|
)
|
(2
|
)
|
|||||||||||||||
Profit (loss) before taxes
|
390
|
46
|
175
|
(2
|
)
|
(65
|
)
|
544
|
||||||||||||||||
Capital expenditures
|
288
|
552
|
91
|
50
|
2
|
983
|
Nine months ended September 30, 2020
|
||||||||||||||||||||||||
(CAD$ in millions)
|
Steelmaking
Coal
|
Copper
|
Zinc
|
Energy
|
Corporate
|
Total
|
||||||||||||||||||
Segment revenues
|
$
|
2,514
|
$
|
1,599
|
$
|
2,285
|
$
|
314
|
$
|
–
|
$
|
6,712
|
||||||||||||
Less: Intra-segment revenues
|
–
|
–
|
(324
|
)
|
–
|
–
|
(324
|
)
|
||||||||||||||||
Revenues
|
2,514
|
1,599
|
1,961
|
314
|
–
|
6,388
|
||||||||||||||||||
Cost of sales
|
(2,273
|
)
|
(1,108
|
)
|
(1,585
|
)
|
(594
|
)
|
–
|
(5,560
|
)
|
|||||||||||||
Gross profit (loss)
|
241
|
491
|
376
|
(280
|
)
|
–
|
828
|
|||||||||||||||||
Asset impairment
|
–
|
–
|
–
|
(647
|
)
|
–
|
(647
|
)
|
||||||||||||||||
Other operating expense
|
(66
|
)
|
(352
|
)
|
(49
|
)
|
(8
|
)
|
(118
|
)
|
(593
|
)
|
||||||||||||
Profit (loss) from operations
|
175
|
139
|
327
|
(935
|
)
|
(118
|
)
|
(412
|
)
|
|||||||||||||||
Net finance expense
|
(43
|
)
|
(122
|
)
|
(33
|
)
|
(19
|
)
|
(7
|
)
|
(224
|
)
|
||||||||||||
Non-operating income (expense)
|
16
|
52
|
3
|
1
|
(19
|
)
|
53
|
|||||||||||||||||
Share of loss of associates and
joint ventures
|
–
|
(3
|
)
|
–
|
–
|
(1
|
)
|
(4
|
)
|
|||||||||||||||
Profit (loss) before taxes
|
148
|
66
|
297
|
(953
|
)
|
(145
|
)
|
(587
|
)
|
|||||||||||||||
Capital expenditures
|
914
|
1,380
|
194
|
78
|
12
|
2,578
|
||||||||||||||||||
Goodwill
|
702
|
409
|
–
|
–
|
–
|
1,111
|
||||||||||||||||||
Total assets
|
16,358
|
14,094
|
4,010
|
3,197
|
2,608
|
40,267
|
10. |
SEGMENTED INFORMATION, continued
|
Nine months ended September 30, 2019
|
||||||||||||||||||||||||
(CAD$ in millions)
|
Steelmaking
Coal
|
Copper
|
Zinc
|
Energy
|
Corporate
|
Total
|
||||||||||||||||||
Segment revenues
|
$
|
4,417
|
$
|
1,877
|
$
|
2,631
|
$
|
762
|
$
|
–
|
$
|
9,687
|
||||||||||||
Less: Intra-segment revenues
|
–
|
–
|
(408
|
)
|
–
|
–
|
(408
|
)
|
||||||||||||||||
Revenues
|
4,417
|
1,877
|
2,223
|
762
|
–
|
9,279
|
||||||||||||||||||
Cost of sales
|
(2,546
|
)
|
(1,390
|
)
|
(1,742
|
)
|
(721
|
)
|
–
|
(6,399
|
)
|
|||||||||||||
Gross profit
|
1,871
|
487
|
481
|
41
|
–
|
2,880
|
||||||||||||||||||
Asset impairment
|
(171
|
)
|
–
|
–
|
–
|
–
|
(171
|
)
|
||||||||||||||||
Other operating expense
|
(87
|
)
|
(163
|
)
|
(30
|
)
|
(20
|
)
|
(233
|
)
|
(533
|
)
|
||||||||||||
Profit (loss) from operations
|
1,613
|
324
|
451
|
21
|
(233
|
)
|
2,176
|
|||||||||||||||||
Net finance income (expense)
|
(44
|
)
|
(81
|
)
|
(34
|
)
|
(20
|
)
|
7
|
(172
|
)
|
|||||||||||||
Non-operating income (expense)
|
(11
|
)
|
47
|
(6
|
)
|
(2
|
)
|
(133
|
)
|
(105
|
)
|
|||||||||||||
Share of loss of associates and
join ventures
|
–
|
(1
|
)
|
–
|
–
|
(1
|
)
|
(2
|
)
|
|||||||||||||||
Profit (loss) before taxes
|
1,558
|
289
|
411
|
(1
|
)
|
(360
|
)
|
1,897
|
||||||||||||||||
Capital expenditures
|
843
|
1,232
|
203
|
147
|
8
|
2,433
|
||||||||||||||||||
Goodwill
|
702
|
407
|
–
|
–
|
–
|
1,109
|
||||||||||||||||||
Total assets
|
16,054
|
12,707
|
4,188
|
6,262
|
2,606
|
41,817
|
11. |
CONTINGENCIES
|
11. |
CONTINGENCIES, continued
|
12. |
SEASONALITY OF SALES
|
13. |
FAIR VALUE MEASUREMENTS
|
13. |
FAIR VALUE MEASUREMENTS, continued
|
(CAD$ in millions)
|
September 30, 2020
|
December 31, 2019
|
||||||||||||||||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||||||||||||||
Financial assets
|
||||||||||||||||||||||||||||||||
Cash equivalents
|
$
|
213
|
$
|
–
|
$
|
–
|
$
|
213
|
$
|
877
|
$
|
–
|
$
|
–
|
$
|
877
|
||||||||||||||||
Marketable equity securities
|
45
|
–
|
36
|
81
|
53
|
–
|
36
|
89
|
||||||||||||||||||||||||
Debt securities
|
89
|
–
|
2
|
91
|
104
|
–
|
2
|
106
|
||||||||||||||||||||||||
Settlement receivables
|
–
|
824
|
–
|
824
|
–
|
465
|
–
|
465
|
||||||||||||||||||||||||
Derivative instruments
and embedded derivatives
|
–
|
75
|
–
|
75
|
–
|
29
|
–
|
29
|
||||||||||||||||||||||||
$
|
347
|
$
|
899
|
$
|
38
|
$
|
1,284
|
$
|
1,034
|
$
|
494
|
$
|
38
|
$
|
1,566
|
|||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||||||||||
Derivative instruments
and embedded derivatives
|
$
|
–
|
$
|
24
|
$
|
–
|
$
|
24
|
$
|
–
|
$
|
33
|
$
|
–
|
$
|
33
|
||||||||||||||||
Settlement payables
|
–
|
29
|
–
|
29
|
–
|
16
|
–
|
16
|
||||||||||||||||||||||||
$
|
–
|
$
|
53
|
$
|
–
|
$
|
53
|
$
|
–
|
$
|
49
|
$
|
–
|
$
|
49
|