Excerpt:

Vancouver, BC – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) reported adjusted profit attributable to shareholders of $29 million, or $0.05 per share, in the third quarter of 2015. Teck also reported non-cash after-tax impairment charges of $2.2 billion resulting in a third quarter loss attributable to shareholders of $2.1 billion, or $3.73 per share. The impairment charges are non-cash revaluations of assets to reflect lower market expectations of commodity prices.

“We are taking significant steps to meet the challenge of low commodity prices,” said Don Lindsay, President and CEO. “We have reduced costs throughout the company and we’ve raised nearly $1 billion in two streaming transactions. We used a portion of those proceeds to reduce debt by $400 million and our current cash balance of $1.8 billion exceeds our remaining $1.5 billion share of capital required for Fort Hills.”

Highlights and Significant Items

• Gross profit before depreciation and amortization was $670 million in the third quarter compared with $752 million in the third quarter of 2014.
• Cash flow from operations, before working capital changes, was $302 million in the third quarter of 2015 compared with $553 million a year ago.
• Adjusted EBITDA (not including non-cash impairment charges of $2.9 billion) was $389 million in the third quarter. Adjusted EBITDA before final pricing adjustments was $530 million.
• We recorded impairment charges in the aggregate of $2.2 billion on an after-tax basis ($2.9 billion pre-tax) including $1.5 billion on our steelmaking coal assets, $0.3 billion on copper and $0.4 billion on the Fort Hills oil sands project resulting in a loss attributable to shareholders of $2.1 billion.
• Our debt to debt-plus-equity ratio was 36% at September 30, and our net debt to net-debt-plus-equity ratio was 32%. Giving effect to the impairments and our recent streaming transaction and debt repayments, our pro forma debt to debt-plus-equity ratio and net debt to net-debt-plus-equity ratios at September 30, 2015 were 35% and 30%, respectively.
• Subsequent to quarter end, we completed the sale of a silver stream linked to our share of the Antamina mine. Taken together with the gold stream sold from the Carmen de Andacollo Operations which closed during the third quarter, these transactions have increased our cash position by approximately $1 billion.
• Our cash balance of $1.8 billion as of October 21 is more than our $1.5 billion share of costs required to complete Fort Hills. We also have an additional US$3 billion undrawn credit facility that can be used for general corporate purposes and US$1.2 billion available for cash draws or for letters of credit. We have certain contractual arrangements that may result in us having to issue letters of credit that would utilize substantially all of this US$1.2 billion facility.
• Our cost reduction program combined with a falling Canadian dollar, lower oil prices, and higher copper grades have contributed to reduce our U.S. dollar unit costs for our products with copper and steelmaking coal unit costs falling by US$0.20 per pound and US$20 per tonne, respectively, compared to last year.
• In response to steelmaking coal market conditions, our steelmaking coal mines took three-week shutdowns during the third quarter to reduce production and product inventory. In the fourth quarter we expect that production rates will be aligned with sales volumes.
• We have reached agreements with the majority of our customers for the fourth quarter of 2015, based on a quarterly benchmark of US$89 per tonne for the highest quality product and we expect total sales in the fourth quarter, including spot sales, to be at least 6 million tonnes of steelmaking coal.
• The Red Dog concentrate shipping season is expected to be completed on October 22 with shipments of 1,048,000 tonnes of zinc concentrate. We expect sales of 200,000 tonnes in the fourth quarter reflecting the normal seasonal pattern of Red Dog sales.
• Our Quebrada Blanca operation restarted normal production activities in late August after unexpected ground movement in late June caused a temporary shutdown of processing facilities. We expect to produce 38,000 tonnes of copper cathode in 2015, a reduction of about 10,000 tonnes compared to the original plan.

Download/view Q3 2015 Report for the full text of this release.

Cautionary Statement on Forward-Looking Information

This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements, principally under the headings “Outlook,” that appear in this release but also elsewhere in this document, include estimates, forecasts, and statements as to management’s expectations with respect to, among other things, our plans to address the challenges of low prices, including planned spending reductions, expectations around our development projects, including that Project Corridor is expected to result in a less capital intense project with higher projected returns, production guidance for our products, our expected cash balance at year-end, anticipated sales for the fourth quarter, capital requirements for our Fort Hills project, timing of oil production at Fort Hills, the expectation that our cash and credit lines are sufficient to meet our capital commitments and working capital needs, cost and production forecasts at our business units and individual operations, sales volume and selling prices for our products (including settlement of steelmaking coal contracts with customers), timing of a regulatory approval for the Frontier energy project and demand and market outlook for commodities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially.

These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and steelmaking coal and other primary metals and minerals as well as oil, and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, our steelmaking coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, our ongoing relations with our employees and business partners and joint venturers. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially.

Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes, political risk, social unrest, failure of customers or counterparties to perform their contractual obligations, changes in our credit ratings, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, and changes or further deterioration in general economic conditions. Our Fort Hills project is not controlled by us and construction and production schedules may be adjusted by our partners. We have not completed our assessment of the impact of the ground movement at our Quebrada Blanca operation.

Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies. Statements regarding anticipated steelmaking coal sales volumes and average steelmaking coal prices for the quarter depend on timely arrival of vessels and performance of our steelmaking coal-loading facilities, as well as the level of spot pricing sales.

We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2014, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F.

Webcast

Teck will host an Investor Conference Call to discuss its Q3/2015 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Thursday, October 22, 2015. A live audio webcast of the conference call, together with supporting presentation slides, will be available at our website at www.teck.com. The webcast will be archived at www.teck.com

Download/view Q3 2015 Report for the full text of this release.

Investor Contact:
Greg Waller
Vice President, Investor Relations and Strategic Analysis
604.699.4014
[email protected]

Media Contact: 
Marcia Smith
Senior Vice President, Sustainability and External Affairs
604.699.4616
[email protected]

Original Article: https://www.teck.com/Generic.aspx?PAGE=Teck+Site%2fMedia+Pages%2fMedia+Detail&releaseNumber=15-30-TR&portalName=tc