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BMO 26th Global Metals & Mining Conference

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BMO 26th Global Metals & Mining Conference

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BMO 26th Global Metals & Mining Conference

  1. 1. 26th Global Metals & Mining Conference February 27, 2017
  2. 2. Forward Looking Information Both these slides and the accompanying oral presentations contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario). Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include statements relating to the long-life of our assets and estimated resource life, our production guidance, estimated profit and estimated EBITDA and the sensitivity of estimated profit and estimated EBITDA to foreign exchange and commodity prices, the expectation that there will be a significant market opportunity for QB2 production in 2021, our expectations regarding market supply and demand in the commodities we produce, expected 2017 zinc production and increase in Antamina zinc production, the expected timing and amount of production at the Fort Hills oil sands project, capital costs and our remaining capital commitment at Fort Hills, Fort Hills anticipated production rate, our statement that Quebrada Blanca 2 is a potential tier 1 asset, the statements made regarding the potential mine life, capital costs, mine life extension and expansion optionality and production for our Quebrada Blanca Phase 2 project, 2017 potential EBITDA, our statement that debt reduction remains our priority, 2017 production guidance and cost guidance, 2017 capital expenditures guidance, our growth/value pipeline, our statements regarding amount of resources and reserves and anticipated number of years that production will be sustained, Q1 2017 average realized coal price expectations, all projections for our Quebrada Blanca 2 project, including those on the slide titled “Quebrada Blanca 2 Summary”, all projections for NuevaUnión, including statements made on the “NuevaUnión Summary” slide, Red Dog resource potential, the Fort Hills project indicative NPV, and financial projections and other statements regarding the project made on the “The Real Value of Long-Life Assets” slide, all statements made on the “Fort Hills Key Numbers”, transportation capacity and our ability to secure transport for our Fort Hills production, and management’s expectations with respect to production, demand and outlook regarding coal, copper, zinc and energy. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially, which are described in Teck’s public filings available on SEDAR (www.sedar.com) and EDGAR (www.sec.gov). In addition, the forward-looking statements in these slides and accompanying oral presentation are also based on assumptions, including, but not limited to, regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and 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 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. Reserve and resource life estimates assume the mine life of longest lived resource in the relevant commodity is achieved, assumes production at planned rates and in some cases development of as yet undeveloped projects. Management’s expectations of mine life are based on the current planned production rates and assume that all resources described in this presentation are developed. Certain forward-looking statements are based on assumptions disclosed in footnotes to the relevant slides. Our estimated profit and EBITDA sensitivity estimates are based on the commodity price and currency exchange assumptions stated on the relevant slide. Cost statements are based on assumptions noted in the relevant slide. Assumptions regarding Fort Hills also include the assumption that project development and funding proceed as planned, as well as assumptions noted on the relevant slides discussing Fort Hills. Assumptions regarding our potential reserve and resource life assume that all resources are upgraded to reserves and that all reserves and resources could be mined. The foregoing list of assumptions is not exhaustive. Assumptions regarding NuevaUnión include that the project is built and operated in accordance with the conceptual preliminary design from a preliminary economic assessment. 2
  3. 3. Forward Looking Information 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. We will not achieve the maximum mine lives of our projects, or be able to mine all reserves at our projects, if we do not obtain relevant permits for our operations. Our Fort Hills project is not controlled by us and construction and production schedules may be adjusted by our partners. NuevaUnión is jointly owned. The effect of the price of oil on operating costs will be affected by the exchange rate between Canadian and U.S. dollars. 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. We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning assumptions, risks and uncertainties associated with these forward-looking statements and our business can be found in our most recent Annual Information Form, as well as subsequent filings of our management’s discussion and analysis of quarterly results, all filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov). 3
  4. 4. Agenda Teck Overview & Strategy Commodity Market Observations Teck Update 4
  5. 5. • Focused on long-life orebodies in stable jurisdictions • High-quality assets: All operating business units generate significant cash flow • Sustainability: Key to managing risks and developing opportunities Strong Resource Position1 With Sustainable Long-Life Assets Coal Resources ~100 years Copper Resources ~40 years Zinc Resources ~15 years Energy Resources ~50 years Attractive Portfolio of Long-Life Assets In Low Risk Jurisdictions 1. Reserve and resource life estimates refer to the production weighted average of mine lives in the relevant commodity assuming production at planned rates from proven and probable reserves and measured and indicated resources and in some cases development of as yet undeveloped projects . See the reserve and resource disclosure in our most recent Annual Information Form, available on SEDAR and EDGAR, for additional detail regarding underlying assumptions. 5
  6. 6. Diversified business model Attractive portfolio of long life assets Low half of the cost curve Appropriate scale Low risk jurisdictions Consistent Long-Term Strategy 6
  7. 7. Q4 2016 2016 Revenue $3.6 billion $9.3 billion Assets (December 31, 2016) $35.6 billion $35.6 billion Gross profit before depreciation & amortization1 $2.0 billion $3.8 billion Profit attributable to shareholders $697 million $1.0 billion Cash Flow from Operations $1.5 billion $3.1 billion Adjusted EBITDA1,2 $1.8 billion $3.6 billion Adjusted profit attributable to shareholders2 $930 million $1.61/share $1.1 billion $1.91/share Financial Results Overview Significant increases in adjusted profit attributable to shareholders2 1. Adjusted EBITDA is EBITDA less impairment charges. 2. Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. 7
  8. 8. The Value of our Diversified Business Model Production Guidance3 Unit of Change Effect on Estimated Profit5 Effect on Estimated EBITDA2,5 $C/$US C$0.01 C$42M /$0.01∆ C$68M /$0.01∆ Coal 27.5 Mt US$1/tonne4 C$21M /$1∆ C$32M /$1∆ Copper 282 kt US$0.01/lb C$5M /$0.01∆ C$7M /$0.01∆ Zinc 972 kt US$0.01/lb C$9M /$0.01∆ C$14M /$0.01∆ Leverage to Strong Steelmaking Coal & Zinc Markets in 2017 1. Gross profit before depreciation and amortization. 2. Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. 3. Assumes the midpoint of 2017 guidance ranges. Zinc includes 670 kt of zinc in concentrate and 302 kt of refined zinc. 4. Based on a US$1/tonne change in benchmark premium steelmaking coal price. 5. Annual effect based on commodity prices and our balance sheet as of February 14, 2017 and a C$/US$ exchange rate of 1.30. The effect varies from quarter to quarter depending on sales volumes and is sensitive to movements in commodity prices. 0% 25% 50% 75% 100% 2009 2010 2011 2012 2013 2014 2015 2016 DiversifiedCash OperatingProfit1,2 Coal Copper Zinc Commodity Mix Shifts with Changes in Relative Commodity Prices 8
  9. 9. Agenda Teck Overview & Strategy Commodity Market Observations Teck Update 9
  10. 10. Coal Price Assessments Source: Argus Plotted to February 15, 2017 • Q4/2016 market tightness due to: − Global curtailments − Production interruptions − Inventory build to cover risks of floods in Australia − China’s operating days • Recent market developments: − Increased production − No new mine restart announcements − Steel mills reducing inventories − Traders liquidating positions? − China relaxed restrictions on operating days (until March 2017?) Supply driven volatility Source: Argus 60 80 100 120 140 160 180 200 220 240 260 280 300 320 $/tonne Quarterly Contract Settlement Argus FOB Australia Steelmaking Coal Prices Seeking Balance 10
  11. 11. SGX TSI FOB Aus Forward Contracts Source: FIS • Upward shift in forward contracts • Spot prices increasing Met Coal Market Responding to Supply Concerns February 23, 2017 February 15, 2017 $100 $110 $120 $130 $140 $150 $160 $170 Feb-17 Mar-17 Apr-17 Q2-17 Q3-17 Q4-17 Cal18 Cal19 US$perTonne
  12. 12. (6,000) (5,000) (4,000) (3,000) (2,000) (1,000) 0 1,000 2014 2017 2020 2023 Thousandtonnes • Demand growth absorbing new mine supply • Less supply growth post 2017 • Disruptions increasing • Market finely balanced through 2018 • Structural deficits grow from 2019 • Significant market opportunity for QB2 production in 2021 Forecast Copper Refined Balance Source: ICSG, Wood Mackenzie, Teck Long-Term Copper Mine Production Still Needed 11
  13. 13. Zinc Metal Market Moving Towards Tightness US¢/lb Data plotted from 2000 to February 3, 2017Source: LME, SHFE, Wood Mackenzie Zinc Prices vs. Days of Reported Stocks • Significant mine closures completed • Mine production has fallen • Asian metal production curtailments • Inventories declining • Stocks approaching critical levels • Treatment charges have tightened significantly days of stocks 12
  14. 14. Source: Consensus Economics, December 2016 Fort Hills first production may coincide with forecasted supply deficit Oil Market to Rebalance Global Crude Oil Supply and Demand Balances Millionofbarrelsperday Millionofbarrelsperday 13
  15. 15. Agenda Teck Overview & Strategy Commodity Market Observations Teck Update 14
  16. 16. Solid Record of Delivery Against Guidance 15
  17. 17. 598 673 560 580 600 620 640 660 680 2012 2013 2014 2015 2016 2017E kt Zinc Production – At the Right Time! 16 Zinc in Concentrate Production1 1. Including co-product zinc production 2017E is the mid-point of the production guidance range. • Significant production at Red Dog − Declining zinc grade offset by increasing mill throughput • Antamina production ~2x 16
  18. 18. Fort Hills Project Status & Progress Source: Fort Hills Energy Limited Partnership, October 2016. • 5 out of 6 areas on plan • Construction >76% complete at year end 2016 • 2 of 6 areas turned over to Operations • First oil end of 2017 • Teck’s share of project costs to completion: $640M in 2017; $165M in 2018 • Nameplate capacity increased to 194 kbpd • Steady state production increased to 186 kbpd Expect to achieve 90% of nameplate capacity by end 2018 17
  19. 19. Quebrada Blanca 2 is a Potential Tier 1 Asset • Top 15 copper producer globally • Development capital costs reduced significantly to US$4.7B • Change in scope, including revised tailings facility • Initial mine life of 25 years uses only ~25% of known reserves & resources • Mine life extension & expansion optionality • Familiar, mining-friendly jurisdiction • Operating and sustaining costs in low half of cost curve • 300 kt annual copper equivalent production in first 5 years 18
  20. 20. Significant Cash Flow Generation Potential EBITDA1 Less: Corporate Steelmaking Coal Copper Zinc 1. Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. Estimates are based on the mid-point of our 2017 production guidance ranges and assume a C$/US$ exchange rate of 1.30 and our typical steelmaking coal sales mix of 40% contract and 60% spot. The steelmaking coal price assumption is based on a combination of the Q1 2017 expected realized price of US$200 to US$215 per tonne, and an assumed quarterly contract benchmark price of US$155 per tonne and an average realized price of 92% of the contract price for the balance of the year. Base metal price assumptions are based on the 2017 year to date average copper price of US$2.60 per pound and average zinc price of US$1.25 per pound. Actual prices will vary, and operating performance and sales may vary materially for a variety of reasons, causing these production and sales estimates to be materially incorrect. These estimates are based on numerous assumptions, and are subject to various risks and uncertainties that may cause results to vary materially. Please see the Cautionary Note on Forward-Looking Information at the beginning of this presentation for more specific information. • Expanded operating margins – prices and costs • Increasing zinc production • Significant leverage to coal, copper and zinc 2017 Based on Current Prices Also Energy from 2018 >C$5 Billion 19
  21. 21. 7.2 6.1 5.0 5.5 6.0 6.5 7.0 7.5 9/30/2015 12/31/2015 9/30/2016 12/31/2016 US$Billions Debt Reduction Remains The Priority 1. As at February 14, 2017. 2. Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. Our revolving credit facility requires a debt to debt-plus-equity ratio of <50%. Bonds Outstanding Current Debt Portfolio1 Public notes outstanding US$6.1B Average coupon 5.7% Weighted average term to maturity ~13 years Debt to debt-plus-equity ratio2 32% >US$1B Reduction 20
  22. 22. Capitalizing on the Turn in the Cycle • Continuing to execute for higher production per share − No equity dilution − No operating assets sold − Investing in production growth from Fort Hills − Maintaining strong liquidity − Reducing debt & managing maturities • Record quarterly results • Generating significant free cash flow • Strengthening our financial position 21
  23. 23. Additional Information 22
  24. 24. Teck Stock Price vs. London Metal Exchange Index Commodity Price Correlation With Stock Price Plotted to February 13, 2017Source: Bloomberg C$/share BloombergCommodityPriceIndex $0 $10 $20 $30 $40 $50 $60 $70 700 1200 1700 2200 2700 3200 3700 4200 4700 5200 22/05/2001 22/11/2001 22/05/2002 22/11/2002 22/05/2003 22/11/2003 22/05/2004 22/11/2004 22/05/2005 22/11/2005 22/05/2006 22/11/2006 22/05/2007 22/11/2007 22/05/2008 22/11/2008 22/05/2009 22/11/2009 22/05/2010 22/11/2010 22/05/2011 22/11/2011 22/05/2012 22/11/2012 22/05/2013 22/11/2013 22/05/2014 22/11/2014 22/05/2015 22/11/2015 22/05/2016 22/11/2016 22/05/2017 LME Index (Left Axis) Teck (Right Axis) 23
  25. 25. North America ~22% Europe ~14% Latin America ~3% China ~19% Asia excl. China ~42% Diversified Global Customer Base Exposure to Recovery in Developed Markets As well as Growing Emerging Markets * Based on 2016 revenue. Revenue Contribution from Diverse Markets* 24
  26. 26. Significant Increase in Margins 25 Gross Profit Margins Before Depreciation1 1. 2013 reflects deferred stripping accounting change, Q1 2012 restated for deferred stripping and pension IFRS adjustments. Non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” section of our quarterly news releases for further information. 0% 25% 50% 75% 100% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016 Steekmaking Coal Copper Zinc Overall 25
  27. 27. Solid Delivery Against 2016 Guidance 1. Approximate, based on capitalized stripping guidance and mid-point of production guidance range. 2. Steelmaking coal unit cost of sales include site costs, inventory adjustments, collective agreement charges and transport costs. Total cash unit costs are unit cost of sales plus capitalized stripping. US dollar unit costs assume a Canadian dollar to US dollar exchange rate of 1.33 in 2016 and 1.30 in 2017. 3. Non-GAAP financial measures. See ‘Use of Non-GAAP Financial Measures’ in our quarterly results news releases for additional information. 4. Includes one-time collective agreement settlement charges of $2 per tonne. 5. Net of by-product credits. 6. Copper total cash unit costs include cash C1 unit costs (after by-product margins) and capitalized stripping. 7. Including co-product zinc production from our copper business unit. 8. Including capitalized stripping. Guidance Results Steelmaking Coal Production 25-26 Mt  27.6 Mt Record production Site costs $45-49/t  $43/t Capitalized stripping $11/t1  $10/t Transportation costs $35-37/t  $34/t Total cash unit costs2,3 $91-97/t US$69-73/t  $89/t4 US$67/t4 Lower unit costs Copper Production 305-320 kt  324 kt C1 unit costs5 US$1.50-1.60/lb  US$1.35/lb Capitalized stripping US$0.21/lb1  US$0.17/lb Total cash unit costs3,6 US$1.71-1.81/lb  US$1.52/lb Lower unit costs Zinc Metal in concentrate production7 630-665 kt  662 kt Refined production 290-300 kt  312 kt Record production Capital Expenditures8 $2.0B  $1.9B Lower capex 26
  28. 28. 2016 Results 2017 Guidance Steelmaking Coal Production 27.6 Mt 27-28 Mt Site costs $43/t $46-50/t Capitalized stripping $10/t $16/t1 Transportation costs $34/t $35-37/t Total cash costs2, 3 $89/t US$67/t $97-103/t US$74-79/t Copper Production 324 kt 275-290 kt C1 unit costs4 US$1.35/lb US$1.40-1.50/lb Capitalized stripping US$0.17/lb US$0.18/lb1 Total cash costs4 US$1.52/lb US$1.58-1.68/lb Zinc Metal in concentrate production5 662 kt 660-680 kt Refined production 312 kt 300-305 kt 2017 Production & Site Cost Guidance 1. Approximate, based on capitalized stripping guidance and mid-point of production guidance range. 2. Average C$/US$ exchange rate of 1.33 in 2016. Assumes C$/US$ exchange rate of 1.30 in 2017. 3. Steelmaking coal unit cost of sales include site costs, inventory adjustments, collective agreement charges and transport costs. Total cash costs are unit cost of sales plus capitalized stripping. 4. Net of by-product credits. Copper total cash costs Include cash C1 unit costs (after by-product margins) and capitalized stripping. 5. Including co-product zinc production from our Copper business unit.27
  29. 29. ($M) Sustaining Major Enhancement New Mine Development Sub-total Capitalized Stripping Total Steelmaking Coal 140 120 - 260 430 690 Copper 130 20 200 350 140 490 Zinc 210 15 20 245 50 295 Energy 50 - 675 725 - 725 TOTAL 530 155 895 1,580 620 2,200 Total capex of ~$1.6B, plus capitalized stripping 2017 Capital Expenditures Guidance 28
  30. 30. Staged Growth/Value Pipeline Strong platform combined with diverse portfolio of options allows us to be selective in terms of commodity and timing Coal Well established with capital efficient value options In Construction Pre-Sanction Copper Strong platform with substantial growth options Zinc World-class resource combined with integrated assets Energy Building a new business through partnership Fort Hills Red Dog Satellite Deposits San Nicolás (Cu-Zn) Elk Valley Replacement Brownfield Quintette/Mt. Duke Frontier Lease 421 QB Phase 2 NuevaUnión Mesaba ZafranalHVC Brownfield Galore/Schaft Creek Cirque Future Options Trail #2 Acid Plant Medium-term Growth Options Elk Valley Brownfield Antamina Brownfield Neptune Terminals to >18Mtpa Red Dog Mill Optimization Teena Coal Mountain 2 29
  31. 31. Operation Expiry Dates Highland Valley Copper In Negotiation - September 30, 2016 Trail May 31, 2017 Cardinal River June 30, 2017 Quebrada Blanca October 30, 2017 November 30, 2017 December 31, 2017 Quintette April 30, 2018 Antamina July 31, 2018 Coal Mountain December 31, 2018 Line Creek May 31, 2019 Carmen de Andacollo September 30, 2019 December 31, 2019 Elkview October 31, 2020 Fording River April 30, 2021 Collective Agreements 30
  32. 32. 0 250 500 750 1,000 1,250 1,500 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 US$MNo Substantial Maturities for 5 Years 1. As at February 14, 2017. Notes due in January 2017 were repaid from cash. Maturity Profile1 Few maturities while Fort Hills completes construction, commissioning, and ramps up to full production 31
  33. 33. Credit Ratings S&P Moody’s Fitch BBB Baa2 BBB BBB- Baa3 BBB- BB+ Ba1 BB+ BB stable Ba2 BB BB- Ba3 positive BB- B+ B1 stable B+ negative Investment Grade Non-Investment Grade Supported by: • Diversified business model • Low risk jurisdictions • Low cost assets • Conservative financial policies • Significant cost reductions • Capital discipline • Excellent operating execution • Increasing coal production • Responsible dividend • Reducing debt Constrained by: • Debt-to-EBITDA*, due to improving metrics Debt reduction is the priority As at February 16, 2017. * EBITDA is a Non-GAAP financial measure. See ‘Use of Non-GAAP Financial Measures’ in our quarterly results news releases for additional information. Issuer Credit Ratings 32
  34. 34. Teck Credit Ratings vs. Bloomberg Commodity Price Index Credit Ratings Reflect Commodity Prices Plotted to February 15, 2017 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Moody's S&P LME Index (Right Axis) BBB/Baa2 BBB-/Baa3 BB+/Ba1 BB/Ba2 BB-/Ba3 BBB+/Baa1 B+/B1 B/B2 B-/B3 A+/A1 A/A2 A-/A3 InvestmentGradeNon-InvestmentGrade 33
  35. 35. Significant Tax Pools in Canada1 ~$6B in Available Tax Pools, Including: • >$4B in loss carryforwards • $1.77B in Canadian Development Expenses Applies To: • Cash income taxes in Canada Does Not Apply To: • Resource taxes in Canada • Cash taxes in foreign jurisdictions Multiples should reflect tax efficiency of earnings 1. As of December 31, 2015.34
  36. 36. • Six focus areas • Community • Biodiversity • Our People • Water • Air • Energy and Climate Change • Achieved all 2015 goals • Set new short-term 2020 goals • Working towards long-term 2030 goals Our Sustainability Strategy 35
  37. 37. Our External Recognition Best 50 Corporate Citizens in Canada 2016 On the Dow Jones Sustainability World Index seven years in a row Top 50 Socially Responsible Corporations in Canada Listed on FTSE4Good Index in 2015 36
  38. 38. Steelmaking Coal Business Unit & Markets
  39. 39. 45 55 65 75 China 0 3 6 9 12 15 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Traditional Steel Markets • China stable • JKT stable • EU slowing Rest of the World • India strong growth • Brazil stable • US slowing Monthly Hot Metal Production Source: WSA, based on data reported by countries monthly; NBS Mt Plotted to December 2016 Global Hot Metal Production JKT India Europe USA Brazil 38
  40. 40. • Total capacity of ~1,200 Mt, including ~400 Mt of surplus capacity • ~100Mt closed in 2016 • Additional 80 Mt committed to closure by provinces and centrally-owned steel companies in 2017-2020 Reductions in Chinese Steel Capacity 97 44 25 11 0 20 40 60 80 100 120 2016 2017-18 2019-20 Within 3-5 Years (No Details Announced) Mt Timing of Capacity Reduction Targets AnnouncedChina’s Steel Capacity Exceeds government target of 140 Mt 2016 production 808Mt Closed in 2016 97Mt Committed to close 80Mt Additional surplus capacity 215Mt 39
  41. 41. 0 200 400 600 800 1000 2010 2015 2020 2025 2030 2035 Milliontonnes Crude Steel and Hot Metal Production Source: WSA, China Association of Metalscrap Utilization, Wood Mackenzie Crude Steel China Scrap Use to Increase Slowly China’s Scrap Ratio Low vs. Other Countries 73% 54% 33% 88% 28% 50% 11% 36% 0% 20% 40% 60% 80% 100% United States Europe Japan Turkey Russia Korea China World Average China Steel Use By Sector (2000-15) Electric Arc Furnace Hot Metal Hot metal / crude steel ratio to remain >90% and EAF share of crude steel production <10% until ~2028 Source: Wood Mackenzie Source: China Metallurgy Industry Planning and Research Institute Construction 55-60% Others 15-20% Machinery 15-20% Auto 5-10% 40
  42. 42. 38 Mt 34Mt 0 10 20 30 40 50 60 70 Mt 2000-2009 average at 23Mt 2010-2014 average at 55Mt Strong Demand Fundamentals ex. China • US exports declined in 2016 • Imports into China flat in 2016, but analysts forecast a decline longer term (subject to China’s policy) • Stronger fundamentals ex-China Tighter Market ex-ChinaUS Steelmaking Coal Exports (ex. Canada) Decline in China offset by growth in other markets Source: Global Trade Atlas Source: Average of Wood Mackenzie & CRU -18 -12 -6 0 6 12 18 China JKT Brazil Europe & CIS India Global Seabornemet.coalimportschange, 2021vs.2016,Mt 41
  43. 43. Seaborne Coking Coal Imports Hegang Project • Inland plant relocating to coastal area • Capacity: crude steel 20Mt • Status: Timeline not announced Guofeng Project • Inland plant relocating to coastal area • Capacity: crude steel 8Mt, hot metal 8Mt • Status: Construction to be started in 2017; completion in 2021 Shougang Jingtang Plant • Expansion • Capacity: crude steel 9.4Mt (phase 2) • Status: Construction started in 2015; completion in 2018 Shandong Steel Rizhao Project • Greenfield project • Capacity: crude steel 8.5Mt • Status: Construction started in 2015; completion in 2017 WISCO Fangchenggang Project • Greenfield project • Capacity: crude steel 9.2Mt • Status: Timeline for blast furnace not announced Large users and coastal steel projects to support seaborne demand Source: NBS, China Customs, company reports 10 21 21 22 25 25 39 26 13 11 0 10 20 30 40 50 60 70 2012 2013 2014 2015 2016 Small users 14 large users China’s Large Users Increasing Seaborne Imports 42
  44. 44. 35 13 3 8 36 24 2 9 0 5 10 15 20 25 30 35 40 Seaborne Landborne Stock at six ports Stock at sample end users Milliontonnes 2015 2016 Seaborne coal utilization increased by ~2 Mt YoY Source: NBS, China Customs, Fenwei, Mysteel China's Coking Coal Imports & Stock ChangesChina’s Coal Production 276 Days Policy (April – October) China’s 276-Day Policy Requires Increased Imports 100 150 200 250 300 350 400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Raw coal output 2015 (rhs) Raw coal output 2016 (rhs) 43
  45. 45. An Integrated Long Life Coal Business 44 Prince Rupert Ridley Terminal Vancouver Prince George Edmonton Calgary Westshore Terminal Quintette Cardinal River Elk Valley Kamloops British Columbia Alberta Seattle Elkford Sparwood Hosmer Fernie Fording River Greenhills Line Creek Elkview Coal Mountain ElcoElk Valley 1,150 km • >1 billion tonnes of reserves support ~27 Mt of production for many years • Geographically concentrated in the Elk Valley • Established infrastructure and capacity with mines, railways and terminals • Only steelmaking coal mines still operating in Canada; competitive globally Neptune Terminal 44 Coal Mountain Phase 2 44
  46. 46. We Are a Leading Steelmaking Coal Supplier To Steel Producers Worldwide High quality, consistent, reliable, long-term supply Proactively realigning sales with changing market North America ~5% Europe ~15% China 2016: ~20% 2013: ~30% Asia excl. China 2016: ~55% 2013: ~45% Latin America ~5% 45
  47. 47. 0 50 100 150 200 250 300 350 Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 Q12014 Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 Q42015 Q12016 Q22016 Q32016 Q42016 US$/tonne Teck Realized Price (US$) Benchmark Price Average realized price relative to the benchmark price is a function of: 1. Product mix: >90% hard coking coal 2. Direction of quarterly benchmark prices (QBM) and spot prices - Q4 2016 average realized price was higher than benchmark price - Expect Q1 2017 average realized price to be US$200-US$215/tonne (70-75% of benchmark), which is an increase from Q4 2016 Historical Average Realized Prices Average Realized Price in Steelmaking Coal Realized prices averaged 94% of QBM over the past three years 96% 88% 93% 94% 92% 91% 99% 46
  48. 48. 46 35 32 3 1 2 35 28 26 15 12 8 2014 2015 2016 Total cash unit costs down 35% from 2014 to 20162,3 Total Cash Unit Costs2 US$/t 2014 2015 2016 Change Site $46 $35 $32 -30% Inventory Adjustments $3 $1 $0 -100% Transportation $35 $28 $26 -26% Unit Cost of Sales (IFRS) $84 $64 $603 -29% Capitalized Stripping $15 $12 $8 -50% Total Cash Unit Costs2 $99 $76 $683 -32% Sustaining Capital $6 $2 $1 -83% All In Sustaining Costs2 $105 $78 $693 -35% 1. In US dollars per tonne. Assumes a Canadian dollar to US dollar exchange rate of 1.10 in 2014, 1.28 in 2015 and 1.33 in 2016. 2. Steelmaking coal unit cost of sales include site costs, inventory adjustments and transport costs. Total cash costs are unit cost of sales plus capitalized stripping. All in sustaining costs are total cash costs plus sustaining capital. Non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” section of our quarterly press releases for further information. 3. Includes one-time collective agreement settlement charges of ~US$2 per tonne in 2016. IFRS Steelmaking Coal Unit Costs1 $99 $76 IFRS IFRS $683 Site Inventory Transport Capitalized Stripping Collective Agreement 47
  49. 49. >75 Mt of West Coast Port Capacity Planned Our Portion is 40 Mt • Exclusive to Teck • Recently expanded to 12.5 Mt • Planned growth to 18.5 Mt Westshore Terminals Neptune Coal Terminal Ridley Terminals West Coast Port Capacity • Current capacity: 18 Mt • Expandable to 25 Mt • Teck contracted at 3 Mt • Teck is largest customer at 19 Mt • Large stockpile area • Recently expanded to 33 Mt • Planned growth to 36 Mt • Contract expires March 2021 MillionTonnes(Nominal) Our share of capacity exceeds current production plans, including Quintette 12.5 18 33 6 7 3 0 5 10 15 20 25 30 35 40 Neptune Coal Terminal Ridley Terminals Westshore Terminals Current Capacity Planned Growth 48
  50. 50. Our Market - Seaborne Hard Coking Coal2: ~200 Million Tonnes 1. Source: International Energy Agency 2014 data 2. Source: CRU Global Coal Production1: 7.9 billion tonnes Steelmaking Coal Production2: ~1,185 million tonnes Export Steelmaking Coal2: ~325 million tonnes Seaborne Steelmaking Coal2: ~290 million tonnes High Grade Hard Coking Coal Is A Niche Market 49
  51. 51. • Around the world, and especially in China, blast furnaces are getting larger and increasing PCI rates • Coke requirements for stable blast furnace operation are becoming increasingly higher • Teck coals with high hot and cold strength are ideally suited to ensure stable blast furnace operation • Produce some of the highest hot strengths in the world 50 60 70 80 90 100 South Africa Japan (Sorachl) Japan (Yubarl) U.S.A. Canada Other Teck HCC Australia Japan South Africa Australia (hard coking) and Canada U.S.A. Australia (soft coking) 10 20 30 40 50 60 70 80 Drum Strength Dl 30 (%) CSR Teck HCC Coking Coal Strength High Quality Hard Coking Coal Source: Yasuschi, Masashi et al, 1983 50
  52. 52. Copper Business Unit & Markets
  53. 53. Copper Stock Movements Don’t Support Price Rally 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 0¢ 50¢ 100¢ 150¢ 200¢ 250¢ 300¢ 350¢ 400¢ 450¢ 500¢ LME Stocks Comex SHFE Bonded Estimate Price Daily Copper Prices & Stocks Source: LME/SHFE/Comex/CRU/SRO Estimates Plotted to February 15, 2017 US¢/lb 52
  54. 54. -1,200 -1,000 -800 -600 -400 -200 0 2005 2007 2009 2011 2013 2015 2017 (Feb) Thousandtonnes 1. Relative to initial expectations 8.1% Disruptions to Concentrate Production Averaged 6.3% in 2007-20151 2.8% • Market has moved into deficit in 2017 and 2018 • Disruptions in 2016 were lower than projected, but 2017 could revert to historic levels. • Post-2017, new supply minimal • Exchange stocks represent <2 weeks of supply Copper Surplus Shifts Into Deficit Source: Wood Mackenzie, Teck 5.1% 53
  55. 55. 10,000 15,000 20,000 25,000 30,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 ThousandTonnes Mine Production SXEW Scrap Demand Mine Production Peaks in 2019 Existing and Fully Committed Mines Source: Wood Mackenzie, CRU, ICSG, Teck Copper Mine Production Peaking 54
  56. 56. Copper Mine Production Forecasts Continue to Decline Forecast 2017 Net Mine Production Lower than 2016 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 5% Disruption net of Projects Market Adjustment 2017 Adjusted thousandtonnescontainedcopper 2016 2017 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 5% Disruption & Projects Market Adjustment 2016 Adjusted 2018 thousandtonnescontainedcopper thousandtonnescontainedcopper • Down 161 kt from 2016 estimates • Projects down 652 kmt from guidance in March or 84%. Source: Wood Mackenzie • Down 1.5 Mt from 2014 estimates • Growth over 2015 2.0% lower than projected at beginning of year. • Down 1.4 Mt from April 2015 estimates • Projects down by 96% or 836 kt • 2017 production down 232 kt over 2016. Source: Wood Mackenzie Source: Wood Mackenzie 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 5% Disruption net of Projects Market Adjustment 2017 Adjusted 55
  57. 57. Rising Copper TC/RCs – China Imports Increase 0¢ 10¢ 20¢ 30¢ 40¢ 50¢ 60¢ Spot Realised TC/RC Strong TCs Allowed Port Stocks to Rise Low prices & High BM TCs kept Concentrate Imports Strong; Stocks of Copper Concentrates Built in Q4 2016 at the Ports Source: Wood Mackenzie Spot TC/RCs Spot Rising Above Benchmark 0 100 200 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 56
  58. 58. 0 200 400 600 800 1,000 1,200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cathode Concs Scrap Blister/Semis 000’stonnes(content) Net Copper Imports Source: NBS Plotted to November 2016 Total copper unit imports continue to climb; Up ~5% in 2015 and 8% in 2016 China Switching to Copper Concentrates 57
  59. 59. Significant Chinese Copper Demand Remains …But Will Add Significantly in Additional Tonnage Terms Annual Growth Rate of Chinese Copper Consumption to Slow Dramatically… China expected to add 1.5x QBs in new demand each year for the next 14 years Source: Wood Mackenzie, Teck - 200 400 600 800 1,000 1,200 1,400 1,600 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 0% 5% 10% 15% 20% 25% 30% 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 Annual Avg. 11.9% Annual Avg. 2.7% Annual Avg. Growth 372 Mt/yr Annual Avg. Growth 283 Mt/yr Thousandtonnes Source: Wood Mackenzie, Teck 58
  60. 60. Copper Metal Demand Gap Outpacing New Supply -1,200 -1,000 -800 -600 -400 -200 0 2005 2007 2009 2011 2013 2015 2017 (Feb) Thousandtonnes 2.8% Production Disruptions Average 6% per Year 5.1% ~5.5 Mt of Uncommitted Production Needed by 2025 0 1,000 2,000 3,000 4,000 5,000 6,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 A Projects B Projects Copper Metal Gap Source: Wood Mackenzie, CRU, ICSG, Teck59
  61. 61. -300 -100 100 300 500 700 900 -300 -100 100 300 500 700 900 2018 Refined Balance2017 Refined Balance Wood Mackenzie’s Copper Outlook Trending Down 60 Thousandtonnes Thousandtonnes Market expected to be in deficit in 2017 despite a fall in demand; Deficit also now expected in 2018
  62. 62. Ore Grade Trends Ongoing Decline will put Upward Pressure on Unit Costs 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 CopperGradeCu% All Operations Primary Mines Co-By Product Mines - (RH axis) Industry Head Grade Trends (Weighted by Paid Copper) Source: Wood Mackenzie 61
  63. 63. Quebrada Blanca 2 Summary Project Capital1 US$4.7 billion Copper Production2 275,000 tonnes per year Moly Production2 7,700 tonnes per year Mine Life 25 years Copper in Reserves 14.2 billion pounds C1 Cash Costs2 US$1.28 per pound Note: Based on Feasibility Study. 1. 100% basis, in constant first quarter of 2016 dollars, excluding working capital and interest during construction. Teck owns a 75.% share. 2. Average production rates and C1 cash costs are based on the first full five years of operations Initial mine life uses ~25% of reserves & resources 62
  64. 64. NuevaUnión Summary Initial Capital $3.0 - $3.5 billion Copper Production1 190,000 tonnes per year Gold Production1 315,000 ounces per year Mine Life 32+ years Copper in Reserves2 16.6 billion pounds Gold in Reserves2 8.9 million ounces Note: Conceptual based on preliminary design from the PEA 1. Average production rates are based on the first full ten years of operations 2. Total copper and gold contained in mineral reserves as reported separately by Teck and Goldcorp. 3. Capital estimate for Phase 1a based on preliminary design shown in 2015 dollars on an unescalated basis 63
  65. 65. Zinc Business Unit & Markets
  66. 66. Zinc Prices & Stocks 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 0¢ 50¢ 100¢ 150¢ 200¢ 250¢ LME Stocks SHFE Price US¢/lb Plotted to February 15, 2017Source: LME/SHFE Daily Zinc Prices & Stocks 65
  67. 67. Significant Recent Increase In Rate of LME Zinc Stock Decline 66 340,000 360,000 380,000 400,000 420,000 440,000 460,0000 200 400 600 800 1,000 1,200 1,400 1,600 1,800 1-Nov-16 8-Nov-16 15-Nov-16 22-Nov-16 29-Nov-16 6-Dec-16 13-Dec-16 20-Dec-16 27-Dec-16 3-Jan-17 10-Jan-17 17-Jan-17 24-Jan-17 31-Jan-17 7-Feb-17 Mt Mt/day Avg Daily Decrease Q4 Avg Daily Decrease Q1 Stocks LME Zinc Stocks (Right axis)(Left axis)(Left axis) 66
  68. 68. 2014-2020 2014-2020 Significant Zinc Mine Reductions Large Short-Term Losses, More Long Term -500 -400 -300 -200 -100 0 Century Lisheen Skorpion RedDog Bracemac-McLeod RapuraAgucha Pomorzany-Olkusz(inclBulk) Jaguar MaeSod Wolverine SanCristobal 0 100 200 300 400 500 Gamsberg Antamina DugaldRiver McArthurRiver Bisha GansuJinhui SindesarKhurd Kyzyl-Tashtygskoe ShalkiyaRestart AguasTenidas Castellanos ZawarMines MiddleTennessee ElBrocal Sanguikou Caribou… Penasquito Changba Source: ICSG, Wood Mackenzie Teck, Company Reports Source: ICSG, Wood Mackenzie Teck, Company Reports 67
  69. 69. Source: Teck, ILZSG 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 Base Secondary Concentrate Stocks Exchange Stocks Hidden Stocks A' Projects B' Projects Demand Thousandtonnescontained 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2018F Last Year 2018F Today 2020F Last Year 2020F Today Thousandtonnes Highly Probable Probable Possible Uncommitted Projects Increasingly Delayed Source: Wood Mackenzie Global Mine Production Global Zinc Mine Production Increasing, But At a Slower Pace 68
  70. 70. Monthly Chinese Mined Zinc Production Chinese Mined Zinc Production Seasonality is a Potential Catalyst for Market Inflection Source: CNIA Production typically declines in winter (January-April) 0 100 200 300 400 500 600 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16 Nov-16 ThousandsDMT 69
  71. 71. Zinc Concentrate Stocks at Chinese Ports Declining Plotted to January 2017 Monthly Stocks of Zinc Concentrate 0 50 100 150 200 250 300 350 400 450 500 ThousandTonnes Huangpu port: Zhanjiang port: Beihai port: Yunyuejiang port Fangcheng port: Nanjing port: Qinzhou port: Dalian port: BaYuQuan port: QHD port: Jinzhou port: Yantai Port: LYG port: Source: Teck70
  72. 72. thousandtonnescontained Global Zinc Mine Production Down in 2016 Source: Teck Mine Production Down in 2016 TCs Dropping to Multi-Year Lows Source: Teck , CNIA, Wood Mac, NBS 11,000 11,500 12,000 12,500 13,000 13,500 12 13 14 15 16 f 0 50 100 150 200 250 300 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Imported TC, $/dmt Spot TC Annual TC 71
  73. 73. Concentrate Supply Shrinking Chinese Zinc Metal Imports 0 100 200 300 400 500 600 700 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 kt Mine production Concs imports Annualized Monthly Avg. Supply Spot and Benchmark TCs Tighten • Domestic concentrate production plus imports ~550 kt/mth in 2013 - Currently ~450 kt/mth • Concentrate imports averaged ~95 kt/mth 2013 to 2015 − 2016 averaging 69 kt/mth • Reduction in supply forcing metal production cuts • Continued tightness is evidenced by the falling TCs Source: NBS/CNIA, Customs $0 $50 $100 $150 $200 $250 $300 2011 2012 2013 2014 2015 2016 2017 Spot Annual Down ~75% 0 20 40 60 80 100 120 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 kt 555 kt Down ~10% 502 kt Chinese Zinc Concentrate Supply Declining Source: NBS/CNIA, Customs Source: NBS/CNIA, Customs Plotted to November 2016 Plotted to December 2016 Plotted to January 2016 72
  74. 74. Zinc Metal Market Mostly in Deficit Since 2013 -800 -600 -400 -200 0 200 400 600 2013 2014 2015 2016 2017 2018 WoodMac CRU Market View – Wood Mackenzie & CRU • Zinc metal deficit forecasted for 2016 and 2017 • Mine production decreased 6.1% in 2016 is expected to increase 11.9% in 2017 − Closure of Century and Lisheen, combined with production cuts, will decrease mine production in 2016 − Higher prices are expected to bring a large amount of Chinese mine production online, and to bring back Glencore’s production. • Deficits of around 500kt/year in 2016 and 2017 will still result in large draw down of stocks Zinc Metal Balance Source: Wood Mackenzie, CRU thousandtonnescontainedzinc 73
  75. 75. China 5% USA 20% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Galvanized Steel as % Crude ProductionChina Zinc Demand Construction 15% Transportation 20% Other 5% Consumer Goods 30% Infrastructure 30% Chinese Zinc Demand to Outpace Supply Source: Teck If China were to galvanize crude steel at half the rate of the US using the same rate of zinc/tonne, a further 2.1 Mt would be added to global zinc consumption Source: Teck 74
  76. 76. Committed Zinc Supply Insufficient for Demand Forecast Zinc Refined Balance Source: Teck • We expect insufficient mine supply to constrain refined production − From 2015-2020, refined metal supply increase of only 250 kt − Over the same period, refined demand increase of 2.1 Mt • Market is projected to be in significant deficit in 2016 due to a lack of concentrate leading to smelter cuts • Metal market moving into substantial deficits with further mine closures and depleting inventories (1,000) (900) (800) (700) (600) (500) (400) (300) (200) (100) 0 2013 2014 2015 2016 2017 2018 Thousandtonnes 75
  77. 77. Largest Global Net Zinc Mining Companies 0 50 100 150 200 250 300 350 400 Thousandtonnes Source: Wood Mackenzie, 2016E Teck is the Largest Net Miner Provides Increased Exposure to Zinc Price Public Company Private Company Teck 76
  78. 78. 2cm 1.1 m @ 42.2% Zn, 14.7 % Pb, 558g/t Ag 2cm 1.9 m @ 24.6% Zn, 6.3 % Pb, 53g/t Ag Red Dog: Anarraaq High Grade Intercepts Demonstrate Significant Resource Potential1 DDH1718 54.7m @ 15.7%Zn, 4.0% Pb, 106g/t Ag Incl. 11.2m @ 34.2% Zn, 11.5% Pb, 382g/t Ag DDH1714 42m @ 18.3% Zn, 4.5% Pb, 82g/t Ag Incl. 23.4m @ 23.2% Zn, 5.2% Pb, 74g/t Ag Industry Average Zinc Grades Falling High Grade Anarraaq Intercepts Red Dog zinc grades are much higher than industry average 0 5 10 15 20 25 2009 2010 2011 2012 2013 2014 2015 Grade% Weighted Average Industry Grade Red Dog 1. The scientific and technical information disclosed has been reviewed and approved by Rodrigo Marinho, P.Geo., Technical Director, Reserve Evaluation, Teck who is a Qualified Person under NI 43-101. For further information, please see Teck’s most recent Annual Information Form. 77
  79. 79. 0 250 500 Meters Teena 1 TNDD015 NR 28.0 @ 6.1/0.9 TNDD013 5.8 @ 9.3/1.3 16.6 @ 7.7/1.3 TNDD012 Teena 5 NR 3.8 @ 6.9/1.1 Teena 2 TNDD014 24.4 @ 14.6/2.3 9.8 @ 9.4/1.5 TNDD020 20.1 @ 13.0/2.0 5.2 @ 9.2/1.6 TNDD010 38.8 @ 14.7/2.3 3.0 @ 4.6/2.9 6.7 @ 8.2/1.4 TNDD019 31.9 @ 9.9/1.5 5.0 @ 9.5/1.2 TNDD009 13.1 @ 5.2/0.9 Teena 6 22.8 @ 10.3/1.6 3.8 @ 10.3/0.7 Teena 22 24.2 @ 8.2/1.3 3.6 @ 8.3/1.3 Teena 17 20.4 @ 11.6/1.8 4.7 @ 8.5/1.2 TNDD011 Teena 4/Teena 4A 4.8 @ 5.5/2.7 (4) 8.4 @ 12.9/0.2 (4) 8.6 @ 7.1/2.7 (4A) 19.7 @ 12.9/2.0 7.2 @ 8.0/1.2 TNDD021 Teena 7 5.8 @ 8.1/1.1 4.9 @ 10.2/1.6 6.0 @ 5.9/0.9 Teena/Reward Zinc Project TenementBoundary DDH Pierce Points NR No results above threshold Drill composites were calculated using a 6% Zn+Pb threshold. Drill intersections are reported as drilled thicknesses. True width of the mineralized interval is interpreted to be 70-90% of the reported length. The scientific and technical information disclosed on this slide has been reviewed and approved by Rodrigo Marinho, P.Geo., Technical Director, Reserve Evaluation, Teck who is a qualified person under NI 43-101. m @ Zn%/Pb% NR Teena 8 NR NR 78
  80. 80. Energy Business Unit & Markets
  81. 81. Crude Oil Overview North American Rig Count Down Sharply Sources: Baker Hughes, EIA, Citi Research, National Bank of Canada US Crude Oil Inventory (Mmbbls) West Texas Intermediate (WTI) Price $0 $20 $40 $60 $80 $100 $120 US$/bbl WTI Feb 2017 Forward Oct 2016 Forward Production Accord Announced As of 02/15/17 Joint OPEC/Non-OPEC Production Cut • 1.80 MM bpd • Effective January to June 2017 • Moderate compliance to date • Muted price impact − US rig activity increasing − US crude inventories continue to climb − North America oil production growth 5000 6000 7000 8000 9000 10000 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Thousandbpd RigCountUnits US Rig Count CAD Rig Count US 4-week Production Avg. 80
  82. 82. Benchmark Differentials Western Canadian Select (WCS) Differential Western Canadian Select (WCS) Is The Benchmark Price For Canadian Heavy Oil At Hardisty, Alberta • Contract settled monthly as differential to Nymex WTI • Long term differential of Nymex WTI minus $10-20 US/bbl • Based on heavy/light differential, supply/demand, alternate feedstock accessibility, refinery outages and export capability • Year To Date differential: $14.60 US/bbl − Heavy sour pricing supported by OPEC cuts − Strong demand to compensate for higher Enbridge apportionment, “air barrels” being purchased and nominated. • Post apportionment prices not significantly distressed compared to pre apportionment • Differentials forecasted to widen throughout 2017 − Increased oilsands production in 2017-2018 − Rail volumes will increase to US Gulf Coast Diluent (C5+) at Edmonton, Alberta Is the benchmark contract for diluent supply for oil sands • Contract settled monthly as differential to Nymex WTI • Long-term diluent (C5+) differential of Nymex WTI +/- $5 US/bbl • Based on supply/demand, seasonal demand (high in winter, low in summer), import outages • Activity ramping up, e.g. Norlite Pipeline linefill, Fort Hills ‘first fills’ requirements • Supply forecasted to exceed demand − Growing local production, − Contract carriage import pipelines Average Monthly WTI/Diluent (C5+) Differential Average Monthly WTI-WCS Differential $- $5 $10 $15 $20 $25 $30 $35 $40 $45 WCS Differential (US$/bbl) $23.12 2012-2013 $15.69 2010-2011 $16.45 2014-2015 $13.99 2016-2017 Long-term WCS Differential Constrained Pipe & Balanced Rail Balanced Pipe & Excess Rail $(10) $(5) $- $5 $10 $15 $20 WTI- C5+ Diff (US$/bbl) Plotted to Feb 2017 Plotted to Feb 2017 Long-term Condensate Differential Cochin Pipeline Reversal 81
  83. 83. Oil Liquids – Discovered Resources & Production (Billion bbl) Oil Exploration Success Fell To a Post-1952 Low in 2015 Enough oil has been discovered to meet production in only four of the past 30 years Source: Rystad Energy, Morgan Stanley 82
  84. 84. Source: BMO Capital Markets, May 2016 Oil Sands Mining Costs Lower Than Understood 0 10 20 30 40 50 60 Cash Cost Royalty Cash Tax Sustaining Capex $/bbl Phase 2: Stabilized Market Where we are now 83
  85. 85. Sufficient Western Canadian Takeaway Capacity Expected Source: CAPP, Teck, Lee & Doma Energy Group Sufficient takeaway capacity expected for forecast growth • 2011–2014 − Rapid production growth resulted in takeaway capacity challenges − Industry added significant pipeline & rail capacity • 2015–2030 − Sufficient takeaway capacity expected through existing pipeline capacity, new pipelines (TransMountain and Keystone XL) and existing rail capacity3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 Kbpd Western Canada Supply Growth Western Canada Supply Total Pipeline & Local Refining Total Pipeline, Local Refining & Rail TransMountain Keystone XL Enbridge Western Canadian Supply and Takeaway Capacity 84
  86. 86. Building An Energy Business Strategic diversification Large truck & shovel mining projects World-class resources Long-life assets Mining-friendly jurisdiction Competitive margins Minimizing execution risk Tax effective         Mined bitumen is in Teck’s ‘sweet spot’ 85
  87. 87. • Significant value created over long term • 60% of PV of cash flows beyond year 5 • IRR of 50-year project is only ~1% higher than a 20- year project • Options for debottlenecking and expansion The Real Value of Long-Life Assets Fort Hills Project Indicative Rolling NPV1 1. Indicative NPV assumes US$95 WTI, $1.05 Canadian/US dollar exchange rate, and costs as disclosed with the Fort Hills sanction decision (October 30, 2013). 50-year assets provide for superior returns operating through many price cycles 86
  88. 88. Teck’s Remaining Project Capital ~$805 million Teck’s Estimated 2017 Spend $640 million Teck’s Share of Production 37,200 bitumen barrels per day Operating Costs1 $20-24 per barrel of bitumen Sustaining Capital2 $3-5 per barrel of bitumen Teck’s Share of Production3 13,300,000 bitumen barrels per year 1. Based on Suncor’s estimates at project sanction in October 2013. 2. Based on estimates at project sanction in October 2013. 3. Life of mine average. Mine life: ~45 years Fort Hills Key Numbers 87
  89. 89. Progress in Implementing Our Diversified Marketing Strategy Market Access Options for Teck’s 50 kbbls/day of Fort Hills Diluted Bitumen Blend Cushing Flanagan Houston Edmonton US Gulf Coast Europe Asia TransCanada Energy East (Proposed, Contract Carriage) TransCanada Keystone/MarketLink (Existing, Contract Carriage) Enbridge Flanagan South (Existing, Contract Carriage) Vancouver TransMountain Pipeline Expansion (Proposed, Contract Carriage) Asia Agreements for pipelines to Hardisty in place Agreement for Hardisty product storage in place Monitoring production vs market access balance Developing a portfolio of pipeline capacity opportunities, to enable access to diversified markets Evaluating opportunities in the secondary market for pipeline capacity Developing a diversified customer base Hardisty Chicago Sarnia Patoka Superior Guernsey Montreal Saint John Enbridge Mainline System (Existing, Common Carriage) Spectra Express (Existing, Contract Carriage) Teck can enter into long-term take or pay contracts 88
  90. 90. Intra Alberta Logistics On Schedule For Fort Hills Commissioning Rail Local Market Pipeline Legend Bitumen Blend Diluent Existing New East Tank Farm Blending w/Condensate Wood Buffalo Extension Norlite Diluent Pipeline Cheecham Terminal Hardisty Terminal Wood Buffalo Pipeline Athabasca Pipeline Edmonton Terminal Fort Hills Mine Terminal Northern Courier Hot Bitumen Pipeline Teck Options Export Pipeline Kirby Athabasca Twin Pipeline Pipeline/Terminal Operator Pipeline Capacity (kbpd) Teck Capacity (kbpd) Project Construction Status* (% completion) Northern Courier Hot Bitumen TransCanada 202 40.4 Pipeline and Facilities: Tank terminal: East Tank Farm - Blending Suncor 292 58.4 Diluent terminaling and blending Wood Buffalo Blend Pipeline Enbridge 550 65.3 In service Wood Buffalo Extension Enbridge 550 65.3 Pipeline: Pump stations and facilities: Norlite Diluent Pipeline Enbridge 130 18.0 Pipeline: Pumpstations and facilities: Hardisty Blend Tankage Gibsons 425 kbbls 425 kbbls Tank completed 86% 85% 100% 100% 81% 98% 100% 60% 84% *As of December 2016.89

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