Teck Resources Limited (TSX: TECK.A and TECK.B) (NYSE: TECK) announced its unaudited second quarter results for 2023.

“We were deeply saddened to report an employee fatality in the second quarter at our Quebrada Blanca Operations. Our deepest sympathies go out to the employee’s colleagues and loved ones. Learnings from the investigation are being shared across Teck and with industry peers to prevent future incidents,” said Jonathan Price, CEO. “In the second quarter we achieved another major milestone at our QB2 project with the first sale of copper concentrate as we ramp up to full production later this year. We continue to explore a range of options to realize the full potential of our world-class base metals business and to progress our overall copper growth pipeline, including receiving regulatory approval for our Zafranal project in May. Strong performance from our steelmaking coal business contributed to solid financial results in the second quarter, further reinforcing the inherent value of our high-margin steelmaking coal business.”

Highlights

• Adjusted profit attributable to shareholders¹ of $643 million or $1.24 per share in Q2 2023.
• Profit from continuing operations attributable to shareholders of $510 million or $0.98 per share in Q2 2023.
• Adjusted EBITDA¹ was $1.5 billion in Q2 2023 driven by continued robust commodity prices and strong steelmaking coal sales. Profit from continuing operations before taxes was $805 million in Q2 2023.
• We completed the first shipment and sale of copper concentrate at QB2 in the second quarter. Line 1 is operating well as per expectations, and Line 2 is in commissioning. We continue to expect to be operating at full production rates by the end of 2023.
• We generated cash flows from operations of $1.1 billion, ending the quarter with a cash balance of $1.8 billion. In June, we made our first scheduled semi-annual repayment of US$147 million on the QB2 project finance facility, further deleveraging our balance sheet.
• Our liquidity as at July 26, 2023 is $7.0 billion, including $1.7 billion of cash.
• We completed $85 million in Class B subordinate voting share buybacks pursuant to our normal course issuer bid. We also paid $65 million to shareholders in Q2 through our regular quarterly base dividend.
• In April, we closed the transaction to form the joint venture on the San Nicolás copper-zinc project in Mexico and in June finalized the Environmental Impact Assessment permit application, which is planned for submission in Q3 2023. In May, we announced that the Zafranal copper-gold project in Peru received regulatory approval from the Peruvian environmental authority.
• On May 12, 2023, we completed the plan of arrangement under the Canada Business Corporations Act to implement a six-year sunset of the multiple voting rights attached to the Class A common shares.

<sup>Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” for further information.</sup>

Key Updates

Executing on our copper growth strategy – QB2 a long-life, low-cost operation with major expansion potential

• We completed the first shipment and sale of copper concentrate at QB2 in the quarter.
• Line 1 is operating well as per expectations, and Line 2 is in commissioning.
• The concentrate pipeline, concentrate filter plant and storage systems are in operation at the port.
• We continue to expect to be operating at full production rates by the end of 2023, and our previously disclosed capital cost guidance for QB2 of US$8.0 to $8.2 billion is unchanged.
• Due to delays in construction and commissioning, our 2023 annual production guidance for QB2 has been updated to 80,000 tonnes to 100,000 tonnes. Our previously disclosed 2024 — 2026 annual production guidance for QB2 is unchanged.

Safety and Sustainability Leadership

• Trail Operations was the first stand-alone zinc processing site globally to receive the Zinc Mark, verifying its performance in responsible production criteria including GHG emissions, community health and respect for Indigenous Peoples’ rights.
• Teck was named one of the Best 50 Corporate Citizens in Canada by Corporate Knights.

Guidance

• We have updated our previously issued 2023 annual production guidance to reduce our copper production as a result of lower QB2 production, and to reduce lead production at Red Dog. There are no other changes to our previously disclosed guidance.
• Our guidance is outlined in summary below and our usual guidance tables, including three-year production guidance, can be found on pages 28 — 32 of Teck’s second quarter results for 2023 at the link below.

<sup>Notes:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” for further information.
2. Excludes Quebrada Blanca.</sup>

Click here to view Teck’s full second quarter results for 2023.

USE OF NON-GAAP FINANCIAL MEASURES AND RATIOS

Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of non-GAAP financial measures and non-GAAP ratios which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS or by Generally Accepted Accounting Principles (GAAP) in the United States.

The non-GAAP financial measures and non-GAAP ratios described below do not have standardized meanings under IFRS, may differ from those used by other issuers, and may not be comparable to similar financial measures and ratios reported by other issuers. These financial measures and ratios have been derived from our financial statements and applied on a consistent basis as appropriate. We disclose these financial measures and ratios because we believe they assist readers in understanding the results of our operations and financial position and provide further information about our financial results to investors. These measures should not be considered in isolation or used in substitute for other measures of performance prepared in accordance with IFRS.

Adjusted profit attributable to shareholders – For adjusted profit attributable to shareholders, we adjust profit (loss) attributable to shareholders as reported to remove the after-tax effect of certain types of transactions that reflect measurement changes on our balance sheet or are not indicative of our normal operating activities.

EBITDA – EBITDA is profit before net finance expense, provision for income taxes, and depreciation and amortization.

Adjusted EBITDA – Adjusted EBITDA is EBITDA before the pre-tax effect of the adjustments that we make to adjusted profit attributable to shareholders as described above.

Adjusted profit attributable to shareholders, EBITDA, and Adjusted EBITDA highlight items and allow us and readers to analyze the rest of our results more clearly. We believe that disclosing these measures assists readers in understanding the ongoing cash generating potential of our business in order to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends.

Adjusted basic earnings per share – Adjusted basic earnings per share is adjusted profit attributable to shareholders divided by average number of shares outstanding in the period.

Adjusted diluted earnings per share – Adjusted diluted earnings per share is adjusted profit attributable to shareholders divided by average number of fully diluted shares in a period.

Gross profit before depreciation and amortization – Gross profit before depreciation and amortization is gross profit with depreciation and amortization expense added back. We believe this measure assists us and readers to assess our ability to generate cash flow from our business units or operations.

Unit costs – Unit costs for our steelmaking coal operations are total cost of goods sold, divided by tonnes sold in the period, excluding depreciation and amortization charges. We include this information as it is frequently requested by investors and investment analysts who use it to assess our cost structure and margins and compare it to similar information provided by many companies in the industry.

Adjusted site cash cost of sales – Adjusted site cash cost of sales for our steelmaking coal operations is defined as the cost of the product as it leaves the mine excluding depreciation and amortization charges, out-bound transportation costs and any one-time collective agreement charges and inventory write-down provisions.

Total cash unit costs – Total cash unit costs for our copper and zinc operations includes adjusted cash costs of sales, as described below, plus the smelter and refining charges added back in determining adjusted revenue. This presentation allows a comparison of total cash unit costs, including smelter charges, to the underlying price of copper or zinc in order to assess the margin for the mine on a per unit basis.

Net cash unit costs – Net cash unit costs of principal product, after deducting co-product and by-product margins, are also a common industry measure. By deducting the co- and by-product margin per unit of the principal product, the margin for the mine on a per unit basis may be presented in a single metric for comparison to other operations.

Adjusted cash cost of sales – Adjusted cash cost of sales for our copper and zinc operations is defined as the cost of the product delivered to the port of shipment, excluding depreciation and amortization charges, any one-time collective agreement charges or inventory write-down provisions and by-product cost of sales. It is common practice in the industry to exclude depreciation and amortization as these costs are non-cash and discounted cash flow valuation models used in the industry substitute expectations of future capital spending for these amounts.

Adjusted site cash cost of sales per tonne – Adjusted site cash cost of sales per tonne is a non-GAAP ratio comprised of adjusted site cash cost of sales divided by tonnes sold. There is no similar financial measure in our consolidated financial statements with which to compare.

Profit Attributable to Shareholders and Adjusted Profit Attributable to Shareholders

^{Notes:
1. Adjustments for the three and six months ended June 30, 2022 are as previously reported.
2. Adjustment required to remove the effect of discontinued operations for the three and six months ended June 30, 2022.}

Reconciliation of Basic Earnings per share to Adjusted Basic Earnings per share

Reconciliation of Diluted Earnings per share to Adjusted Diluted Earnings per share

<sup>Notes:
1. Adjustments for the three and six months ended June 30, 2022 are as previously reported.
2. Adjustment required to remove the effect of discontinued operations for the three and six months ended June 30, 2022.</sup>

Reconciliation of EBITDA and Adjusted EBITDA

^{Notes:
1. Adjustments for the three and six months ended June 30, 2022 are as previously reported.
2. Adjustment required to remove the effect of discontinued operations for the three and six months ended June 30, 2022.}

Reconciliation of Gross Profit Before Depreciation and Amortization