Teck Resources Limited (TECK) Earnings

Management highlights

- Overall Financial Performance * Delivered strong Q2 2026 results: adjusted EBITDA tripled YoY to $2.2 billion, with a record adjusted EBITDA margin of 61% (up from 36% YoY) * Generated $1.7 billion in cash flow from operations, increasing net cash position by $756 million in the quarter and $1 billion in H1 2026 * Returned $61 million to shareholders via quarterly base dividend; ended the quarter with $10.3 billion in total liquidity including $6.1 billion in cash - Safety Performance * High potential incident frequency rate for controlled operations remained low at 0.08, in line with 2025 performance * Highland Valley copper mine life extension project achieved 1 million hours worked without a high potential incident or lost time injury, reflecting a strong safety culture - Quebrada Blanca (QB) Operations * Achieved third consecutive quarter of stable operations with no tailings management facility (TMF) related downtime; completed Rock Bench 5, an important TMF milestone * Evaluating accelerating Rock Bench 6 construction (originally planned for 2027) to enable earlier installation of permanent TMF pipeline infrastructure; if approved, construction would start in late August/early September 2026, finish by year end, with an estimated $100 million 2026 capital cost * Completed planned maintenance in May 2026 that optimized plant performance and laid the groundwork for future throughput improvements - Highland Valley Mine Life Extension Project * Detailed engineering is 95% complete, procurement is nearing completion, and construction is ramping up across the site * Invested $254 million in project capital during the quarter; full lifecycle capital guidance remains unchanged at $2.1 to $2.4 billion, with 2026 capital guidance unchanged at $900 million to $1.2 billion * When complete, the project will extend the mine life to 2046 and support average annual copper production of ~132 thousand tonnes - Merger with Anglo American * Remaining regulatory approval (from China's SAMR) is progressing as expected, with no remedy requests received to date * Integration planning is intensifying, with work on organizational structure, leadership appointments, business processes, and synergy capture planning well underway * Transaction completion is still expected within 12 to 18 months of the September 2025 announcement, and would close within a couple of weeks of receiving final Chinese approval - Trail Operations Strategic Initiative * Announced a strategic investment agreement with the Government of Canada to expand strategic metals production, with potential to expand germanium and antimony output and add new gallium capacity * The project remains subject to conditions and internal capital allocation review

Guidance

- Full year 2026 copper segment production guidance is unchanged at 455 thousand to 530 thousand tonnes, maintaining the original range set earlier in the year - Full year 2026 zinc segment guidance is unchanged: 410 thousand to 460 thousand tonnes of zinc in concentrate production, and 190 thousand to 230 thousand tonnes of refined zinc production - 2026 capital expenditure guidance for the Highland Valley mine life extension project remains unchanged at $900 million to $1.2 billion, with total project capital guidance unchanged at $2.1 to $2.4 billion - Capitalized stripping guidance for the copper segment remains unchanged at $450 million to $550 million for 2026 - Annual guidance for overall operational and financial performance has not been revised from prior disclosures, with management confirming existing guidance ranges remain valid and appropriate given expected H2 production decreases at Highland Valley and Antamina

Segment performance

1. Copper Segment: Gross profit before D&A more than doubled year-over-year (YoY) to $1.8 billion, with margins expanding to 65% from 46% in Q2 2025. Copper production increased 25% YoY, with QB producing 55.8 thousand tons of copper (up from 52.7 thousand tons YoY) on the back of three consecutive quarters of stable operations. Net cash unit costs improved 19% YoY to $1.64 US per pound. Copper generated an adjusted EBITDA margin of 70%, up from 45% YoY, and accounts for approximately 83.5% of the company's total gross profit before D&A. 2. Zinc Segment: Gross profit before D&A increased 122% YoY to $353 million, with margins rising to 39% from 28% in Q2 2025. Trail Operations delivered strong performance, with gross profit before D&A increasing to $203 million from $42 million YoY despite a planned lead circuit shutdown. Red Dog zinc production was in line with mine plan, with sales of 37 thousand tonnes within guidance ranges. Net cash unit costs improved 29% YoY to 35¢ US per pound, and adjusted EBITDA margin increased to 38% from 25% YoY. Zinc accounts for approximately 16.5% of the company's total gross profit before D&A.

Risks & headwinds

- Continued reliance on regulatory approval for the Anglo American merger, with uncertainty around the final timing of the Chinese SAMR review - TMF operational constraints at QB could still impact operational continuity if development milestones are not met on schedule, though current progress has significantly reduced this risk - Volatility in commodity and byproduct prices, as well as energy prices, could impact full year cost and profitability performance relative to guidance - Diesel price increases could impact zinc segment costs once Red Dog's 2026 shipping season diesel deliveries are completed, with a sensitivity of ~1¢ per pound of zinc for every $10 per barrel change in WTI oil prices - The Collahuasi-QB2 expansion project faces the risk of failed negotiations between co-shareholders to reach a mutually beneficial development agreement

Analyst Q&A

• Q: Would accelerating Rock Bench 6 construction at QB directly increase 2027 or 2028 throughput rates from current plans? /

  A: Management states the accelerated Rock Bench 6 project is focused on derisking operations and supporting ongoing operational continuity, not directly increasing near-term throughput. The project enables earlier installation of permanent TMF infrastructure, which will improve tailings deposition efficiency and provide greater operational flexibility, but does not change base throughput projections for 2027 and 2028.

• Q: What is the status of the Chinese SAMR approval process for the Anglo American merger, and what requests have regulators made? /

  A: Management confirms the approval process is progressing in the normal course, with the company responding to routine information requests aligned with standard regulatory processes. No requests for asset sales or other remedies have been received, and completion is still expected within the original 12-18 month timeline from the September 2025 announcement. The transaction would close within a couple of weeks after final approval is received.

• Q: What is the status of the Collahuasi-QB2 joint expansion project, and when will a formal study be completed? /

  A: Management remains highly focused on the project, which it views as the lowest risk, lowest capital, highest return copper growth opportunity for both operations. The company is working with Anglo American to develop the project framework, has engaged co-shareholders and local governments, and remains optimistic a mutually beneficial agreement will be reached. Commercial negotiations remain confidential at this stage, with the project study being progressed at pace by the two lead partners before shared with all co-shareholders.

• Q: Why is full year production guidance maintained at the original range rather than being raised to the upper end after strong H1 performance? /

  A: Management notes full year guidance is unchanged because H2 2026 is expected to see lower production at two key assets: Highland Valley will require mill downtime for mine life extension project tie-ins and will see lower feed grades, and Antamina is also expected to produce less in H2. The company prioritizes operational stability over aggressive guidance, and the existing range remains appropriate for expected full year results.

• Q: How will Teck secure germanium feed for the expanded Trail Operations after Red Dog's current reserve base is depleted? /

  A: Teck has already pursued a strategy of securing additional feed sources through offtake and priority purchase agreements with other developing miners in Western North America, including Blue Moon Metals, Bunker Hill, and Valhalla Metals. The expansion project is focused on increasing processing capacity at Trail, not just improving recovery from existing feed, and the company will continue evaluating additional Western-sourced feed opportunities to build long-term optionality.