Ladies and gentlemen, thank you for standing by. Welcome to Teck's First Quarter 2021 Earnings Release Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. This conference call is being recorded on Wednesday, April 28, 2021. I would now like to turn the meeting over to Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis. Please go ahead. Thanks very much, Kate, and good morning, everyone. Thank you for joining us for Teck's First Quarter 2021 Results Conference Call. Before we begin, I would like to draw your attention to the caution regarding forward-looking statements on slide two. This presentation contains forward-looking statements regarding our business. This slide describes the assumptions underlying those statements. Various risks and uncertainties may cause actual results to vary. Teck does not assume the obligation to update any forward-looking statement. I would also like to point out that we use various non-GAAP measures in the presentation. You can find explanations and reconciliations regarding these measures in the appendix. With that, I will turn the call over to Don Lindsay, our President and CEO. Thanks very much, Fraser. Good morning, everyone. I'll begin on slide three with first quarter highlights. I'll be followed by Jonathan Price, our CFO, who will provide additional color on our financial results, and then we'll conclude with a Q&A session where Jonathan and I and several additional members of our senior management team would be happy to answer any questions. Strong operational performance and higher commodity prices contributed to a very solid start to 2021 in the first quarter. Our operations continue to be resilient despite ongoing challenges associated with COVID-19. The Teck team continues to rise to meet those challenges, putting in place comprehensive measures to protect the health and safety of our people and our communities to ensure that we can continue to operate responsibly and progress our strategy to grow copper production. Across our businesses, production was in line with plan. We met our quarterly sales guidance in both Steel making Coal and Zinc. There are no changes to our annual guidance. At the same time, we achieved major milestones for our priority projects. We are now past the halfway point of construction at our QB2 project, which is a long life, low-cost operation with major expansion potential. QB2 is expected to double our consolidated copper production by 2023. We continue to expect first production in the second half of 2022, which is next year. Our Neptune Port Upgrade project has moved into commissioning phase. We've now loaded 18 ships. We successfully commissioned the Elkview Saturated Rock Fill expansion in the first quarter on schedule and below budget. The Elkview SRF has been achieving near complete removal of selenium and nitrate from up to 10 million liters of water per day since 2018. It is part of our ongoing work to implement the Elk Valley Water Quality Plan to maintain the health of the watershed around our Steel making Coal operations. The Elkview SRF expansion doubles the water treatment facility's capacity to 20 million liters of water per day. Turning to slide four, revenues were up 7% from a year ago to CAD 2.5 billion, and profitability improved even more, with adjusted EBITDA increasing almost 60% to CAD 967 million, and bottom line adjusted profit attributable to shareholders increasing almost 250% to CAD 326 million, which is CAD 0.61 per share on a diluted basis. This reflects higher prices for our principal products, most significantly copper, zinc, and Western Canadian Select. Jonathan will review our financial results in more detail in just a few minutes. I will now run through highlights of our first quarter by business unit, starting with Copper on slide five. Our Copper Business Unit had a strong Q1 with a 205% increase in EBITDA compared to the same period last year, reflecting substantially higher copper prices. Production was similar to a year ago, with higher production at Highland Valley Copper and Antamina, offset by lower production at Carmen de Andacollo and QB, as expected in our mine plan through 2021. Net cash unit costs were CAD 1.38 per pound in the quarter, up from CAD 1.28 per pound a year ago, in line with guidance. The increase in cost is primarily due to higher workers' participation and royalty expense resulting from higher profitability in Antamina, as well as lower production volumes at Carmen de Andacollo. Turning to an update on our QB2 project on slide six. Overall project progress surpassed the halfway point in April. We have been seeing the pace of construction trending upwards through the first quarter. In fact, we have been hitting new weekly records over the last month. These successes are a reflection of the project team's efforts in effectively managing through the current wave of COVID-19 in Chile. We continue to enhance our extensive COVID protocols in order to protect the health and safety of our workers and the communities in which we operate, including pre-screening of the entire workforce with PCR testing. The situation is being actively managed to maintain the current workforce level and to allow for further ramp up as soon as is practical. As I mentioned earlier, we are still on track for first production in the second half of next year. Our capital cost estimate remains at $5.2 billion. That's absent the COVID-19 related capital expenses, which are being tracked separately. We have previously disclosed $450 million-$500 million of COVID-19 related costs, of which $197 million have been expensed. COVID-19 does continue to affect project progress. That said, we are pleased with the progress we are making in light of the current COVID-19 restrictions, the final extent of COVID-19 related costs will depend on the progress of the pandemic in Chile and the extent of further impacts on staffing levels. Slide seven provides an aerial view of the concentrator area. The grinding lines, shown in the middle, remain the critical or longest path for the project. We have made significant progress on the grinding lines, five of the six mills are now in place. Since the start of the year, we have advanced the placement of the third and fourth ball mills. Here you can see the last shell segment being lowered in place for the fourth ball mill. We've also significantly advanced the structural steel of the grinding building and have installed the staged flotation reactor, or SFR cells, in the flotation area, which you can see just here in green on the far right of the photo. These are just adjacent to the large blue rougher flotation tanks, which are well advanced in terms of mechanical installation. Slide eight shows our marine works, where piling for the jetty is advancing from shore, you see that in the foreground, as well as from a temporary island in the background, supporting two additional work fronts offshore. Slide nine shows the starter dam of the tailings management facility. We have significantly advanced construction in this area, completing the abutments seen in the background and continuing to raise the elevation of the dam in the foreground. For these works, we have been using Teck's current mine fleet, which includes several new Cat 794 haul trucks that were recently commissioned. Teck mine fleet is performing very well, and it has provided significant benefit to the project. Slide 10. The pipeline right of way and platform development is now essentially complete, and we continue with trenching, pipe stringing, welding, and placement of the pipelines. Slide 10 shows a section of the water pipeline being lowered into place. This is the pipeline that will bring desalinated water from the port up to the site. To see more of the latest progress at QB2, I encourage you to take a look at a video of the project and our quarterly photo gallery. We have posted these with our quarterly conference call materials at teck.com, and there are links to them also in our Q1 2021 press release. Next, our Zinc Business Unit results for the first quarter are summarized on slide 11. As a reminder, Antamina zinc-related financial results are reported in our Copper Business Unit. Substantially higher zinc prices were more than offset by a stronger Canadian dollar, lower sales volumes, and higher unit operating costs and royalty expense. As we had flagged last quarter, lower 2020 production volumes at Red Dog have resulted in lower material available for sale and higher unit cash costs of sales in the first half of this year. Red Dog sales of zinc in concentrates were 104,000 tons, which was above our guidance range of 90,000 tons-100,000 tons. Looking forward to Q2, we expect Red Dog zinc sales to be 35,000- 45,000 tons, which is again, lower than normal as a result of the reduced production in 2020. At Trail, while we continue to expect to produce between 300,000 - 310,000 tons of refined zinc this year, Q2 production will be impacted by a planned annual zinc roaster maintenance. Turning to our Steel making Coal business on slide 12. Sales were 6.2 million tons, in line with our quarterly guidance. Our second quarter average realized price reflects around 2 million tons of sales to Chinese customers at high CFR China prices. Our adjusted site cash cost of sales were CAD 63 per ton in the quarter. This was higher than anticipated due to intermittent processing challenges, which are largely behind us, and mining sequence adjustments, which advanced higher cost steelmaking coal production from later in the year into Q1. Despite these challenges, unit costs were within our annual guidance range, and all operations currently have healthy raw steelmaking coal inventories. We are now well-positioned to maximize production out of the operations and deliver strong cash flows going forward. Also in Q1, we resolved the charges under the Fisheries Act in connection with discharges of selenium and calcite in 2012 from our Fording River and Greenhills operations. As I mentioned earlier, we have successfully commissioned the Elkview SRF on schedule and below budget. Looking forward to Q2, we expect sales of 6 million to 6.4 million tons. We will continue to prioritize available spot sales volumes to China, which is expected to continue to result in favorable price realizations. We expect our realized price in Q2 to be materially higher than the 10-year average of 92% of the benchmark, which was coming from the average of the three assessments lagged by one month. As I indicated earlier, our Neptune Port Upgrade project has now moved into the commissioning phase. The first steel making coal was unloaded using the double rail car dumper pictured on slide 13 on April 19th. I visited the site day before yesterday, saw it all in action. It looks terrific. Ramp up is proceeding as planned. All major equipment is performing according to or better than planned. To date, 18 vessels have already been loaded using the new outbound system. At the same time, the upstream rail infrastructure improvements by both CP Rail and CN Rail to support our increased volumes through Neptune, they are all largely complete. We are very, very pleased with the status of Neptune. As I said, the first steelmaking coal went through the new double rail dumper on April 19th, and you can see the photo on slide 14 shows it being placed on our stockpile by the new stacker reclaimer. If you would like to see the new double dumper in action, we have posted a short video with our quarterly conference call materials at teck.com, and there is a link to it in our quarterly press release. Slide 15 shows our new ship loader loading steelmaking coal into a vessel. We are really pleased to see the project move into the commissioning phase and achieve first steelmaking coal, as Neptune is a key component of our long-term, low cost, and reliable supply chain for our Steelmaking Coal business. Turning to our energy business unit results for the first quarter, which are summarized on slide 16. Our realized price and results reflect a material improvement in benchmark oil prices and Western Canadian Select compared with Q1 2020. However, this was partially offset by higher unit operating costs due to lower production. Bitumen production in the first quarter was impacted by low available mine inventory levels at the end of 2020. Looking forward, though, Suncor expects to ramp up to two train production by mid-year and to sustain production of 175,000 - 185,000 barrels per day by the fourth quarter. The focus is on overburden stripping and building mine inventory levels to allow ramp up to a two-train production. With that, I'll pass it over to Jonathan for some comments on our financial results, and if I could please ask everyone to keep their phone on mute while the presentation's ongoing. Thank you. Jonathan? Thanks, Don. I'll start by addressing the details of the first quarter earnings adjustments on slide 17. Environmental costs were CAD 33 million after tax, primarily relating to an increase in the rates used to discount our decommissioning and restoration provisions and increased expected remediation costs. We reversed CAD 6 million in inventory write-downs. Share-based compensation expense was CAD 10 million. Commodity derivatives were CAD 15 million on an after-tax basis. After these and other minor adjustments, bottom-line adjusted profit attributable to shareholders was CAD 326 million in the quarter, which is CAD 0.61 per share on both a basic and a diluted basis. The changes in our cash position during the first quarter are on slide 18. We generated CAD 585 million in cash flow from operations. We spent CAD 869 million on sustaining and growth capital, including CAD 523 million on QB2, CAD 157 million on the Neptune Port Upgrade project and CAD 153 million in sustaining capital. Stripping activities were CAD 134 million, primarily related to the advancement of pits for future production at our steel making coal operations. This was lower than a year ago, driven by the decrease in strip ratios in our Steel making Coal business. For investments in other assets, we paid CAD 44 million on expenditures and received CAD 11 million in proceeds. Net proceeds in the first quarter were from a CAD 577 million drawdown on the $2.5 billion limited recourse project financing facility to fund the development of the QB2 project. We repaid a net CAD 44 million on our $4 billion revolving credit facility. Lease payments totaled CAD 33 million, and we paid CAD 113 million in interest and finance charges. We issued CAD 6 million in Class B subordinate voting shares and paid CAD 27 million in respect of our regular quarterly base dividend of CAD 0.05 per share. After these and other minor items, we ended the quarter with cash and short-term investments of CAD 369 million. Turning to our financial position on slide 19. We have maintained our strong financial position with current liquidity of CAD 6.3 billion. This includes our current cash and the amounts available on our $5 billion of committed revolving credit facilities. $3.8 billion is available on our $4 billion facility that matures in Q4 2024, our $1 billion sidecar that matures in Q2 2022 remains undrawn. Both facilities do not have any earnings or cash flow-based financial covenants, do not include a credit rating trigger, and do not include a general material adverse effect borrowing condition. The only financial covenant is a net debt to capitalization ratio that cannot exceed 60%, and at March 31st, that ratio was 26%. Financing facility for the QB2 project was drawn in the first quarter. The QB2 project achieved its target ratio of project financing to total shareholder funding in April. As a result, there will be shareholder contributions going forward, starting in the second quarter. We have no significant note maturities prior to 2030 and investment-grade credit ratings from all four credit rating agencies. Overall, we have a strong financial position to allow us to continue to weather the changes around COVID-19 and to complete the QB2 project. With that, I'll pass it back to Don for closing comments. Okay, thanks, Jonathan. In closing, I want to say we remain focused on Teck's prudent copper growth strategy, growing into green metals as they're now called. We made solid progress on our key initiatives in the first quarter. We surpassed the halfway point of construction at QB2, we've moved into commissioning phase at Neptune, and we successfully commissioned the Elkview SRF on schedule and below budget. We believe Teck is one of the best positioned companies globally to capitalize on the strong demand growth that we see for green metals and in particular for copper. We have one of the very best copper production growth profiles in the industry and located in attractive jurisdictions. Accelerating copper growth is the cornerstone of our strategy, and by growing our copper production, we rebalance our portfolio towards what's now called green metals. In the process, we expect to continue to reduce carbon as a proportion of our total business while continuing to produce the high-quality steel making coal that the world absolutely needs for a low-carbon future. We're also continuing to strengthen our existing high-quality, low-carbon assets through RACE21 technology, which is harnessing cutting-edge technologies, including artificial intelligence and automation, to drive step change improvements in productivity, efficiency, safety, and sustainability. We strive to maintain the highest standards of sustainability and operational excellence in everything we do. We have a leadership team with the right mix of skills and experience to deliver on our strategy. With that, we would be happy to answer your questions, and like many of you, most of us are on phone lines from home, although I'm in the office personally today. Please bear with us if there is a delay while we sort out who will answer your question. With that operator, over to you. Thank you. We will now take questions from the telephone lines. If you have a question and you're using a speakerphone, please lift your handset before making your selection. If you have a question, please press star one on your device's keypad. You may cancel your question at any time by pressing star two. Please press star one at this time if you have a question. There will be a brief pause while the participants register for questions. Thank you for your patience. Our first question, Orest Wowkodaw from Scotiabank. Your line is open. Please go ahead. Hi, good morning, and thanks for taking the question. Don, I was wondering if we could get some more color on the QB2 development here, just in the context of what's happening with the COVID outbreak in Chile. You did say that the COVID is having an impact on the pace of development. Just wondering where you are with respect to headcount. Have you been able to get to the full rate? Also, where is the project with respect to consuming the contingency that was embedded in the original $5.2 billion CapEx number, please? Okay. I'll make an opening comment and then I'm going to turn it over to Red Conger and Alex Christopher, whichever one wants to follow me. That has slowed us down relative to the ramp-up schedule that we had. Having said that, we just had our best four weeks, and in fact, we just had our best two weeks. It continues to improve, and we're quite encouraged by the progress the last month. There's no doubt that February and March were very tough, but things are coming along well. COVID is still with us. It is still an ongoing challenge. In terms of the contingency, we still have most of the contingency that we published available going forward. With that, I'll turn it over to Red or Alex, whoever wants to go. Yeah, Don, Red here. Orest, thanks for the question. We're really proud of the team and all the accomplishments that they continue to make there in the face of these circumstances. Headcount right now is about 9,400. We've been able to hold that level here the last couple of months and continue to make the progress that we would expect with that level of effort on the site and the beauty of how the team is managing this as the upsets or the hindrances that we face with COVID continue to get better. We're in a great position to springboard off of that and increase additional personnel on the site. All in all, very proud of where we're at. Thanks, Red. I didn't quite catch the number you gave us. Sorry, the headcount. Can you give me the headcount one more time and what percent is that of where you're supposed to be in terms of maximum? Yeah, it's 9,400 and I don't have the percentage of total, but it's, I'm guessing 10% less. Alex, if you want to add more precision to that. Yeah, I think, Orest, our peak numbers here in our plan coming over definitive estimate that we were going to hit just shy of, I think, 12,000 workers on site. At 9,400, we're sort of 20% or so below that or in that order. This is really our ability to move from, I'd say, two people per room to three people per room over time as Chile comes through this current wave of COVID things. I think there's lots of positives here with respect to Chile on that. They've now given, I think, vaccines to 42% of their total population and nearly 32% of the population or 7 million people actually have had two vaccine doses. This is really positive there. I think it is one of the leading countries in the world in terms of vaccinations. This gives us lots of a view towards what's going to happen over the next two months and our ability to start to ramp back up to three people per room. Okay. We should note that the peak workforce wasn't intended to be there today. That was a target for mid-year. Okay. Thank you very much. Thank you. Our next question from Greg Barnes. Your line is open. Please go ahead. Yes. Thank you. Not to belabor the point, Don, but what completion rates per month are you achieving right now? April will be our best month, and I don't have that number yet. April's not quite finished. I think we're going to have to leave that, Greg, because it varies quite a bit week to week. We're very pleased with April having had a tough February and March. Okay. Just a question for you, Don, given you have QB2 in flight, you've got a couple of copper projects in the pipeline, potentially, if you want to build them. There's a lot of talk about what the right long-term incentive copper price is. Do you have a view on that, and could you give us your ideas on that? Yeah. That could be a very long answer, but I'll distill it. In our planning, I'll give what we do as a company and then personal view, if you like. In our planning, we've generally used CAD 3 copper. In some cases, we've used CAD 3.10 or CAD 3.15, but it's been down in those ranges. I see quite a few research reports now coming out saying incentive price has to be at least CAD 3.50 to do it. You always have to look at these things, whether they're inflation adjusted or not, relative to sort of real prices. My own view is that COVID has accelerated copper demand from what would've been a long-term rate of about 2%, and it's probably gone up a full percentage point to 3%. Would max at 3.2% or 3.5%. That's probably right if you see the activity in the world. You see what's happened in the last week between President Biden hosting the climate summit, President Xi making his announcements, and Mark Carney getting the banks and insurers to mobilize trillions of dollars to net zero, all of that is going to accelerate decarbonization and accelerate demand for copper. I think the prices are going to be there. We're seeing that in the market now. I just don't think the resources are there to develop. We're in a very fortunate position. We have a long list of projects at different stages, some of which could be built quite shortly or built by partners quite shortly. QB itself is massive, over 8 billion tonnes now, headed to 10 billion tonnes. We could do nothing but just that for the next 10 years, and that would be a real value-adding for the company. I think given the nature of the resources that are out there, you're probably going to need CAD 3.50 copper to get companies to mobilize, to go after, to actually develop them. There's got to be a real reward for going through the 10-15 years of pain to get something built. Great. Thanks, Don. That's very helpful. If I can, one final question, maybe to Jonathan. The 42% tax rate in the quarter, what drove that? It's significantly above what the normalized rate would be. Yeah, Greg, there were a couple of items, which were unique to the quarter that were essentially non-deductible for tax purposes. In the absence of that, we'd probably have been at 37%, so consistent with our usual range. Nothing significant and nothing that's structural. Okay. Thank you. Thank you. Our next question is from Jackie Przybylowski from BMO Capital Markets. Your line is open. Please go ahead. Hi. Thanks very much. I wanted to just ask a question on the Coal division first. Your Coal sales into China for Q1, they seem quite strong, 2 million tonnes. The guidance you'd given previously was for the year 2021 at 7.5 million tonnes. I thought Q1 was supposed to be sort of lower run rate versus the rest of the year. Are you thinking that there's any way that the coal sales into China could go above that 7.5 million tonne number that you had previously guided? I'll turn it over to Réal, but I'll just say that we thought the same as you, because normally with Chinese Lunar New Year in the first quarter, you'd have a little lower number. Yeah. The answer to the big picture question is no, 7.5 million is our target. Réal, more detail from you. Yeah, not much more to add, Jackie. As Don is saying, we have contractual commitments with long-term customers in other markets. We're still looking at a similar target, 7.5 million tons for all of 2021. Okay. Thank you. Can you maybe, while we're on the topic, can you talk a little bit about what you're seeing today? I know things change so quickly. The Chinese coal market seems pretty strong right now, but maybe that's not the case in other markets like India. Can you give us a little bit of commentary on what you're seeing, in terms of the CFR premium versus the FOB benchmark today? Yeah, sure can, Jackie. The current premium is getting very close to $100 FOB price this morning is down to around $109. CFR China is at $227. If we deduct ocean freight, which currently for us is in the low twenties, you end up with very close to $100 ton premium. Thank you very much. That's amazing. Maybe just shifting gears. I've been reminiscing on some old site visits since we haven't left the house in a while. Thinking back to the site visit we did to Highland Valley, I think it was around September 2019, and we saw the technology working there, the ore sorting, the autonomous haulage. Would you mind giving me an update maybe on how those trials are going? I think it's been a while since you've been doing those trials. Are you seeing success there, and is there any read-throughs for how that might be kind of rolled through other mines or other areas of your business? Yeah, it's pretty good. Shehzad, why don't you start? Sure. Thanks, Don. Jackie, on AHS at Highland Valley, we have now converted 21 trucks, not all are in service and autonomous, but will be as 2021 progresses. Our plan is to have 35 trucks fully autonomous in both the pits by Q1 of 2022. That was our plan. In terms of the performance of the AHS, it's performing as designed, as expected, and we are doing test work to see longer term benefits such as tire life, maintenance, and fuel savings, which were on top of our expected benefits from AHS of utilization and labor issues. Of course, safety being one of the best things, we have had really no issues on the safety front. It has performed really well. With respect to MineSense was your other question, and we have them on three shovels and, depending on where we are, we usually use two of them. We continue to utilize them. The utilization is a little bit lower than expected, but we're working through the technology issues of making them more robust and so as per expectations. I should also add that, on RACE21 aspect, Highland Valley has been one of the earlier ones out of the gate. With respect to our flotation models and comminution and the grinding circuits, the models that we have created are bearing fruit and performing really well. Highland Valley has delivered significant improvements in expected throughput compared to our geological models and even recoveries as well, so I'm very happy with that. Is there any plan to expand these trials to other operations? Perhaps Andrew or Robin can talk. We do have AHS at Elkview as well right now and Andrew or Robin, if you want to add to that. Robin, why don't you do your version of what Shehzad just did? Yeah, you bet it. It'd pretty much be a repeat. We're pursuing the same technology at the Elkview Mine. We've got about half the truck fleet converted there now, so about the same 21 trucks. We'll have that fully converted by the end of the year. We're seeing very similar safety improvements, maintenance type improvements, tire life, that kind of thing. Very strong technology and it's so far quite successful in coal as well. Thanks very much, everybody. That's it for me. Thank you. Our next question from Emily Chieng, Goldman Sachs, your line is open. Please go ahead. Good morning, everyone. I wanted to pivot back to met coal and just maybe your longer term views on the commodity there. There certainly doesn't seem to be a lot of new greenfield growth for met coal, which certainly is supportive on the supply side. How do you square that off against what's happening in global steel markets longer term, where different regions of the world, China in particular, is perhaps looking at curtailing production or more globally, you're seeing a transition to more EAF capacity? Okay. Réal Foley, why don't you start on that? Yeah, can do that. Thanks for the question, Emily. What we're seeing actually in the short term is record high steel prices, and that is in large part due to recovering demand in all parts of the world, including China, India, and also outside of those regions. There was an announcement this morning, actually, that China is removing the tax rebate on the majority of its steel product exports. That will also support steel production in other countries and will help China to reduce their exports. The exports from China, just to put this in perspective, were 54 million tons last week. Estimates of that announcement, again, it's just as of this morning, it's pretty early, it looks like it could reduce those export by 70%-75%. That's around 40 million tons or so. That compares to record high exports from China that were around 150 million tons a few years ago. There is a bit of a shift in terms of scrap utilization that we're starting to see in China. China's currently using around, it's in the low 20% range in terms of scrap utilization. Overall, EAF production in China is still very low, and given the stage that China is at in terms of scrap generation, a lot of the steel in China is going into construction and infrastructure, which is a longer cycle t o generate significant scrap to support fast increase of EAF. In other countries like India, where the majority of the growth is going forward, story is quite similar. Scrap availability is lower, and then when we look at more developed markets, scrap utilization is probably somewhere around the low 30% to mid 30% utilization. We could see eventually shifting to that kind of level, but that will probably take some time to get there, just in terms of scrap availability. That's really helpful color. Then maybe just one follow-up, if I may. On the copper price environment and positive demand trends that you're seeing for the green metal, and certainly QB2 delivering into that should be a very exciting time. As you think about your longer-term organic portfolio, is there a need to accelerate any of the other growth projects that you have? From a Teck perspective, would you rather see how the copper price environment plays out for a little while longer, enjoy the free cash flow harvest, and then make those decisions? Let me speak to that. We don't need to see the copper price play out any longer. We have confidence in the long-term copper price that the market is going to need those projects. That wouldn't be the limiting factor. The limiting factor is the stage at which each of the projects are at. For example, QB2 is obviously going to be finished next year. Even if we wanted to go ahead with QB3, the earliest we could sanction that is probably beginning of 2026, because we have to finish the pre-feasibility study that's in now, then feasibility, then file for the SEIA and so on. If everything went perfectly, you might be able to do it three to six months faster, but nothing ever does go perfectly. There's going to be a gap between when QB2 starts up next year of probably three full years of very strong free cash flows. Even when QB3 is sanctioned, the first equity capital comes from our partners and end project finance, so Teck wouldn't have to come up with any funding till 2027 or 2028. There's a long stretch there, where there should be very strong cash flows available to return to shareholders. The other projects, Zafranal, the feasibility is finished, but there's a lot of optimization going on. Peru is still locked down. I saw earlier that's likely to stay until September. The earliest anybody who wanted to partner with us there could go visit it is not for several months yet. San Nicolás, we've just finished the pre-feasibility study, which we'll be publishing in due course. We're just working on some final questions. That's one that maybe could be built during the period between QB2 and QB3. We'd probably have a partner build that for us. Again, we wouldn't have to come up with any capital. The market will need the projects, the project themselves have to go through the stage gate process until they're ready to be built. That's really the state of affairs. That's the same worldwide, by the way. You look at all the list of projects, there's about four or five that are already under construction coming on in the next two years. After that, there's a long period when there's quite a gap that's going to open up. Great. That's perfect. Thank you. There was a consultants research report out a couple of days ago calling for a 4.5 million ton gap between supply and demand by 2030. That's 15 QB2s. They're just not around. Thank you. Our next question, Adams Bryce, CIBC Capital Markets. Your line is open. Please go ahead. Good morning. Thanks for the update and taking my questions. Actually, I just have one. It's a follow-up to Orest and related to QB2. With today's update, the project passed 50% completion. Going back to 2020 updates, I recall you were targeting 40% completion by year-end, which ultimately you achieved. My question is, and I know that COVID is a variable, but on your updated project schedule, what percentage of completion are you targeting by 2021 year-end? I don't think we're going to give you a number on that, because it's so dependent on COVID, and we're not through that situation yet. Once we are through it and we can finish the ramp up to peak workforce, then the predictability and the percent per weeks to go back to Greg's question, all that becomes much clearer, and we can give you a better number. What we can say is that we've just had our four best weeks in April. It's going the right direction. We expect the percent completion per week to continue to increase week by week going forward as long as COVID doesn't get in the way. Until we have COVID well and truly behind us, it wouldn't be right for us to be too definitive on those things. We do have a lot of confidence, very high level of confidence that it's going to be finished, as we've always said, in the second half of 2022. Okay. Excluding COVID, if we try to track it publicly and at a very high level, first production is expected second half of next year. We're at or past 50% now. Would it be fair to split the difference and say that to be on track for first production on schedule, that the project needs to be at or about 75% for year-end? Is that a fair reference, or is that misplaced? I think you're trying to get too specific, and we're going to leave the disclosure as it is. Thanks. Okay. Thank you. Thank you. Our next question from Timna Tanners, Bank of America. Your line is open. Please go ahead. Hey. Good morning, guys. I have two follow-ups to the topics we had earlier on met coal and on the satellite projects. On met coal, it's really missing the party in terms of global prices, and the gap you pointed out is really wide. I know you've said you have long-term contracts, but are there any potentials for revisiting those contracts? Do they come due at any point? If this is a long-term situation, is there anything that can happen down the road? I'll ask a follow-up on the copper projects. Thanks. Yeah. We certainly understand why you're asking the question, and it's something that we would conceptually look at here. I think it's too soon to conclude that it's a long-term situation between China and Australia. Even if it was, the fact is, you have to look at the market globally. You can't be totally dependent on one country. We have some really good, strong, important customers that we've had long-term relationships with. What I think you'd more likely see is the current pricing mechanism evolve over time. Right now, we have a bifurcated market with two distinct prices. One's really good. We're very happy with it. Yes, we wish we could sell more tons at the higher price, obviously. I think if the market concludes that the geopolitical situation is long-term, that the pricing mechanism will change, and that will be favorable to us. Some competitors, it won't be as favorable to. All right. That makes a lot of sense. Thank you for that. Then on the projects, the Satellite Project, you just went through and explained that the earliest sanctioning for QB3 would be 2026. Zafranal has done the feasibility and San Nicolás is potentially furthest. Can you just go through and give us earliest production and what are the gaps in the projects, if you could? Because you'd also said that Teck is in a favorable position to start earlier than other companies. I'd just like to understand that timing a little better. Thank you. That's a fairly detailed question. What I'm going to suggest is that What's the best way to handle it? Because there's eight projects, really, and all different timetables because there are different levels of development from pre-feasibility, feasibility, and so on. The permitting in different countries takes a different length of time. I think what we'll probably do is put a package to answer that and get it out to the market generally in some form between now and the next quarterly. Certainly at Investor Day, we'll be going through those plans and details. It would be a very long answer, and it would only generate a whole bunch more questions if we tried to go through the whole list today. No, that's okay. Certainly appreciate the question and in due course, we'll get you a more reasonable answer. Thank you. Thank you. Our next question from Lucas Pipes, B. Riley Securities. Your line is open. Please go ahead. Hey, good morning, everybody. I have questions along the same lines as well. First to turn to China and the met coal market. You noted the decline of 80% of imports in the release. Obviously, the steel market's globally very strong, and I wonder what your perspective is on how China is meeting its demand today, if not with seaborne imports, and then how sustainable you think that situation is longer term. Thank you. Réal, over to you. All right. Thanks, Lucas. What China is doing in the short term is increasing their domestic production. In Q1 2021, their domestic production was up 13 million tons year-over-year. That is on the backdrop of some challenges that the domestic industry has faced in terms of coal mine accidents and following increased safety and environmental inspections. It remains to be seen where it could increase to. Currently, China consultants are expecting that Not steel, sorry. Domestic coal production will be above 500 million tons, a bit above 500 million tons in 2021. That is up somewhere around 15 million tons compared to 2020. As a result of that tight availability, of course, the domestic price in China has increased. It is now sitting around $231 CFR equivalent. The other place where China is getting more coking coal is from Mongolia. During Q1, the imports were up also. They are still down on an annualized basis compared to the record high in 2019. That record high was 34 million tons, and in Q1, the number is annualized at 24 million tons. A lot of it is a result of increasing COVID cases in Mongolia that is putting a damper on the exports. That started from about mid-March and is still ongoing today. Imports from the seaborne market, as you said, are lower given that there is none from Australia now since December of 2020. Overall, seaborne imports for Q1 on an annualized basis are up to above 21 million tons, and that compares to about 13 million tons excluding Australia in 2020. That's kind of where the coal is coming from during the Australian ban. Réal, I really appreciate all this detail. My second question is along the lines of copper, Project Satellite, et cetera. When I think back to a few years back, it seems like some of those projects were potential monetization targets. It sounds very different today, obviously. What I wondered, in terms of strategy going forward, would you be going so far as to be inquisitive on the M&A side when it comes to copper projects specifically, and if so, where would you be looking, and then, given some of the things you mentioned earlier in regards to the outlook for copper, what would be the implications for exploration spending, et cetera? Would really appreciate your perspective on this. Thank you. Okay. There were several questions within that. I'll start with some of them. First, in terms of, you mentioned inquiries or looking at buying. We're not interested in buying anything because we are very rich in resources and technically we have eight projects to work through. That's not to say that our eyes are closed. We're obviously going to keep an open mind. If something comes along that is that much better than everything we've already got, then we'll take a look at it, but we don't expect that to occur. In terms of exploration budget, as we get further along knocking off all these initiatives such as Neptune, Elkview water treatment, Fording River water treatment, and with pricing with copper, zinc where they are, more capital becomes available and I would expect that exploration will share in that. We've been very pleased with the work our exploration team has done over the years. Yes is the answer to that question. In terms of monetization of the assets, I guess I'd make two observations. One is, clearly the assets are worth more today than they were a year ago pre-COVID, and that's just a function of two things. One is the long-term view of copper price or copper demand, which drives price, has shifted from about 2% copper demand growth to three to three and a half. That opens up a big gap, which means that these projects are more valuable based on the long-term price people are using. The mid-caps, that really need their next project, they have a much better access to capital markets, and they can do a bought deal for CAD 500 million of equity and put that to work getting themselves a new project. The number of buyers and the ability of the buyers to pay has increased significantly over the last year. In that context, we will look at the market, but as one of our board members said, "Why would you ever sell a copper project, given the outlook for the world over the next 10 years?" I think the answer is somewhere in between, getting the right balance. We've looked at some of our situations and listened to the inbound calls that we've been receiving. There are some interesting opportunities whereby we could bring on a partner and they build it with their capital and their people, and we're left with half a mine or more for free. If that sneaks in between QB2 and QB3, then that's a pretty good situation. We're looking at those kind of options. What we'll do is, we'll put together a whole package of information on the portfolio. Just back to Timna's question earlier, one of the reasons we can't really answer today is because we just don't know when COVID's going to end, and COVID is the single determining factor as to whether people can even visit a site to decide whether they want to buy something or partner with us or whatever. That's still up in the air, still not possible in some circumstances. That's why it's hard to be too definitive on the dates. Don, I really appreciate this perspective. Thank you very much, and best of luck. Thank you. Thank you. Our next question from Matthew Murphy, Barclays. Your line is open. Please go ahead. Hello. I was wondering if you could share any thoughts you might have on Peru. We've got the leading presidential candidate positioned fairly aggressively against foreign miners. I'm just wondering if you or Antamina management or the Chamber of Mines have had any recent insights into his administration and just anything you can suggest we should think about as this election plays out? Yeah. Clearly, we're all watching it. There's different professional geopolitical commentators that publish reports every day. I read some of them, I'm sure most of the team does. I don't think that there's much additional insight that we can add to that to help you with your question. No one knows the answer and the result. I see that Castillo's been modifying his position somewhat, but in the end, he comes from a vantage point that's fairly far left, and it looks like in the polls, he has a lead. In our case, for our company, it's an important thing to watch. We have two key assets. Antamina, of course, a very important asset. Zafranal, a development asset. It's not that material to our company as it would be to some other companies. In the end, I'm sorry, we're all just going to have to watch and see what happens. Sure. Maybe just as a follow-on on that, it's my understanding that you don't have a tax stabilization agreement in place right now. Can you just remind, if we look just at Antamina, how much CapEx you'd be planning to put into the asset over the next few years? I'll turn that to Jonathan, just saying, because you prompted the issue, we do have one at QB2, which is very important. Jonathan, over to you. Sorry, just getting off mute there. I don't have the outlook for Antamina CapEx to hand, but, if you can get with Fraser after this call, we can just give you whatever relevant disclosures we have on that point. Okay. Thank you. Thank you. Our next question, Brian MacArthur from Raymond James. Your line is open. Please go ahead. Hi. Good morning, Don. Again, mine has to do with Project Satellite. I know you've given lots of answers, and obviously, you've got lots of strategic options. Are we now thinking? Originally, Project Satellite was all monetization. You've talked about a partner building one of your projects. Can I assume that you don't really want to build any of these eight projects? I could argue maybe you should have another production center, or what's your philosophical thinking on that? Given originally you thought you could monetize Project Satellite for CAD 3 billion, or at least that number was originally put out, I don't know if you'd be willing to put out a new potential number you might be able to get out of this. A couple clarifications, that we took these projects that were all very early stage, and what we said is we'd move them through the resource reserve scoping study, pre-feasibility, feasibility, and then decide what best to do with it, whether it was to actually build it, if it made sense as part of Teck's portfolio, or to partner or to contribute into another company, take back shares, ride the cycle, or to sell outright for cash. It was never contemplated that we would monetize all of them, but some were less likely to become part of the Teck portfolio going forward. It was always thought that some of them would be monetized. We set a target of CAD 3 billion of value. In terms of NAV, we have significantly exceeded that for those five projects. We haven't necessarily realized any of it in cash. We do know from just inbound calls and letter proposals and things that we get unasked, that we could clear significantly over CAD 1 billion on a couple of them if we chose to do that. When we say we know, we know we've received offers that say those numbers. It's a long way from getting a letter to actually closing a deal. Significant value has been created by the Project Satellite team. The market has shifted structurally, we think, for some time. COVID's had a big impact on the world, no question about it, and part of that is decarbonization and the associated electrification and long-term demand for copper looks very strong. That causes us to rethink it carefully so that we don't leave value on the table. We've done studies of all our competitors to see what they have coming, a lot of people don't have much in the cupboard in terms of copper resources to develop. If you look at the exploration track record as an industry, the copper industry hasn't done that well overall. There have been some successes, but it's limited. We're looking at it very carefully, and as I said earlier, we will commit to putting out a full update on our copper growth division, if you like. We'll maybe start calling it that. That people can see just what kind of a pipeline we've got. It's pretty exciting, and we've got tremendous resources. We're rich in resources. Great. Thanks. That's very helpful. Just a second question, just for a detail question. For the settlement with the fisheries, I think there were two CAD 30 million payments. Have they been made yet? Are they out of cash flow yet? Just a final thought on your last question. Sure, thanks. We almost know for sure we will be building QB3, right? Right. We just don't know whether it's a direct 50% quick expansion, a doubling, or a tripling, right? Certainly the resources are there to sustain that. You can assume that Teck and our partners, Sumitomo Metal Mining Co will be building and expanding QB over time. On the fisheries, I'll turn that to Peter Rozee. I don't hear Peter Rozee, I'll just say that the two thirties have not been paid yet. I think we have a year to do so. Sorry, getting myself off mute. The answer is we have not paid the Fisheries Act fines yet. They're recorded as a short-term liability at quarter end. Great. Thank you very much. Thank you. There are no further questions registered at this time. I'd like to turn the meeting back over to Don Lindsay. Okay. Well, with that, thank you very much for joining us today. We'll look forward to having the next quarterly call in July, and we'll give you another update on QB2 then. We're very excited to have passed the halfway point, very excited with our progress in the last four weeks. We do see some improvement in the COVID situation in Chile. We certainly hope that continues, and that allows us to ramp back up to peak workforce towards the middle of the year. We're delighted to have Neptune in the full commissioning stage, 18 ships having already been loaded. As I said, I was there on Monday. It's looking terrific, and it's going to be a tremendous long-term asset for our coal business and structurally lower the cost for decades to come and allow us to deliver high-quality metallurgical coal to our customers when they want it, when prices are high. Once again, thank you all. Have a good day. Thank you. The conference has now ended. Please disconnect your lines at this time. 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