Reference: Greg Waller, VP Investor Relations & Strategic Analysis 604.699.4014 Marcia Smith, VP Corporate Affairs 604.699.4616
Teck Resources Limited +1 604 699 4000 Tel Suite 3300, 550 Burrard Street +1 604 699 4750 Fax Vancouver, BC Canada V6C 0B3 www.teck.com
For Immediate Release Date: February 8, 2011 11-06-TR
TECK REPORTS UNAUDITED RESULTS FOR 2010
Vancouver, BC – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) announced adjusted earnings of $1.5 billion, or $2.62 per share for 2010, up 36% from $1.1 billion in 2009. Fourth quarter adjusted earnings increased 76% to $548 million or $0.93 per share compared to $312 million in 2009. EBITDA was $4.3 billion for the year and $1.0 billion in the fourth quarter.
Don Lindsay, President and CEO said, "2010 was a strong year. We are reporting record revenues, record annual operating profits and an increase in both copper and coal production. There is further growth ahead of us as each of Teck Coal, Andacollo, Antamina and Highland Valley Copper increase production. Our balance sheet was significantly strengthened as a result of a further $3.1 billion reduction in our debt and through our refinancing we significantly reduced our interest costs.”
Highlights and Significant Items
- We recorded record annual and record quarterly revenues of $9.3 billion and $2.8 billion, respectively. Operating profit for the year was a record $3.6 billion and cash flow from operating activities was $2.7 billion.
- Operating profit, before depreciation, for the year was $4.5 billion compared with $3.7 billion last year. Operating profit in the fourth quarter, before depreciation, was $1.4 billion compared with $1.0 billion in 2009.
- EBITDA was $4.3 billion for the year and $1.0 billion in the fourth quarter.
- Net earnings for the year were $1.9 billion compared with $1.8 billion a year ago. Net earnings in the fourth quarter were $361 million after refinancing charges compared with $411 million in 2009.
- In November we declared a 50% increase in our semi-annual dividend on our Class A common and Class B subordinate voting shares to $0.30 per share, which was paid on January 4, 2011.
All dollar amounts expressed in this news release are in Canadian dollars unless otherwise noted.
Reference: Greg Waller, VP Investor Relations & Strategic Analysis 604.699.4014
Marcia Smith, VP Corporate Affairs 604.699.4616
Additional corporate information is available at www.teck.com
- During the year our outstanding debt was reduced by $3.1 billion, which will result in annual interest savings of $225 million.
- Teck Copper:
- our copper production in 2010 rose to 313,000 tonnes from 308,000 tonnes in 2009,
- we achieved commercial production at Carmen de Andacollo’s copper concentrator in October, marking the completion of project development, commissioning and operational ramp-up of the new facility. The concentrator produced 20,700 tonnes of copper in the ramp-up period from February to September, and contributed 14,100 tonnes to our copper production in the fourth quarter of 2010, and
- we commenced a feasibility study by a major international engineering company for Quebrada Blanca Phase 2, the development of a copper concentrator at this mine, with a provisional annual production capacity of 200,000 tonnes of copper.
- Teck Coal:
- our coal production in 2010 rose 22% to 23.1 million tonnes compared to 2009,
- we entered into a 10-year agreement with Canadian Pacific Railway Limited (“CP”) to transport coal from our five mines in southeast British Columbia to Vancouver area ports. The commercial terms of the agreement are confidential, but include commitments by CP to provide capacity necessary for us to realize our coal growth strategy and to deliver increased production on a timely basis to our key markets,
- we obtained agreement on prices with the majority of our coal customers for the first quarter of 2011 with pricing at or above US$225 per tonne for our highest quality products. We expect our weighted average selling prices for coal in the first quarter of 2011 to be in the range of US$206 to US$211 per tonne, and
- we announced that first quarter coal sales are expected to be in the range of 5.0 to 5.5 million tonnes and planned sales for calendar 2011 to be in the range of 24.5 to 25.5 million tonnes assuming no interruption in production due to labour disturbances and expected levels of service from our rail and port service providers. On January 31, the unionized workers at the Elkview mine went on strike. We do not expect that the strike will affect our guidance for the first quarter as product inventory levels at the minesites should be sufficient to meet that target, but it is likely to affect guidance for the full year.
- Teck Zinc:
- Red Dog commenced mining the Aqqaluk deposit, completed a successful shipping season and recorded an operating profit before depreciation,
2 Teck Resources Limited 2010 Fourth Quarter News Release amortization and price adjustments of $548 million in 2010 (compared with $402 million in 2009).
- Teck Energy:
- In December, Suncor announced an updated development schedule, subject to partner approval, for the Fort Hills oil sands projects (Teck 20%). Based on that schedule, bitumen production from the first phase of the project is expected to commence in 2016.
3 Teck Resources Limited 2010 Fourth Quarter News Release
This news release is dated as at February 8, 2011. Unless the context otherwise dictates, a reference to “Teck,” “the company,” “us,” “we,” or “our” refers to Teck and its subsidiaries. Additional information, including our annual information form and management’s discussion and analysis for the year ended December 31, 2009, is available on SEDAR at www.sedar.com.
This document contains forward-looking statements. Please refer to the cautionary language under the heading “CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION” below.
Earnings, Adjusted Earnings and Comparative Earnings*
Adjusted earnings, which exclude the effect of certain transactions described in the table below, were $548 million, or $0.93 per share, in the fourth quarter of 2010 compared with $312 million, or $0.53 per share last year. The higher adjusted earnings were primarily due to significantly higher coal and copper prices and increased coal sales volumes. Earnings attributable to our shareholders were $361 million, or $0.61 per share, in the fourth quarter compared with $411 million or $0.70 per share in the same period last year. Our fourth quarter earnings included a $289 million after-tax charge related to the refinancing of a portion of our debt.
Three months ended Year ended December 31 December 31
| ($ in millions) | 2010 | 2009 | 2010 | 2009 |
| Earnings attributable to shareholders as reported (note 1) Add (deduct): Asset and investment sale gains Foreign exchange gains on net debt Derivative (gains) losses Refinancing costs Asset impairment included in equity losses Asset impairment Tax items Loss (earnings) from discontinued operations Adjusted earnings Pricing adjustments (note 2) Comparative net earnings | $ 411 (137) (35) (4) 4 48 20 - 5 | $ 1,831 (320) (561) 36 117 119 20 (30) (81) | ||
| $ 361 | $ 1,860 | |||
| (2) | (768) | |||
| (25) | (65) | |||
| (86) | (153) | |||
| 289 | 658 | |||
| - | - | |||
| - | - | |||
| 11 | 11 | |||
| - | - | |||
| 548 | 312 (58) | 1,543 | 1,131 (207) | |
| (38) | (53) | |||
| $ 254 | $ 924 | |||
| $ 510 | $ 1,490 |
(1) Earnings attributable to shareholders are earning less minority interests in earnings.
(2) See FINANCIAL INSTRUMENTS AND DERIVATIVES section for further information.
Our EBITDA was $1.0 billion for the quarter and $4.3 billion for the year. After adjusting for the amounts disclosed in the table above, adjusted EBTIDA was $1.2 billion for the quarter and $4.0 billion for the year.
- Our financial results are prepared in accordance with Canadian GAAP (“GAAP”). This news release refers to adjusted net earnings, comparative net earnings, EBITDA, operating profit and operating profit before depreciation and pricing adjustments, which are not measures recognized under GAAP in Canada or the United States and do not have a standardized meaning prescribed by GAAP. For adjusted net earnings and comparative net earnings, we adjust earnings attributable to shareholders as reported to remove the effect of certain kinds of transactions in these measures. EBITDA is earnings attributable to shareholders before interest and financing expenses, income taxes, depreciation and amortization. Operating profit is revenues less operating expenses and depreciation and amortization. Operating profit before depreciation and pricing adjustments is operating profit with depreciation, amortization and pricing adjustments added or deducted as appropriate. Pricing adjustments are described under the heading “Average Prices and Exchange Rates” below. These measures may differ from those used by, and may not be comparable to such measures as reported by, other issuers. We disclose these measures, which have been derived from our financial statements and applied on a consistent basis, because we believe they are of assistance in understanding the results of our operations and financial position and are meant to provide further information about our financial results to investors.
4 Teck Resources Limited 2010 Fourth Quarter News Release Our business unit results are presented in the tables below.
Three months ended December 31 Operating profit before depreciation and
($ in millions) Revenues pricing adjustments Operating profit
| 2010 | 2009 | 2010 | 2009 2010 | 2009 | ||||
| 2010 | 2010 | 2010 | ||||||
| Copper Coal Zinc | $ 664 810 693 | $ 368 $ 456 372 544 205 204 | $ 363 219 195 | |||||
| $ 852 | $ 453 | |||||||
| 1,215 | 679 | |||||||
| 742 | 242 | |||||||
| Total | $ 2,809 | $ 2,167 | $ 1,374 | $ 945 $ 1,204 | $ 777 |
Year ended December 31 Operating profit before depreciation and
($ in millions) Revenues pricing adjustments Operating profit
| 2010 | 2009 | 2010 | 2009 2010 | 2009 | ||||
| 2010 | 2010 | 2010 | ||||||
| Copper Coal Zinc | $ 2,161 3,507 2,006 | $ 1,031 $ 1,289 1,795 1,690 511 576 | $ 1,002 1,278 454 | |||||
| $ 2,610 | $ 1,470 | |||||||
| 4,351 | 2,248 | |||||||
| 2,378 | 691 | |||||||
| Total | $ 9,339 | $ 7,674 | $ 4,409 | $ 3,337 $ 3,555 | $ 2,734 |
Revenues
Revenues from operations were a record $2.8 billion in the fourth quarter compared with $2.2 billion a year ago. Revenues from our copper business unit increased by $188 million, primarily as a result of copper prices averaging 30% higher than the same period a year ago. Coal revenues rose by $405 million to $1.2 billion in the fourth quarter, which reflected significantly higher coal prices and an 11% increase in sales volumes. Revenues from our zinc business unit in the fourth quarter increased by $49 million compared with a year ago as a result of slightly higher zinc sales volumes and additional silver by-product revenues. The effect of the weaker US dollar partly offset the impact of higher commodity prices in each of our business units.
Copper Business Unit
Operating profit from our copper business unit was $456 million in the fourth quarter compared with $363 million in 2009. Copper prices rose strongly in the quarter and closed the year at US$4.40 per pound. As a result of the rising copper prices, pre-tax positive price adjustments were $75 million in the fourth quarter compared with $62 million in 2009. Operating profit, before depreciation and pricing adjustments, was $453 million in the fourth quarter compared with $368 million a year ago primarily as a result of the significantly higher average copper prices. Carmen de Andacollo achieved commercial production from its new copper concentrate plant on October 1, and for the year contributed a total of 34,800 tonnes of copper, consisting of 20,700 tonnes produced in the pre-commercial start-up phase and 14,100 tonnes of new copper production in the fourth quarter. This additional new production was partially offset by lower production from Highland Valley Copper due to lower ore grades.
5 Teck Resources Limited 2010 Fourth Quarter News Release
Coal Business Unit
Operating profit from our coal business unit was $544 million in the fourth quarter compared with $219 million last year primarily due to significantly higher coal prices and increased sales volumes. This was partially offset by the effect of a weaker US dollar and higher operating expenses. Coal prices averaged US$200 (C$204) per tonne in the quarter compared with US$139 (C$151) per tonne in the same period a year ago. Demand from our customers was strong during the fourth quarter and sales volumes increased by 11% compared with the fourth quarter of 2009, reflecting our expanded production levels. However, sales in the quarter were lower than expected due to extremely cold weather during the month of November, which disrupted coal handling at the Vancouver ports as well as at our Greenhills mine. Unit cost of product sold, before transportation and depreciation charges, was $54 per tonne compared with $52 per tonne in the same quarter a year ago due primarily to higher strip ratios, increased diesel costs, and higher external contractor costs for initiatives undertaken to maximize production. Transportation costs were also higher due to a customer sales mix that included a higher proportion of sales inclusive of ocean freight. In addition, rail surcharges increased due to higher diesel prices and rail detention charges as a result of the coal handling problems in November.
Zinc Business Unit
Operating profit from our zinc business unit was $204 million in the fourth quarter, similar to $195 million in the same period a year ago. We recorded positive price adjustments of $12 million at Red Dog in the fourth quarter compared with positive pricing adjustments of $28 million in the same period a year ago. Operating profit, before depreciation and pricing adjustments, was $242 million in the fourth quarter compared with $205 million a year ago. Slightly higher zinc sales volumes and increased silver by-product revenues were partially offset by a planned 32-day maintenance shutdown of Trail’s Kivcet lead smelter and a $7 million reduction in surplus power profits as a result of the sale of a one-third interest in the Waneta Dam in the first quarter of 2010. The Kivcet shutdown was completed on time and on budget, incurring repair and maintenance costs of $23 million and capital expenditures of $21 million.
Average Prices and Exchange Rates*
Three months ended Year ended December 31 December 31 2010 2009 % Change 2010 2009 % Change
| Copper(LME Cash - US$/pound) | 3.92 | 3.01 | +30% | 3.42 | 2.34 | +46% |
| Coal(realized - US$/tonne) | 200 | 139 | +44% | 181 | 157 | +15% |
| Zinc(LME Cash - US$/pound) | 1.05 | 1.00 | +5% | 0.98 | 0.75 | +31% |
| Silver(LME PM fix – US$/ounce) | 27 | 18 | +50% | 20 | 15 | +33% |
| Molybdenum(published price - US$/pound) | 16 | 12 | +33% | 16 | 11 | +45% |
| Lead(LME Cash - US$/pound) | 1.08 | 1.04 | +4% | 0.97 | 0.78 | +24% |
| Cdn/U.S. exchange rate(Bank of Canada) | 1.01 | 1.06 | -5% | 1.03 | 1.14 | -10% |
- Except for coal prices, the average commodity prices disclosed above are based on published benchmark prices and are provided for information only. Our actual revenues are determined using commodity prices and other terms and conditions specified in our various sales contracts with our customers. The molybdenum price is the price published in Platts Metals Week.
6 Teck Resources Limited 2010 Fourth Quarter News Release Sales of metals in concentrate are recognized in revenue on a provisional pricing basis when title transfers and the rights and obligations of ownership pass to the customer, which usually occurs upon shipment. However, final pricing is typically not determined until a subsequent date, usually in the following quarter. Accordingly, revenue in a quarter is based on actual prices for sales settled in the quarter and ongoing pricing adjustments from sales that are still subject to final pricing. These pricing adjustments result in additional revenues in a rising price environment and reductions to revenue in a declining price environment. The extent of the pricing adjustments also takes into account the actual price participation terms as provided in certain concentrate sales agreements. In the fourth quarter of 2010, we had positive pricing adjustments of $64 million ($38 million after non-controlling interests and taxes) compared with $90 million ($58 million after non-controlling interests and taxes) in the fourth quarter last year. This amount consists of $37 million ($23 million after-tax) on sales from the previous quarter and $27 million ($15 million after-tax) on sales that were initially recorded at the average price for the month of shipment and subsequently revalued at quarter end forward prices.
The table below outlines our outstanding concentrate receivable positions, which were provisionally valued at September 30, 2010, the pounds of metal included in the September 30 receivables and settled in the fourth quarter, and our receivable positions provisionally valued at December 31, 2010.
| Outstanding at | Settled during | Outstanding at | |||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, 2010 | the fourth quarter | December 31, 2010 | |||||||
| (pounds in millions) | Pounds | US$/lb | Pounds | US$/lb | Pounds | US$/lb | |||
| Copper | 93 | 3.65 | 81 | 3.90 | 98 | 4.39 | |||
| Zinc | 145 | 0.99 | 136 | 1.06 | 140 | 1.11 | |||
| Lead | 72 | 0.92 | 72 | 1.08 | 2 | 1.17 |
Cash Flow from Operations
Cash flow from operations, before changes in non-cash working capital items, was $900 million in the fourth quarter compared with $673 million a year ago. The increase in cash flow from a year ago was due to strong operating cash flow from our copper and coal business units, as a result of significantly higher copper and coal prices.
Changes in non-cash working capital items provided a source of cash of $59 million in the fourth quarter compared with $24 million in the same period a year ago. During the fourth quarter of 2010, we sold a portion of our coal receivables, which reduced our working capital by approximately $150 million at the end of the year.
7 Teck Resources Limited 2010 Fourth Quarter News Release The table below shows our share of production and sales of our major commodities.
| Units (000's) Production | Sales | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fourth Quarter Year-to-date 2010 2009 2010 2009 Principal products Copper (notes 1 & 2) Contained in concentrate tonnes 60 53 216 203 Cathode tonnes 25 26 97 105 85 79 313 308 Coal tonnes 6,028 5,354 23,109 18,930 Zinc Contained in concentrate tonnes 153 189 645 711 Refined tonnes 70 66 278 240 Other products Lead Contained in concentrate tonnes 17 36 110 132 Refined tonnes 13 16 72 73 Molybdenum Contained in concentrate pounds 2,665 2,204 8,557 7,798 | Fourth Quarter Year-to-date | |||||||||||
| 2010 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||||
| 2010 | 2010 | 2010 | 2010 | |||||||||
| Principal products Copper (notes 1 & 2) Contained in concentrate tonnes Cathode tonnes Coal tonnes Zinc Contained in concentrate tonnes Refined tonnes Other products Lead Contained in concentrate tonnes Refined tonnes Molybdenum Contained in concentrate pounds | 203 105 | 50 27 | 205 100 | |||||||||
| 60 | 216 | 55 | 209 | |||||||||
| 25 | 97 | 26 | 101 | |||||||||
| 85 | 79 | 313 | 308 | 81 | 77 | 310 | 305 | |||||
| 85 | 313 | 81 | 310 | |||||||||
| 5,354 189 66 36 16 2,204 | 18,930 711 240 132 73 7,798 | 5,368 242 64 46 17 2,261 | 19,767 681 243 119 73 7,979 | |||||||||
| 6,028 | 23,109 | 5,950 | 23,167 | |||||||||
| 6,028 | 3,109 | 5,950 | 3,167 | |||||||||
| 153 | 645 | 241 | 696 | |||||||||
| 70 | 278 | 68 | 274 | |||||||||
| 70 | 278 | 68 | 274 | |||||||||
| 17 | 110 | 41 | 130 | |||||||||
| 13 | 72 | 13 | 70 | |||||||||
| 13 | 72 | 13 | 70 | |||||||||
| 2,665 | 8,557 | 2,264 | 8,060 | |||||||||
| 8,557 | 8,060 |
(1) We include 100% of production and sales from our Highland Valley Copper, Quebrada Blanca and Carmen de Andacollo mines in our production and sales volumes, even though we own 97.5%, 76.5% and 90%, respectively, of these operations, because we fully consolidate their results in our financial statements. We include 22.5% of production and sales from Antamina, representing our proportionate equity interest in Antamina.
(2) Includes pre-commercial production and sales volumes from Carmen de Andacollo prior to September 30, 2010. Production of copper contained in concentrate during the pre-commercial start-up period was 20,700 tonnes. Pre-commercial sales volumes of copper contained in concentrate were 16,600 tonnes. The proceeds from these sales were not recognized in revenue, but were netted against capital costs, less related production costs.
8 Teck Resources Limited 2010 Fourth Quarter News Release
QUARTER ENDED DECEMBER 31
Our revenue, operating profit before depreciation and pricing adjustments and operating profit by business unit for the quarter ended December 31 are summarized in the table below:
amortization and Operating profit ($ in millions) Revenues pricing adjustments (note 1)
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||
| 2010 | |||||||||
| Copper Highland Valley Copper Antamina Quebrada Blanca Carmen de Andacollo Duck Pond | $ 239 204 166 30 25 | $ 124 127 97 10 10 | $ 138 149 66 1 9 | ||||||
| $ 249 | $ 126 | $ 144 | |||||||
| 198 | 130 | 149 | |||||||
| 196 | 108 | 73 | |||||||
| 166 | 66 | 70 | |||||||
| 43 | 23 | 20 | |||||||
| Coal (note 2) Zinc Red Dog Trail Other Inter-segment sales | 852 | 664 810 434 319 11 (71) | 453 | 368 372 196 16 3 (10) | 456 | 363 219 200 3 2 (10) | |||
| 852 | 453 | 456 | |||||||
| 1,215 | 679 | 544 | |||||||
| 679 | |||||||||
| 450 | 215 | 212 | |||||||
| 356 | 31 | 19 | |||||||
| 13 | 2 | 2 | |||||||
| (77) | (6) | (29) | |||||||
| 742 | 693 | 242 | 205 | 204 | 195 | ||||
| 742 | 242 | 204 | |||||||
| TOTAL | $ 2,167 | $ 945 | $ 777 | ||||||
| $ 2,809 | $ 1,374 | $ 1,204 |
9 Teck Resources Limited 2010 Fourth Quarter News Release
TWELVE MONTHS ENDED DECEMBER 31
Our revenue, operating profit before depreciation and pricing adjustments and operating profit by business unit are summarized in the table below:
amortization and pricing Operating profit ($ in millions) Revenues adjustments (note 1)
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||
| Copper Highland Valley Copper Antamina Quebrada Blanca Carmen de Andacollo Duck Pond | $ 838 634 484 101 104 | $ 338 353 259 46 35 | $ 408 427 135 5 27 | ||||||
| $ 872 | $ 480 | $ 442 | |||||||
| 674 | 435 | 443 | |||||||
| 697 | 406 | 285 | |||||||
| 228 | 91 | 79 | |||||||
| 139 | 58 | 40 | |||||||
| Coal (note 2) Zinc Red Dog Trail Other Inter-segment sales | 2,610 | 2,161 3,507 986 1,190 50 (220) | 1,470 | 1,031 1,795 402 122 6 (19) | 1,289 | 1,002 1,278 399 70 4 (19) | |||
| 2,610 | 1,470 | 1,289 | |||||||
| 4,351 | 2,248 | 1,690 | |||||||
| 1,121 | 548 | 505 | |||||||
| 1,447 | 134 | 85 | |||||||
| 40 | 7 | 7 | |||||||
| (230) | 2 | (21) | |||||||
| 2,378 | 2,006 | 691 | 511 | 576 | 454 | ||||
| 2,378 | 691 | ||||||||
| TOTAL | $ 7,674 | $ 3,337 | $ 2,734 | ||||||
| $ 9,339 | $ 4,409 | $ 3,555 |
10 Teck Resources Limited 2010 Fourth Quarter News Release
COPPER
Highland Valley Copper (97.5%)
Operating results at the 100% level are summarized in the following table:
Three months ended Year ended December 31 December 31
| 2010 | 2009 | 2010 | 2009 | |||
| 2010 | 2010 | |||||
| Tonnes milled (000's) Copper Grade (%) Recovery (%) Production (000's tonnes) Sales (000's tonnes) Molybdenum Production (million pounds) Sales (million pounds) Cost of sales ($ millions) Operating costs Distribution costs Depreciation and amortization Operating profit summary ($ millions) Before depreciation, amortization and price adjustments Price adjustments – positive (negative) Depreciation and amortization | 10,243 0.34 89.2 30.6 28.6 2.1 2.1 $ 79 $ 8 $ 14 $ 124 28 (14) | 42,888 0.32 87.1 118.2 118.2 6.6 6.6 $ 334 $ 31 $ 65 $ 338 135 (65) | ||||
| 11,112 | 42,488 | |||||
| 11,112 | 42,488 | |||||
| 0.25 | 0.27 | |||||
| 84.5 | 86.3 | |||||
| 23.9 | 98.5 | |||||
| 23.0 | 97.8 | |||||
| 23.0 | 97.8 | |||||
| 2.0 | 6.9 | |||||
| 1.8 | 6.7 | |||||
| 1.8 | 6.7 | |||||
| $ 86 | $ 315 | |||||
| $ 9 | $ 33 | |||||
| $ 10 | $ 82 | |||||
| $ 10 | $ 82 | |||||
| $ 126 | $ 480 | |||||
| 28 | 44 | |||||
| (10) | (82) | |||||
| After depreciation, amortization and price adjustments | $ 144 | $ 138 | $ 442 | $ 408 |
Highland Valley Copper’s fourth quarter operating profit, before depreciation and pricing adjustments of $126 million was similar to last year. Copper sales volumes in the fourth quarter were 20% lower than the same period a year ago, as a result of lower production levels as further described below. The lower copper sales were partially offset by significantly higher copper prices in the period compared with the fourth quarter of 2009.
Copper production of 23,900 tonnes was 22% lower than the same period last year primarily due to geotechnical constraints in the Valley pit and lower grade ore sources available. Highland Valley Copper is continuing to execute push backs of both the east and west walls of the Valley pit to access additional ore sources. The east wall stabilization project will be completed in 2011 at an estimated capital cost of $48 million. This includes amounts for remaining waste stripping of the weak clay layers, placement of a stabilization buttress and completion of a comprehensive dewatering system.
11 Teck Resources Limited 2010 Fourth Quarter News Release A new life of mine plan was developed, incorporating a major pushback and extension of the Lornex pit and an extension of the lower grade Highmont pit. The new plan adds approximately 200 million tonnes of ore reserves and five years to the production plan. The expected mine life of Highland Valley now extends into 2025, assuming additional permit amendments are approved. Lornex has slightly lower copper grades than the remaining reserves in the Valley pit, and is anticipated to provide 30% of the feed to the mill after pre-stripping is complete in 2013. Overall annual production is expected to range from 90,000 tonnes to 135,000 tonnes of contained copper for an average of 115,000 tonnes a year during the remaining mine life, driven primarily by the available grades of copper ore. Further engineering studies have commenced to consider possible recovery and throughput improvements in the mill through modernization, debottlenecking and other enhancements.
Highland Valley’s copper production in 2011 is anticipated to be similar to 2010. Molybdenum production is expected to increase to 9 million pounds as a result of higher grades in the feed to the mill.
12 Teck Resources Limited 2010 Fourth Quarter News Release