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DATE

  • Thursday, July 24, 2025, at 11 a.m. EDT

CALL PARTICIPANTS

  • Chief Executive Officer — Jonathan Price
  • Chief Financial Officer — Crystal Prystai
  • Senior Vice President, Base Metals — Shehzad Bharmal
  • Vice President, Projects — Ian Anderson

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RISKS

  • Teck lowered its QB (Quebrada Blanca) annual copper production guidance to 210,000 to 230,000 tonnes for 2025, citing ongoing TMF (tailings management facility) development issues and potential external delays, with online time affected in Q2 2025 and full completion dependent on successful remedial actions by year-end.
  • The ship loader outage at QB’s port facility, announced June 2, is expected to extend into the first half of 2026, forcing the company to rely on alternative shipping arrangements resulting in an incremental impact on net cash unit cost, expected to be approximately $0.10 per pound.
  • CFO Prystai highlighted a 21% reduction in corporate overhead as a positive in Q2 2025, but noted this was partially offset by lower copper and zinc prices, as well as higher operating costs at Highland Valley and QB.
  • CEO Price acknowledged a fatality at the Antamina mine, noting the event led to a one-week site shutdown in the quarter and lower production from that operation.

TAKEAWAYS

  • Adjusted EBITDA: $722 million of adjusted EBITDA in Q2 2025, up 3% year-over-year, driven by increased profitability at Trail operations, lower smelter processing charges, and reduced corporate overhead, partially offset by lower copper and zinc prices and higher operating costs.
  • Copper Production Guidance: Revised to 470,000–525,000 tonnes for 2025, reflecting a lower outlook for QB due to TMF challenges, while all other operations maintain previous guidance.
  • Copper Segment Gross Profit: $673 million before depreciation and amortization in Q2 2025, down 3% year-over-year, due to lower prices and higher costs, partially offset by co-product and byproduct revenues.
  • Copper Net Cash Unit Cost: Net cash unit cost improved by $0.14 to $2.00 per pound in Q2 2025, driven by higher byproduct credits from zinc and molybdenum, despite cost increases at QB and Highland Valley.
  • QB TMF Remediation Impact: Incremental net cash unit cost is expected to be approximately $0.10 per pound, with remediation work targeted for completion by year-end.
  • Shareholder Returns: $487 million returned via buybacks in Q2 2025 (9.8 million shares); $1.1 billion returned year-to-date via dividends and buybacks; 70% of the $3.25 billion buyback authorization completed ($2.2 billion) as of Q2 2025.
  • Highland Valley Copper Mine Life Extension (MLE) Project: Sanctioned by the board for construction, extending mine life to 2046 with expected average annual copper production of 132,000 tonnes; updated capital estimate is CAD2.1 billion–CAD2.4 billion (raised from a prior CAD1.8 billion–CAD2 billion estimate) due to contingencies, inflation, and accelerated procurement, as announced with the sanction of the Highland Valley Copper mine life extension project.
  • Liquidity: $8.9 billion in liquidity, including $4.8 billion in cash on hand as of July 23, 2025; company maintains investment-grade credit rating and has reduced debt by $2 billion since 2024.
  • Zinc Segment Performance: Gross profit before depreciation and amortization increased 137% year-over-year to $159 million in Q2 2025, primarily due to higher byproduct revenues and lower operating costs; Red Dog sales were 35,100 tonnes in Q2 2025, exceeding the guidance range.
  • Zinc Net Cash Unit Cost: Decreased by $0.20 to $0.49 per pound in Q2 2025, mainly due to lower smelter charges and higher byproduct credits; annual production and cost guidance unchanged.
  • Sustainability and Safety: High-potential incident frequency rate for controlled operations was 0.09 in the first half of 2025, below the 2024 performance of 0.12; recognized for the nineteenth consecutive year as a "Best 50 Corporate Citizen" in Canada by Corporate Knights in 2025.
  • Labor Agreements: All collective bargaining agreements at QB now concluded, securing coverage through 2028; Carmen de Andacollo agreements finalized in June and July with three-year terms.
  • Growth Projects Progress: Sanction readiness targeted by year-end for both Zafranal (Peru) and San Nicolas (Mexico) copper projects; Zafranal is more advanced in permitting and construction readiness.
  • QB Optimization Potential: Mill optimization and debottlenecking could increase throughput by 15%-25%, according to company statements; planning underway with DIR permit application expected in the second half of the year.
  • Copper Production Per Share: There is potential for a further 33%-50% increase in copper production per share by 2026 as QB stabilizes and share buybacks continue.

SUMMARY

Teck Resources (TECK -6.04%) reported a year-over-year increase in adjusted EBITDA for Q2 2025 and highlighted a robust capital return program, with approximately 70% of its authorized share buyback executed as of Q2 2025. The company sanctioned the Highland Valley Copper mine life extension project, raising its capital estimate to CAD2.1 billion–CAD2.4 billion to account for inflation, contingencies, and accelerated equipment procurement, and described this investment as foundational for its ambition to double copper production by decade’s end. Management addressed operational setbacks at QB, reducing copper production guidance for 2025 due to TMF issues and forecasting incremental unit costs of approximately $0.10 per pound due to alternate shipping logistics after a ship loader outage in Q2 2025, while asserting these constraints should be resolved by year-end. The company’s zinc segment delivered substantial profit growth in Q2 2025, and management emphasized disciplined cost management, resilient balance sheet strength, and maintained investment-grade credit status. Strategic project advances were noted across the portfolio, with Zafranal and San Nicolas targeted for sanction readiness and all major labor agreements now secured through multi-year terms.

  • CEO Price stated, The project extends the core assets to 2046, with average annual copper production of 132,000 tonnes over the life of the mine.
  • Ship loader repairs at the QB port are ongoing as of Q2 2025, with capital cost estimates pending full damage assessment, and insurance recovery is being pursued, according to Anderson: we do have insurance coverage, and that includes interruption.
  • The planned transition to steady-state operations at QB will mark a one-time milestone following completion of TMF work, after which long-term production is expected to stabilize, with the company targeting design rates by the end of 2025. “showcase [QB] as a tier-one asset.”
  • CFO Prystai reported, “We have now completed $2.2 billion or approximately 70% of our $3.25 billion authorized buyback, leaving approximately $1 billion remaining.”
  • Growth project sanctioning approaches for Zafranal and San Nicolas were framed as optionality, with sequencing yet to be determined and each subject to final investment decisions.

INDUSTRY GLOSSARY

  • TMF (Tailings Management Facility): An engineered structure for storing the byproducts (tailings) of mining operations, critical for operational continuity and environmental compliance.
  • QB (Quebrada Blanca): Teck Resources Limited’s large-scale copper mining complex in Chile, subject to ongoing expansion and operational ramp-up.
  • MLE (Mine Life Extension): A capital project that extends the operational life of an existing mine through new development and infrastructure.
  • DIR (Declaración de Impacto Ambiental): The environmental impact statement submission required for permitting new or expanded mining activities in certain jurisdictions.

Full Conference Call Transcript

Jonathan Price: Okay. Thank you, Emma, and good morning, everyone. Now before we get into the quarter, I would like to take a moment to acknowledge the incident earlier on Tuesday at one of our peers' operations in the Northwest of our home province of British Columbia. Our thoughts are with the three workers that remain in the underground work area as well as their families, friends, and colleagues, and the emergency response teams. And we hope for their safe and speedy rescue. So turning to our second quarter 2025 results, starting with highlights on Slide four. Overall, we are advancing our strategy of copper growth, while returning cash to shareholders.

Our profitability improved compared to the same period last year, to $722 million of adjusted EBITDA. We had strong performance in our zinc segment, with Red Dog sales above our guidance range and a significant improvement in our zinc net cash unit costs. As well as another quarter of profitability and cash generation at Trail. Across our established operations, production is on track to meet our annual guidance. At QB, we had previously noted that we would be at the lower end of our guidance of around 230,000 tonnes for the year.

Whilst the team is working hard to achieve this, we acknowledge that there could be risk from possible external factors or, of course, any delay from the TMS development work. As a result, we've revised our outlook for QB to 210,000 to 230,000 tonnes for the year but continue to target design rates by year-end. Earlier today, we announced that the board has sanctioned the Highland Valley Copper mine life extension project in British Columbia for construction. This is foundational to our strategy to double copper production by the end of the decade. Given the strong demand for copper as an energy transition metal, the project will generate compelling returns.

With an IRR far surpassing our cost of capital and secure access to this critical mineral for the next two decades. The project extends the core assets to 2046, with average annual copper production of 132,000 tonnes over the life of the mine. We are continuing to return significant cash to shareholders, with elevated daily share buying levels in the quarter resulting in a total of $487 million or 9.8 million Class B shares. Year to date, we have returned a total of $1.1 billion to our shareholders through dividends and share buybacks and we have completed approximately 70% of our authorized $3.25 billion buyback which is the equivalent of $2.2 billion.

Finally, we are maintaining the resilience of the business. Including through our strong balance sheet which enables us to navigate uncertainty and continue to create value. We currently have $8.9 billion in liquidity, including $4.8 billion in cash. Turning to slide five. We continue to be committed to safety and sustainability. Across the operations that we control, our high potential incident frequency rate remained low in the first half of the year at 0.09 below our 2024 performance of 0.12. I would like to take a moment to acknowledge the fatality that occurred on April 22 at Antamina in which Teck Resources Limited holds a non-controlling interest.

We are deeply saddened by this event and offer our condolences to the family, friends, and colleagues of the deceased. Teck Resources Limited fully participated in the investigation, which was led by the team at Antamina, and learnings will be shared across our company and across the sector. We were honored to be named as one of Corporate Knights' 2025 Best 50 Corporate Citizens in Canada. It's the nineteenth consecutive year that we've received this recognition, which is based on an evaluation of up to 25 sustainability indicators including board diversity, resource efficiency, financial management, sustainable revenue, and sustainable investment. So now turning to QB on slide six. QB's second quarter performance was impacted by the ongoing TMF development work.

We're advancing multiple TMF development initiatives to improve sand drainage rates and accelerate mechanical movements of sand to achieve steady-state operation. This work impacted mill online time in the quarter as previously disclosed. The planned post-QB2 construction pace of TMF development was based on design assumptions for sand drainage rates that have subsequently proven unachievable. Modifications to cyclones alone, while showing an improvement in sand drainage rates, were not sufficient to allow us to fully catch up on TMF development work in the quarter. As a result, we are implementing a range of additional measures to improve sand drainage rates and accelerate the mechanical movements of sand. Including enhanced sand placement techniques and optimization of the grind size concentrator.

Importantly, the TMF development work and the transition from starter dam to regular ongoing sound lifts is a one-time milestone. Related to the ramp-up of the operation. When it is completed, the TMS development work will be behind us for the life of the facility. While the TMS development work will continue in Q3, we continue to target design rates. By the end of the year. Throughput increased from the prior quarter, and we expect to see consistent grades of approximately 0.61% in the second half of the year. Work is ongoing to improve recoveries by year-end, which will also be helped by more consistent mill run time.

The outage of the ship loader at QB's port facility announced on June 2 is expected to be extended into the first half of 2026. We have been successfully shipping concentrate through our alternative port arrangements and have maximized shipments to local customers so there has been no production impact. Alternative sales logistics have had some incremental impact on our net cash unit costs, which is expected to be approximately $0.10 per pound. We had a good step up in the molybdenum production as a result of some key process improvement initiatives implemented during the quarter. We expect to continue to see molybdenum production improvements and we continue to target design throughput and recoveries at the moly plant by year-end.

Once we have completed the TMF development work, QB will be able to run at steady state. Showcasing it as a tier-one asset will be a cornerstone of Teck Resources Limited's portfolio for generations. We continue to work on defining the most capital-efficient and value-accretive path for future growth of QB. Through optimization of the mill, and low capital debottlenecking opportunities, that could collectively increase throughput by a third of 15% to 25%. The foundation of QB is its large long-life deposit, which can support multiple expansions. And it offers multiple potential paths to create value for our shareholders including assessing adjacencies or synergies with Coyoac. The operation also has the advantage of a very low strip ratio.

Which enabled competitive all-in sustaining costs. We successfully achieved completion testing requirements under QB2.5 dollars project finance facility earlier this year, which provides independent verification confirming the robustness of design, construction, and operational capacity. And we have a taxability agreement in place through 2037. Taking all these factors into account, we are well positioned to generate significant future cash flows from this Tier one asset for decades to come. Turning to the mine life extension at Highland Valley on slide seven. Highland Valley is Canada's largest copper mine, and a core asset in our portfolio. And we are excited to announce the sanction of the Highland Valley Copper mine life extension or HPC MLE project.

This is a lower risk and lower complexity brownfield project that is 100% owned by Teck Resources Limited. The MLE is an extension of the operation to 2046. And is expected to produce 132,000 tonnes of copper per annum on average over the life of the mine. Based on additional technical and engineering work, have the project as a result this capital estimate of the sanction is CAD2.1 billion to CAD2.4 billion, in nominal terms.

Compared with our prior estimate of $1.8 billion to $2 billion Canadian dollars, it now includes project level contingencies, accounts for inflation, input cost escalation, and the impact of potential tariffs on construction materials, and reflects the accelerated procurement of mobile equipment originally planned for later project phases. It also incorporates additional scope, and indirect contract requirements identified through ongoing project refinement. The MLE project consists of development of site infrastructure and facilities, grinding circuit upgrades, increased tailings storage capacity and enhancements to power and water systems. As well as the mine pushback that requires additional waste stripping to access high-quality resources within the Valley Pit.

The project economics are attractive including generating a robust internal rate of return is significantly above our cost of capital and a project net present value using an 8% sorry, a positive net present value using an 8% discount rate. The capital intensity of the project is expected to be low at US$11,500 to US$13,200 per tonne of copper on an annualized basis. Overall, we expect to generate significant EBITDA inflows over the life of the mine. We have operated Highland Valley for decades and have successfully executed several mine life extensions there.

And importantly, project readiness for construction has been confirmed through independent assurance activities including an external construction readiness assessment and a review of the technical scope, capital cost estimate, and execution strategy and planning. We are well positioned for solid project execution of the Highland Valley mine life extension, with a strong and experienced team in place. All major permitting complete, engineering nearly 70% complete, and all contracting and permitting well advanced. Construction mobilization is underway, We plan to start construction in a few weeks, and we look forward to delivering on this value-accretive project.

We have summarized the changes to our guidance on slide eight, Production changes are driven by the revised outlook for 230,000 tonnes for the year, Whilst this is still possible, we acknowledge that there could be risk from possible external factors or from any delay to the TMS development work, As a result, we have revised our outlook for QB to 210,000 to 230,000 tonnes for the year, but continue to target design rates by year-end. Production guidance for all other operations is maintained. As such, the impact of the revised QB outlook is the only driver of flow-through changes to total copper production moly production, and therefore net unit cash costs.

We have also incorporated the increase in copper production in 2028 and the start of the growth capital investment associated with the sanction of the Highland Valley copper mine life extension project. Please refer to the MDA for further detail. Turning to the near-term growth on Slide nine. Our ongoing growth trajectory is underpinned by our established portfolio of operating mines. The sanction of the HBC MLE project is foundational to our copper growth. Strategy, and a significant milestone in the growth of Teck Resources Limited's copper production into the future. Our high returning greenfield projects at Zafranal in Peru and San Nicolas in are progressing as planned. And we are targeting sanction readiness by year-end.

Now for now, we initiated advanced early works in May, following receipt of the advanced works permit in April. This will enable construction to start immediately following project sanction. We are targeting receipt of the construction permit of Stage A approval first of two approvals required in Q3 and the earliest date for a potential sanction decision is late in 2025. San Nicolas? Engagement with government authorities and other stakeholders is ongoing to support our permit applications. We plan to complete the feasibility study in the fourth quarter which is the earliest date of the project to be positioned for a potential sanction decision following the receipt of necessary permits.

These projects are significantly less complex and smaller in scope than QB, with lower capital intensities attractive project economics, and well-balanced risk-return profiles. In addition, we are working to define the most capital-efficient and value-accretive path for further growth of QB, for optimization of the mill, and low capital debottlenecking opportunities it could increase throughput by 15% to 25%. Our priority at QB remains completing the ramp-up. But optimization plans are also progressing. Detailed planning for debottlenecking is underway. This should enable us to submit the declaration of environmental impact or DIR permit application in the second half of the year.

All of our growth projects must meet stringent criteria, delivering attractive risk-adjusted returns competing for capital in alignment with our capital allocation framework. Overall, we expect to be able to double copper production by the end of the decade with a path to annual copper production of up to 800,000 tonnes through these near-term projects. With that, I will now hand the call over to Crystal.

Crystal Prystai: Thanks, Jonathan. Good morning, everyone. I will start with our second quarter 2025 financial performance on slide 11. Our adjusted EBITDA increased by 3% in the quarter compared to a year ago, $722 million primarily due to another profitable quarter from trail operations, lower smelter processing charges, and reductions in corporate overhead costs. Partially offset by lower copper and zinc prices and higher operating costs at Highland Valley due to increased production, and at QB. The improved performance from trail operations reflects the implementation of initiatives to improve profitability and cash flow including increasing byproduct revenue. While the current load smelter processing charges are a headwind for Trail, Teck Resources Limited overall has a net benefit from them.

We successfully reduced our corporate overhead cost by 21% reflecting our ongoing efforts to reduce costs across our business. We continue to expect lower annual corporate overhead costs compared with 2024. Importantly, we continue to return cash to shareholders. With $548 million returned in the second quarter, This includes $61 million of base dividends, and $487 million of share buybacks which equates to 9.8 million shares and reflects elevated daily share buying levels through the quarter. Year to date, we have returned over $1.1 billion to our shareholders. Turning to Slide 12. Which summarizes the key drivers of our financial performance in the second quarter compared to the same period in 2024.

Our adjusted EBITDA increased by $19 million to $720 million driven by another profitable quarter from Trail Operations. Lower smelter processing charges, reductions in corporate overhead costs, and lower royalty. It also reflects higher sales volume, and an increase in commodity prices for our byproducts, and positive foreign exchange impact. Trail's improved results reflect higher byproduct production volumes such as silver, germanium and indium, and higher refined lead production as compared with the year ago. These factors were partially offset by a $91 million reduction in settlement pricing adjustments and higher operating costs at Highland Valley due to increased production. And at Now looking at each of our reporting segments in greater detail, starting with copper on slide 13.

In the second quarter, gross profit before depreciation and amortization from our copper segment declined by 3% to $673 million compared with the same period last year, primarily due to lower copper prices, and higher operating costs partially offset by increased co-products and byproduct revenues from same and molybdenum, and lower smelter processing charges. Copper production remains similar to the same period last year at 109,000 tons. At QB, no online time was impacted by the TMS development work, required to complete the wrap-up of the operation. As expected. Our established operations are performing in line with guidance, and our outlook remains on track for the balance of the year.

Production improved significantly at Highland Valley, driven by higher grades and mill throughput as we advanced mining in the Lornecks Pit. Production at Antamina was lower, reflecting a shutdown of approximately one week due to the fatality. As well as the processing of a lower proportion of copper-only ore as expected in the mine plan. The site returned to full production in June. Hermizan De Coyo had higher production in the quarter, driven by higher grades and recoveries as water availability improved compared to the same period last year, which was impacted by drought conditions. The improved performance in Q2 2025 was despite maintenance at the SAG mill for approximately one month for repair.

The operation has been running at full rates since its successfully restarted at the June. Our net cash unit cost improved by $0.14 per pound to $2.00 $2 US per pound. While cost of sales increased, particularly at QB and Highland Valley, this was more than offset by increased byproduct credit including significantly higher zinc revenue from Ativan, and additional molybdenum revenue from Highland Valley and QP. As well as much lower sales. In order, we labor agreements at QB and Carmen de Andacollo acollo.

QB's third labor union by the new three-year collective bargaining agreement in early April, completing all labor negotiations for QB's workforce and ensuring that labor agreements are now in place through 2028 across our QB operations. At CDA, both units contracts were ratified in June and July with each covering a three-year period. Looking forward, we continue to target design rates at QB by the end of this year. We also continue to expect higher quarterly copper production at Highland Valley through the balance of this year as we process increasing proportion of higher grade Flornex ore. As mentioned earlier, we've updated our annual production and unit cost guidance based on our revised QB operational outlook.

Copper production has been revised to 470 to 525,000 tons. And copper net cash unit costs have been revised to a dollar 90 to $2.05 US. Per pound. Turning now to our zinc segment on slide four Performance in our zinc segment was very strong in the second quarter. Our profitability in zinc improved substantially. With 137% increase in gross profit before the pre-depreciation and amortization, compared to the same period last year, to a 159,000,000. This improvement was driven by higher byproduct revenues as a result of our updated operating strategy at Trail, and lower operating costs. Red Dog performed well despite lower grades that we expected in the mine plan.

Red Dog sales of 35,100 tons were higher than our guidance range of 25 to 35,000 tons due to the timing of sale. Our net cash unit cost for zinc improved significantly. Decreasing by 20¢ US per pound to US 49¢ per pound primarily due to lower smelter processing charges and higher byproduct credit. At Trail Operations, profitability was strong in the quarter, reflecting our updated operating plans to improve profitability and cash flow generation, in challenging smelter market position. We have curtailed our refined zinc production and increased production of byproducts such as silver, germanium, and other critical metals compared with the same period last year.

We also implemented cost reductions in 2024 the benefit of which continued into Q2. Overall, this strong performance led to a 13% improvement in our gross profit margin before depreciation. And amortization for our zinc segment 28% compared to the same period last year. Looking forward to the third quarter, we expect zinc and concentrate sales from Red Dog of 200,000 to 250,000 tons And with Red Dog shipping season commencing on July 11, we expect reductions in Red Dog inventory in the third quarter reflecting the normal seasonality of sales. Our annual production and unit cost guidance for zinc segment is unchanged. The zinc concentrate production of 525 to 575,000 tons.

Refined zinc production of a 190 to 230,000 tons, and net cash unit cost of US 45 to 55¢ per pound. Looking at our cash return to shareholders on slide 15. We continue to build on our strong history of cash returns to shareholder. We have returned a total of approximately 6,000,000,000 since 2020. This includes over 1,100,000,000.0 year to date reflecting elevated daily share buyback levels in the second quarter. We have now completed $2.2 billion or approximately 70% of our $3.25 billion authorized buyback, leaving approximately $1 billion remaining. And with the strong cash flow generation potential of our business, we could see further cash returns to shareholders in line with our capital allocation framework.

We remain committed to returning between 30% and a 100% of future available cash flows to our shareholders. Looking now at our balance sheet on slide 16. We remain focused on maintaining the resilience of our business including the strength of our balance As of yesterday, our cash balance remained significant at $4,800,000,000 and our liquidity is strong at 8,900,000,000.0 We also continue to maintain investment grade credit rating. We have moved into a small net debt position in the quarter, as we continue to deploy the proceeds from the sale of steelmaking coal business to shareholder return.

But we do expect a release of working capital build of Red Dog inventory to unwind in the third quarter, reflecting the normal shipping season. Since 2024, we have reduced our debt by $2,000,000,000 left and our $1,000,000,000 US outstanding term notes are long dated. We made a semiannual repayment of a 147,000,000 US on the QB project finance facility in the quarter And through these payments, we are further deleveraging our balance sheet on an ongoing basis. Our near term growth projects, including the HPC MLE, project, remain well funded, and we are strongly positioned for continued value creation as we execute on our strategy. With that, I'll turn it back to Jonathan.

Jonathan Price: Thanks, Crystal. On Slide 18, we remain focused on our priorities to create value for our shareholders. Completing the TMS development work at QB and ramping up the operation, targeting design rates by year-end. Driving operational excellence including growing our copper production reducing our unit costs and improving our margins. Continuing to return cash to our shareholders through execution of our authorized share buyback program and through our base dividend and progressing our value accretive near-term copper projects to create options for our next phase of copper growth. Maintaining the resilience of our business including our strong balance sheet. We are committed to continuing to balance investment in growth in copper, with cash returns to shareholders.

Turning to slide 19, We can continue to significantly impact the accretive growth potential of our metrics on a per share basis. Last year, with the ramp-up of QB and with a significant portion of our $3.25 billion share buyback completed, we increased our copper production per share by 54%, compared to the prior year. By 2026, our copper production per share could increase by a further 33% to 50% as we stabilize QB at full production while completing the remaining authorized share buyback. Our copper production per share could increase substantially beyond that as we bring on near-term value accretive growth projects.

And this does not consider the impact of any further share buybacks that could be authorized under our capital allocation framework given the strong cash flow generation potential of our business. Our copper production has the potential to increase rapidly long-term on a per share basis. So thank you. And with that, operator, please open the line for questions.

Operator: Certainly. To join the question queue, You will hear a tone acknowledging your request. We ask that you please limit yourself to one question and one follow-up. If you're using a speakerphone, please ensure you lift the handset before pressing any keys. If you wish to remove yourself from the queue, you may press star. Then two. The first question comes from Orest Wowkodaw with Scotiabank. Please go ahead.

Orest Wowkodaw: Hi, good morning. Some questions on QB2, please. Firstly, the tailings issue that's limiting throughput and then the new investment required here. Is there any knock-on impact to 2026? I mean, will tailing still be a constraint next year?

Jonathan Price: Hi, Orest. Thank you for that question. Yes, as you point out in the current quarter and to some extent as well, expected in Q3, the TMS development work has been limiting online time for QB. Actually, throughput at the plant and the recoveries of the plant have been good considering these constraints, but online time is an issue. Our expectation here, Orest, is that we can work through the TMS development issue and put that behind us. So that it won't deconstrain operations on an ongoing basis. On that basis and based on what we see in terms of throughput and recoveries and grade, of course, the operation we have maintained our guidance for 2026.

But of course, as we noted, we'll continue to monitor the progress TMS development work through the balance of the year.

Orest Wowkodaw: Is there potentially more investment required in the tailings next year?

Jonathan Price: At this point, we've guided to the know, to the capital incremental capital spend for this year. We don't expect additional investment next year. We expect normal operating conditions around the TMS and its ongoing development, but we don't expect to signal additional capital essentially as we have done in the current quarter.

Orest Wowkodaw: Okay. And just I mean, given the state of the ramp-up, I mean, at this point, I'm having trouble understanding how realistic it is for QB to even reach the low end of its guidance for '26. I mean, that would imply monthly production required of 23,000 tons a month. The operation hasn't done that in a single month to date. What at this point, what gives you confidence that you can exit the year anywhere close to that kind of run rate?

Jonathan Price: Yeah. So our view, Orest, is that when we can put the TMS issue behind us, and we can therefore improve the online thing. Plan. That we see from a throughputs, recoveries, and grade perspective, the potential around the guidance for 2026. So these are assumptions that we are able to underpin by operating parameters that we have experienced and delivered at the plant. Of course, it requires us to run the operation consistently through the year to achieve those numbers. They're consistent with design, of course, and at the low end of the range, you know, we have seen operating results already that give us confidence that those numbers are achievable.

You know, as you can imagine, we continue to interrogate both the operational parameters at QB, and we continue to interrogate the forward guidance for QB. But at this point in time, we don't see any changes to 2026. And believe with a period of consistent operation without the constraints of TMS development that we can move forward and deliver.

Orest Wowkodaw: Okay. Thank you.

Operator: The next question comes from Matthew Murphy with BMO Capital Markets. Please go ahead.

Matthew Murphy: Hi. Have a question just on the pace of CapEx this year. So first half of the year, you've done almost $700 million CapEx that's growth in sustaining, not including capitalized stripping. And then your guidance is around $2.4 billion if I'm not mistaken. So you have to spend $1.6 to $1.8, call it, back half of the year. Am I thinking about that right?

Jonathan Price: Yeah. I'll let Crystal speak to the details behind that. Of course, you know, we have increased our capital guidance for the second half of the year. In large part based on the sanctioning of HPC MLE. Which goes to both capitalized stripping, but it also, of course, goes directly to the growth capital as well as some of the additional capital that we've just discussed. For TMS development at the QB. But, Crystal, over to you.

Crystal Prystai: Yeah. Matt, for the question. You're right. So year to date, we spent $700 million on capital expenditures capitalized stripping and our total for the year is at the low end, $2.3 billion. So that's a reasonable run rate in terms of what you're thinking. That would put us around $1.6 billion over this second half of the year. Again, a large portion of that is in relation to growth, and that number, again, is increasing as a previously didn't increase the sanction capital associated with HBCMLE over the balance of the year. So we have now embedded that spending for the second half of the year, and that's why I think seeing that the run rate.

Of course, we also have embedded the TMS expected cost associated with that work It is the plan, and you'll see some of that coming through in the first quarter as well.

Matthew Murphy: Okay. Yeah. It's just the magnitude of the step up. I mean, do you worry about being able to get that done this year? Or are there some big ticket items in there that you're confident you'll see that spend? And is a lot of the tailing spend, therefore, yet to come in the back half of the year?

Crystal Prystai: Yeah. I think the run rate is reasonable. We've done a detailed scrub through the project to understand exactly what, you know, what if remaining ongoing. We do have a few larger projects in the sustaining side that we expect to kick off in including, you know, the Antamina tailings lift associated with the mine life extension, We have the QB truck shop that we're continuing construction on. We also have some demobilization of the facilities as we've been to the next phase of mining there. So that, in addition to ATV MLE, which of course, we have a, you know, a rigorous schedule associated with the project and the CapEx that we've articulated is, is in line with that.

Schedule. And then in the context of TMS, we have we have spent past today. We haven't disclosed what that figure is, but we can step up, out to folks as required. But do you expect that spending to continue through the second half the year? And, really, you know, maybe to articulate a bit more about why that number is the number that it is. We did have spend associated with CMS embedded in our in our sustaining capital guidance for this year. But the amount and distance of mechanical proven of sand related to the TMF. And the related cost of that work. Has increased that expected cost and tends to get our guidance in relation to that.

Matthew Murphy: Okay. Thank you. Thanks, Matt.

Operator: The next question comes from Carlos De Alba with Morgan Stanley. Please go ahead.

Carlos De Alba: Yes. Thank you. Good morning, everyone. Just on QB, maybe could you please provide a little bit more comments around the ship loader repairs? How long would it take if you have already started? And also if there is any maybe you mentioned this but I might have missed it. If there is any impact on CapEx that are material because of the of the repairs.

Jonathan Price: Yes, Carlos. Thank you for that question. As you know, we disclose the challenge with the ship load back in June. Essentially, cause for that was a brake failure on the shuttle, which caused an overextension of the ship loader and of course some damage associated with that It took some time to be able to access the ship loader to even assess the repair work, and that was because we were required to apply for and obtain some submarine permits. The assessment of that damage is ongoing. And the repair plans are being finalized associated with that work as well.

As we've said, we do think that's going to be an extended shutdown now that will extend first half of 2026. We haven't got a finalized capital number for that repair at this point in time because that assessment is ongoing. Importantly, as we've said, the work on the ship loader and the downtime of the ship loader is not impacting our production here. As you'll recall, previously we had in place trucking arrangements while we were awaiting the completion of the ship loader originally that was allowing us to move material to either smelters in Chile or to other ports in Chile. We've just reactivated that and we have that trucking fleet operating daily.

So no production constraints, and that allowed us to minimize any buildup in inventory at the port.

Carlos De Alba: Fair enough. And then just if I may, second question. Just on the sequence of the projects, for Safranal and San Nicolas. While both are likely to be sanctioned or maybe sanctioned by the end of this year, the earliest, is it fair to think that Safra now probably is ahead and maybe will be developed earlier?

Jonathan Price: Well, I mean, I think it's fair to say that Zafaranal is more advanced. In terms of the permitting status, in terms of the construction readiness of that team. For example. However, you know, we consider both of those to be options. While we're saying we would like to get them ready for sanction by the end of the year. Of course, those are decisions that are yet to be taken, and they're they you know, a range of factors that will play into those decisions. So I wouldn't give any particular guidance now on the sequencing of those projects.

Think of them as options that we have in the portfolio as we look to derisk and predict progress those options to the point that we could take sanction decisions when ready.

Carlos De Alba: Thank you very much, Jonathan. Bye.

Jonathan Price: Thanks, Carlos.

Operator: The next question comes from Craig Hutchinson with TD Cowen. Please go ahead.

Craig Hutchinson: Hi, good morning guys. Just on the Highland Valley extension, now that you guys have made a final investment decision, is there a plan to file a technical report? And just maybe as an interim, can you give me a sense of what throughput you're looking at to achieve that annual production rate of 132,000 tons a day? Tons a year, sorry?

Jonathan Price: Yeah. So we will publish a technical work report. We expect that to happen in August, and, of course, you'll get all the detail associated with that. The throughput throughout the life of the future mine will be variable. Of course, it's going to be a product of the ore wind mining. You'll see in our disclosure that we go through various phases here. Where we're mining different pits, different ore hardnesses associated with the ore coming from those pits. So there'll be variable throughput is the answer and variable grade of course, that goes with that.

Crystal Prystai: And, Craig, we did disclose in our investor day in November of what a production profile would look like for HTC, Emily. So I just encourage you to go back and look at that as about it. It shows the variability.

Craig Hutchinson: Which is, I guess, to get to the 132,000 tons per year, I would assume the throughput has to be truly higher just based on your reserve grade, unless I'm missing something.

Jonathan Price: I mean, I think we are adding capacity to the circuit. We're adding mills there to increase the throughput of material and also to improve recoveries of material. I should say. I mean, last year, you saw production at HPC come in just below 100,000 tonnes. This year, of course, that production guidance is materially higher, you know, in the sort of one forty, one fifty range. You see there year on year currently the through the operations at HPC, and that's been driven this year in the processing of additional Lawn X ore. And I think that's what you should expect going forward is variability depending on the ore type that's dominating mill speed at any point in time.

Craig Hutchinson: Okay. And then just on QB, how are the recoveries progressing? And you guys do you feel like you'll be through the transitional? This quarter, or is that still kind of you know, lagging into four?

Jonathan Price: Yeah. Look. I'll just ask Shehzad Bharmal to talk about that in terms of the transition or where we are on recoveries and what we're doing there. To drive those higher.

Shehzad Bharmal: Thanks, Greg. Greg, as we have noted last year that we did expect lower recoveries in the first half as we were dealing with more transition hours. And our recovery performance was just a slightly below what we had expected. Due to the inconsistency in the first half of the down days. We do expect to have better quality ore in the second half with a high grade and higher recoveries. And the transition ores will be variable. But, yes, we expect lot less variable transition over in the second half. And in 2026.

Craig Hutchinson: Alright. Thanks, guys.

Jonathan Price: Thanks, Craig.

Operator: The next question comes from Myles Allsop with UBS. Please go ahead.

Myles Allsop: Yes. Just a couple of questions. Maybe first on QB and Colawesi, as you mentioned in your presentation, it sounds like discussions are not happening at the moment. Is that right, or is there any progress in terms of looking at that option seriously?

Jonathan Price: Look. There are discussions regarding QB Kaua'iwaseo. I'm not gonna go into those because, of course, they are, you know, they're confidential in nature. But as we've said before, we recognize the potential of the opportunity there for synergies. We will always do what's in the best interest of our shareholders in that regard. As you can see right now, we have our hands full with ramping QB up to the steady state, which has to be our priority here to make sure we get stable production there and then the cash generation that this asset is capable of delivering.

But, you know, as I mentioned, you know, in parallel, we continue to think about continue to discuss the potential synergies there, but I won't unpack discussions given their confidential.

Myles Allsop: That's fair enough. And then just going back to two issues, at QB. Why is it taking a year to fix the shiploader if it's overextended? It's a new ship loader. Seems an awful long time. And, obviously, there is a meaningful OpEx impact. And with the tailings, when will when are you hoping to get that complete? Is it right to assume that will be sorted largely by the end of this year. Or is that gonna drag?

Jonathan Price: So I'll hand the ship over there to over to Ian Anderson in a moment. I'm just gonna talk about tailings. I mean, of course, given the fact that we have maintained our guidance for 2026, our expectation is that we put the TNF issues behind us this year. And, you know, that's what we're providing for in our guidance. So as I mentioned, you know, it's sort of a onetime event at associated with ramp up. And when we get through that phase of work, move into a steady state operation. So it's not something we expect to be plaguing this operation indefinitely at all. It's something we expect is a, you know, it's a discrete piece of work.

We'll get that resolved and move past it. And then we'll be able to secure the online time essentially that we need from this operation and in stages. Ian, would you like to make some comments just on the ship loader outlook, please?

Ian Anderson: Sure. Thank you very much, Miles, for the question. So despite the fact that we said it would conclude in the first half 2026, that's not saying that it will, in fact, take a year. At this point, we're really carefully defining the nature of that work. So as a result of the brake failure, of course, we have to assess all of the structural elements, make sure that ship loader is returned safely. And similarly, that we complete all the work to get it back into great condition. And so we'll progress that project as we go. Course, you are dealing with maritime authority. That can cause permit delays.

We certainly wanna be cautious about how we deal with that announcement. So make sure that continues at pace, but at the same time, the nature of the incident demands.

Operator: The next question comes from Bill Peterson with JPMorgan. Please go ahead.

Bill Peterson: Yes. Hi, good morning, everyone, and thanks for taking the questions. On the higher CapEx guide for Highland Valley, mine might extension relative to last year's strategy day, looks around 15% to 20% higher you provide additional color or breakdown between materials inflation, contingencies you mentioned or any other factors? And then is there any read through for projects sanctioning for Zafranal or San Nicolas, for example? Should we expect some more sort of double-digit increase at this stage? Just to be prudent or any read through at all? Thanks.

Jonathan Price: Yeah. So on the HPC piece, I mean, I won't specifically give that breakdown. But as I mentioned, there's a range of things in there. Mean, project level contingency, it's inflation, it's cost that escalation, the potential for tariffs on construction materials, we think is a real driver of course, particularly between The US and Canada. So that is something that we've reflected here. Importantly, as I mentioned, it's also the acceleration of the procurement of mobile equipment. That we brought forward from later project phases, and that materially derisks the project and the rate at which we'll be able to essentially access the valley pit for the long term.

So you know, those are important derisking elements in our view. I'll also ask Crystal just to comment on some of the process by which we looked at this capital spend through the investments approach here that we've taken and you know, our determination to ensure that we give robust capital numbers that can be delivered.

Crystal Prystai: Sure. No problem. Thanks. Phil. But we've advanced this project through the final stage of our project delivery framework as well as for our governance processes, including through our investment committee. Those processes embed the final project requirement the construction readiness, probabilistic modeling around various facets of the estimates involved, As well, we had detailed independent assurance provided on many areas of the business plan as well as in the context of construction. Readiness. So all of those are learnings that we chose from the key project that we've committed to embedding as we go forward in future projects, an HPC, MLE, and the conclusion of that work ahead of sanction has led to capital range that we're disclosing.

Of course, in addition to the factors that John noted the context of what's embedded in that range.

Jonathan Price: So I think they'll be looking at read through for future.

Jonathan Price: Yeah. Yeah. I was just gonna just gonna pick up on that. Look, you know, every project has its own characteristics. We will take the same approach with future projects Crystal just outlined in terms of, you know, using independent insurance taking probabilistic modeling to ensure the full range of obviously, economic outcomes associated project, but also the full range of potential input assumptions here. Which go to capital because we need to ensure that we're reflecting uncertainties or known unknowns in the project as we're setting forth the assumptions here. But, again, as I mentioned, this project has its own unique characteristics. So I don't think you should take a direct read through from that.

But what I can say if we will apply the same rigorous approach the Dapronal and Sandlink that we've applied to HPT.

Bill Peterson: Well understood. Thanks for that. My next question is not something the teams talked about recently, but is NewRange, the potential project in The U. S. Any update on where that project stands in terms of permitting, community engagement, an opportunity to potentially move faster than what appears to be pretty strong support within The US in terms of permitting and promoting domestic production?

Jonathan Price: Yeah. Look. I mean, you know, that remains an interesting option for us. It's clearly further out than the, you know, than Zafra now or San Nicolas here in the schedule. I think the key for us there is to define what is the right project. What is the configuration that will deliver the greatest value in the event that project develops, and that's the work that we're doing now. And, of course, you have to define that before you can start to approach the permitting process in any detail. So think that's the conversation for later, Bill. We have our hands full with other things right now, but we do continue work that in. Work that in parallel.

Bill Peterson: Well, understood. Thanks for your insights.

Jonathan Price: Thank you.

Operator: The next question comes from Chris LaFemina with Jefferies. Please go ahead.

Chris LaFemina: Hi, thanks for taking my question. I just wanted to ask about first on the incremental CapEx for QB for the TMF. How do you decide whether you're going to include CapEx in the project CapEx or in sustaining? Because I would think if you're spending money to ramp the project to full capacity, for whatever reason, that would have been part of the project CapEx. I understand it's really just a question of semantics. When we think about the capital intensity of the project, why wouldn't that be project CapEx rather than sustaining?

Jonathan Price: I hand the Symantec's question over to Crystal. Hi, Chris.

Crystal Prystai: Thanks for the question. Okay. In the context of PMF, when we thought about the growth capital for the project, of course, there was construction costs associated with that built into the project capital that we've ordered against in our results over years. I think the pieces that I add to why now sustaining I mean, firstly, we're running the operation, and we're producing copper. So I think it you know, these things are no longer growth capital.

We did expect spend on the TMF, but that amount, as I mentioned, is more significant than we expected as we are now, you know, moving significantly more sand further distances than we expected for mechanical movements, and a related cost of that is in expected cost, then I think at this point, it doesn't make sense to selling growth capital, and it becomes part of the sustaining capital as well.

Chris LaFemina: Okay. That's fair enough. And then secondly, just on the ship loader, you have any insurance related to the issues there, or is it all on you? Thank you.

Jonathan Price: Ian, do you wanna comment on that as well?

Ian Anderson: Yes. Certainly, we are investigating the root cause and we'll understand based on that what the next steps will be. In terms of insurance. So, yes, we do have insurance coverage, and that includes interruption. That's that.

Chris LaFemina: Okay. Great. Thanks.

Jonathan Price: Thank you, Chris.

Operator: Thank you. We are out of time for further questions. I will now hand the call back over to Jonathan Price for closing remarks. Please go ahead.

Jonathan Price: Thank you, operator, and thanks again to everyone for joining us today. We look forward to welcoming many of you to our QB site visit on November of this year. Please reach out to Emma Chapman and our IR team for further information on the site visit or, of course, if you have any follow-up questions on the quarter. So thank you and enjoy the rest of your day.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.