Teck Resources Limited Class B Aktie

Ladies and gentlemen, thank you for standing by. Welcome to Teck's Second Quarter 2026 Earnings Release Conference Call. [Operator Instructions] This conference call is being recorded on Thursday, July 23, 2026.

I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Teck's Second Quarter 2026 Conference Call.

Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward-looking statements. Please refer to Slide 2 for the assumptions underlying our forward-looking statements. We will reference non-GAAP measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website.

On today's call, Jonathan Price, our CEO, will provide highlights for the second quarter of 2026. Crystal Prystai, our CFO, will follow with further details on our operational performance and financials in the quarter. Jonathan will then wrap up with closing remarks and an opportunity for Q&A.

And with that, over to you, Jonathan.

Thank you, Emma, and good morning, everyone. We've delivered another quarter of strong operational and financial performance. We generated significantly higher earnings and robust cash flow in the second quarter of 2026, supported by favorable commodity prices, including another record quarterly average copper price.

Compared with the same period last year, we generated cash flow from operations of $1.7 billion and tripled adjusted EBITDA to $2.2 billion. We also successfully managed our net cash unit costs despite energy cost headwinds, supported by stronger operational performance and favorable byproduct pricing. As a result, we increased our net cash position by $756 million during the quarter and $1 billion in the first half of the year.

Alongside this strong financial performance, we continue to make good progress against our near-term priorities to create shareholder value. We are advancing our merger of equals with Anglo American, with our focus on securing the remaining regulatory approval. Meanwhile, integration planning is intensified to ensure we are ready to close shortly after approval is received.

Operationally, we continue to build momentum across the business. Copper production increased by 25% compared with the second quarter of last year with higher production across all our copper operations, coupled with continued strong sales volumes. We are delivering greater operational stability quarter-by-quarter through our continued focus on safe, reliable and consistent performance, and there are no changes to our previously disclosed annual guidance. Importantly, this strong performance includes QB, where we achieved our third consecutive quarter of stable operations, an important step towards realizing the full value of this world-class asset.

During the quarter, we also continued to advance our tailings management facility work at QB, including the completion of Rock Bench 5. And I'll return later in the presentation to some of the TMF options currently under evaluation with the potential to further enhance operational continuity.

At Highland Valley, we continue to advance the mine life extension project, with detailed engineering now approximately 95% complete. Overall, this was another strong quarter that demonstrates disciplined execution across the business, reinforces the quality of our portfolio and positions us well as we move towards completing our merger with Anglo American.

So turning to the merger update on Slide 5. The regulatory approval process in China continues to progress as expected, and we remain focused on engagement with the regulator. In parallel, integration planning continues to advance. Our teams are working hard to ensure we are fully prepared to close the transaction following receipt of the necessary approvals, while also continuing to develop our plans to capture the significant value creation opportunities available through the combination. Consistent with our original expectations, we continue to anticipate completing the transaction within 12 to 18 months of the September 2025 announcement.

Turning to our focus on safe and stable operational performance, beginning with safety on Slide 6. During the second quarter, our high potential incident frequency rate at Teck-controlled operations remained low at 0.08, broadly in line with our performance last year. Any safety incidents are thoroughly investigated, with corrective actions implemented to strengthen critical risk controls and reduce the likelihood of recurrence. We're also very pleased that the Highland Valley Copper Mine Life Extension Project has now achieved 1 million hours worked without a high potential incident or a lost time injury, reflecting the strong safety culture across the project team.

So turning now to our operational performance on Slide 7. Copper production increased by almost 25% in the second quarter compared with the same period last year, with higher production across each of our operations, as shown in the chart on the left. This higher production, together with favorable commodity and byproduct prices, drove a significant reduction in our net cash unit costs, more than offsetting the impact of higher energy prices.

As a result, our profitability continued to strengthen, with adjusted EBITDA margins reaching a record 61%, up from 36% in the second quarter of 2025. These results demonstrate how our continued focus on operational performance is translating into higher volumes, lower costs and improved financial returns.

Turning to QB on Slide 8. As we continue to advance tailings management facility development, we have not experienced any TMF-related downtime in the past 3 quarters, supporting improved asset utilization and operational consistency. As a result, QB produced 55,800 tonnes of copper during the quarter compared with 52,700 tonnes in the same period last year, with stable throughput and recoveries and all key operating metrics tracking in line with our full year guidance.

During the planned maintenance shutdown in May, we completed several initiatives designed to optimize plant performance and increase throughput. We began to see the benefits of that work towards the end of the quarter, providing a solid foundation for continued operational improvement throughout the remainder of the year. Overall, QB continues to demonstrate improving operational consistency, giving us increasing confidence in the long-term performance and value of this world-class asset.

Now looking at the QB TMF on Slide 9. Progress on the TMF remains an important enabler of predictable operating performance at QB, and we made significant progress during the second quarter. As you can see from these photographs, we completed Rock Bench 5 during the quarter, an important milestone that supports [ freeboard ] management through the remainder of the year. Completion of the cyclone station upgrades and increased paddock availability improved our sand deposition rates and supported continued progress towards planned TMF performance.

As mentioned, there was no TMF-related downtime at the concentrator in the past 3 quarters, demonstrating the progress we've made in reducing operational constraints. Work has continued to optimize the supporting ancillary infrastructure required to accommodate higher sand deposition rates. And construction of the secondary cyclone station should further improve our sand deposition performance.

The latest progress on the QB TMF is reflected in our updated scorecard on Slide 10. As I've already mentioned, we completed Rock Bench 5 as planned. Looking ahead, we expect to complete installation of the secondary sand cyclone system by the end of the year, further strengthening the robustness of the tailings handling system and increasing its ability to manage variability in plant feed.

Consistent with our QB action plan, we are progressing our evaluation of the timing and sequencing of the installation of the permanent TMF pipeline infrastructure, which will mechanically raise the tailings pipeline, supporting more efficient and optimized TMF performance. As part of this assessment, we are evaluating opportunities to accelerate certain TMF activities, including the potential advancement of material placement currently planned for 2027 by constructing an additional rock bench this year.

Proceeding with Rock Bench 6 would allow the permanent pipeline infrastructure to be installed later this year, which is earlier than planned. This would provide greater operational flexibility during completion of the sand dam, reducing execution risk and supporting continued improvements in operating performance from a stable operating base.

If we take the decision to proceed, construction of Rock Bench 6 is expected to commence in late August or early September and be completed by around year-end, with an estimated capital investment of approximately USD 100 million this year. Overall, we continue to make good progress on the TMF and are focused on opportunities to safely accelerate development and further strengthen the long-term reliability of QB operations.

So turning now to the mine life extension at Highland Valley on Slide 11. Construction continues to advance well, with the project achieving an important safety milestone of more than 1 million hours worked without any high potential incidents or lost time injuries. During the second quarter, we completed installation of the pilings for the mill upgrades and successfully executed the first integrated shutdown between the operation and the mine life extension project.

Detailed engineering is now approximately 95% complete. Procurement is nearing completion, and construction activity continues to ramp up across the site, including earthworks, pipelines, brownfield works and supporting infrastructure. We invested $254 million of project capital during the quarter, and our capital expenditure guidance remains unchanged at $900 million to $1.2 billion for 2026 and $2.1 billion to $2.4 billion over the life of the project.

Capitalized stripping activity is also expected to increase during the second half of the year as we prepare future mining areas. While higher diesel prices will have some impact, our guidance for capitalized stripping remains unchanged at $450 million to $550 million for the copper business.

The mine life extension will extend Highland Valley's mine life to 2046, while supporting average annual copper production of approximately 132,000 tonnes, reinforcing its position as a cornerstone asset in the copper portfolio. Overall, we're continuing to execute well across our portfolio with strong operational performance, supporting disciplined project delivery and positioning the business well for the future.

I'll now hand over to Crystal to take you through the financial results in more detail.

Thanks, Jonathan. Good morning, everyone. Starting with an overview of our strong financial performance in Q2 2026 on Slide 13. We delivered significantly stronger financial results in the second quarter, with adjusted EBITDA tripling to $2.2 billion compared to the same period last year. This performance was underpinned by strong copper production across all of our operations, including a third consecutive quarter of stable production at QB, together with higher commodity prices and increased byproduct revenues. In addition, we significantly improved profitability at Trail Operations as we continue to focus on cash generation through value-driven optimization of feed sources and production.

As a result, our adjusted EBITDA margin increased to a record 61%. Our strong earnings in the second quarter translated into robust cash generation with $1.7 billion of cash flow from operations, contributing to a $756 million increase in our net cash position over the quarter. We also returned $61 million to shareholders through payment of our regular quarterly base dividend.

Looking now at the key drivers of our higher profitability in Q2 2026 on Slide 14. The increase in adjusted EBITDA was primarily driven by significantly higher commodity prices, including favorable pricing adjustments and stronger byproduct pricing. Higher copper production and sales volumes and higher volumes of byproducts also made significant contributions. Overall, operating costs were lower year-on-year, more than offsetting higher oil prices, while lower smelter processing charges also provided a benefit. These positive factors were partially offset by higher royalties and profit sharing as a result of higher profitability at our operations.

Turning to our copper segment now on Slide 15. Compared with Q2 last year, gross profit before depreciation and amortization more than doubled to $1.8 billion, with margins substantially higher at 65% compared to 46% a year ago. This stronger performance was driven by record copper prices, together with higher production across all operations. Higher copper production reflects higher throughput across our operations as well as higher grades at Highland Valley and Antamina, as expected.

QB delivered its third consecutive quarter of stable operations, with copper production increasing to 55,800 tonnes from 52,700 tonnes in the same period last year. Our copper net cash unit costs improved by 19%, reflecting higher copper production and byproduct credits. Looking ahead, guidance for our copper segment remains unchanged, and we continue to expect further growth in copper production this year to 455,000 to 530,000 tonnes from 454,000 tonnes last year.

Looking at our zinc segment on Slide 16. Compared with Q2 last year, gross profit before depreciation and amortization increased 122% to $353 million, with margins significantly higher at 39% compared with 28% previously. This improvement was primarily driven by strong performance at Trail Operations. This reflects materially higher byproduct pricing and the continued execution of our value-driven optimization of feed sources and production, including prioritizing processing of residues in the near term. As a result, gross profit before depreciation and amortization at Trail increased to $203 million compared with $42 million in the same period last year despite the planned shutdown of the lead circuit during the quarter.

On July 7, we also announced a strategic investment agreement with the Government of Canada to support strategic metals production at Trail. The initiative has the potential to expand production of germanium and antimony and add new gallium capacity. It also remains subject to certain conditions as well as evaluation under our capital allocation framework.

At Red Dog, zinc production in the second quarter reflected lower grades and recoveries consistent with the mine plan, and zinc sales were within our guidance range at 37,000 tonnes. Zinc net cash unit costs improved 29%, benefiting from lower smelter processing charges and higher byproduct credits.

Looking ahead, Red Dog shipping season commenced on July 12. As in previous years, the majority of diesel deliveries are expected during the third quarter alongside zinc concentrate sales of 220,000 tonnes to 270,000 tonnes, reflecting the normal seasonal shipping pattern. Our guidance for the zinc business remains unchanged. We continue to expect zinc in concentrate production of 410,000 tonnes to 460,000 tonnes and refined zinc production of 190,000 tonnes to 230,000 tonnes in 2026.

Turning now to our net cash unit costs on Slide 17. Despite oil price headwinds during the quarter, we reduced net cash unit costs across both our copper and zinc businesses, reflecting strong operational performance, cost discipline and favorable byproduct pricing. In copper, total cash unit costs declined despite approximately USD 0.07 per pound of energy inflation impact, supported by higher production across our operations. Net cash unit costs improved even further from USD 2.02 per pound to USD 1.64 per pound as stronger byproduct production and pricing, particularly for molybdenum, silver and zinc, increased byproduct credits. In zinc, total cash unit costs were broadly stable as the impact of lower production volumes has been largely offset by lower smelter processing charges.

Red Dog has been largely insulated from higher energy prices year-to-date as diesel for the 2026 shipping season had not yet been delivered. Net cash unit costs in zinc also improved significantly from USD 0.49 per pound to USD 0.35 per pound, driven by stronger byproduct prices, including silver, lead and germanium. These cost improvements, together with the favorable pricing environment, translated into materially stronger margins across both of our business segments.

Turning now to our margins on Slide 18. We delivered a significant expansion in margins across both of our business segments during the second quarter, reflecting the benefit of higher commodity prices, together with continued operational improvements and disciplined cost performance. In copper, our adjusted EBITDA margin increased to 70% compared with 45% in the second quarter of last year, driven by stronger copper prices, higher production and sales volumes and strong byproduct credits. In zinc, our adjusted EBITDA margin increased to 38% from 25% a year ago, reflecting higher zinc prices, stronger byproduct credits and the continued optimization of feed sources at Trail Operations.

Turning now to our balance sheet on Slide 19. As a result of the strong cash generation from our operations, we continue to strengthen our balance sheet while funding the Highland Valley mine life extension project. In the second quarter of 2026, we generated significant cash flow from operations of $1.7 billion. Net cash increased by $756 million during the quarter to $1.2 billion, representing an increase of $1 billion over the first half of this year.

Our liquidity strengthened further to $10.3 billion as at June 30, including $6.1 billion of cash. We also continue to reduce debt through our scheduled semiannual repayments under the QB project finance facility, positioning us with a strong balance sheet as we move towards completion of the Anglo-Teck merger.

I will now pass it back to Jonathan for closing remarks.

Thanks, Crystal. I'll now wrap up briefly on Slide 21. We're pleased to have delivered another quarter of strong operational and financial performance, reflecting the continued progress we are making across the business.

As we look to the second half of the year, our key near-term priorities remain clear: advancing our merger of equals with Anglo American, including securing the remaining regulatory approval and progressing integration planning; continuing to deliver safe, stable and reliable operating performance across our business; further strengthening the performance of QB through continued operational improvements and progress on the tailings management facility; and advancing the Highland Valley mine life extension project. By remaining focused on these priorities, we believe we are well positioned to complete the merger and create a leading critical minerals company with the financial strength, operational capability and portfolio quality to deliver long-term value for shareholders.

So with that, over to you, operator, for questions, please.

[Operator Instructions] The first question comes from Orest Wowkodaw with Scotiabank.

It's really great to see the operational turnaround, especially at QB. And before my question, I just wanted to also put out a big thank you to Emma for all her help at IR, with the best on her next opportunity.

What specifically -- I'm just curious if advancing Rock Bench 6 and advancing some of the infrastructure, if that could positively impact throughput rates in terms of versus plan for 2027-'28?

Thanks, Orest, and thank you as well for that comment on Emma. I'll talk a little bit about that later. The short answer to your question is no, Orest. We don't expect any impact to throughput rates directly the result of the planned actions that we're taking here. As mentioned, we see this as an acceleration and essentially a derisking that allows us to further underwrite that ongoing operational continuity that we've worked so hard to achieve over the last 3 quarters.

Okay. And second question, just in terms of the regulatory approval, specifically from China, can you give us an update on where things are at, whether you think [indiscernible] any requests for potential offtakes or asset sales or anything like that? Or is it just really -- I'm curious to what the Chinese may be asking for in terms of the process?

Yes. Look, I'd say that the process with SAMR, which is the market regulator in China, is unfolding in the normal course. We continue to respond to information requests aligned with the typical process here.

We're moving ahead. We still expect completion to be within the originally announced 12 to 18 months from the date of announcement. And beyond that, there's nothing more to say in that we haven't received any request for remedies arising from the approval process. So business as usual for the time being.

Okay. And just finally, how quickly do you [indiscernible] receive that Chinese approval?

Sorry, you just cut out a little bit there. How quickly...

Sorry, how quickly do you expect the transaction to close, post the Chinese approval?

Very quickly. We'd be talking a matter of a couple of weeks, no more than that.

The next question comes from Dalton Baretto with Canaccord Genuity.

On the assumption that you do get the SAMR approvals in short order and you close fairly quickly, can you give us an update on where you're at in terms of the integration planning? What sort of things have been sort of settled on and ready? What are you still working on? And any thinking around the pro forma portfolio?

Yes. Thanks for those questions, Dalton. An enormous amount of work going on, on integration planning between ourselves and Anglo American right now. Of course, we have to continue to operate entirely as independent companies until such time as the merger closes. We run our own businesses, there's no crossover of decisions in relation to operations or current activities.

In the meantime, of course, we've got to ensure that we can seamlessly integrate these two new companies to do two things: one, to maintain operational continuity and to ensure we can operate efficiently and effectively. On the other hand, of course, we've got a lot of value to capture here through the combination of these businesses. So we're planning for both of those things.

So on the one hand, we have to plan the way forward around business processes and systems, organizational structures. Of course, the appointment of leadership and other teams throughout the new organization will be key to standing that new business up. On the other hand, we're working hard to build out the synergy capture plans that we have at a much higher level of fidelity to ensure that as soon as the merger closes, teams in the new Anglo-Teck organization can get after capturing that value. So an enormous amount of work going on, and we'd expect that work to continue with a high level of intensity all the way through to completion of the transaction.

And maybe in parallel as you're working through that, can you comment on where you guys are at either as Teck or potentially with Anglo American on the Collahuasi-QB2 tie-up, specifically from an ownership perspective?

Yes. So we remain super focused on that, of course, given the significant value opportunity that, that presents. As we've said before, we continue to believe that it offers the shareholders of both QB and Collahuasi the fastest growth route to copper growth, lowest risk, lowest capital intensity and therefore, delivers the highest returns of any opportunity available to either operation and either set of shareholders here.

One of the first steps there, of course, is advancing a formal study to ensure that we validate and underwrite the investment thesis here and begin to shape exactly what that project will look like from an execution perspective. We've engaged with shareholders of both operations. We've engaged with local governments. And we remain very optimistic that we'll arrive at a mutually beneficial agreement here for all parties because there is so much value to be shared.

I won't comment more on the nature of those commercial interactions at this point because, of course, they remain confidential. But we remain very focused, as is Anglo American, on pursuing that synergy capture opportunity.

Great. And just maybe one more thing on that. Is that study being conducted or will be conducted as a collective? Or are the different shareholders having different people look at this?

So ultimately, of course, that's going to have to be a shared piece of work across both sites. But what we have to do is, of course, come into those interactions with the specifics here. We're working with Anglo American on developing that. So we have the coverage, of course, as we do today across both QB and Collahuasi in that respect. But of course, ultimately, what that looks like is going to be something for all shareholders to be part of. But for the time being, that's something we're progressing at pace.

The next question comes from Anita Soni with CIBC World Markets.

And again, similar to Orest, congratulations, Emma, on your move and best wishes on your next endeavor. And thanks for all your help over the last couple of years.

I just wanted to ask firstly on this Rock Bench 6. What would you need to see to be able to make that go-ahead decision to accelerate the Rock Bench 6 construction?

I think, Anita, as ever, when we make a decision to invest capital, we need to ensure that that's the right thing to do in terms of the uplift that it will give to the value of the operation. I think we have a pretty strong conviction view that this is the direction that we will go in because of that acceleration and derisking that I mentioned. But we've just got our usual investment committee processes to work through here and the technical assessment of Dale and his team. But like I said, I think a high likelihood that that's the direction that we'll follow.

And the idea is that you now build out the rock bench, that you'd have a wide enough crest to be able to put the infrastructure in earlier, and then that would help with the sand deposition and accelerate that?

Yes, that's exactly right, of course. An additional rock bench here, Rock Bench 6 will significantly widen the crest. That will enable the installation of the permanent infrastructure on that crest. And of course, then the efficiency of the deposition of tailings upstream and the deposition of sand downstream will be significantly enhanced and more efficient than the practices that we're deploying today.

Okay. So would there be any kind of cost savings from that? I mean, just more of the sand deposition is being taken up by just sort of automatic deposition rather than physically placing it with trucks. Is there any kind of cost savings that you guys are looking at?

Yes. I mean, I think that's a fair assumption. I don't think they'll be dramatically material in the context of the overall operation at QB. But yes, you're right in that we will gain efficiencies from progressing to this next phase of a steady-state operation.

Okay. And I just have one quick question. On the Antamina zinc pipeline, is there any update on where that stands? I read -- it says in your release that it was shut down during the quarter. Is there any idea when it would restart?

Yes. Anita, that's now fixed, and it's back in operation.

The next question comes from Craig Hutchison with TD Cowen. The next question comes from Craig Hutchison with TD Cowen.

I just want to ask a follow-up question on the throughput at QB. Just given your guidance range of 115,000 tonnes to 132,000 tonnes, is the goal now in the second half of the year to really kind of push the mill up to its design rate? Or are you guys still kind of being a bit cautious on that? I guess maybe as a follow-up, like is there anything on the tailings management facility or the mill itself that would prevent you guys from operating a design?

Dale, do you want to provide a bit of color on that, please?

Sure, thanks for the question. I think really, the focus that we've been doing and recognizing 3 quarters of stable operation is just stability. And what that's allowed us to do is you can see sort of achieving that stable metallurgical recovery as well as improve the moly plant performance.

But agree, our focus now is to build upon that stability, start optimizing and improving plant performance, and it is unconstrained from the TMF. So really, our focus is to be able to achieve stable operations and be able to drive demonstrated results through that improvement over the next few quarters. So that's our focus there.

Okay. And then the improvements in recovery, is part of that just the stability of the operation? Or are you also starting to see improvements just in terms of geology, less oxide, less clay-type interferences with the recoveries?

Yes. As the mine continues to develop, we do expect to see improved recoveries as a result of the ore type. But at the same time, what we're doing today is through stable operations, it's far easier to identify those opportunities to make some incremental improvements. This is allowing us also to drive more operating discipline to achieve that stability and repeatability of performance. So it's really a combination of the two as we keep moving forward.

Okay. Great. And just maybe one last question for me. Just on the Trail deal you guys announced a few weeks back, just -- is the plan to double the production of germanium -- is part of that just better recoveries from Red Dog? Or is it more you're going to source more ore from other places? And I'm just trying to understand, like how much of an uplift would be for you guys from your existing operations versus just more of a tolling type of arrangement?

Yes. So Craig, that's more about increasing the processing capacity at Trail over time so we can handle more feed. Of course, the majority of our feed today comes from Red Dog. And of course, that's been supplemented by certain residues and other sources to complement that.

And we continue to look on a go-forward basis at a wide range of potential sources. And our commercial group, working with our corporate development group, has been very active sourcing a wide range of feeds to support that going forward. But fundamentally, the additional volume isn't a recovery game. It's actually expanding processing capacity, and that's what the investment would be directed towards.

The next question comes from Liam Fitzpatrick with Deutsche Bank.

Two quick ones probably. First one, just on indexation in Canada. Any recent updates that you can share with us on that?

And then second one on Trail. You did highlight that Q2 would be impacted by maintenance, but profitability has still remained very strong compared to history in Q2. So should we expect similar or better profitability in the second half? Or anything else you'd highlight on that asset?

Thank you, Liam. I'll get Crystal to [indiscernible] have to meet certain domicile criteria for Canada. But that's been quite encouraging in that it talks about the materiality being an important part of the Canadian investment landscape, but it also doesn't require Canada to be the highest level of economic component of a business of an issuer to achieve that.

So we're quite encouraged by what we've seen overnight. Also, S&P, rather than applying strict criteria are giving themselves some flexibility here and some discretion around how these decisions are made, and importantly, when these decisions are made. So the consultation process will start shortly. It's open for comment until the 21st of August, and we expect beyond that to learn more.

So I think the signals there, Liam, are being quite positive here, and we'll continue to watch that carefully. And of course, our investors and other members of the investment community continue to advocate strongly for that development. And then Crystal on Trail, please.

Liam, I hope you're doing well. Similar to what we said in the first quarter, as we think about Trail, we're very focused on the feed optimization, and the profitability as we go forward really depends both on commodity prices as well as that feed profile. We continue to focus on maximizing profitability over volumes.

But there's a couple of things I would note for the second half of the year, first being that we expect the refined zinc production to increase in the third quarter as we continue to optimize the feed source, as I mentioned. And that also balances with processing residues. And then we do have planned shutdowns for required maintenance in both zinc and lead in the fourth quarter. So I think those would be things I would use to moderate your expectations for the second half of the year.

The next question comes from Myles Allsop with UBS.

I mean, one thing that surprised me a little bit is that you didn't point to the upper end of guidance. I mean, how -- are you just being super prudent given history when thinking about production for this year? Or are there -- is there a kind of realistic scenario where you could be at the midpoint of guidance rather than the top end of guidance?

Yes, Myles, thank you. I mean, we are very focused on this operational consistency and stability throughout the year. That's a primary focus for us. I think we've spoken before, particularly at HVC, that, that has been very much an H1-weighted story. In the second half at HVC, we're going to have some downtime in the mills for tie-ins to the mine life extension project. And we also expect a reduction in grade as well from a feed perspective in the second half of 2026. So we are expecting lower production there. We're also expecting lower production at Antamina in the second half of the year.

So of course, we'll work as hard as we can to generate the best production outcomes possible across all of our sites, but we do still think that the guidance ranges that we have here are valid and appropriate and reflect well, the full year outcomes that we're anticipating.

Okay. And going back to QB, the debottlenecking optimization, now that we're getting 3 steady quarters and the tailings has been kind of derisked to a large degree, should we be thinking about bringing forward the debottlenecking optimization opportunities, getting throughput up that 15%, 20% or so?

Thanks for the question. I think certainly, the work in achieving that stable operation is certainly highlighting key areas that will allow us to, one, optimize and then think about future debottlenecking. So that work is in progress, really building upon that operational information that we're gathering to think about what's next and as we progress.

But certainly, our focus now is to certainly drive that stability and provide that incremental improvement within what we have. And that's really highlighting that really, the best cost-effective ways to improve the operation as we go forward.

What's the best time frame to start debottlenecking? I mean, could that be sort of over the next 2 years? Or would we still be looking further out?

So I think that's part of the work that we're doing to understand what work we're actually needing to do and then how fast we can do that work. Just recognizing all the other work we're doing in terms of the broader picture of what QB will be, what it will look like and how we progress. So I think that work is still being defined to what we can do short term, and then what we would take more work in a bit longer time.

Okay. I think, Myles, you can see from our disclosure today around some of the key operating parameters, we still got work to do to push those towards design levels. And that provides a higher base and a strong foundation on which to execute those debottlenecking projects.

The next question comes from Lawson Winder with Bank of America.

This is Adam Smiarowski on for Lawson. I just have a follow-up question on the recovery initiative at QB2. Would you be able to kind of describe some of the work that's being done there? And what level of copper recovery we should expect for the remainder of 2026 and into 2027?

Yes. So look, we're not going to reguide the copper recoveries. We've set out the parameters for this year that we're targeting to operate within. But Dale, maybe if you can just give some color on some of the initiatives that we're pursuing to improve recoveries?

Quite a bit of the work that we've done builds upon the comprehensive operational review that was done last year. One key element was certainly accelerated drilling, getting some more information around the ore body to help our operational plans and help develop key playbooks for different ore types as we go forward. So that work has been done, and now we're currently optimizing that, and that's being fed into our different process control setups to allow us to be more efficient in what we do.

In addition, we continue to progress installation of additional sensors and controls to allow us to be -- fine-tune the operation and really building upon that stable operation and see what we can do to improve that control and just that stable base. We continue to improve and optimize our reagent addition, building upon that stability that's allowed us to be more effective and efficient in how we see things. And this gives us more confidence in the repeatability of our performance and our ability to build upon it as we continue to improve our throughput rates.

Great. And just a question on costs. Q1 and Q2 net cash costs have been well below guidance and byproduct prices are above the sort of the guidance that you provided. So my question is, are unit cash costs setting up to beat guidance? And communicate sort of the sensitivity of those unit costs to byproduct prices as well as especially for diesel shipments going in, how -- what the sensitivity we have to the zinc to diesel prices?

Crystal?

Sure. Hi, hope you're having a good day. Again, similar to the story on production, I think that's an important component as we think about the unit cost in the second half of the year. Obviously, we're very pleased with our cost performance year-to-date. There remains a lot of volatility in the byproduct pricing as well as in energy costs. So while we do have a more conservative assumption embedded in our guidance because those were established late last year, we remain confident in the ranges. I think if byproduct pricing persists, we would expect to be below the midpoint on copper, and then similarly on the zinc side of things.

From a sensitivity perspective, I think there was a few things you had in there. I believe you said energy and what the sensitivity to that was. For every sort of $10 change in -- per barrel of WTI is about $0.01 on our zinc C1 and about $0.03 on copper. I'm not sure if I captured everything that you were asking there, but feel free to weigh in if there was more.

That's helpful on the energy. And just on some of the byproduct assumptions, so I think silver is roughly double what you have in your guidance. So just sort of how $10 change in silver, how that's going to affect net costs?

Sorry, just give me one quick second here to find -- I don't have it off the top of my head. Can we circle back with you offline? Sorry, I just need to get the team to provide a bit more on that. I can provide it to you in an EBITDA context, but I don't have the C1s off the top here.

That's perfect.

Okay. We'll come back to you offline.

The next question comes from Brian MacArthur with Raymond James.

I just want to follow up on Craig's question about the germanium and I guess, gallium and other stuff that the Canadian government is putting money in at Trail. At Red Dog, as it currently sits, it runs out over a number of years. We've got a new area.

I got a couple of questions. Does the new area have the same amount of germanium? Or b, if it doesn't, how do you get your heads around the fact that you may be losing one of the major sources for germanium at Trail on a longer-term basis if it's not grading the same way? And I realize this is pretty competitive information, so I'll accept whatever you're willing to actually talk about.

Yes. Thanks for that question, Brian. I'm going to pass you to Ian Anderson, our Chief Commercial Officer. Because in addition to Red Dog, which he can comment on, he's also been looking at and working to develop a whole series of other feed sources to supplement the feed at Trail. So over to you, Ian.

Thanks for the question, Brian. I would say at the outset that decisions in terms of Red Dog MLE and the advancement of that project are independent from what we're doing at Trail, and of course, subject to the normal both capital allocation and portfolio decisions that are required of any project.

But the feed sources from Trail come from a variety of places, including Red Dog. As we're advancing the Red Dog MLE project, which, of course, is rich in germanium, we've also entered into a number of recent transactions in order to secure offtake agreements with both zinc and germanium miners.

And I'll give you some examples. So we recently had a transaction to divest the Apex germanium mine to Blue Moon Metals, and that secured an offtake agreement for zinc concentrate from Blue Moon and marketing rights for that product produced from Apex. We also had a recent investment on an equity basis to rebuild zinc, lead and silver capacity in the Idaho Silver Valley, an area that's really growing, and you're seeing more production coming on there through Bunker Hill. And we also engaged in a recent divestment of the Smucker project to Valhalla Metals, and that secured priority purchase rights and [ last ], an offer of -- [ last ] on concentrates produced from the Sun and Smucker properties.

So we are also working on a number of others. And of course, based on this announcement, this is an exciting area where there's lots of promise. So we intend to continue our strategy of optimizing for value at Trail, and both residues and feed sources are an important component of that in order to create optionality.

Great. That's very helpful. Can I just ask one more question? Because when I look at some of the other sources, Kipushi, China, would you take that stuff? Or you're trying to get your -- I assume it's all designed to be Western sources.

We've got lots of offers, and we'll be very careful about how we engage with those, but some of them are pretty exciting, as I said, both on the residue basis and on the raw feed basis. So more to come on that one.

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

Okay. Thank you, operator. And before we sign off and to some of the kind comments earlier in the call, I did want to note that this is Emma Chapman's last quarterly conference call with Teck. Of course, I'd like to thank Emma for her incredible contributions, for the incredible relationships that she's built and has maintained throughout both the sell side and the buy side.

And I know she's worked in very close partnership with many of you. Of course, Emma has been with us through what has been an intensely active period of time. And she's done an amazing job on behalf of Teck, and we wish her all the very best in her next chapter.

Edwin Shadeo has stepped in as Acting Vice President, Investor Relations and Treasurer. Many of you will already know Edwin from his previous roles with the company since 2005. He's been in Treasury. He's been in Corporate Development and previously in Investor Relations. So please do reach out to Edwin, and of course, other members of our IR team on anything that you want to follow up on.

So thanks again to all of you for joining us today, and enjoy the rest of your day. Thank you.

[Audio Gap]

I also would like to introduce and welcome Dr. Norman B. Keevil, Teck's Chair Emeritus. He's also in the room with us today. He's a founder and an incredibly important person in our history. Thank you, Norm, for coming today.

Sitting on stage with me is Teck's Chief Executive Officer; and my fellow director, Jonathan Price; Executive Vice President and Chief Legal Officer and Sustainability Officer, Lyndon Arnall; and Vice President, Legal and Corporate Secretary, Amanda Robinson.

When the formal business of the meeting is complete and the meeting has been adjourned, Jonathan will give a presentation. Following which, we'll invite questions.

At Teck, we begin each meeting with a safety or values message. I'd like to introduce Teck's Chief Inclusion Officer, Jackie Scales, to give us a values message.

Good afternoon, everyone. I want to take a moment to share a value-based message on ending violence against women and girls, particularly the disproportionate impacts faced by indigenous women, girls and Two-Spirit people. In Canada, indigenous women are significantly more likely to experience violence or go missing than any other women. As a company that operates on indigenous lands and works closely with indigenous communities, we believe it's important to acknowledge these realities clearly and respectfully.

Two important natural -- national observations that help bring visibility to this issue are the Red Dress Day, which happens on May 5; a day of awareness for Missing and Murdered Indigenous Women, Girls and Two Spirit people; and the Moose Hide Campaign Day on May 15, which invites individuals and organizations to take a stand against gender-based and domestic violence.

When we talk about Moose Hide Day, it is in particular where men and boys stand up to do their part in ensuring that we eradicate violence and domestic abuse against women and children.

At Teck, we recognize that respect, safety and dignity are foundational to sustainable development. Our observation of Red Dress and the Moose Hide Day campaign reflects our broader commitments to respecting indigenous peoples, cultures and rights, contributing to safer workplaces and communities and standing against violence and harassment in all its forms. This commitment aligns with our sustainability framework and our focus on responsible and values-driven leadership.

The artwork that you see here was commissioned by Kayla Phillips, an indigenous artists with deep ties to regions where Teck operates. Her work reflects remembrance, loss and the ongoing call for justice and reminds us that behind these statistics are real people, families and communities. We are grateful to share her work today with permission as part of this message.

Addressing violence against women and girls, particularly indigenous women and girls is not a single-day event. It requires awareness, partnership and engagement and willingness to eradicate violence against women and girls in particular, in these two instances, indigenous women and girls.

Thank you for taking a moment to learn about how we can take part in this and pass it back to you.

Thank you very much, Jackie. Before we begin the formal business of the meeting, I want to make a few comments on behalf of the Board of Directors and to reflect on where Teck stands today and the future that lies ahead. This annual meeting is very likely the last one that we hold as Teck in its current form as we work towards completion of the merger of equals with Anglo American. That makes this a very meaningful moment, not only for our company, but for our employees, our communities and our shareholders, who have helped build this company over many, many decades.

Teck has a long and proud history as a Canadian company, grounded in responsible resource development and a commitment to long-term value creation. This is a legacy that many people have contributed to and in particular, Dr. Keevil and his father.

The planned combination truly draws on the strengths of that foundation and our legacy, and the confidence that we have in the future. It will mark the beginning of a new chapter as Anglo Teck, a Canadian headquartered global critical minerals champion, drawing on the legacy of both organizations to create a step change, creating new opportunities for growth, resilience and shared success while continuing to deliver value for our shareholders and opportunity for all of our stakeholders.

On behalf of the Board, I want to thank you for your continued support as we navigate towards this exciting new future.

The meeting will now come to order. I'll chair the meeting. I'll ask Teck's Vice President, Legal and Corporate Secretary, Amanda Robinson, to act as Secretary of the meeting.

Pursuant to the authority granted to me by Teck's bylaws, I appoint Zabrina Evangelista of TSX Trust Company to act as scrutineer.

The Secretary has confirmed to me that the meeting materials were mailed to shareholders in accordance with applicable laws on March 23, 2026. I direct that a copy of the minutes and a declaration of mailing rather be attached to the schedule of the minutes to this meeting.

I'll now ask the Secretary to read the scrutineers' preliminary report on attendance.

Quorum for the transaction of business at this meeting is at least 3 shareholders present in person or by proxy, who hold shares representing at least 25% of the votes that could be cast at this meeting.

I'm pleased to report that there are 56 shareholders holding 6,302,858 Class A common shares with 100 votes per share and 302 shareholders holding 344,434,427 shares Class B subordinate voting shares present in person, virtually or by proxy at this meeting. This represents a total of 358 shareholders holding 974,720,227 total votes, which is 78.5% of the 1,241,269,110 issued and outstanding votes as of the record date of March 2, 2026, including 71.6% of the votes attached to Class B subordinate voting shares.

Thank you, Amanda. Having determined that a quorum is present, I declare the meeting properly constituted for the transaction of business, and I direct that a copy of the final scrutineers' report on attendance be attached as a schedule to the minutes of the meeting.

Voting today is going to be conducted by way of a ballot for each resolution to be considered. Registered shareholders who submitted a valid proxy in advance of the meeting do not need to vote again. If you're attending in person, voting will take place on ballots that were provided to you when you arrived. Please mark your ballots as the meeting progresses and the scrutineers will collect them at the end of the meeting.

If you're attending virtually, voting will be conducted by electronic ballot on each item of business. Polls will remain open until, in my opinion as Chair, every registered shareholder or duly appointed proxyholder has opportunity to vote.

Rather than hold up the business of this meeting for the final tabulation, detailed voting results will be filed on SEDAR+ for those who are interested.

Each Class A common share carries 100 votes. Each Class B subordinate voting share carries 1 vote on all matters. Approval of all resolutions before this meeting today require the affirmative vote of a majority of votes cast by shareholders voting together as a class, present or virtually or represented by proxy at this meeting.

During the discussed period, only registered shareholders or proxyholders are permitted to ask questions. If you do have a question, please limit your question to 2 minutes of speaking time. All questions must relate to the business at hand.

If you're attending this meeting in person and would like to ask a question, please raise your hand, and I will call on you at the designated time. When asking your question, please provide your name or the name of the entity you represent and confirm that you are a registered shareholder or a duly appointed proxyholder. If you're attending virtually, please submit your questions through the virtual meeting platform.

To ensure fairness for all attendees, I will exercise discretion to decide on the amount of time allocated to each question and may limit consolidate or decline questions. We're also happy to engage with shareholders outside of the formal meeting in accordance with our shareholder engagement policy, which is found on our website. So if anyone feel questions have not been addressed or they did not have an opportunity, they just need to reach out to us as per the shareholder engagement policy.

So now to the business of the meeting. The first item of business is the presentation of our audited consolidated financial statements for the year ended December 31, 2025, together with the auditor's report. The financial statements are contained in our 2025 annual report, which is available on our website and under profile on SEDAR+ or in the United States on EDGAR.

Are there any questions or comments regarding this matter from shareholders or proxyholders in the room?

Seeing none, Amanda, are there any questions or comments submitted in connection with the presentation of the audited consolidated financial statements online?

There are no questions online.

Thank you, Amanda. The second item of business is the election of directors. As noted at the outset, we have 11 directors being nominated for election in accordance with the provisions of general bylaw #1. You've already met all of them. They are at the front of the room, but they are Arnaud Balhuizen, James Gowans, Norman Keevil III, Catherine McLeod-Seltzer, myself, Una Power, Jonathan Price, Paul Schiodtz, Tim Snider, Sarah Strong and Yu Yamato.

Based on the proxies that we've received in advance of this meeting, each director that we have nominated has received votes in favor that range from at least 97.7% to 99% of the votes cast, and each will therefore be elected based on those proxy results.

Are there any comments or questions regarding the election of directors from shareholders or proxyholders in the room? Amanda, are there any questions or comments submitted in accordance in connection with this matter?

There are no questions online.

Thank you very much. Okay. I will now entertain a motion that those nominees be elected as directors of the corporation.

For efficiency, I have asked our Corporate Secretary, who is an appointed proxyholder, to move all of our motions today.

So moved.

Thank you. If anyone is voting by ballot, I'd encourage you to sign your ballot now, printing your name on the ballot. And for those of you who are attending virtually, voting on these items will be open for a short period of time on the virtual meeting platform. Please submit your votes now.

[Voting]

I'm going to move now to the third item on the agenda, which is the appointment of the auditors. Based on the proxies received by the scrutineer in advance of the meeting, the auditors have received votes in favor, representing at least 97.8% of the votes cast.

Are there any questions regarding this matter from shareholders or proxyholders? Amanda, any questions online?

There are no questions online.

All right. Then I will entertain a motion to reappoint PricewaterhouseCoopers LLP as auditor of Teck and to authorize the directors to fix the auditor's remuneration.

So moved.

Thank you, Amanda. Please mark your ballots now and vote online for those of you attending virtually.

[Voting]

The fourth item and last, you'll be relieved to know, on our agenda is the advisory vote on Teck's approach to executive compensation.

Consistent with past practice, the Board has asked shareholders to vote on an advisory say-on-pay resolution as described in the management proxy circular for this meeting. Based on proxies received by the scrutineer in advance of this meeting, the say-on-pay advisory vote has received votes in favor, representing 98.2% of the votes cast.

Are there any questions from anyone in the room regarding the say-on-pay vote? Seeing none, Amanda?

There are no questions online.

All right. Thank you. I'll now entertain a motion to approve the advisory resolution on the corporation's approach to executive compensation in the form set out in the management proxy circular.

So moved.

Thank you. So please mark your ballots if you are voting in the room and vote online for those of you voting virtually.

[Voting]

I believe everyone has now had an opportunity to vote on the items of business before the meeting. I declare the polls to be closed.

And as noted, as we went through this, since we had such overwhelming support in the proxies that were submitted before the meeting, I can provide you with a preliminary voting result from the scrutineer on the 3 items of business. Each of the 11 directors have been -- that were nominated has received a majority of votes cast in favor for their election and are thereby elected.

The reappointment of PricewaterhouseCoopers LLP as auditor of Teck has been approved, and the directors are authorized to fix their remuneration. And the advisory resolution on Teck's approach to executive compensation has been approved.

I direct that the final results of the vote on each matter before the meeting be included with the minutes of this meeting, and we will issue a news release with the voting results in accordance with TSX rules and detailed voting results will be filed on SEDAR+.

We've now reached the end of the formal business of this meeting. There being no further business to come before the meeting, I declare the meeting terminated, and I will turn the meeting over to our President and CEO, Jonathan Price, for an update. Following which, we will entertain your questions. Jonathan?

Thank you, Sheila, and thanks, everyone, for joining us today for Teck's 2026 Annual Meeting of Shareholders. As Sheila said, this is a historic meeting as we are on the threshold of a next exciting chapter for Teck with the planned merger of equals to form Anglo Teck. And we head towards that milestone in very strong shape, building on a 2025 that saw Teck continue on the journey to become a truly global critical minerals champion.

Before we start, I would like to draw your attention to the caution regarding forward-looking statements. I know this is your favorite part. 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 statements.

I will also refer to various non-GAAP measures in these remarks. You can see how we define those measures and how they reconcile to our accounts in our most recent quarterly filings and in Teck's latest investor presentation in the Investors section of teck.com.

So with that, I will start with a summary of the key highlights from 2025.

Teck continued to make significant progress on our strategy to be a global leader in critical minerals with a focus on copper growth. And the merger of equals with Anglo American represents a significant step forward in that strategy. It will massively increase our scale, resilience and copper growth potential and position us as a top 5 global copper producer.

In December, shareholders voted overwhelmingly in favor of the merger, and a key approval was secured under the Investment Canada Act. We thank you for your support. We look forward to closing the merger, and we remain excited about its outstanding value creation potential.

In October, we announced the completion of our comprehensive operational review, which strengthened our operational plans and was a key contributor to closing out the year with strong operational performance.

At QB, we made meaningful progress against our QB action plan and towards steady-state operations by the end of this year. We maintained a robust balance sheet and continue to return significant cash to our shareholders through share buybacks and dividends, totaling $1.3 billion in 2025.

We also began construction of the Highland Valley Copper mine life extension in July, and the project is now well underway. And of course, we never wavered from our first priority, the health and safety of our people.

Health and safety is a core value at Teck and the first consideration in everything we do. Our high potential incident frequency rate for 2025 was 50% lower than 2024, marking our best result on record. And we've had a solid start to 2026 as well with an even better high potential incident frequency rate for the first quarter.

We continue to advance our safety culture through the rollout of life-saving commitments, a fatality prevention program that reinforces consistent safety practices. However, we were deeply saddened by 2 fatalities in separate incidents at our non-operated joint venture Antamina in 2025. We work closely with our partners to complete thorough investigations and we shared learnings from these events across Teck and the industry to help prevent recurrence.

As I noted earlier, in 2025, we returned a total of $1.3 billion to shareholders while also reducing debt and retaining significant cash on hand. This included $1 billion in share buybacks and $246 million in dividends.

Teck achieves strong financial results for the year, including adjusted EBITDA of $4.3 billion and profit from continuing operations before taxes of $1.7 billion for the year.

As of December 31, 2025, Teck had a cash balance of $5 billion and a liquidity position of $9.1 billion. This strong financial performance continued into 2026 with adjusted EBITDA of $2.1 billion in Q1 2026, which was $1.2 billion or 125% higher than the same period last year.

Our cash balance also continued to increase. And our cash balance as of yesterday was $5.7 billion. Teck continues to have the strongest balance sheet in our sector, which supports the continuation of balancing returns to shareholders with reducing debt investing in value-accretive growth.

So now turning to our operations. 2025 was a significant year. As I mentioned, we met our revised operational guidance for 2025 and have delivered a very strong start to 2026, underpinned by record quarterly copper sales, strong commodity prices and disciplined execution across all our operations.

At QB, we continue to make strong progress towards steady-state operation by the end of the year through implementation of our QB action plan. The primary constraint on QB production has been the tailings management facility or TMF, and the TMF development work is now proceeding as planned.

In December, we achieved the highest monthly rate of throughput in 2025. This progress continued in Q1 this year as QB delivered strong production consistent with Q4 2025.

In 2025, we also received regulatory approval and sanctioned the construction of the mine life extension for Canada's largest copper mine, Highland Valley Copper here in BC. Extending that operation out to 2046 and producing 132,000 tonnes of copper per annum on average over the life of mine, and work on that project is now well underway.

We have also continued building on our environmental and social performance. We achieved 100% renewable power at our Chilean operations by the end of 2025. We're named one of the most attractive companies to work for in Chile and for the ninth consecutive year, one of Canada's top 100 employers. And Teck was recognized by Morningstar Sustainalytics as a 2025 ESG industry top-rated company and achieved Prime status on the ISS ESG Corporate Rating.

I want to close by talking about both the history of Teck and its future, about the spirit of reinvention and evolution that has defined the journey of this organization for the past 113 years and continues to guide us today into the next chapter of that story.

Starting in 1913 as a single gold mine through mergers and consolidations, exploration and development and, of course, from the good old-fashioned work of actually building new mines, mines like Temagami, Afton, Bullmoose, Red Dog, Antamina and, of course, Quebrada Blanca.

At various points in time, Teck has been a company known for gold, copper, zinc, oil and steelmaking coal and always as a company that has evolved to meet the needs of our shareholders, our customers, our employees and the world.

As Dr. Keevil would be quick to remind, you can never rest on your laurels. And I think it's fair to say that Teck certainly has not. And we owe an enormous debt to Dr. Keevil, his father and the many other pivotal individuals who made that culture part of the DNA of this great company.

The seeds for the next big reinvention was set beginning back in 2023, and we began repositioning Teck to become a pure-play metals company focused on copper. That included exiting the oil sands in 2023 and the steelmaking coal business in 2024 while growing shareholder value. We completed construction on QB, our new tier, Tier 1 cornerstone copper asset, all the while advancing and de-risking our leading copper growth pipeline.

And we grew our copper production by approximately 55%, and it now represents over 70% of our total production, all of which made possible the most consequential strategic milestone, the merger of equals with Anglo American to form Anglo Teck.

This merger is a step change forward in advancing our strategy and the next chapter of the story of reinvention and growth that has defined Teck for so long. Anglo Teck will be one of the world's leading investable copper opportunities as a top 5 global copper producer with significant scale, resilience and growth potential.

We expect this positioning will provide access to a deeper pool of investors and enhance Anglo Teck's re-rating potential. The combined business will have one of the world's leading copper portfolios with 6 world-class copper assets, more than 70% copper exposure and tremendous copper growth optionality at very low capital intensity.

The compelling opportunity to combine QB and Collahuasi has the potential to unlock USD 1.4 billion in annual underlying EBITDA uplift. There are also $800 million in tangible recurring annual corporate synergies potentially available. And we will have the resilience and enhanced financial capacity to grow copper production into what is proving to be a very strong market. This is crucial because for electrification, energy security and advanced computing, copper is central and indispensable. As global demand continues to rise, Anglo Teck will be in a strong position to fill that essential need and capture value.

So in closing, the evolution of Teck into Anglo Teck is the culmination of a strategic purposeful journey to grow this company to become a truly global critical minerals champion headquartered here in Canada.

Today, at what is most likely the last annual meeting of Teck shareholders, I want to thank Dr. Keevil, our Board of Directors, our Chair, Sheila Murray, our employees and of course, you, our shareholders. We look forward to embarking on this next exciting chapter together.

So with that, I am happy to take your questions. Thank you very much.

Thanks to everyone who joined us today for Teck's Annual Meeting of Shareholders. The meeting is now concluded.

Ladies and gentlemen, thank you for standing by. Welcome to Teck's First Quarter 2026 Earnings Release Conference Call. [Operator Instructions] This conference call is being recorded on Thursday, April 23, 2026. I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Teck's First Quarter 2026 Conference Call.

Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. That does not assume the obligation to update any forward-looking statements. Please refer to Slide 2 for the assumptions underlying our forward-looking statements. We will reference non-GAAP measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website.

On today's call, Jonathan Price, our CEO, will provide highlights of first quarter 2026. Crystal Prystai, our CFO, will follow with further details on our operational performance and financials in the quarter. Jonathan will then wrap up with closing remarks and an opportunity for Q&A.

And with that, over to you, Jonathan.

Thank you, Emma, and good morning, everyone. We will start with the highlights from the first quarter 2026 on Slide 4.

We delivered a very strong start to the year with robust financial results, reflecting both disciplined execution across our operations and the cash flow generation potential of our portfolio. Our adjusted EBITDA more than doubled to $2.1 billion in the quarter, driven by record quarterly copper sales volumes, higher commodity prices and the continued success of our optimized feed strategy to Trail operations. This has supported robust cash generation with $1 billion in cash flow from operations, contributing to a $338 million increase in our net cash position over the quarter. And with ongoing cash generation into April, we further increased our cash by nearly $300 million since March 31, and our current liquidity is $9.8 billion as of yesterday.

Throughout the quarter, we made considerable progress against our key near-term priorities. For our merger of equals with Anglo American, we obtained regulatory approval from South Korea and advanced integration readiness. We had strong performance across all operations in both our copper and zinc segments. We are tracking well against our plans with no changes to our previously disclosed annual guidance.

At QB, the team delivered consistent performance with production in line with Q4 2025 and record quarterly copper sales. We also made significant progress on the tailings management facility or TMF, including completion of Rock Bench 4. And we continue to advance the Highland Valley mine life extension project with detailed engineering now over 90% complete and procurement nearing conclusion with our capital guidance of $2.1 billion to $2.4 billion unchanged.

All in all, it's been another strong quarter of performance in which we demonstrated the resilience and potential of our assets and further improved our strong balance sheet.

So turning to an update on the merger of equals and Anglo American on Slide 5. We continue to make progress with regulatory approvals. As mentioned, we received approval from South Korea in the first quarter and the approval from China is advancing. At the same time, we are making good progress on our integration planning work to ensure readiness to close and to position the combined business to hit the ground running from day 1. We are moving steadily closer to creating a leading global critical minerals champion and realizing the significant value creation potential of Anglo-Teck. We continue to expect closing of the transaction within 12 to 18 months from the announcement last September.

Turning now to safety on Slide 6. Teck had very strong safety performance in the first quarter. Our high potential incident frequency rate for Teck-controlled operations remained low at 0.05% in the quarter. This is below our 2025 annual rate of 0.06%, which marks Teck's best-ever annual result. Health and safety remain core value for Teck, and we are focused on continual improvement and our vision of everyone going home safe and healthy every day.

So turning to QB performance in the first quarter on Slide 7. I went to QB last week, and I am incredibly pleased with the performance of the team there and the progress we are making at the Tier 1 assets, executing on the TMF action plan and driving operational stability. In the first quarter, we delivered robust and consistent performance with strong production of 56,000 tonnes. This was in line with Q4 2025 despite the planned maintenance shutdown and a shorter operating month in February.

Mill availability of 92% was lower quarter-on-quarter as we completed our planned scheduled maintenance in January, which also had a slight impact on overall asset utilization in the quarter of 87%. Despite this, asset utilization in the quarter remained above the range assumed in our 2026 guidance. Throughput improved slightly quarter-over-quarter, reflecting enhancements in operational discipline and integration across the mine and the plant. Recoveries at 83% benefited from stable continuous operations.

Overall, there was continued operational stability at QB with enhanced reliability and consistency in plant operations during the quarter.

Slide 8 highlights the development of QB's TMF. While at site was able to see the significant progress the team has made in advancing development of the facility. These photos show the progress that we have made since many of you visited QB in November 2025. In the first quarter, we successfully completed Rock Bench 4. You can see that the dam crest has widened significantly, which enabled the raising of the dam wall with no associated downtime of the mill. We also advanced construction of the paddocks and development of the sand dam as evidenced in the picture on the right-hand side, as sand production and quality improved from the installation of new cyclone technology late last year.

Overall, sand deposition rates improved in the first quarter, and the continued improvement is expected throughout the year as we progress construction of the sand dam.

Slide 9 summarizes the status of QB's TMF development work, which remains on track. Construction of the mechanical rock benches is aligned with our plan with the completion of Rock Bench 4 in Q1. We now expect to complete Rock Bench 5 by the end of the second quarter, adding further width to the dam crest. With the installation of the new cyclone technology late last year and the associated improvements in sand deposition, we expect to continue to advance development of the sand dam to enable steady-state operations by year-end. We've decided to install a secondary sand cyclone system to further improve sand quality. The timing of installation will be determined in the second half of this year.

And finally, the schedule for installation of the permanent infrastructure remains under evaluation and will be confirmed later in the year. While we've made significant progress on the TMF, there is still much work to be done throughout the remainder of the year. Importantly, completion of the development of the sand dam, and we remain acutely focused on closing out all remaining objectives.

So turning to the Highland Valley mine life extension on Slide 10. The project includes enhanced mine infrastructure and expanded mobile equipment fleet and a new maintenance shop. The infrastructure working towards a new tertiary grinding mill and replacement of an AG mill with a SAG mill upgrades to the floatation circuit and upgraded power and water systems. Construction activities continue to ramp up across these work fronts and are progressing to plan. We have commenced construction of the new maintenance shop made substantial progress along the tailings corridor and advanced installation of pilings for the new tertiary mill. The early productivity indicators are positive. Detailed engineering is now over 90% complete and procurement awards are now over 95% conflict, with our focus now shifting to expediting the fabrication and then ensuring that time lines for delivery to site are maintained.

We invested $188 million in project for the first quarter. Our capital expenditure guidance for the project is unchanged at $900 million to $1.2 billion this year, which is a peak year for project spend and $2.1 billion to $2.4 billion overall. There is also additional capitalized stripping at HVC to develop future mining areas, and this is expected to continue to ramp up over the remainder of the year.

While we expect some impact from higher diesel prices, our 2026 guidance for capitalized stripping is unchanged at $450 million to $500 million for the entire copper segment. This project will enable average annual copper production of 132,000 tonnes per annum at Highland Valley and extend the life of this core asset to 2046.

With that, I'll hand over to Crystal.

Thanks, Jonathan. Good morning, everyone. I'll begin with our financial performance in the first quarter of 2026 on Slide 12. As Jonathan mentioned earlier, our adjusted EBITDA more than doubled to $2.1 billion in the quarter, with margins expanding to 53% from 40% in the same period last year. This was driven by our highest ever quarterly copper sales volumes and significantly higher commodity prices with copper prices averaging a record USD 5.83 per pound in the quarter.

There was also a meaningful contribution from increased byproduct revenue, particularly from silver. We continue to focus on cash flow generation through our optimized feed strategy at Trail operations. This strategy continues to deliver positive results. Gross profit before depreciation and amortization from Trail significantly improved to $258 million in the first quarter compared with $80 million in the same period last year. We continue to assess our feedstock strategies and remain agile to implement initiatives that will enhance Trail operations profitability and cash flow.

Slide 13 summarizes our financial performance in the first quarter of 2026 compared to the same period in the previous year. The 125% increase in our adjusted EBITDA was primarily driven by higher primary and byproduct prices, which resulted in a total increase in adjusted EBITDA of over $1 billion. Lower smelter processing charges remain a tailwind as the concentrate market continues to be tight. Controllable factors made a positive contribution to EBITDA with higher sales volumes resulting in a $232 million increase. Higher copper volumes were marginally offset by lower zinc sales from Red Dog, which were in line with our expectations.

Now looking at each of our reporting segments in greater detail and starting with copper on Slide 14. In the first quarter, our gross profit before depreciation and amortization in copper increased 158% from the same period last year to $1.8 billion primarily driven by record quarterly average copper prices and copper sales volumes and lower net cash unit costs. Gross profit margin before depreciation and amortization improved substantially to 62% from 47% in the same period last year.

Operational performance is strong across all assets in our copper segment. Copper production increased 32% from Q1 2025 to 140,000 tonnes, including the significant increase in QB's production to 56,000 tonnes. We also achieved record quarterly copper sales at QB, which exceeded production at 70,000 tonnes, drawing down inventory built at the 2025. These sales were supported by normal operations on the ship loader at QB's port facility following the completion of repairs and return to service in February.

Highland Valley's production increased 11,000 tonnes from Q1 2025 due to increased mill throughput and higher grades, partially offset by lower recoveries as mill feed continues to be dominated by softer ore from the Lornex pit. Antamina's production grew 41,000 tonnes due to higher grade copper-only ore as expected in the mine plan. And Carmen de Andacollo's production increased to 14,000 tonnes due to higher copper grades and recoveries. Our copper net cash unit costs were significantly lower than the same period last year, down USD 0.27 per pound, reflecting higher production, lower smelting processing charges and higher silver and molybdenum byproduct credits at QB and HVC.

Looking forward, all of our annual guidance for 2026 to 2028 for our copper segment is unchanged. This year, we continue to expect further growth in copper production to 455,000 to 530,000 tonnes compared with 454,000 tonnes last year.

Turning now to our zinc segment on Slide 15. In the first quarter, gross profit before depreciation and amortization increased 72% from the same period last year to $387 million, driven by higher commodity prices and as I mentioned previously, our continued focus on our optimized feed strategy at our Trail operations. Gross profit margin before depreciation and amortization expanded to 37% compared to 29% in the same period last year.

At Red Dog, zinc production of 106,000 tonnes reflected lower grades as expected in the mine plan and zinc sales were above our quarterly guidance range of 52,000 tonnes. Despite the lower production, we reduced our zinc net cash unit cost by USD 0.18 per pound compared to the same period last year due to higher byproduct revenue largely driven by increased silver prices as well as lower smelter processing charges. Refined zinc production at Trail operations increased 16,000 tonnes compared to Q1 2025 as the zinc electrolytic plant was running at full capacity in the quarter.

Looking forward, we expect Red Dog zinc sales for Q2 2026 to be between 30,000 and 40,000 tonnes, consistent with the normal seasonality of sales. Our annual zinc guidance for 2026 to 2028 is unchanged, and we continue to expect zinc and concentrate production of 410,000 to 460,000 tonnes and refined zinc production of 190,000 to 230,000 tonnes in 2026.

Looking more closely now at our unit costs on Slide 16. In the first quarter, our net cash unit costs in both our copper and zinc segments decreased significantly compared with the same period last year. This was a function of disciplined execution at our operations with higher production and improved byproduct pricing. The current conflict in the Middle East result in some inflationary and supply chain risks, largely from diesel prices and in particular, diesel imports into Chile. This inflationary risk to cost needs to be seen in the context of a material benefit on our unit costs from additional byproduct revenue, which currently more than offset the impact of higher diesel prices. Our annual net cash unit cost guidance impact conservative byproduct prices below those achieved last year and below current spot prices. If current commodity prices persist, this would be a benefit to our realized net cash unit cost for the year.

Our annual 2026 net cash unit cost guidance ranges for both copper and zinc are unchanged and we have provided sensitivities for our net cash unit costs to buy products and the WTI prices. The largest sensitivities are currently expected to be from silver and the WTI oil prices as a proxy for diesel. In our copper segment, our annual net cash unit cost guidance for this year remains USD 1.85 to USD 2.20 per pound compared with USD 2.03 per pound last year and reflecting the growth in copper production that we continue to expect this year.

For every USD 10 per ounce change in the silver price, our copper net cash unit costs are expected to move USD 0.02 per pound. Our 2026 guidance range embeds an assumption of USD 36 per ounce and the spot price is currently trading at around USD 80 per ounce. For every USD 10 per barrel change in the WTI oil price, our copper net cash unit costs are expected to move USD 0.03 per pound. Our 2026 guidance is based on a WTI oil price of USD 65 per barrel and the spot price is currently around USD 93 per barrel.

In the zinc segment, we continue to expect our annual net cash unit cost for this year to be between USD 0.65 and USD 0.75 per pound compared with USD 0.33 per pound last year, reflecting the expected decline in zinc production volumes this year. For average USD 10 per ounce change in the silver price, our zinc net cash unit costs are expected to move USD 0.05 per pound. And for every USD 10 per barrel change in WTI, our zinc net cash unit costs are expected to be USD 0.01 per pound. At Red Dog, we take delivery of all of our required diesel during the shipping season, and we are still consuming fuel shipped in the third quarter of 2025. We are continuing to actively monitor the situation for any potential for further disruptions, including in the cost and supply of inputs.

Turning now to our operating cash flow outlook on Slide 17. With the cash flow we have already generated from operations in Q1 of this year, our illustrative EBITDA cash flow from operations have further improved based on several copper pricing scenarios. Assuming an average copper price of USD 5.50 per pound for the rest of the year, we could generate $6.6 billion in EBITDA and $5.5 million in operating cash flows. And if copper prices remain at current levels, close to USD 6 per pound for the remainder of the year, this could increase to around $7.1 billion in EBITDA and $5.9 billion in operating cash flows. These cash flows are primarily driven by our copper segment, including QB, with a significant contribution from zinc tax segment. This illustrates the cash flow potential of the business, particularly if current copper prices are sustained. We expect strong operating cash flow conversion, particularly at QB.

Turning to our balance sheet on Slide 18. Cash flow from operations in the first quarter was strong at $1 billion. This was despite an $834 million build in working capital due to seasonal working capital outflows throughout the quarter, including payment of the [ nano ] royalty as well as an increase in receivables at the end of the quarter due to higher sales volumes and higher quality prices.

As a result of our strong operating performance, we are building cash with a $338 million increase in our net cash position in the quarter to $488 million. We have continued to generate cash into April with a $276 million increase in our cash balance from March 31, and our current liquidity is $9.8 billion as of yesterday. The cash flows generated from operations also support our capital investments as we continue to execute the HVC MLE project this year. We continue to maintain investment-grade credit ratings and to pay our regular annual dividend of $0.50 per share or $61 million in the first quarter. Overall, robust cash flow generation is strengthening our balance sheet and ensuring our resilient position.

With that, I'll hand back to Jonathan for closing remarks.

Thanks, Crystal. I'll come back to our key near-term priorities to wrap up on Slide 20. First, we are working on securing the remaining regulatory approvals for our merger of equals of Anglo American while advancing our integration timing. Second, we are focused on continuing to deliver safe, stable and predictable operational performance against our plans and guidance. Third, we are pushing hard to progress the TMF development to achieve steady-state operations at QB this year to underwrite the full value of this extraordinary asset. And finally, we are advancing construction of the Highland Valley mine life extension project.

With these key near-term priorities, we are setting a strong foundation for our next chapter of Anglo-Teck as a global top 5 copper company as we continue with our relentless focus on unlocking value for our shareholders.

So with that, over to you, operator, for questions.

[Operator Instructions] The first question comes from of Liam Fitzpatrick with Deutsche Bank.

First question just on QB, just around the installation of the permanent infrastructure. Can you just outline some of the key factors that will drive the timing there? And does it pose any risk to the production guidance that you've given?

Liam, thanks for that question. Firstly, I'll say it poses no risk production guidance, but I'll let Dale Webb, our SVP of LatAm, just talk to some of the timing considerations.

Liam, thanks for the question. I think the primary drivers are really our progression in terms of getting the tailings down to steady state, and that's on track to be -- to achieve that by year-end. Once we're able to achieve that, then we will find an operating window where we have an extended period of time where we don't need to do additional lifts, at which point we can implement and install that infrastructure. So we'll be looking at a period of time in 2027 to be looking to do that. That would be preliminary at this stage, which is under constant review as we progress the build the tailings down.

Okay. And my follow-up is on the Trail asset. I mean, historically, this has not been I guess my biggest focus when looking at the numbers, but it's become quite material. Can you just help us just sort of understand what a sustainable level of EBITDA for this asset will be moving forward? I mean Q1 does look exceptional, but how should we think about Q2 and beyond?

Yes. Thanks, Liam. I'll get Brock to just start a little bit on the operating strategy at QB and then perhaps Crystal can just comment on the financial outcomes of that.

Good morning, and thank you, Liam. As Crystal stated in her opening comments, our strategies remained consistent for the past 18 months. There's 2 key drivers to profitability. One is our feedstock from concentrate and non-concentrated sources. We work closely with the commercial team to have the feed strategy in advance to optimize pricing. Also note, it's an integrated zinc business where our principal feed source is from Red Dog. The second driver is capacity to the plant. We're focused on operating discipline. We have planned shutdowns this year in May and October, approximately 15 to 20 days each.

And with that, I'll hand it over to Crystal.

Liam, I think really the future possibility of Trail as we take forward every quarter, it's going to depend heavily on moly prices, the TC environment and FX rates. Those are all going to be drivers. And as Brock notes, the feedstock is going to be really critical to that. So what you're seeing is byproducts really driving the profitability in the quarter. And so I think it's challenging to measure that sort of EBITDA, but you really have to think about what your views are on commodity prices, and we can have further discussions with the modeling offline, if that's helpful.

The next question comes from Myles Allsop with UBS.

Great. Congratulations on a good quarter. Maybe just firstly on the merger kind of with Anglo. And how are the discussions progressing with the Chinese regulators? Is there anything untoward? And how quickly once the -- assuming the approval comes through from China, can you actually complete the merger and move forward? That's the first question.

Yes. Thanks, Myles. So on the first point. The interactions with SAMR, the regulator in China are proceeding very much on the normal course. We continue both ourselves and Anglo American to respond to information requests, which is quite typical at this point in time. And right now, we haven't received any requests for remedies arriving from this process. So it is very much a normal 2-way technocratic process, if I can put it that way, and we'll continue to remain very engaged in that. As I mentioned before, we don't see any change to the time lines for closing of the transaction with this 12 to 18 months from the date of announcement still remaining our best and current view on that.

With respect to then completing or closing the transaction post the receipt of the China approval, of course, we would look to do that as quickly as possible. There will be a number of considerations that flow into that, but I think you could expect to see one following the other in pretty short order.

Okay. And then on the TSX index, how have those discussions been progressing? Is it looking like you may get index inclusion now?

Well, there's been a few sort of brief shoots coming through in that conversation of the way. As you know, it's something we've been focused on since P&L terms of the transaction, but I'll let Emma just provide a little bit of an update as to where we are with that right now.

Myles, I think the good news is we've seen some really positive momentum coming from S&P and the TSX to find a practical solution to enable Anglo-Teck to retain indexation as a combined entity on the TSX. I mean this is ultimately gain driven by market participants who really want this outcome. And we know that there is currently a consultation process ongoing, which could help shape what the potential framework could look like to enable that indexation. But at the moment, we are hearing pretty positive feedback from the market that there is and incentive to try to find a positive solution, and we just need to establish the timing of what that process would look like and hopefully see a conclusion reached ahead of close of the deal. So we'll work cost with the market, and we'll work closely with S&P and the TSX to try and get that determination for investors.

The next question comes from Anita Soni with CIBC.

Congratulations on a good quarter. Just a couple of questions. I just want to follow up on the indexation. And I guess kind of address it as well because that came up in I think the S&P was soliciting feedback from investors. So do you have any idea when you would hear whether or not you would be included in the index? Is there any time frame?

We don't have any specific time frame, Anita. I think there is obviously some variables that are uncertain. So I think like the actual closing of the transaction. I think from the feedback that we've received from the market, there is a desire to try and accelerate getting the conclusion of that done so that it is done in advance of the close of the deal. But I don't believe that a step process and time line has been established at this point, and we will again, trying to work as closely as we can to try and facilitate accelerated decision from S&P and TSX.

Yes. I think all we have in addition to that, sorry, Anita, is that they make these decisions on a quarterly basis and there's a consultation period ahead of each quarter. So to Emma's point, it's about timing that consultation to be as close as possible to completion of the transaction as we can.

Just to follow up on QB as well. So is there anything that we need to consider going as the year evolves in terms of capacity within the tailings dam? Like at this stage, is there sufficient capacity ahead of you for Q2 and Q3? Or could that be a bottleneck going forward? I understand the mill is running well, but I'm just thinking about the capacity for the deposition.

Yes. So just at a very high level. We've signaled that we expect Rock Bench 5 to be completed within this quarter, within Q2. Assuming we deliver that, then we expect to be able to operate throughout the remainder of 2026 unconstrained by the dam and by tailings capacity.

Another question. The NPI at Fourmile, so that's come up. Is there any plans for you guys to monetize that? Or like how are you thinking about that royalty that you have?

Yes, no specific plans for that right now. We recognize that a valuable asset that we have here in the portfolio. It's a reflection of what is actually quite a large portfolio we have of various royalties associated with prior exploration projects that we've had in the Teck stable. Obviously, very pleased to see how that project will advance over time. There's a lot of technical work that has to still be done around the Fourmile development, and that will further inform the value of the royalty that we hold. So something that we'll remain very close to, of course, but that is one for the future.

The next question comes from Craig Hutchison with TD Cowen.

Just on the potential for the JV between QB and Collahuasi. I think you guys had mentioned in Q1 that we're starting to have discussions there. Can you provide any updates on kind of where things stand with regard to the future JV between those 2 assets?

Yes. Thanks for that, Craig. Look, we remain very focused still, of course, on unlocking the full potential of QB and Collahuasi for all shareholders and stakeholders. We're absolutely convinced that, that combination will offer the fastest route to new copper growth. It will have the lowest risk, the lowest capital intensity and therefore, the highest returns relative to any stand-alone alternatives for either site. However, of course, progressing with QB-Collahuasi and the synergies there will not in any way preclude further expansion of either QB or Collahuasi in the future. We do see that as a district that will be able to offer a significant expansion of multi-decade copper growth for all parties. There is a lot of work going on around that right now. We are progressing with scoping studies. We are progressing with permitting strategies. We are having engagements between the parties and stakeholders more broadly. So lots happening on that front, but of course, nothing concrete to announce at this point.

Okay. Great. And then one more question for me. Just on Highland Valley, very strong grades this quarter. What's the cadence look like from a grade perspective for the balance of the year? Does it drop off pretty significantly in Q2? Or is it sort of steady state and it rolls off in the second half? Anything on grades would be helpful.

Yes, we do expect to see some reduction in grades. But Brock, perhaps you just want to comment on that a little more.

Thanks very much, Craig. So the grade in Q1 '26 was expected in line with our plan and in our annual guidance range. Grades in the first quarter were slightly higher than projected. That was a function of sequencing within the mine plan. Just as a note, we do expect some additional downtime in the second half of the year, so it's associated with the mine life extension project. As we -- as Jonathan mentioned, we're going to convert the autogenous mill to a SAG mill, and we're going to install the tertiary grinding mills. So connecting those 2 things will impact capacity. But all consider guidance great. So no change there.

Next question comes from Carlos De Alba with Morgan Stanley.

Yes. Sorry if this question was asked before or the topic was addressed, I joined a little bit late. Has the Chinese authorities indicated any potential your request in terms of asset divestitures or something of that nature as they go through the review of the proposed transaction?

Carlos, we did address this earlier, essentially, that process is unfolding under the normal course in terms of the -- or responding to information requests are receiving from SAMR. No indication of any request for remedies associated with the approval process at this time.

We have a follow-up question from Myles Allsop with UBS.

Just on the guidance, obviously, a very strong first quarter. I mean, do you think that the guidance now is more conservative? I can understand why you'd want to keep guidance conservative, but why was there no change to production guidance for the year?

Myles, yes, we've worked very, very hard. Last year, but also this quarter, of course, to achieve the guidance and deliver the performance that we have this quarter, and we'll have to continue to remain very focused and work very hard to meet guidance through the balance of this year. So we don't see any case for changing at this point in time.

Where do you see the key vulnerabilities as we stand today after the strong first quarter?

Look, I mean, it's just -- the mining industry is an unpredictable industry. And we just have lots of moving parts at all of our sites all the time. And it's very important that we just remain focused on delivering the plan that we put forward for the year. Of course, we're always striving for improvements and continuous improvement across our sites, but we think that the guidance that we've set out for 2026 is appropriate in reflecting the potential of the assets that we have and reflecting known risks that exist around all of the assets that we have. So there's no specific issue that we are concerned about here. It's a matter of consistent production throughout the course of the year, establishing that steady baseline on which we can continue to focus on improvement above and beyond that.

Okay. And then maybe just 1 last question on the projects Zafranal, San Nicolas, are they -- how -- once the merger completes, how shelf ready are they now? And in theory, could Duncan and yourself move those forward quickly to execution? Or do you think it will take -- is there still -- are there still issues that need to be resolved first?

Look, I think for both projects at the moment, they are at a relatively advanced stage, but we don't yet have all of the permits that are needed. We do still have some studies to be completed in engineering to be further progressed. We're certainly having these projects sanctioned ready either late this year or early next year. And then there will be decisions, of course, that will be considered by Anglo-Teck in our combined form.

The next question comes from Brian MacArthur with Raymond James.

Sorry, can I go back to Trail, and I appreciate it's difficult to forecast given the mix of feed and prices. But you sort of did, call it, $100 million in the fourth quarter and $250 million this quarter and prices are up. But did you benefit on a relative basis this quarter because you had less Red Dog feed? Were you feeding higher third party this quarter where you're making a lot of profit? And if so, do we have to think about that variability going forward as well as pricing?

Yes. I'll get Ian to just [indiscernible] in terms of mix. I think the short answer is no, Brian.

Brian, how are you. In short mill, we've really kept our feed profile both stable and optimized, and that consistently comprises portions of Red Dog as well as third-party feed. And really, it's been the increase in pricing that has driven what we've done relatively...

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.

Okay. Thank you, operator. Thanks, everyone, for joining us today. As ever, any further questions, please follow up with me and the IR team, and wish you all a good day. Thanks.

Ladies and gentlemen, thank you for standing by. Welcome to Teck's Fourth Quarter 2020 Earnings Release Conference Call. [Operator Instructions] I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Teck's Fourth Quarter 2025 Conference Call. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward-looking statements. Please refer to Slide 2 for the assumptions underlying our forward-looking statements.

We will reference non-GAAP measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website. On today's call, Jonathan Price, our CEO, will provide highlights for the full year 2025 and fourth quarter. Crystal Presti, our CFO, will follow with further detail on the operational performance and financials in the quarter and full year. Jonathan will then wrap up with closing remarks and an opportunity for Q&A. Over to you, Jonathan.

Thank you, Ella, and good morning, everyone. I will start with the highlights of the first -- fourth quarter and full year on Slide 4. 2025 as the year further significant evolution for tech as we continue to focus on our strategy of becoming a global leader in critical minerals. On September 9, we announced our transformational merger of equals with Anglo American, a significant step in strengthening our long-term position in copper. This transaction will create a top 5 global copper producer with greater scale, resilience and ability to progress a broader suite of high-quality growth opportunities.

Turning to our operational performance. We closed out 2025 with strong momentum in the fourth quarter with operational performance in line with our revised guidance. And at QB, we continue to make meaningful progress on the ramp up of the operation and against our QB action plan, including key TMS development progress to achieve steady-state operations by the end of 2026.

QB's quarterly copper production was the strongest of the year at 55,000 tonnes, reflecting our progress on the TMF and our focus on initiatives to underpin operational stability. A key contributor to our strong year-end operational performance was the comprehensive operational review completed in October. The review strengthened our operational plans through a robust assessment and rebasing where required, and with that work complete, we intensified our focus on disciplined and predictable execution, which allowed us to deliver against our revised operational guidance for 2025. With that increased clarity and confidence in our operating plans, in January, we reaffirmed our annual production guidance for 2026 to 2028 for all tech operated sites.

Turning to our financial results. Our Q4 performance was very strong with an 81% increase in adjusted EBITDA to $1.5 billion. primarily driven by significantly higher copper prices and increased byproduct revenue. Importantly, this translated to an adjusted EBITDA margin of approximately 50% in the quarter, one of the strongest quarterly margins we've delivered in recent years and a clear reflection of the quality of our portfolio in a stronger price environment.

Our strong Q4 performance was supported by solid full year financial results with a 48% improvement in adjusted EBITDA to $4.3 billion. We maintained a robust balance sheet and returned a net cap cash position supported by robust cash flow from operations. Throughout the year, we continued to return significant cash to shareholders with a total of $1.3 billion returned through share buybacks and dividends.

We also sanctioned the Highland Valley mine life extension or HVC MLE in July and the project is now well underway. HBV MLA will extend the life of mine to 2046 and is expected to produce 132,000 tonnes of copper per annum on average over the life of mine. Overall, 2025 was another transformative year for tech as we continue to advance our strategy of becoming a global leader in critical minerals with the announced merger with Anglo American and a strong foundation of operational execution as we move into 2026.

So turning now to safety and sustainability on Slide 5. Teck has strong safety performance in 2025 with a meaningful improvement in the high potential incident frequency rate for tech controlled operations. It improved to 0.06 for the full year, which is 50% lower than the previous year and equivalent to our best-ever annual result. And we are deeply saddened by the 2 fatal events at Antamina in 2025 and and we offer our condones to the family, friends and colleagues of the disease. We have supported and will continue to support the Antamina team during both investigations to ensure that lessons are learned and shared across the industry.

Looking at our sustainability highlights. We reached 100% renewable power in Chile on October 1, when our long-term clean power agreement for QB's electricity supply came into elect. We are also pleased that Teck was recently named one of Canada's top 100 employers for the ninth consecutive year, recognizing our exceptional human resource programs and innovative workplace policies.

We will provide further details on our full year sustainability performance with the release of our 2025 sustainability report in March, and we will continue to progress our sustainability initiatives through 2026. Turning now to QB on Slide 6. The fourth quarter was the strongest of the year at QB with significant progress made across key operational performance indicators and TMS development.

Throughput in the fourth quarter improved progressively and December's monthly throughput rate was the highest of the year, in line with the strong rates achieved in the fourth quarter of 2024. Recoveries remained consistent over the quarter and were within plan and a function of the ore type process. And copper grades also aligned with our plan, averaging 0.59% in the quarter. This operational performance represents meaningful progress towards steady-state operations at QB. And our operational performance in the fourth quarter provides confidence in our delivery against our 2026 guidance.

Moving at the TMS development work at QB on Slide 7. We made significant progress on advancing the TNF in the fourth quarter with the current development status shown in the diagram on the left of the slide. We completed installation of alternative cyclone technology in November, which has materially improved sand quality, and we have implemented panic design improvements. As a result, we have seen a strong improvement in both sand drainage times and pad development rates.

The diagram on the right shows where we expect to be with the TMF work at the end of this year. We expect to complete the mechanical construction of rock benches and and the improvement that we have seen in sand drainage rates is expected to enable us to catch up on sand dam construction and achieve steady state development by the end of 2026. As previously indicated, during the year, we expect periodic downtime at the plant as we complete TMF work, all of which is fully reflected in our 2026 production guidance.

Overall, we expect QB production will no longer be constrained by TMF developments by the end of this year. Slide 8 provides a high-level overview of the current status and expected completion of our near-term objectives for QB TMF development. Several objectives are now complete, and as just mentioned, other key items, including construction of the mechanical rock benches and advancing the sand down towards steady-state operations are on track to be completed by year-end.

In addition, the secondary sand cyclone system designed to further improve sand quality is scheduled for installation in the second half of this year. And the timing of the permanent infrastructure remains under evaluation and will be confirmed in due course. Together, these initiatives position QB to operate at steady state from the beginning of 2027 onwards, enabling us to unlock the full value of this exceptional resource.

So turning to our operating guidance, which is summarized on Slide 9. As I mentioned earlier, on January 20, we reaffirmed our previously disclosed annual production guidance for 2026 to 2028 for all Teck operated sites as well as our annual 2026 net cash unit cost guidance for both our copper and zinc segments. We also disclosed a decrease in our 2026 annual zinc in concentrate production guidance for Antamina by 20,000 tonnes to reflect an updated mine plan that was finalized in Q4 2025. We remain focused on operational execution and delivering against our operational plans. With that, I'll hand over to Crystal.

Thanks, Jonathan. Good morning, everyone. I'll begin with our financial performance in the fourth quarter and the full year 2025 on Slide 11. Our adjusted EBITDA increased by 81% to $1.5 billion in the fourth quarter and increased by 48% to $4.3 billion for the full year compared to the same period in 2024. These increases were primarily driven by higher copper prices and increased by product revenue. .

As Jonathan mentioned earlier, this translated to one of the strongest quarterly adjusted EBITDA margins that we've delivered in recent years at approximately 50%. Copper prices rose significantly during Q4 with the highest sequential quarterly price gain since the first quarter of 2021. We recorded positive pricing adjustments of $295 million in the quarter, reflecting the higher copper prices.

Our annual 2025 net cash unit costs were lower than the prior year in both our copper and our zinc segments. Trail operations benefited from the strong commodity prices, particularly from the increase in precious metals pricing and generated $106 million in gross profit before depreciation and amortization in the fourth quarter. We generated cash flow from operations of $1.3 billion in the fourth quarter, contributing to our return to a net cash position. In 2025, we also returned $1.3 billion of cash to our shareholders.

Slide 12 summarizes our financial performance in the fourth quarter of 2025 compared to the same period in the previous year. The 81% increase in our adjusted EBITDA in the quarter was primarily driven by higher commodity prices, particularly copper, as well as strong pricing on our byproducts and coal products. This includes the benefit of silver at Red Dog and Trail and specialty metals, including germanium at Trail. We also benefited from lower smelter processing charges, a reflection of the current concentrate market tightness and from lower royalties, primarily at Red Dock. These increases were partially offset by lower sales volumes in the quarter, reflecting the timing of QB and Red Dog sales.

Our operating costs increased in the quarter with increased copper production, but our copper net cash unit cost decrease, reflecting a net benefit from higher by-product prices and lower smelter producing charges. Now looking at each of our reporting segments in greater detail and starting with copper on Slide 13. In the fourth quarter, gross profit before depreciation and amortization in copper improved by 47% compared with the same period last year to $1.1 billion. This reflects higher commodity prices and lower smelter processing charges as previously noted. We have strong operational performance across our copper operations.

Copper production increased 10% from Q4 2024, reflecting higher throughput in grades at Highland Valley, higher grades at Antamina and higher throughput at Karma and coil. As Jonathan mentioned, QB's fourth quarter copper production was the strongest of the year at 55,000 tons, which is a 16,000 ton increase from Q3 2025.

Sales volumes at QB were impacted by weather and see conditions in December, delaying shipments into early 2026 and resulting in a short-term build in working capital at the end of the year. Copper net cash unit costs improved by USD 0.11 per pound, primarily due to increased molybdenum byproducts at QB. Looking forward, our copper production guidance for 2026 to 2028 is unchanged. We expect the quarterly cadence of copper production to be consistent throughout 2026 with some variability across operations.

At QB, we expect grades and recoveries to improve in the second half of the year. At Highland Valley, we expect to process more ore fees from the Besselham and Himatpits in the fourth quarter of 2026 resulting in lower mill throughput and recoveries in line with our plans.

Normal operation at the ship loader at QB's port city has resumed following the completion of repairs at the end of January as that. This should enable us to reduce our logistics costs in 2026 as contemplated in our 2026 annual unit cost guidance.

Looking at our operational guidance for copper in 2026 on Slide 14. Our annual guidance for 2026 to 2028 for our copper segment is unchanged. We expect to see further growth in copper production this year to 455,000 to 530,000 tons compared with 454,000 tons in 2025. This increase is primarily driven by higher TV production as we continue to progress the TMF development work as well as production growth from Antamina with a higher proportion of copper-only ore.

We expect copper production at both Highland Valley and CDA to be stable. Our 2026 annual copper net cash unit cost guidance is USD 1.85 to USD 2.20 per pound compared with USD 2.03 per pound in 2025. This reflects expected higher copper production balanced by conservative assumptions on byproduct pricing, the price is embedded in our 2026 guidance for byproducts are below prices achieved in 2025 and well below current spot levels. If these byproduct price levels persist, we would expect increased byproduct credits and improved net cash unit costs in 2026.

Turning to our bank segment on Slide 15. In the fourth quarter, gross profit before depreciation and amortization for our zinc segment was $305 million, 5% lower than the same period last year due to the expected decrease in red dog zinc sales. This decrease was largely offset by improved profitability at Trail operations. We had strong byproduct revenues at Red Dog and Trail, particularly from silver and germanium as well as lower royalties at Red Dog.

At rail operations, we continue to prioritize the processing residues over maximizing refined zinc production, which allows us to reduce our concentrate purchases in the current low treatment charge environment. As a result of our operating strategy and focus on cash flow generation as well as improved pricing for precious and specialty metals, including gold and silver and germanium, Trail operations is making a positive contribution to our results with $106 million in gross profit before depreciation and amortization generated in the fourth quarter and $281 million generated for the year.

At Red Dog, sales were at the high end of our quarterly guidance range at 136,000 tonnes. Red Docks Q4 bike production declined compared to the same period last year to 87,000 tons due to lower grades and recoveries as we expected in the mine plan.

Looking forward, we expect Red Dock zinc sales for Q1 2026 to be between 40,000 and 50,000 tons, consistent with the normal seasonality of sales. Looking at our operational guidance for zinc in 2026 on Slide 16. Our annual zinc in concentrate and refined zinc guidance for TAC controlled operations for 2026 to 2028 is unchanged. In January, we disclosed the decrease in our 2026 Annual zinc and concentrate production guidance for Antamina by 20,000 tons to reflect an updated mine plan that was finalized in Q4 of 2025. We expect a decline in zinc in concentrate production to 410,000 to 460,000 tons this year from 565,000 tons in 2025. This reflects declining grades at Red Dock as the operation nears the end of mine life and a lower proportion of copper zinc ore Antonina.

Our prefeasibility study is underway for the Red Dog mine life extension or Red Dog MLE. Last year, we advanced construction of an all-season road to access and drill the deposits. This year's focus will be on completing the all-season access road continuing to drill the deposit and advancing the pre-feasibility study. Refined zinc guidance remains unchanged at 190,000 to 230,000 tons for 2026.

As we are seeing the benefit of our strategy to process residues at Trail, we plan to continue to operate at production rates in 2026. We expect our 2026 annual zinc net cash unit cost to be between USD 0.65 and USD 0.85 per pound compared to USD 0.33 per pound in 2025. This increase reflects the expected decline in zinc production volumes this year. And similar to our copper accounts unit cost, the byproduct prices embedded into our zinc net cash unit cost guidance are below the prices achieved in 2025 and current spot prices. If these byproduct price levels persist, you would expect to increase byproduct credit and improved net cash unit cost for our zinc segment in 2026.

Turning to our balance sheet on Slide 17. Teck continues to maintain a strong balance sheet with investment-grade credit ratings, and we have returned to a net cash position. Our cash balance decreased by $2.6 billion over 2025, funding cash returns to shareholders and cash tax payments associated with earnings and transaction-related taxes at EBR. We also invested in copper growth, maintaining optionality in our portfolio and commencing construction on the HVC Ali project. We ended the year in a net cash position of $150 million, and we currently have $9.3 billion in liquidity, including $5.2 billion in cash.

We have not executed share buybacks since July '25, and we will not execute further buybacks through to the closing of our merger with Anglo American. However, our cash return to shareholders remain significant in 2025 at $1.3 billion. This includes $61 million to shareholders in the fourth quarter, reflecting the ongoing quarterly payment of our regular base annual dividend of $0.50 per share. Overall, our strong balance sheet ensures we maintain our resilient position.

Turning to our operating cash flow outlook on Slide 18. At an average annual copper price of USD 5.50 per pound, we could generate $6.2 billion in EBITDA and $4.3 billion in operating cash flows. As if copper prices return to highs of USD 6 per pound, this could increase to $6.9 million in EBITDA and $4.8 billion in operating cash flow. These strong cash flows are primarily driven by the cash generated by our copper segment, including QB, with a significant contribution from our zinc segment. This illustrates the strong cash flow potential of the business, particularly if correct copper prices are sustained. We expect strong operating cash flow conversion, particularly at QB.

Slide 19 summarizes our capital guidance for 2026. The previous slide shows that we are well positioned to fund the capital needs of the business with a strong balance sheet and strong cash flow generation from operations. We expect 2026 to be a peak year for capital expenditures, driven by the remaining TMF development capital required at QB and the execution of the HVC project with the expenditures expected to decrease in future years.

The left-hand side of the slide shows our expected sustaining capital and capitalized stripping requirements and TMF development capital this year. We expect a combined total of between $1.8 billion and $2.1 billion this year, which includes $390 million to $460 million in QB TMS development capital, consistent with our previous disclosures.

The increase in capitalized stripping in 2026 is due to the increased stripping requirements at Highland Valley to access the higher grade ore in the valley pit. The right-hand side of the slide shows our total growth capital for 2026. We expect a total of between $1.5 billion and $1.9 billion, which includes $900 million to $1.2 billion for HVC MLE with 2026 being a peak year in the project.

Detailed engineering work for the project is now over 80% complete and significant materials have already been delivered to Highland Valley. The construction site is substantially established and major works have been started, including earthworks, pipelines, landfill and the warehouse.

Gross capital guidance for 2026 includes $200 million and $250 million for Red Dock MLE to complete the all-season access road contindrilling of the deposit and to advance the feasibility study. The remaining growth capital primarily relates to our other covered growth options, including Zafarnal and is focused on advancing engineering, feasibility studies and permitting.

These investments are intended to maintain optionality and enhance value, particularly given current copper prices. Overall, we expect total capital spending for 2026 to be between $2.8 billion and $3.4 billion, excluding capital stripping and between $3.2 billion and $4 billion, including capital estimate. With that, I'll hand back to Jonathan for closing remarks.

Thanks, Crystal. So looking now at the copper market on Slide 21. Copper prices reached record highs in the first -- fourth quarter of 2025, supported by strong financial flows and robust metal consumption. This was the highest sequential quarterly price game for copper since the post-pandemic period of early 2021. And for the first time, the quarterly average was over USD 5 per pound. .

Looking longer term, the outlook for the copper market fundamentals remain very strong. We see copper as key to global electrification and the shift towards a clean energy future. Governments and consumers worldwide are increasingly aware of copper's strategic importance and global growth continues to move into a more electricity-intensive phase. I understand the central role that global mining industry plays in meeting the robust demand growth expense.

The key bottleneck to expanding global electrification is grid infrastructure. Significant investment in upgrading aging grids and expanding capacity is required, and we are starting to see it come through. For example, China State Grid, the world's largest copper consumer, announced a sharp uplift in spending over the next 5 years. And of course, rapid growth in artificial intelligence is contributing to substantial data center capital expenditures.

Copper is also essential to meeting climate targets in supporting global broader policy priorities such as those aimed at strengthening domestic supply chains and industrial capacity. On the supply side, constraints remain significant. Smelting capacity additions continue to outpace mine supply growth as reflected in lower smelter utilization rates and exceptionally low spot and annual benchmark copper TC/RCs with the benchmark set at 0, the lowest level ever seen.

Investments in new copper concentrate supply haven't kept pace with demand and new supply is more capital intensive with longer lead times. Overall, the long-term fundamentals for copper are extremely compelling and with over 70% exposure to copper, Anglo Tech will be well positioned to benefit from these structural trends.

So coming back to our merger of equals with Anglo American on Slide 22. This is a highly compelling transaction and a unique opportunity to create a step change in value for shareholders for decades to come. We believe that Anglo Tech will be one of the world's leading in fetal copper opportunities as a top 5 global copper producer with significant scale, resilience and growth potential. The combined portfolio is expected to deliver approximately 1.2 million tonnes of annual copper production supported by 6 world-class copper assets and a substantial pipeline of growth opportunities.

We expect the combined company to benefit from access to a deeper pool of global investors with significant rerating potential. Through the transaction, we expect to deliver tangible corporate synergies of USD 800 million per year with a road map to unlock an additional USD 1.4 billion of annual underlying EBITDA uplift from the substantial adjacencies between QB and Coyote. And the combined platform will have the resilience and enhanced financial capacity to balance attractive shareholder returns with high-value investment opportunities across an exceptional portfolio of assets.

Slide 23 shows the latest update on the expected time line and required approvals for the transaction. Both boards supported the recommended this merger and shareholders of both Tech and Anglo American voted in support of the transaction in separate votes on December 9. We've already received approval under the Investment Canada Act as well as competition and antitrust approvals from Canada, Chile, Australia, Japan, the EU and the U.S.

We are working collaboratively with Anglo to secure the remaining approvals required to complete the transaction, including China and South Korea. At the time of the announcement, we said we expected it to close within 12 to 18 months and that remains our expectation. We look forward to closing the transaction and launching Anglo Tech as a global leader in critical minerals.

In the meantime, and while we can't start working as a combined team until closing, integration planning work is well underway to ensure day 1 readiness and a rapid transition following the closing of the transaction. Our discussions with Anglo leadership have been open, constructive and aligned. Both organizations are committed to building a company that draws on the strength of each partner. This is a true merger of equals and a true partnership, and that tone is well established.

So I'll wrap up on Slide 24 with our key near-term priorities. Firstly, we are focused on securing the remaining regulatory approvals for our merger of equals with Anglo American and integration planning is proceeding at pace. We are moving steadily closer to realizing the significant value creation potential of the combination. Second, we continue to view disciplined operational performance is the best way to contribute to the success of the combined company.

Our focus remains on delivering safe, stable and predictable operational performance and delivering against our operational plans and guidance. Third, realizing the full value of QB remains a priority. This includes completing PMF development and achieving steady-state operations this year. And finally, we continue to advance the Highland Valley mine life extension project, which is off to a strong start.

With these key near-term priorities, Teck is well positioned as we move towards our new chapter as Anglo Tech, delivering disciplined elution of our business plans and advancing the merger to create a global top 5 copper company. With that, over to you, operator, for questions, please?

[Operator Instructions] The first question comes from Liam Bizbatrak with Deutsche Bank.

First question is on the QB TMF. I just wanted to check if anything has changed since the November site trip in terms of timing and profile and specifically on the rock benches, correct me if I'm wrong, I think I'm right in saying that the target was to complete BenchVby around the middle of the year. Are you still on track for that? And what's the confidence level at the moment that you won't have to build additional benches. .

Thanks for the question, Liam. At the highest level, I'd say nothing has significantly changed from what we talked about during the visit late last year, but I'll hand over to Dan, who can give a little more color.

Yes. Thanks for the question. Since the site visit, we've progressed the Bacton bond at per plant. We've been successful to implement the new cycles as well as finish the hepatic redesign. And with that, we've seen significant improvement in our sand deposition rates, which gives us confidence over the year to achieve that steady state by end of this year. In terms of their offenses, we finished the fourth bench. We've already started the bench. So that's all progressing according to plan. So overall, we're on track.

If I could have one separate follow-up. Just on the deferred stripping CapEx, which has gone up quite a bit in relation to -- is this a multiyear phase? And when can we expect it to normalize back then .

Crystal?

Liam, thanks for the question. It is a multiyear phase. We back the deferred stripping levels to be elevated for a few years into sort of 2020 time line. And then we'd expect it to revert back to normalized levels once we've moved into all the new areas that we plan to mine in HVC.

The next question comes from Myles Allsop with UBS London.

Just a couple of questions here. So first of all, on ColosQB, have there been any discussions so far, and then also with Zafranal, obviously, not really mentioned at all. In theory, how quickly would that project be ready to move forward on once the merger completes.

So first one on Cubicos, yes, we are having discussions with all of the partners there. Of course, we're very focused on maximizing the value from the opportunity of the of the combination of these 2 sites and lots of work ahead of us, of course, to bring that through. But moving forward, working constructively on both the commercial and the project elements of that. With respect to Zafranal, we did provide a little bit of color on some of the changes we've made there in in 2025 and into 2026. But I'll hand that over to Karla Mills, who's running the project elements of that just to provide a bit more detail.

Yes, sure. Happy to. Thanks for the question. The first half of this year, we're heavily focused on completing that feasibility study and looking at the overall business case to allow all the necessary inputs for us to make a decision on whether or not we would advance that into construction, it's advancing well and progressing as planned. .

And with Colas and QB, where -- I mean, we've just approved the feasibility study for a fourth line or the kind of study a feasibility for the fourth line. How do the two options sit side by side?

I mean I think that's probably more of a question for Cosi than it is for us directly. But Myles, I think it's hard to compete with the the opportunity that we see through the adjacency here and the returns that could be created in a very low capital efficient manner to deliver significant incremental production and, of course, significant incremental EBITDA associated with that. So that's the path that we and Anglo continue to work on. And as I said, we're engaging with the other partners on that basis. .

This concludes the question-and-answer session. I will now hand the call back over to Jonathan Price for closing remarks. Please go ahead.

Okay. Thank you, operator, and thank you to everyone for joining us today. We look forward to seeing many of you at next week's conference in Florida. Thank you very much. .

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

It looks like everyone has settled down in their seats, so I'm going to call this meeting to order. My name is Sheila Murray. I'm the Chair of the Board of Teck Resources. And I'm delighted to welcome you to this special meeting of our shareholders. The meeting has been called in connection with the proposed merger of equals with Anglo American.

Before we begin, I'd like to acknowledge that we're meeting today on the traditional ancestral and unseated territory of the Coast Salish peoples, the Squamish, Tsleil-Waututh and the Musqueam Nations.

Sitting on stage with me today is Teck's President and Chief Executive Officer, and my fellow Director, Jonathan Price; along with our Executive Vice President and Chief Legal and Sustainability Officer, Linda Darnell; and Vice President, Legal and Corporate Secretary, Amanda Robinson.

Before we start the business of today's meeting, we'd like to start with a safety share. We start each meeting at Teck, whether it's a committee meeting, an executive meeting or a Board meeting with a safety share and value share.

So I'm going to invite Dr. Joshua Tepper, Teck's Vice President of Health and Safety and our Chief Medical Officer, to give us our safety message.

Thank you so much. Good morning, everybody. My name is Joshua Tepper, and I'm proud to be part of Teck's Health and Safety Team. I obviously spend a lot of time thinking about the risks that face the thousands of our remarkable amazing people who work here at Teck. The risks include the interaction with large vehicles, working at heights, working near water, exposures to hazardous dust or chemicals, and I also think about the risks to a person's mental health and the risk of harm from addiction.

But today, I'd like to talk about a different risk. It's a risk that's represented on this next slide. These are MRI pictures taken when somebody is driving, an activity most of us do every day at work and at home. And what this picture shows us is that when we add more distractions, like an incoming phone call, that not only does the brain need to recruit more processing power unrelated to the task of driving, but actually the brain starts to throttle back and reduce some of the visual and cognitive capacity it had been using to focus on the task as safe driving. It reduces its capacity to focus on the most important task it has before.

This Canadian study is just one of several that highlights that one of the biggest risks facing our workforce today is distraction and a loss of attention.

Next slide. This is not a new idea. In fact, in the 1970s, the Noble law at Herman Simon coined the term the attention economy and described a condition where an excess of information leads to a scarcity of attention. At Teck, we're very proud to be a company that provides critical minerals that the world needs, but I would suggest that when it comes to safety, attention is an equally critical resource our workforce needs to keep safe.

Unfortunately, in the decades since Herbert Simon's work, the literature is clear. Despite the importance of the ability to sustain our attention on a given task, it's actually getting worse. Studies have shown that over a short period of years, our ability to sustain attention on a task has gone from an average of about 2.5 minutes to 47 seconds and even less if you're exposed to certain digital platforms. The environment in which people are working in, including in safety-sensitive activities is being disrupted by a growing number of visual and auditory information sources. It comes from news and social media platforms, complex procedural and operational guidebooks, elaborate performance reporting systems and complex dashboard filled with noises, lights and sounds.

An uncomfortable truth is that we can keep building policies, technologies, procedures, training and cultural programs to advance safety. But the practice, the adherence to all of these important programs and initiatives relies on our ability to maintain attention and that ability is in clear decline. It's not just a health and safety issue, of course. Distraction and poor attention has implications for all parts of our work. The time we spend interacting with our teams, developing our next strategic plan or analyzing performance data are all negatively impacted by the deficit of just attention and the problem of distraction.

While the solutions to this challenge are complex, and don't worry, I'm not going to try to solve it today, the risk of inattention is clear and something we need to think about going forward. But of course, the reality is the fracking of our attention doesn't end even when we leave work. It permeates our personal lives as well. And so with that reality in mind, let me leave you with one short final thought. As we head into the holiday season, a time to be with those we care most about, perhaps one of the greatest presence we can offer them and ourselves is the gift of our sustained attention.

Please get home safe and healthy today and every day, and thank you for the chance to say a few words.

Thank you very much, Joshua. Important words, particularly as we head into this important season. Before we begin the formal business of the meeting, I want to make a few comments on behalf of the Board of Directors. The proposed merger with Anglo American represents the culmination of an important process of negotiation and engagement, during which your Board has been focused on evaluating a wide range of alternative approaches and options to advance Teck's strategy. The proposed merger with Anglo American represents a unique opportunity to create a leading copper-focused producer of scale and the natural progression of our strategy that enhances and accelerates Teck's value creation proposition. Your Board was unanimous in supporting this transaction, and we're so excited to be bringing it to the shareholders to vote on today.

Now I'll call the meeting formally to order. I will Chair this meeting, and I'll ask Teck's Vice President, Legal and Corporate Secretary, Amanda Robinson, to act as Secretary of the meeting. Pursuant to the authority granted to me by Teck's bylaws, I appoint Zabrina Evangelista of TSX Trust Company to act as scrutineer.

The Secretary has confirmed that the meeting materials were mailed to shareholders in accordance with applicable laws on November 10, 2025. I will direct to the copy of the affidavit of mailing be attached as a schedule to the minutes of this meeting.

I'll now ask the Secretary to read the scrutineers' preliminary report on attendance.

Quorum for the transaction of business at this meeting is at least 3 shareholders present in person or by proxy who hold shares representing at least 25% of the votes that could be cast at this meeting. I'm pleased to report that there are 66 shareholders holding 6,329,767 Class A common shares and 343 shareholders holding 380,831,701 Class B subordinate voting shares represented in person or by proxy at this meeting.

This represents a total of 409 shareholders holding 1,013,808,401 share of total votes. This represents 81.76% of the 1,239,920,791 issued and outstanding votes, including 83.29% of the Class A common shares and 79.35% of the Class B subordinate voting shares.

Thank you, Amanda. It sounds like it's time for a share consolidation. Having determined that a quorum is present, I declare the meeting is properly constituted for the transaction of business and I direct that a copy of the final scrutineers' report on attendance be attached as a schedule to the minutes of this meeting.

Now voting today will be conducted by way of a ballot, a ballot on the resolution to be considered.

Registered shareholders who submitted a valid proxy in advance of the meeting do not need to vote again. If you're attending in person, voting will take place on the ballots that were provided to you when you arrived. Please mark your ballots as the meeting progresses and the scrutineers will collect them at the end of the meeting.

If you're attending virtually, voting will be conducted by an electronic ballot. Polls will remain open until in my opinion, as Chair, every registered shareholder or duly appointed proxy holder has had an opportunity to vote.

If necessary, once the polls have closed, and the ballots have been collected, I will call a brief recess, but rather than hold up the business of the meeting for the final tabulation of votes, Teck will issue a news release with the final voting results, which will also be filed on SEDAR.

Each Class A common share carries 100 votes and each Class B subordinate voting share carries 1 vote.

The arrangement resolution is the only item of business on the agenda today and must be approved by at least 2/3 of the votes cast by holders of Class A common shares present and represented by proxy at the meeting voting separately as a class and 2/3 of the votes cast by all holders of Class B voting shares present or represented by proxy at the meeting, also voting separately as a class.

During the discussion period, only registered shareholders or proxy holders are permitted to ask questions. If you do have a question, please limit your question to 2 minutes of speaking them. If you're attending the meeting in person and would like to ask a question, please raise your hand, and I will call on you at the designated time.

When asking the question, provide your name, the name of the entity that you represent and confirm that you are a registered shareholder or a duly appointed proxy holder. If you're attending virtually and would like to ask a question, submit your question through the virtual meeting platform.

All questions must relate to the business at hand being the approval of the merger of equals. To ensure fairness for all attendees, I'll exercise my discretion as chair to decide on the amount of time allocated to each question and, if necessary, may limit, consolidate or decline questions.

We're always happy to engage with our shareholders outside of the meeting in accordance with our shareholder engagement protocol, which can be found on our website.

The only item of business today is to consider the special resolution, the arrangement solution, which is set out in full in Appendix A to the management proxy circular of Teck, dated November 3, 2025. This resolution is to approve the arrangement pursuant to Section 192 of the Canada Business Corporations Act, involving the merger of equals between Teck and Anglo American.

Based on the proxies that we received in advance of this meeting, 99.7% of the votes cast in respect of the Class A common shares at 89.7% of the votes cast in respect of the Class B subordinate voting shares were cast in favor of the arrangement resolution.

Are there any questions or comments regarding the matter before the shareholders? Amanda, are there any online?

There are no questions online.

All right. There being no questions, I will now entertain a motion to approve the arrangement resolution in the form attached as Appendix A to the Management Proxy Circular. I've asked our Corporate Secretary, who is an appointed proxy holder to move that motion today.

So moved.

Anyone who has a ballot, please mark it now including signing and printing your name on the ballot as noted. And for those of you attending virtually, voting is now open for a short period on the virtual meeting platform. Please submit your votes now.

[Voting]

All right. It looks as if everyone has had an opportunity to vote, I declare the poll for the special meeting of shareholders to be closed. I'll now report the preliminary voting results. As you heard earlier, the arrangement resolution as set out in the form attached as Appendix A to the management proxy circular has received the required number of votes cast in favor by each of the Class A common shares and the Class B subordinate voting shares, voting separately as classes. I declare the motion is carried. The arrangement resolution is approved. I'll direct that the final results of the vote before the meeting be included with the minutes of this meeting.

We'll issue a news release with the voting results in accordance with the TSX rules, and detailed voting results will also be filed on SEDAR + as noted. I want to thank all of you for attending. I also want to thank all of the management team for the incredible hard work that they have done to bring us to this point. It is not easy to even contemplate the merger of 2 major companies, let alone set about to bring it to life, and I really have to applaud Jonathan and the entire team for the extraordinary work and diligence, and of course, with the able help of our financial and legal advisers as well.

Thank you for getting us to this point. As you can see, our shareholders have thoroughly endorsed this. So next stage execution. So thank you all very much, and thank you for attending this meeting.

Good afternoon, everyone. My name is Emma Chapman, and I lead the Investor Relations team here at Teck. And thank you so much for joining us in wonderful Santiago for Teck's QB Operations Site Visit and Update.

At Teck, we start every meeting and engagement with a safety share. So to kick off, we will start with a safety briefing for those in the room with us today. In case of fire, or if evacuation from the hotel is necessary, audible and visible alarms will be activated. We will proceed to the emergency exits and gather in the safety area, which is in the pool terrace on the ground floor. From this meeting room, we will exit to the corridor, turn left and go up the marble staircase to the ground floor and turn right to the pool terrace. If you are in your guest room, check the evacuation plan on the back of your door and find Staircase A, next elevators, or Staircase B at the east end of the corridor. Evacuate immediately if the route is clear.

Do not use elevators and check if the door is hot before opening it. Crawl under the smoke, if necessary, and cover your nose and mouth with a damp cloth if possible. Close doors as you leave and do not reenter the building until the fire department confirms it is safe. If the route is not clear, take refuge as far from the fire as possible. Seal doors and windows with wet towels to prevent smoke from getting in.

Call reception on 0 or the Fire Department on 132 and make yourself visible from the window such as with a flashlight, sheet or signal. Chile is an earthquake zone. So if there is an earthquake, remain calm and locate the nearest evacuation route. Move away from windows and objects that may fall and protect yourself under tables or desks. And in an emergency, hotel staff will be wearing yellow reflective jackets to direct us.

I should also note that the washrooms are out the doors and to your right, and the WiFi password is TECK10, Teck in capital letters and the #10. And please, could you make sure that your mobile phones or cell phones are on silent, please?

And so to start proceeding today, on behalf of the entire Teck team, a very warm welcome to Chile. We appreciate you making the time to spend a few days with us. It has been 2 years since we last hosted an investor and analyst tour of QB, and we are a large group, likely Teck's largest ever investor and analyst tour. Clearly, there is a lot of interest in QB and we are looking forward to showing you this Tier 1, multigenerational asset and highlight how we leverage this asset to drive future value creation from the QB-Collahuasi synergies. We are confident that you will see the significant progress that has been made and that QB remains a world-class Tier 1 asset.

We have a full schedule for this afternoon's presentations, which are being webcast live. So welcome to all of you online, and thanks for joining us. Jonathan Price, our President and CEO, will start with the presentation on delivering shareholder value. Dale Webb, our Senior Vice President of Operations for Latin America, will then provide a deep dive on realizing the full value of QB, including an overview, an update on the tailings management facility development work and further details on the significant value of QB. We will then take a 20-minute break, which will be held in the [ Tarrozza Olas ] room, which is where we just had lunch. The webcast will be paused during this time.

After the break, Crystal Prystai, our Executive Vice President and CFO, will speak to our strong financial outlook, and Jonathan will wrap up with our future value creation opportunities, followed by a 30-minute question-and-answer session. We'll then conclude the live webcast and begin the tour portion of the event. I will provide further details on tour logistics after the webcast ends.

The presentations are available on our website at teck.com, and a recording will be posted there within 24 hours. For those of you in the room, the device with the QR code printed on them will link you directly to the presentations.

And before we start, I'll briefly draw your attention to our caution regarding forward-looking statements. This event contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward-looking statements. Please refer to Slide 5 for the assumptions underlying our forward-looking statements.

We will reference non-GAAP measures throughout this event. Explanations and reconciliations are in the latest MD&A and quarterly press release on our website.

And with that, I'll hand over to you, Jonathan.

Thank you, Emma. And buenos tardes, good afternoon, everyone, and welcome to Chile. Great to have you all here, and we're excited to host you over the next 2 days and showcased our world-class QB asset and present a significant value from our proposed merger of equals with Anglo American.

In addition to Crystal, Dale and myself presenting today, several members of our executive team have joined us including Ian Anderson, Executive Vice President and Chief Commercial Officer; Karla Mills, Executive Vice President and Chief Project Development Officer; and Brock Gill, Senior Vice President of our operations for North America. We will all be happy to answer your questions later in the Q&A section.

So starting on Slide 4. Everything we do at tech is guided by a single objective: responsibly maximizing long-term value for our shareholders. That commitment is shared by our Board, our senior leadership team and by me personally. Execution is rarely without complexity, but our strategy remains clear and consistent. It guides our decisions and actions, and we remain disciplined in delivering against it. This focus is what underpins our ability to drive sustainable shareholder value.

Starting in 2022, we've embarked on the most significant and rapid reinvention in Teck's history, with one clear goal: to unlock enduring shareholder value. In just 3 years, we've transformed from a company primarily focused on steelmaking coal into a leading energy transition metals business with world-class copper growth potential. And now through the merger of equals with Anglo American, we will become a top 5 global copper producer. Because of our strategic clarity, we are well positioned to continue delivering significant value to our shareholders in the current macro environment.

While we have been bold and front-footed in pursuit of a strategy to create value for shareholders, including to unlock future value creation opportunities, I acknowledge that we have not always met expectations when it comes to execution at our operations and projects. But I'm confident that over the course of the next 2 days, you are going to see clear evidence that that is changing, which I'll talk to later.

It all starts with creating the right portfolio. Ours is now exclusively focused on the metals and critical minerals needed for global development and for economic resilience. Copper is at the core of what we do, and we are well positioned to benefit from the secular theme of global electrification and from the growing realization of the crucial role mining plays in ensuring stable supply of responsibly sourced raw materials.

Our critical minerals portfolio is located in established mining jurisdictions in the Americas, and its foundation is our world-class copper and zinc assets. We are focused on operational excellence across our operations and projects and are absolutely committed to delivering against our revised operational plans and guidance. We are also rigorously advancing our value-accretive project portfolio to provide growth for the future.

At the same time, health, safety and sustainability are core to the way we do business. Our responsible and ethical approach is central to our efforts to provide products the world is counting on and to realize value.

We also continue to maintain a very strong balance sheet and have a proven track record of delivering substantial cash returns to our shareholders.

Importantly, we stand at the threshold of our next reinvention with the proposed merger of equals with Anglo American, which will take Teck into the next phase of our story as part of Anglo Teck, unlocking significant value for our shareholders in the process.

Slide 5 summarizes the significant transformation of the company since I became CEO in 2022. We refocused the portfolio on critical minerals, exiting both the energy and steelmaking coal businesses and generating substantial shareholder value in the process. We completed construction of the QB2 project last year, creating a Tier 1 cornerstone asset that we expect to generate significant cash flow for decades to come. We have grown our copper production by approximately 55%, and it now makes up more than 70% of our total production on a year-to-date basis. We are also advancing our projects for future growth and have derisked certain projects by establishing key joint ventures.

At the same time, we are driving margin optimization, through a focus on commercial excellence in our product sales, leveraging our high-quality products to achieve premium pricing, developing and maintaining a regionally diverse sales book, and efficiently operating our well-established logistics chain.

And we modernized our governance with the introduction of a sunset for our Class A shares. We have delivered significant cash returns to our shareholders which have totaled CAD 5.7 billion since 2022. And in the same period, we reduced our debt by USD 2.7 billion.

Finally, our most recent and most consequential strategic milestone, we've announced the merger of equals with Anglo American, an exceptional opportunity to combine 2 industry-leading portfolios with complementary strategies, cultures and capabilities. This positions us to become a top 5 global copper producer, significantly enhancing our scale, resilience and growth potential.

So turning now to our transformative merger of equals with Anglo American on Slide 6. This merger is a natural progression of our strategy and portfolio simplification, through which we created a high-quality copper-focused growth platform to enable exactly this sort of transformative transaction. And with Anglo American undergoing their own significant portfolio simplification, we are now both well placed to further unlock and maximize value through this combination.

The timing also allows us to take a definitive step forward in creating what will be one of the world's largest mining copper mining complexes with QB and Collahuasi. And importantly, the merger offers outstanding value creation potential for Teck shareholders. It provides the opportunity to participate in future value creation from the combined world-class portfolio, which would have over 1.2 million tonnes of annual copper production underpinned by 6 world-class copper assets and offering exceptional further growth optionality. It would be a larger, more diversified asset and cash flow base, including premium iron ore and zinc, enabling a stronger balance sheet.

The value creation opportunity for Teck shareholders extends well beyond the current tech operating base, as Anglo Teck will offer an improved and derisked growth profile focused on copper. In the near term, this includes the debottlenecking at QB as well as participating in the upside opportunities at Collahuasi, Quellaveco and Kumba. In the medium term, this includes the significant adjacencies generated by integrating the resources and infrastructure of QB and Collahuasi, which are compelling and highly capital efficient.

We expect this combination to produce approximately 175,000 tonnes of incremental copper and generate an annual average underlying EBITDA uplift of approximately USD 1.4 billion per year for at least 20 years on a 100% basis.

There are also additional potential adjacencies that Teck shareholders would participate in, including those recently outlined between Anglo's Los Bronces and Codelco's Andina operations.

The combination of greater scale and a strong balance sheet will expand the opportunity set as we optimize the approach to growth through the combination of 2 significant project pipelines that will compete for capital based on risk-adjusted returns. In addition, approximately USD 800 million in recurring annual synergies have been identified, with approximately 80% of that expected by the end of the second year following completion.

As a group, Teck shareholders are expected to hold 37.6% of Anglo Teck. This ownership reflects an increase relative to our respective market capitalizations at the time of announcement via Anglo American's payment of a special dividend to their shareholders, providing Teck shareholders with an improved participation in the ownership of and future value creation from the combined entity.

Anglo Teck would be one of the world's leading investable copper opportunities with both scale and quality and over 70% copper exposure. It would be a global leader in critical minerals and a top 5 copper producer with an enhanced capital markets footprint. We expect Anglo Teck to be well received by the market with a highly attractive portfolio of operations and projects. The new company would be positioned to capitalize on the highly compelling fundamentals in our primary commodity copper.

With the increased scale and market positioning expected to expand access to a deeper pool of investors, this creates a significant rerating potential. Both Anglo American and Teck strongly believe this merger is a significant value creation opportunity for our respective shareholders and stakeholders.

Slide 7 shows our current portfolio of critical minerals assets in established mining jurisdictions, which Teck would contribute to the combined Anglo Teck portfolio. We have 6 quality operations in the Americas focused on critical minerals, including 3 Tier 1 assets. Teck is currently a top 10 copper producer operating in the Americas through QB and Carmen de Andacollo here in Chile, Antamina in Peru and Highland Valley Copper or HVC in British Columbia, Canada. We sanctioned construction of the HVC mine life extension project in July to extend production from a core asset to 2046. The project has moved into the execution phase, and we are progressing early works.

Teck is also the largest net zinc miner globally, primarily through Red Dog in Alaska. And we have a fully integrated value chain through Trail operations, which is our smelter in British Columbia, which is a key North American source of strategic metals such as germanium and [ antimony ].

So turning to Slide 8, our portfolio of value-accretive copper projects. Teck has an attractive pipeline of value-accretive copper projects in established mining jurisdictions across North and South America. We continue to advance these projects with a focus on maximizing our options for future growth and improving returns from the portfolio, while at the same time derisking projects including through key joint ventures with our strategic partners.

Overall, it is a well-balanced pipeline with a mix of greenfield and brownfield opportunities. And in combination with Anglo's near-term brownfield expansion opportunities and medium-term adjacencies, would collectively make up an extensive portfolio of growth options within Anglo Teck. As is the case in our portfolio today and in the future within Anglo Teck, all projects must compete for capital based on risk-adjusted returns, though we see the most immediate and material value opportunity coming from the QB-Collahuasi adjacency.

So turning to Slide 9. Health, safety and sustainability are critically important to us, and this will not change with the merger as we and Anglo are completely aligned in this regard, both recognizing the need for and benefits of responsible mining for long-term value creation for all stakeholders. Safety performance is considered a key indicator of stable operating performance. We've seen a strong improvement in the high potential incident frequency rate at Teck controlled operations year-to-date to September 30 at 0.06. This is 50% below our annual rate in 2024.

On sustainability, our sites are on track to accomplish their 2025 objectives. We are excited to see our operations here in Chile reaching 100% renewable power on October 1, when our long-term clean power agreement for QB's electricity supply came into effect. This puts us on the path to achieving our goal for Net-Zero Scope 2 emissions across our operations by year-end.

Our approach to sustainability is fully aligned with our business strategy to provide a platform centered around greater focus for greater impact. We are in the process of updating all our sustainability goals to ensure that they are fully aligned with our business strategy and to provide that focus and impact. We plan to provide an update with the publication of our 2025 Sustainability Report. Our firm commitment to responsible business practices will not change.

So turning to Slide 10. We are focused on disciplined execution across our operations and projects, strengthening our discipline in planning and performance to deliver on our operational plans following completion of the comprehensive operational review. We have the right people and we continue to improve and implement best practices through the redesign and upgrading of our processes and systems to enable disciplined execution against our revised and risk-adjusted plans.

We've strengthened governance and executive oversight and accountability for operational activities, including by having the SVPs of Operations for LatAm and North America, Dale and Brock, reporting directly to me since the beginning of September. And at the Board level, the Safety, Operations and Projects Committee meets regularly with our team to oversee execution.

At the same time, we are strengthening a culture of performance and accountability throughout the organization, including reinforcing the expectation that emerging risks and challenges are transparently communicated in real time. Completion of our comprehensive operational review positions us for delivery against our revised operational guidance, which is based on risk-adjusted operating plans and value drivers that reflect demonstrated performance.

The review included detailed bottom-up assessments of these key value drivers, input from third-party experts and rigorous pressure testing of operating plans for reasonableness and achievability. For each operation, the review resulted in updated plans to establish production and cost ranges. We also identified and clearly delineated opportunities to improve and enhance asset reliability and value, all of which we are actively pursuing. And we have redefined and implemented enhanced monitoring and tracking of operational performance, while further standardizing processes through the ongoing rollout of Teck's management operating system, or MOS, across all our sites.

In addition, we are implementing an ERP system company-wide to improve access to and analysis of the data needed to drive better performance, to simplify and standardize enterprise business processes and to enable the Anglo Teck integration. Overall, we have the right assets, the right partners and the right people to continue to generate shareholder value.

So with that, I will now hand it over to Dale Webb for a deep dive on QB.

Gracias, Jonathan. Buenos tardes and bienvenidos to Santiago. I'm excited to host you all here today here in Santiago, especially since I live just down the street. So thank you.

We are looking forward to introducing you to our great team as we take you to our IOC later today and then the site tomorrow, showcasing the exceptional asset we have, including the work we are doing to achieve ramp-up, and progress we are making towards achieving design rates at the operation.

Today, I'll walk you through how I think about QB and the different elements I'll talk today. First, I'll begin with an overview of the incredible asset that is QB operations. Secondly, I'll discuss the initiatives we are working on at the tailings management facility or the TMF. Then I'll discuss how we achieve stability and improve operation to design and the path to optimization thereafter. And finally, I'll summarize the full value potential of the asset.

Starting on Slide 13. QB is a multigenerational Tier 1 asset; a large, long-life asset with significant upside potential located in the Tarapacá region of Northern Chile, one of the most prolific copper-producing regions in the world. It has extensive resources, which present multiple paths to grow and to generate significant value in the future.

Our ability to exploit our high-quality resource base has enabled -- is enabled by a modern robust plant and infrastructure that provides opportunities for optimization, debottlenecking and incremental growth over time, including the most value-accretive option, which are the QB-Collahuasi synergies.

Our near-term priority, of course, will be stabilizing production as we remove the constraint from the TMF and improve our ability to reach design rates at the plant. The ore at QB produces a high-quality clean concentrate with all levels of impurities that is in demand by customers and commands a premium -- and commands premium pricing in the market.

Our continuing focus on safety and sustainability enables a stable and resilient operating environment at QB, including through our environmental stewardship and positive relationships with both the surrounding communities and the local workforce.

Turning to QB's ore body on Slide 14. QB has an extensive resource base and the current life of the mine utilizes less than 15% of those resources. The QB reserve pit, as indicated by the green line on this diagram, shows a mine life based on current reserves of close to 1.4 billion tonnes. We also have significant resources, which add to an additional 8.2 billion tonnes of ore as shown by the resource pit shell. Beyond this, the resource is open both laterally and at depth.

Importantly, you can see the benefit of having a [ bit ] that has largely been prestripped through past mining activities, resulting in a very low strip ratio of just 0.7 over the life of mine, which is a key driver of QB's significant cash flow generation potential. Following the initial period of higher grades, the grade profile remains relatively stable over the mine life, at close to the reserve grade of 0.52% copper.

Looking at an overview of the full system on Slide 15. QB operation is a large integrated site operating an altitude of 4,200 meters above sea level. It includes the mine with its autonomous truck fleet, concentrator and the TMF. QB port includes a concentrate filtration plant, a ship loader and a desalination plant, which prepares water for mining. And we have 165 kilometers of pipeline between them, transporting concentrate from the mine to the port, and transporting desalinated water from the port back to the mine. All these assets are operated from our integrated operation center, our IOC, in Santiago, which we'll have the opportunity to visit later today. Importantly, the mine, the concentrator and port have individually achieved design performance.

However, the operation is currently constrained by the ongoing TMF development work, which is leading to increased downtime of the plant. You will recall that QB operations has previously demonstrated that it's capable of operating at higher recoveries and throughput levels when there is no constraint on the mill. Once we have completed the TMF development work, our ongoing focus will be driving stability and improving performance throughout the operation to achieve design rates.

To conclude, when you go through the IOC in Santiago later or when you go to site tomorrow, you will see that QB is a robust operation with a modern, state-of-the-art mill that has demonstrated its ability to operate at design levels.

Turning to QB's commercial value proposition on Slide 16. One clear advantage for QB is its positioning of its copper concentrate in the market. Our customer base is very broad geographically, compared to many of our peers, which helps diversify our risk profile. While it's easy to think it's just a commodity, quality and consistency of the product matters. We produce high-quality products, not just at QB, but across our copper and zinc operations.

QB's concentrate is recognized for having negligible arsenic levels, making it a very clean, premium concentrate in a world of increasingly complex mine production and product quality. It is ideal for blending, which helps with the future realization of marketing synergies and creating enhanced value and use, which means we match our product qualities to what the smelters need most.

The graph on the bottom right shows our current copper contracts at QB, with the y-axis reflecting a premium benchmark pricing. This shows we achieve premium pricing versus standard market terms in every contract through treatment and refining charges, qualities or payables.

Ian and his commercial team employs a strategy to structure our sales book to build in optionality, strategically placing tonnes to take advantage of premia, freight and logistics opportunities, while retaining flexibility in a market that can rapidly change. Premium pricing that we achieved across our entire product range reflects the value of the strategy, which is a real commercial advantage. Ian is here today and will be available during the Q&A session to answer any questions on the commercial side.

Turning to a quick update on ship loader repairs on Slide 17. As a reminder, the damage on the ship loader has had no impact on our copper concentrate sales. Our ship loader was damaged in Q2 of this year following a brake failure, which caused structural damage to the support of the boom. The repairs are being handled as a project under Karla and her team and are progressing well. Karla is also here today and will be available during the Q&A session to answer any questions on projects.

As you can see in the photo on the right-hand side, the installation has been progressing. In fact, repairs are on track for completion in Q1 of next year.

We have maintained a steady inventory -- we have maintained steady inventory levels and continue to be able to move concentrate in line with our sales plans. Our backup logistics remain in place to transport concentrate to alternative parts, both as a risk mitigation plan and in line with normal anticipated business interruption at QB due to ocean swells that can impact our ability to load concentrate at our port. As a result, we have seen incremental costs of around USD 0.10 per pound, in line with expectations, with no impact on our sales.

Turning to Slide 18. QB demonstrates how sustainability leadership translates into operational excellence. By getting the fundamentals right, we have created a model for sustainable operations that delivers value for all stakeholders. That includes water, power, biodiversity, cultural heritage, community relations and workforce engagement. QB is the first mining operation in Chile's Tarapacá region to operate with 100% desalinated seawater. And as Jonathan mentioned earlier, the operation is now powered by 100% renewable electricity.

These decisions reflect strategic foresight during the design of the operation, securing sustainable water in one of the world's driest regions while preserving local freshwater resources and working with energy providers to secure 100% renewable power. As a result, QB has a clear operational advantage.

What really sets QB apart is our approach to relationship building. 12 years before our first copper production, we were already in dialogue with local communities to ensure their needs were heard and met. Our experience at Teck has taught us that early genuine engagement enables collaboration and constructive dialogue through construction and operations. Today, having 23 agreements in place with indigenous communities and fisherman's unions is proof that proactive partnership builds operational stability.

And finally, diversity and inclusion offers significant benefits to any workforce, and we are particularly proud of our composition of QB's workforce. When 1/3 of your employees are women in an industry that traditionally struggles with gender balance, especially in Chile, you are accessing your broader talent pool with diverse perspectives that drive innovation. Add this to our 42% local employment rate and our network of 700 entrepreneurs, and you're looking at an operation deeply connected to its community.

This in part has led to a stable labor relations at QB. All 3 labor collective agreements were ratified this year, with no labor action or stoppages, which is quite exceptional in Chile. As a result, we have all labor contracts in place until 2028. Together, these enable QB's fiscal and operational stability.

We will now turn to the action plan we have underway to develop the tailings management facility. Slide 20 provides an overview of the TMF Teck's near-term priority remains enabling a safe unconstrained production by raising the crest of the height of the dam. This diagram highlights the key workstreams that we are undertaking to complete the TMF development work. As background, sand is separated from slimes at the cyclone station. When separated, the sand is placed downstream in [ hepatic ] configuration. At that point, we drain water from the sand, allowing us to place compact and reapply the sand, gradually building up the sand dam.

This process depends on water being liberated from the sand at a specific rate. If that rate isn't achieved, sand cannot be compacted until it drives sufficiently, extending amount of time it takes to build the sand dam.

Sand produced has always met specifications. However, we have recently learned that slow drainage caused by the presence of ultrafines has delayed progress in development of the sand dam. Addressing this is currently -- or addressing this currently is our key priority. We are constructing additional rock benches to mechanically increase the height of the tailings dam, shown as Item #1, while continuing to progress initiatives to improve sand drainage to support construction of the downstream sand dam. As a result, the mechanical construction of the rock benches continue in the first half of 2026 and the impact on production has been embedded into our guidance.

Another key element is constructing the upstream rock fill platform, as shown as Item #2. This is done by placing sand followed by rock fill. By design, this is to support the growth of the dam. We have undertaken significant work through 2025 to improve sand drainage times.

Two key initiatives have advanced since Q2 of 2025, which are the installation of new cyclone technology and the paddock redesign as shown by Item #4 on the diagram. Improved sand drainage will ultimately allow for mechanical sand dam construction to be completed during 2026.

Ultimately, the sand dam will continue to grow using hydraulically placed sand. This is expected to enable steady-state TMF operation.

Over the next few slides, I will go into more detail on the crest growth, sand drainage and the paddocks, which are all required to get to steady state.

Starting with crest growth on Slide 21. To manage production rates, we need to ensure we raise the crest at a sufficient rate to match the rate of increase of the tailings pond. As a mitigation plan, while we continue to work on building the sand wedge, we are building rock benches to provide with and stability to increase the height of the crest. So far, 3 rock benches have been constructed to support the widening of the tailings dam crest, and we are currently constructing the fourth, allowing the dam wall to be raised. As we progress the sand wedge construction, we will continue with construction of the fifth rock bench, which should be completed in the first half of 2026.

As part of the design of a centerline dam, we are also building a rock fill platform upstream of the crest that also supports dam stability. Once we achieve steady-state operations, we'll install piping infrastructure on the platform to hydraulically deposit slimes upstream and sand downstream.

Looking at the cyclones on Slide 22. By working with third-party experts and cycle manufacturers and by sharing industry experience, we have identified alternative cycle and technology that improves separation of ultrafines from the sand. We have already successfully installed the first [ bank of ] new cyclones, as shown in the picture. These require only minor infrastructure modifications, enabling them to be quickly installed.

We have further progressed replacing the cyclones this week and -- or sorry, 59% have now been replaced as of yesterday. We are now on target to replace all the cycles before year-end.

Initial results from the battery of new cyclones have been promising, and we have seen around a 50% improvement in the rate of sand drainage, which gives us increased confidence that we are on the right track to be able to deliver sand construction in 2026. Water is draining faster, sand quality has improved and there is less solid content in the drainage water, all positive signs in achieving sustainable operational performance.

Looking at our progress on paddock redesign on Slide 23. We have tested several techniques on sand deposition using the paddock method, leveraging experience from across our operations and external industry experience. Through those tests, we have defined the most efficient approach to depositing sand, which enable us to repeatedly deliver operational results.

To summarize, with the paddock optimization and the cycle in improvements, we have growing confidence that we will achieve sand wedge construction in 2026. During that period, we will transition to depositing sand via the [ on-slope ] method as per design. This method effectively enables us deposit sand downstream through the installation of permanent hydraulic pipe infrastructure, which is far less equipment-intensive and far more cost-effective, and it is the final step to achieving stable operations.

Finally, looking at what we still need to achieve -- what we still need to achieve on sand dam construction on Slide 24. While the slower than required sand drainage times have not allowed us to construct the sand wedge at the pace expected, we have been able to supplement this by constructing rock benches downstream. The total volume of sand required to build out the sand wedge has been reduced as a result of building rock benches. As we continue to build out the sand wedge, we will progressively flatten out the downstream slopes, facilitating the on-slope deposition of sand. Importantly, the change in construction methodology has not impacted dam safety or integrity requirements, and early indications of all of the work done to date to improve sand drainage have been positive.

To be clear, we have no shortage of sand. We have the capacity to capture over 42,000 metric tonnes of sand per day, which is more than enough to build the sand wedge in 2026.

Slide 25 shows our current progress on the TMF development plans. Significant work has been undertaken to [ review ] the sand drainage [ times ] and complete the TMF development work. As I mentioned earlier, the first bank of cyclones with new technology were installed ahead of schedule, and we are seeing positive early results. We have also finished construction of the [ hepatic ] designs, and we are also seeing improvements in sand drainage. We continue to expect rock benches to be fully constructed in the first half of 2026.

We are also assessing whether additional sand washing stages required, which has been installed at other operations in the mining sector as additional risk mitigation. And we expect to have more clarity in our decision in early 2026. Early indications of progress gives us confidence we are on the right track to finding solutions to improve sand drainage.

To conclude, we currently expect to be well positioned to catch up on construction of the sand dam, and we aim to install the permanent infrastructure that will hydraulically deposit tailings and sand and replace the current mechanical process by the end of 2026. This will enable us to drive QB to steady-state operations from the beginning of 2027.

Turning now to the significant value of QB. First, I'll speak to the good performance in October, then I'll summarize our guidance. And finally, I'll talk about the work that we're doing to improve our performance.

First, looking first at QB's October performance on Slide 27. Following the shutdowns in September and early October due to the TMF constraint, we have restarted operations over the past month. While we continue to experience downtime due to the TMF constraint in the first week of October, performance has shown good trajectory since then and is expected to continue throughout the remainder of the year.

We have maintained good availability throughout the month, although, the first week, we did have some minor maintenance. Asset utilization, which is the measure of utilization post availability, has recovered since the first week of October, and we are now operating at levels of 95% and above. This is higher than levels required to meet both the low end and high end of our 2026 guidance.

As a result of strong asset utilization with no real shutdowns in weeks 2 through 4, we were able to maintain throughput rate in line with what is required to meet our 2026 guidance.

Recoveries are running around 81%, in line with expectations for next year as we continue to mill a high concentration of transition ore material. Overall, our October performance highlights our ability to perform in line with our 2021 guidance.

Turning to QB's guidance, starting with 2026 on Slide 28. So as we showed in our October performance, we are demonstrating our ability to operate at levels needed to meet our guidance ranges for QB disclosed on October 7 subsequent to the completion of the comprehensive operational review. For 2026, we expect asset utilization to still be constrained by the ongoing TMF development. This, in turn, impacts our expected mill throughput for the year.

Our grade profile is expected to be stable with an average grade of 0.59% for the year. We now have incorporated recovery assumptions based on proven performance of 81% to 82.5%. And our production guidance for 2026 is now based on demonstrated performance, while we are focused on a variety of initiatives to enhance near-term performance and enable QB to deliver potential upside, which I will detail later.

Looking beyond 2026 QB on Slide 29. You will recall that QB operations as previously demonstrated that is capable of operating a design recovery and throughput levels when there is no constraint on the mill. The underlying potential of QB remains intact. We continue to work towards achieving design rates on a sustained basis, particularly in recoveries. Our assumptions over this period have been based on proven performance and only show moderate improvement over the guidance period. 2026 recoveries of 81% to 82.5% are only expected to rise to between 83% and 85% by 2028.

As we progress the development of the TMF and allow for unconstrained operation of the plant, stability of operations will allow us to optimize recoveries, and we continue to believe that the design rates of 86% to 92% remain achievable. We expect to continue TMF development work into 2026, constraining mill availability and, hence, throughput. However, in 2027 and in 2028, we expect to continue to improve and partially realize optimization with throughput beginning to move to optimized levels. Grade reconciliation with the block model has been good, and these are expected to continue to be in line with plan.

Turning to Slide 30. Despite our revised approach to setting guidance based on demonstrated performance, significant work is ongoing at QB to drive to design rates. We have several business improvement issues underway to continue to build our performance. We're working on further improving equipment utilization and fleet velocity to enhance mine performance. We are focusing on more effective shutdowns and limiting unplanned downtime to improve mill availability.

We are continuing to work on increasing throughput towards steady state while progressing optimization and debottlenecking. And we are conducting more geometallurgical testing to drive recoveries higher. And finally, as we stabilize operations, we are focusing on optimizing our cost to deliver improved margins.

Looking at mine performance on Slide 31. We have continued to improve our mine performance over the course of the year with increasing efficiency and productivity from our mine fleet. Two good indicators of these improvements are truck utilization rates and our average fleet velocity. QB's truck utilization rates are over 90%, reflecting the benefits of our autonomous haul fleet. This is a step above equipment utilization rates that can be seen in manual haul fleets. Our average fleet velocity was just over 20 kilometers per hour in the first half of the year, and we have seen a 5% improvement since then. These indicators demonstrate that the mine isn't a constraint to our production, showing we are in excellent position to meet concentrator requirements while continuing to expand the mine operations.

However, we'll continue to strive to improve mine performance. Work plan in 2026 includes improving truck availability through a dedicated program with our suppliers. We also continue to focus on improving our fleet performance with a relentless focus that each second lost -- relentless focus on each second lost to ensure the concentrator is always full.

Turning to availability and throughput on Slide 32. We have utilized downtime -- we have utilized the downtime caused by TMF this year to work on improving availability and throughput performance. We have advanced improvements across all key pieces of equipment. We have improved conveyors, our pumps, to increase our operational life reliability, as well as installing a new liner to increase the life of the [ SAG ] mill. These modifications all drive an increase in plant availability, which should ultimately lead to fewer scheduled maintenance days. All of our changes also support increased throughput to meet optimization.

Looking at recoveries on Slide 33. As a result of the TMF issues and lower online time, we have not had the opportunity to optimize our processes to maximize our recovery. As we continue to process transition ore, we need additional information to help operations fine-tune its operating parameters to optimize recovery to plans. As a result, we have already initiated a geometallurgical program that includes additional events drilling with 3,000 meters this year and 4,000 meters next year. And we will complete metallurgical testing in 175 samples from the drilling campaign to calibrate models, provide higher resolution to short-term planning and optimize operating parameters. This is in addition to the work previously completed, which includes over 411 discrete interval samples used for metallurgical tests to help inform our work today.

The geometallurgical test work will complement 2 others of focus: continuing to improve operating excellence and implementation of our advanced process control, APC, coupled with machine learning to increase consistency of our operation. APC is a key part of supporting final optimization, and we have already implemented base APC in our grinding and rougher circuits, and we'll be leveraging machine learning already completed in HVC.

In addition, we're focused on improving upon our operating procedures as we increase our operation align time for [indiscernible] ores, aligning PH, reagent, air flow points to enhance our operating excellence. With the variability in the system this year, it has been difficult to fine-tune our processes. We expect to be able to do so as the TMF stabilizes.

Overall, our guidance at QB reflects our progress to date, and we'll continue to advance our program to support continued improvements over the next 12 months as the operation stabilizes.

Turning to the ramp-up of our molybdenum plant or moly plant on Slide 34. It's never easy to start up a moly plant and the factors that have impacted QB's copper circuit have also impacted its moly plant. Our priority continues to be to stabilize the copper circuit. We have been -- but we have been improving our moly plant in parallel.

We had always expected the ramp of the moly plant to lag out for the copper circuit. Moly performance is expected to mirror the constrain time, so it's equally impacted by the TMF. However, we have been improving operational reliability of the circuit through improvements in design and base operating excellence.

Recoveries of the moly circuit are expected to improve as the copper circuit stabilizes in 2026. Importantly, the design of the moly plant is robust, and quality of QB's moly is high with grades of just under 50% and we are continuing to look for opportunities to drive premium pricing for it. Overall, moly provides significant benefit to QB's costs, margins and cash flows through substantial byproduct revenue at current spot prices.

Turning to QB's unit costs on Slide 35. All the work we're doing at QB to improve our performance and, therefore, production also helps stabilize our costs. As we improve copper production, we will only -- we will also see the moly byproduct credit more than double as moly production increases. The number of contractors on site is currently elevated to help with ramp-up activities, and this should normalize as we move towards steady state. We also currently have a large proportion of contractors working at the TMF development work, which is captured in our TMF capital guidance. As we improve reliability, this will allow for more efficient planned maintenance, which will also improve our costs. As operations becomes more consistent, we'll be able to leverage efficiencies all across our QB's cost structure.

For example, optimized reagent usage, more efficient procurement in spares and consumables, and more efficient maintenance practice all contribute to a more efficient cost structure.

I'll wrap up by putting all these factors together with QB's pathway to value on Slide 36. Our 2028 guidance represents a view of our operational potential based on demonstrated performance. As you have seen, we are working hard to drive operational performance to design rates. The work we are doing to achieve design rates at the operation and progress optimization and debottlenecking opportunities offers a clear pathway to growth and value creation in the medium term.

Optimization is partially embedded in our guidance for 2028, and we expect to achieve an increase in throughput up to 154,000 tonnes per day. The work we're doing in recoveries will be the last factor that enables us to fully optimize the QB operation. Debottlenecking of the plant is not reflected in our current copper production guidance, but it could see a further growth to between 165,000 to 185,000 tonnes per day.

Improving throughput and reaching the bottom end of potential debottlenecking 165,000 tonnes per day would yield around 40,000 tonnes of incremental copper production over and above our 2028 guidance. Between 2029 and 2034, sequence grade improves, adding 10,000 tonnes of copper. However, future long-term production is highly dependent on ore grade within the mine plan.

And lastly, driving recoveries to the bottom end of design rates as 10,000 tonnes of copper production while achieving the midpoint recoveries at 89% achieves a further 10,000 tonnes of copper. Altogether, this represents upside potential to around 310,000 tonnes of annual copper production in the medium term.

The value of QB is intact, and we believe there is a clear path to achieving design rates, progressing growth and driving value delivery from the asset. This creates a strong platform to leverage our highest value expansion option: the QB-Collahuasi synergies, which Jonathan will talk to in more detail later.

And to close, I look forward to hosting you at the IOC later today and the site tomorrow, so you can all meet the team and see what truly is a world-class asset.

And with that, I'll pass you back to Emma.

Perfect. Thank you so much, Dale. We're now going to take a short break. Refreshments are available in the [ Tarrozza Olas ] room, which is where we had lunch. We are running slightly ahead of schedule. So we're going to take a 20-minute break and we will be back here at 10 past the hour, or for those in the room, 10 past 2. So thank you very much.

[Break]

So thank you, everybody. We're going to continue with the presentations and the live webcast now. So if I could kindly ask you to take your seats.

Just in case anybody was wondering where the QR codes are, there is a box which contains a little holder, and that is where you will find the QR codes to the presentation. So I just wanted to confirm.

And with that, Crystal will now take the floor. Thank you.

Thank you, Emma. Good afternoon, everyone. Welcome back. I'm going to provide an overview of the strong financial outlook for our business, starting on Slide 39. Just giving a minute for it to come up.

As a result of the comprehensive operational review that we recently completed, we have achievable operating plans in place that are the foundation of the revised guidance ranges that we provided with our October 7 news release. An extensive review of our operational plans was performed with input from third-party technical experts and independent advisers. We completed a detailed range analysis of our production and operating cost estimates, with a risk-based approach to our key operating variables. The focus was on evaluating risks to redefine ranges of outcomes for key inputs and operational drivers. We set key parameters based on proven performance as opposed to design rates, though we continue to work towards stabilizing and optimizing our assets and driving them towards design rates.

Turning now to Slide 40. With this strong foundation, we continue to see our business as resilient and financially stable. Our portfolio of assets remains highly cash generative, with significant cash flows being generated at current prices. And we can further improve on this. We expect our unit cost to decline in the near term as QB production continues to ramp up, and initiatives are underway to further lower our operating and corporate costs, expand our margins and improve our profitability.

And while our capital profile remains elevated in the near term due to our investment in the HVC mine life extension, we see a path for our capital expenditures to decline by around 45% and as the project is completed towards a steady state level. Importantly, our strong balance sheet enables our financial flexibility and resilience with over $5 billion of cash and a small net debt position of around $300 million with no significant debt maturities in the near term. We have delivered significant cash returns to shareholders totaling $5.7 billion since 2022.

Turning to our margins on Slide 41. In the near term, we expect our margins to expand as our copper net cash unit costs move meaningfully lower. Our copper net cash unit costs have decreased this year already, and we expect to reduce them by approximately 7% next year. As we increase our copper and molybdenum production, we expect continued improvement in our copper net cash unit costs due to higher fixed cost absorption and a more efficient cost base with higher byproduct credits. We continue to pursue opportunities to optimize our corporate and operations cost base.

Turning to our outlook for our operating cash flows on Slide 42. Our portfolio of world-class operations is expected to generate significant EBITDA from operations and operating cash flow across a range of commodity prices. At current spot prices of around USD 5 per pound, we could generate $2.7 billion of annual EBITDA from our established copper operations. As the TMF development work is completed and QB's production ramps up, QB could generate an additional $2.4 billion of annual EBITDA. And our zinc assets, including our Tier 1 Red Dog operation, could contribute an additional $400 million of annual EBITDA. Overall, we could generate a total of $5.5 billion of annual EBITDA from our operations at current spot prices.

We also have significant upside in higher commodity price scenarios, and we remain resilient in lower commodity price scenarios. Our operating cash flow is also strong with the potential to deliver $4.2 billion of operating cash flow at current spot prices. This is underpinned by our low effective cash tax rate, particularly at QB where we don't expect to be subject to cash income taxes in the near term and where we have a tax stability in place through 2037.

Looking at our near-term capital profile on Slide 43. In 2026, we expect elevated capital expenditures driven by the Highland Valley mine life extension as we execute planned investments in additional fleet and the mill. We also expect QB's TMF development work to be $420 million, as previously disclosed.

With no further TMF development work capital expected at QB after 2026, our capital profile should gradually reduce in 2027 and then further step down in 2028, reducing by 45% compared to 2026 levels. Annual sustaining capital and capitalized stripping requirements for all of our operations remained stable at around $1.35 billion on average.

We also expect to continue to invest $300 million to $400 million annually to progress our copper growth projects and Red Dog's mine life extension to maintain future optionality for Anglo Teck. The combination of our strong operating cash flow generation and the reducing near-term capital profile will enable increasing free cash flow generation in the near term.

Turning to our balance sheet on Slide 44. Teck retains a very strong balance sheet position with $9.5 billion of liquidity, including $5.3 billion of cash, as of October 21. We are also in a small net debt position of only $300 million, having reduced our debt by USD 2.7 billion since January 1, 2022. We will also continue to naturally delever our balance sheet as we pay down the QB project finance facility through semiannual repayments. With a debt maturity profile that contains no significant near-term maturities, we can comfortably service our obligations from the significant free cash flow generated from our operations and maintain our investment-grade credit ratings, which supports the strong financial position of Anglo Teck following completion of the merger.

Turning to Slide 45. While we have deleveraged the balance sheet, we have also maintained our strong record of returns to shareholders. We have delivered material returns to shareholders through share buybacks and dividends, including $5.7 billion since 2022. This represents approximately 20% of our market capitalization as of last Friday. And since 2022, we have repurchased 73.2 million Teck shares at an average price of CAD 53 per share, reducing our shares outstanding by over 13%.

We have not executed share buybacks under our normal course issuer bid since July 25. And due to the proposed merger of equals with Anglo American purchases will not resume. Importantly, though, we will continue to return cash to shareholders through our annual base dividend of $0.50 per share, which is paid quarterly.

In conclusion, we have a very strong balance sheet. And when combined with the cash flow generation potential of both us and Anglo American, positions Anglo Teck to be highly resilient and well positioned to deliver significant cash returns to shareholders.

I'll now hand back over to Jonathan.

Okay. Thank you, Crystal. So now looking forward to our future value creation potential. Turning to Slide 7.

With QB's extensive resource base, stage growth opportunities can unlock significant incremental value. First, through optimization. We expect to achieve an increase in production from 140,000 tonnes to up to 154,000 tonnes per day from 2029. No additional permits are required, and we are doing work to ensure readiness for implementation through 2028.

Second, QB has the potential to generate value through debottlenecking. And studies are ongoing to rigorously define these opportunities, including how we might adapt our approach post merger. We have additional power available in the SAG mills, and we will determine how best to utilize this to optimize mill operations. Potential debottlenecking opportunities include equipment upgrades to conveyor rollers and the [ ball edition ] system at the mill, updated stockpile and feed shoot designs, improvements to the pebble circuit and the addition of 2 flotation cells at the end of the circuit to improve recoveries. This debottlenecking could drive further growth in throughput to between 165,000 and 185,000 tonnes per day and is expected to have a very low capital intensity of around USD 4,000 per tonne of copper. We are working towards submitting a DIA permit in 2027, with implementation beginning as early as 2028.

Finally, longer term, QB has significant potential for future growth opportunities. As Dale mentioned, the current permitted mine plan at QB uses less than 15% of the defined reserves and resources. The most value-accretive option in capturing the potential is the adjacency with QB-Collahuasi. And the merger of equals with Anglo American enables us to accelerate this opportunity at a competitive capital intensity of USD 11,000 per tonne of copper. This is industry leading compared with the capital intensities of recent greenfield and brownfield projects which are closer to USD 30,000 or USD 40,000 per tonne of copper.

And with neither side having yet committed to individual expansion plans, this merger presents a timely opportunity to coordinate a shared development approach, minimizing capital investment, optimizing infrastructure use and reducing execution risk. Further, once QB-Collahuasi synergies are realized, and given the size of the resources of both assets, we will have the ability to evaluate multiple configurations for further growth.

On Slide 48, the potential adjacency from combining QB and Collahuasi is a meaningful component of the value creation from the merger of equals. QB-Collahuasi offers potentially the best operational synergies in the market right now with incremental production of approximately 175,000 tonnes per annum enabled by the combination of high-grade softer ore from Collahuasi with a state-of-the-art modern QB plant infrastructure. With most of the infrastructure already in place, the key capital requirements include a 15-kilometer conveyor from the Collahuasi pit to the QB plant, additional flotation tanks to manage the increase in throughput and incremental mine fleet to increase production from Collahuasi. It's an extremely capital-efficient way to add low-cost production into the combined portfolio.

Based primarily on the production uplift, we expect to add approximately USD 1.4 billion in annual underlying EBITDA on a 100% basis for almost 20 years. Given the size of the combined resource from 2 extraordinary ore bodies, there is potential to extend this benefit for many years. And beyond this, we could see meaningful cost savings from sharing other assets and infrastructure, including optimizing haulage, port utilization and support services.

The potential adjacencies in QB-Collahuasi are compelling. They were reviewed and validated by external advisers before they were published, so there is a good deal of rigor around them.

Slide 49 further unpacks the growth in production from QB-Collahuasi. And this chart provides an illustrative look at the drivers of incremental production. Of course, the predominant driver is grade. Processing a greater volume of higher-grade Collahuasi ore enables around 2/3 of the production uplift. The balance of the production increase is due to increased throughput. The QB plant has 2 lines, and we expect to dedicate one line to Collahuasi ore, with the second line continuing to process only QB ore.

Throughput on the line processed in Collahuasi ore is expected to increase by around 50%, because of the softness in the material combined with a larger grind size. The higher throughput results in a decline in recoveries, which only marginally offset these benefits. Overall, we expect value accretive additional copper production of approximately 175,000 tonnes year after year.

And in terms of costs, while we expect mining costs to increase to reflect the higher strip ratio at Collahuasi, this is expected to be offset by fixed-cost economies of scale, resulting in a marginal reduction in overall unit costs. There is limited additional infrastructure required and our preliminary capital estimate is around USD 1.9 billion. We expect the benefits of the adjacency to be delivered as early as 2030.

On Slide 50, we are aiming to combine these 2 world-class assets to create one of the largest copper complexes in the world by 2030. In addition to this leading production position, a highly competitive blended grade for QB-Collahuasi concentrate will enable strong margins and cash flows from the operation. Production will be supported by an enviable combined resource base allowing for production for decades to come and significant growth optionality.

As a result, QB-Collahuasi is expected to be one of the leading multigenerational copper assets with a long-life resource base.

Slide 51 outlines the value drivers from the merger of equals. This transaction is a unique opportunity to create a critical minerals company with both scale and quality. There are multiple sources of value, including through corporate synergies, optimization, capital-efficient adjacencies and future growth optionality. We have identified approximately USD 800 million in annual recurring pretax corporate synergies, which are primarily comprised of procurement, overhead and marketing.

The combined portfolio offers value-accretive and low capital intensity near-term growth from asset optimization, debottlenecking and other projects with low execution risk. In addition to the approximately USD 1.4 billion in uplift in annual underlying EBITDA generated by QB-Collahuasi adjacencies, there are also potential adjacencies at Los Bronces and Andina and at Minas Rio and Serpentina.

Teck shareholders will participate in value creation from all such adjacencies through the proposed merger. These are exceptional opportunities to leverage proximate and contiguous ore bodies and complementary infrastructure to optimize investment and drive value. Teck shareholders will gain exposure to the exciting growth options within the current Anglo American portfolio, and there is significant further future growth optionality from this combined portfolio.

Anglo Teck will have an attractive suite of brownfield and greenfield projects in established mining jurisdictions, and the scale, capabilities and financial strength to progress the most value-accretive opportunities. This growth optionality will enable us to continue to provide the critical minerals that the market requires for decades to come.

Slide 52 outlines how the combination of these value drivers can generate significant value for shareholders and stakeholders. Corporate synergies of approximately USD 800 million annually of the low-hanging fruit of the transaction. We expect approximately 80% of that to be achieved by the end of the second year following completion. At the same time, there are low capital intensity growth options available in the near term from optimization of assets, debottlenecking and other projects with low execution risk. Importantly, within the combined portfolio, all projects will have to compete for capital.

The potential QB-Collahuasi adjacencies are meaningful, and there is work ahead of us in terms of establishing agreements between all owners of both QB and Collahuasi to capture them. Working together at Anglo Teck will materially derisk and accelerate our ability to realize this valuable opportunity given the new company will own 60% of QB and 44% of Collahuasi.

Ultimately, incentives are aligned on both sides, and we would expect all the owners of QB and Collahuasi to be highly motivated to work collaboratively to capture the significant value available on behalf of their shareholders. You can see there is a win-win there. And longer term, for Anglo Teck, additional value can be created through the significant growth optionality in the combined portfolio.

Overall, there are multiple value drivers to grow Anglo Teck's EBITDA and create significant value for our shareholders, with further potential for a multiple rerating.

So I'll wrap up on Slide 53 with our key priorities to deliver value for our shareholders in the near term. We are advancing a transformative merger of equals with Anglo American as the gateway for Teck's next reinvention to unlock further material value creation. Both boards support and recommend this merger and there will be concurrent separate votes by the shareholders of Teck and Anglo American on December 9.

At the same time, we remain laser-focused on disciplined execution across our operations and projects, and on delivering on our commitments and against our revised operational guidance. And we are working hard to realize the full value of QB as a Tier 1, multigenerational asset, with significant upside potential beyond our current QB guidance and with multiple paths to value at QB, from ramp-up to optimization, to the compelling QB-Collahuasi synergies.

Overall, both Anglo American and Teck believe the merger will enhance portfolio quality, financial and operational resilience and strategic positioning, and it would be highly value accretive for our respective shareholders with great benefits for all stakeholders. There is an incredible future ahead for both companies as Anglo Teck.

So with that, we're going to move now to the question-and-answer session. If you have a question, members of our IR team are around the room with microphones so those listening to the webcast will be able to hear. So with that, I will take a seat and open the floor to questions. Thank you.

Hi, everyone. [Operator Instructions]

I guess I'm going first. Dalton Baretto from Canaccord. Jonathan, I was just looking back on my notes from the 2023 site visit here. And I realize that a lot of the language is very similar to what we heard today. I'm looking at conservative guidance, I'm looking at efficiency and reliability, external experts. But clearly, there were a couple of blind spots, and that's where we are today. And so I'm just wondering, what have you done, like what gives you comfort that we don't have any blind spots in the future? I mean your -- the whole process hasn't been fully tested at capacity. How are you thinking about that from a risk assessment perspective?

Yes. Thanks for the question, Dalton. Look, the first thing I would point to is Q4 of last year, of course, where we ran completion testing across the asset. And that was a very comprehensive piece of work across all areas of the system, and there are high thresholds required to pass those tests, which we did at that point in time. Now of course, since then, we've run into the challenges associated with tailings, that Dale has outlined in detail today. And he can talk more to this. But of course, that was a situation where we were measuring the quality of the sand that we were producing, and it was on spec, according to the standard industry tests, and therefore, the conclusion and the advice we have from experts was that we needed to pursue other mechanisms to support the growth of the tailings dam. And predominantly, that was around different construction methodologies.

That effort didn't drive the improvement that we needed, and therefore, we went back again around the middle of this year to review in detail other alternatives. And of course, we identified the presence of ultrafines. We've implemented changes to the cyclones. We now believe that we have a solution for the tailings facility and that will enable us to de-constrain production through 2026 and, therefore, not be constrained by tailings beyond that period.

We've tested other parts system, of course, through 2024, and we've continued to operate the plant, albeit intermittently through 2025. And we believe we have a very good understanding of the flow sheet. As Dale articulated earlier, now the mine is operating very well and is not a constraint. The plants were not constrained by tailings in terms of utilization, availability, throughput, similarly operating very well.

I think we've said we have more work to do on recoveries, and that is going to be an ongoing focus for us. in the coming years. Again, we're taking action on that in particular with the additional geometallurgical data that we will have to support that effort. So all efforts of the plant and operation have had a great deal of focus.

I think more importantly, if I step back though, as I mentioned before, we're very confident we have the right team. That is the starting point here. You will meet many members of this team tomorrow. They've got broad experience from across the industry, experts in their particular areas of operation or technical work. Of course, under Dale's leadership, he continues to empower that team and provide very, very strong oversight to the activities going on.

You see through the work we did through the comprehensive operational review where we've built plans -- rebuilt plans from the bottom-up focused on key value drivers, ensuring all key risks are known, using insight from independent technical experts, independent advisers to ensure that those who have experience of operating systems like this, we've embedded that thinking and that experience into the plans that we have. And I'm very confident now in the teams that we have and the processes that we have and in the guidance we've set out to deliver.

So 2025, no doubt, has been a challenging year, and they have been challenges that have been predominantly related to the tailings facility. We believe now we have a strong path forward to a resolution of those challenges to allow us to operate in the future in an unencumbered fashion, and we're very confident in the future outlook for the asset. We believe this is a Tier 1, world-class asset. We believe that we can hit some of the numbers that Dale shared today, and we believe we can generate significant value. And it will put us in an excellent position for the combination of QB and Collahuasi through which we can generate significant synergies.

Carlos De Alba with Morgan Stanley. Thank you very much for hosting us here in Santiago tomorrow at QB. I would like to explore a little bit more the QB bottlenecking process. You alluded to it, Jonathan, in your presentation, but maybe can you share more color on the timing of the potential approval? Is that early 2027 or late 2027? And then if the operation starts in 2028, what would be the ramp-up that we can expect for that project?

Yes. Thanks, Carlos. I'll hand that question to Dale. Of course, all of that work is being done between Dale and Karla with the operations and the projects team working together. .

Great. Thank you for the question. I think first and foremost, for debottlenecking, requires a stable plant to be able to truly assess where the operation is at and what's needed to be able to deliver debottlenecking without requiring a major infrastructure change.

The one element I can highlight is when we've been operating stably in our grinding circuit, we've been able to identify that our SAG mills have excess power to be able to be used for debottlenecking. So about 10% excess power is available when we're running at design. So this gives us confidence that our main infrastructure will be able to support the debottlenecking efforts to achieve 165,000 tonnes per year -- or per day.

The catch here is now the work that we're doing through stable operations, what else do we need to do. So part of the work we're doing today is to assess what other infrastructure require, whether it be flotation tanks, whether it be other pieces of infrastructure. These are all small elements relative to the larger infrastructure needed, whether it's water and power, which we won't need.

Part of that work can start earlier, so -- because we need some of that work to actually support some of the other things that we're doing at site. So we see a phased approach to debottlenecking to be able to approach our progress. We expect to put the [ Dia ] into the system in early 2027, and that will allow us to initiate and increase production in early 2028, recognizing the availability we have of power and then, in the sequence way, to add the different pieces of equipment. So we see the path there, and it really starts with stable operation that we expect to achieve in the upcoming year.

Orest Wowkodaw with Scotiabank. Just a question about the expected copper recoveries. I'm having trouble understanding why you're assuming recoveries are so far below design in '27 and '28 when the tailings constraints are supposed to be over after the end of '26. Like what is giving you pause in terms of reaching design recoveries beyond '26?

I'll make a first comment on that and then hand it over to Dale to add more color. As we outlined when we released the plans for the business as part of the operational review, we ensured we were using proven observable data from our operations. We still believe that, in due time, that the design recovery rates will be achievable. But we don't want to build plans on future assumptions until we've had periods of reliable operations where we can prove those things out. And that's what you see manifest through the guidance that we provided in '26, '27, '28.

We do show some improvement in those years, but really an improvement that at this point in time only gets Q4 of 2024, again, data that we've been able to prove in the field. But Dale, maybe you can talk some more about the work that's going to be done and why we are where we are today with the recoveries that we have.

So I think fundamentally, the first part when we think about recoveries is we need to run stably, and we haven't been able to do that as a result of the TMF issues. And as a result, we -- one of the key learnings we have is we need more information to be able to understand the transition ore and to be able to react more effectively to it, which is one of the reasons we've initiated geometallurgical program, to get more data to be able to refine our models and improve our operating practices. So that will take time, and that will take time through '26 to get that information, align operating process and implement some of the systems in place, whether it be APC or improved machine learning.

From there, it will -- and our guidance shows incremental improvement, that's the improvement rate we expect to be able to go through and improve the operation as we go forward based on our progress to date. To provide context, the work that we're doing, but certainly recognizing it does take time to be able to deliver this with the experience we've had to date.

Yes. And as I've mentioned before, in the event we find ourselves, of course, delivering operational outcomes above and beyond what's in our guidance, we would update that in due course. But until such time as we can do that, it's prudent, it's appropriate that we've got guidance that we believe is realistic and achievable. And that will be a function of how we operate in the periods ahead.

Anita Soni from CIBC World Markets. My first question, and I'll ask one and then cycle back, I'm sure, because I just want to go through these throughput numbers in detail. So on 32, you presented some of the throughput rates year-to-date. I'm just trying to understand that top bar, say, like in Q1 2025, when you say 136, that's -- if there was no tailings constraint, that's what that would mean?

Yes. That's correct.

All right. Can I ask 1 follow-up to that then?

You can, because that was a short one.

That was a short one, okay. So what I'm trying to understand, I think earlier you had said that there was no improvement embedded into the guidance outlook. But then later on in another slide, you did say there was some partial improvement in the outlook in 2028. What is the full throughput of -- I mean what are you using as the full number? Because when I look at the utilizations and the capacities, like the 90% and the 92%, and divide by -- I'm sorry, I'm just trying to find the guidance table there. So if we look at 2027 as an example and say, okay, if that's 86% utilization on the bottom end, divide that into the 126, right, that then you sort of end up kind of just below 150. But as you get out to the top end of the -- top end of the 2027 guide, certainly the 2026-2028 guide, it does look like there's operational improvements embedded within that, because the top end would be about 16and in the bottom end of that guide would be 151. Sorry.

That's a lot of detail.

It is a lot of detail, but we're here for the math.

Yes. I think we can probably unpack some of that math off-line. But Dale, are there any comments you want to make about the -- perhaps the low and the top end of that range?

I think what we've highlighted in the presentation, over the years, we are starting to see improvements in growth in '27 and '28. And that is what you see in the numbers and the ranges we show, is how we see the operation improving over that period of time. I'm not sure -- we can go through -- I think we have the pleasure of touring together tomorrow. So we have all day to go through it.

Liam Fitzpatrick from Deutsche Bank. Just one on sand drainage. As part of the merger, Anglo said that they've got comfort around the long-term outlook for QB because they encountered similar issues at Quellaveco. Could you perhaps compare and contrast where the issues are similar and where they are not? And what they did and where you are currently in comparison to that?

Thank you for the question. I think our work around sand has involved not only our internal experts, third-party experts, lots of industry support. And I think feedback from Quellaveco was encouraging in that our sand drainage issues were quite similar, how the sand behaved. And our solutions are quite similar as well. So that gives us confidence as it gives them confidence that we're on the way path to be able to progress and see our way out of this in 2026. So very aligned.

Very similar, in terms of when we think about cyclone technology, behaviors in your paddock, those key levers that you'll see tomorrow in site operation, those are the key levers that we have. And certainly, that sharing along with other third-party experts gives us confidence that we're aligned and on the same path as we go forward.

So Liam, just to be a bit more specific, we both use the same vendors for the original cyclone design and construction. We're using the same vendors -- different vendors, but the same ones as Quellaveco that have provided the new cyclones that we're now implementing that solved the issue at Quellaveco, and we're now seeing the requisite improvement at QB. So from a technology perspective, a lot of similarity in what's being done. .

It's Myles Allsop of at UBS. Maybe just some of the questions we had we asked with the Q3 results, just sort of as an update around Investment Canada discussions, is there any kind of positive movements on that, the TSX index inclusion and whether discussions with Glencore have started yet? I presume probably not.

Yes. Thanks, Myles. A lot of questions in one there. Well played. So just to start with the ICA, there's nothing materially new from what we updated at the at the quarter. We are continuing to work very constructively and collaboratively with the government of Canada. There's a good open line of communication there.

What we're doing essentially now is, having submitted the application, is providing them further information regarding the package of undertakings that we put forward. Of course, just as a reminder, those undertakings predominantly go to 3 areas. One is investment in Canada. That's the $4.5 billion of investment over 5 years to be spent well on the Highland Valley copper mine life extension, investment into Galore Creek and Schaft Creek, investment into the Trail smelter and refinery, as we said, through a 5-year period.

Secondly, employment is always a very important aspect under Investment Canada and the net benefits test. And really, that's about maintaining employment levels in Canada, that's quite straightforward for us. We're going to continue to operate the assets that we have there today. And of course, with the headquarters of the new company being in Vancouver, and we would expect, of course, therefore, some movement from people in Anglo into this Vancouver headquarters, that we would see numbers certainly maintained.

And the final piece, of course, is just the location of that headquarters and that being an enduring commitment. So this is something that will be in place in perpetuity, and the significant majority of the senior executives and their teams will be located in that head office. So they're the undertakings that we put forward to the government. Very constructive conversations going on with them since that time.

Your second question on the TSX, and this is with respect to indexation. We will, of course, list the shares of Anglo Teck in Toronto. Now the TSX and the main index provider there, S&P, has domicile tests that is traditionally put in place. Now Anglo Teck, of course, will be a U.K. incorporated company. However, there are a series of material facts that are advantageous in the context of Anglo Teck having the potential to obtain indexation in Canada.

And in a recent meeting with S&P, where they have a number of buy-side and sell-side participants, the feedback from that was encouraging on a number of fronts with respect to those material facts, one being the location of the headquarters of this global company being in Canada; two, being the fact that there are material assets of this company based in Canada and material ongoing investments into assets in Canada. And then thirdly, Teck today is the largest critical minerals company in the Canadian indices, and in future, of course, with critical minerals being so core to the government strategy for critical minerals and there being great investor appetite for investment in critical minerals, that is another material fact that this much larger Anglo Teck could also be considered for index inclusion.

So there's a long way to go on that. That's not something that is going to be solved or resolved in the very near term, but the feedback received from that meeting was very encouraging.

To your third question, which will probably be a little quicker to answer, on Glencore. No direct engagement right now. We continue to work very closely, of course, with Anglo American. We did a lot of work, as I mentioned, just before in outlining these synergies. The benefit, of course, is working with them on a merger of equals approach allowed a lot of information to be shared across both sites, something that hadn't been possible previously. So we both have a lot of information now about one another's sites. We put together the synergies and the basis for that working together with, as I said, a review from independent experts, again, to validate those numbers before we could publish them. And we'll continue to work on this.

Ultimately, we need to do this with all parties, and that's certainly our proposal. Going forward, we think there are great benefits to be accrued from the combination of QB and Collahuasi, and we think that is to the benefit of all owners and their shareholders on both sides of that opportunity.

Ralph Profiti from Stifel Financial. Dale, there's been a lot of discussions around particle size distribution and the cyclones, but I was wondering if you can maybe put into perspective the magnitude of some of the changes went on at sand dam construction, some of the discussions around crest growth and bench construction. Was this just a matter of increasing the safety factors? Or did you actually go back and order of magnitude changed some of the design parameters? And I think some of those specifics is what I'm looking for.

So in terms of the design parameters around the tailings dam, or were you referring to the sand itself? So in terms of the tailings dam, we've been operating within design. Yes, we've added our rock benches, but that has been incorporated into our design, and we continue maintain our design as a centerline dam, and we can build along the intent to building that wedge to support the tailings down. So that is what we're progressing and what we're doing towards. So we haven't changed the intent and fundamental design.

Recognize the life of the design, the life of the tailings dam is 25 years. So the expectation is as the sand dam grows, where we are today will certainly be encapsulated by significant volume of sand.

Relative to the sand itself, the sand has always been in spec. So we have a spec relative to fines percentage. That is what drove us to, as Jonathan mentioned earlier, drove us to operating practices, which drove us to looking at how we were working in the paddocks. And then really in terms of mitigation factors, building rock benches and work our way through that.

Through all that work and including all the support from external experts and other industry peers, we emphasized and continue to focus on that path. But eventually realizing that there is something else with the sand we need to review. And that's where we rereviewed certainly our sand composition, in particular, identifying ultrafines. And that led us to the opportunity to review different cyclone technologies, which are more effective in dealing with ultrafines in our circumstance, which allows, and our preliminary results are very encouraging, to give us confidence we're on the right path.

Well, that's taken us time to work through, just the magnitude of what we're talking about, the size of our tailings dam, and it's something that we don't necessarily want to take rapid changes in terms of changing our parameters. So through that work and lots of peer reviews and industry support, we've been able to identify those key factors.

Alex Hacking from Citi. Dale, you mentioned earlier you've seen a 50% improvement in sand drainage rates. I realize it's early days, but if those results were to hold, is that sufficient to run a 300,000 tonne a year copper mine or you would need like incremental improvement above and beyond that?

Thank you for the question. Certainly, it is early days. We need to be able to translate that performance that we have and then recognize that it's only 1 battery of our 2 batteries of cyclones, to be able to translate that performance into operation and execution. If we're able to translate that in that 50% improvement, we will be able to achieve our sand wedge in 2026 and achieve steady-state operation in 2027. Once we achieve steady state operation, our tailings dam will be able to achieve -- will be able to maintain 300,000 tonne rate.

Craig Hutchison from TD Cowen. Just can you provide a general overview of how the joint venture is going to work for the QB-Collahuasi? Is it going to be structured over all of QB or just over 1 train? And then can you provide some detail in terms of how it works with the taxability agreement you have and the fact that they don't have one, if you have any preliminary discussions with the government how that works? Is it the taxability agreement tied to the ore or the concentrator or both?

Yes, just I'll deal with the last part first. It's to be determined with respect to how the taxability agreement will apply. So we haven't assumed any benefit from that in the numbers that we've put forward at this point in time. Of course, it's materially important. It's a material value, particularly on the QB side. So we will work hard at the right point in this process.

More generally, with respect to the structure for a joint venture essentially across both sites, there's a number of ways in which that could be done. And each mechanism of putting something like that in place will have different pros and cons with respect to efficiency and effectiveness. And by efficiency, I mean, minimizing any leakage that might occur, and tax stability is a good agreement there -- a good example there. Or from effectiveness is how do you best operate these sites.

Now our going-in thesis would be that the broader the combination of these sites, including all of their infrastructure and assets, the more synergies that will be available to the partners. But of course, that requires both sides to come together and agree to work on that basis.

Just to give a little bit of an idea on time lines here, because this does come up quite frequently in terms of the path forward from here to have these synergies being realized from 2030 onwards. The way we see that is in '26 and '27, we will be, on the one hand, working on the commercial agreements between the sites, and on the other hand, working on the permit preparation because the idea here to submit a permit. And we think that would be a DIA to be submitted by the end of 2027.

That means 2028 then we are looking to get that permit approved by the end of the year. And of course, at that point, we're finalizing studies and making sure we are execution ready upon receipt of the DIA and the sectoral permits. We could move into construction then in 2029. We think it's about a 1-year construction period. So 2030 then, we're into commissioning ramp-up and operations. That's, broadly speaking, the time frame that we're looking at here.

Our view is that we don't need to wait until the deal is completed for QB and Collahuasi to start working on the potential combination here and the way that might be structured. We think it will be far more effective once we have the deal complete, of course, because of that alignment of interest that I mentioned before with 60% Anglo Teck on the QB side and 44% Anglo Teck on the Collahuasi side.

But irrespective, in the meantime, what we will continue to do at QB is the no-regrets debottlenecking work that we've spoken about, which will be part of supporting both the upside in production and value from QB stand-alone, but critically supporting the unlock of synergies when QB and Collahuasi are working together.

So it's a long way of saying we can get to work right away. There's a lot that we can do. Now we can continue sharing information as we have been between the joint ventures we can continue outlining the work that needs to be done, both from a permitting and a studies perspective, to move this forward. And again, we think that that time line I've set out allows us to start realizing the benefit of these synergies in 2030.

It's Richard Hatch from Berenberg. Question on the costs of the operation. So back in 2018 when you sanctioned it, the all-in sustaining cost was $1.42, and I appreciate there's been inflation since that point. Just wonder whether you can just talk around what the long-term targets of all-in sustaining costs to be for this operation, please.

Yes. Thanks, Richard. I'll pass that one to Crystal, please.

Thanks, Richard. I think if you noted back on Dale's slide, he talked about some of the key drivers for driving that number down. We do expect that to begin in 2026. We're going to see a factor of improvement in our unit cost guidance as a result of the just production base improving somewhat from 2025. We're also going to see with the ship loader repair, that $0.10 a pound of incremental transportation come down. And then molybdenum will continue to ramp up, as we've indicated in our guidance, which gives us benefit in our moly credit.

So we haven't put out a long-term target because there are a lot of opportunities that we need to first unpack and to be able to stabilize, but I do expect it to continue to decline as we go forward, particularly given with the production base benefit that we're getting.

And I think I'd just add to that, Richard, that we haven't seen any structural change in the assets. So for the reasons Crystal outlined, when we capture those benefits, despite the fact -- including the effect of inflation I suppose, we should be broadly in line with the unit cost we've outlined previously.

And then maybe just to get the circle-back and answer your question on capital. So beyond 2026, we no longer expect to have the TMF capital impacts beyond that year. And I think that sustaining capital range continues to be reasonable from the original sanctioned piece in the outer years.

Daniel McConvey, Rossport Investments. Another question for Dale on tailings. This might have been touched on in the announcement of the merger. But -- and then there's not many big tailings stands like this around. But is there any analogy to similar problems that, I know Anglo was mentioned before, to this and historically? And what happened and how [indiscernible]? And I'm just wondering also just on the cyclones, if they've been used before in this situation successfully.

So in terms of industry, in terms of industry experience, I think one of the elements around the cyclone technology, if you happen to have this technology day 1, you may not appreciate you have this problem and that technology allows you not to have the problem and you progress. We have lots of tailings dams around in Chile that don't have this problem, but yet, depending on what cyclone technology they have, that's a different discussion.

Certainly, the experience of Quellaveco and the sharing we've had has allowed us to reinforce our path forward and be able to give us confidence we're on the right track relative to cyclone technology and our behaviors in terms of how to manage the sand and our sand deposition.

In terms of other tailings dams and industry experience, it's quite limited. And that also contributed to the early days when we're focusing on our sand was meeting sand specifications, industry experience says, well, then it's all operational operating practice and how you're driving and how you're improving that path. There's very limited industry experience relative to this element, recognizing the cyclone technologies that it's out in the market today.

Brian MacArthur, Raymond James. Can I go back to the QB cost synergies? You put up a slide for QB, talk about how good the concentrate is, how clean it is. Can you just talk about what it's like at Collahuasi? And as you go forward, whether there's any big marketing synergies between the 2 as you move forward and whether that's included in the $1.4 billion?

Yes. Thank you, Brian. I will pass you to Ian Anderson, our Chief Commercial Officer, to pick that one up.

Thanks for the question, Brian. So at Collahuasi, you see a reserve grade of about 0.96, and of course, at QB, you see above 0.52. So together, when you blend those grades, you get a combined grade of about 0.73%. And we did consider arsenic as a key contributor in terms of how this would add to the synergies. And so when you look at arsenic, the key factor in the market is to get down to that 0.05 level. And Collahuasi has typically been about the 1 range. And so when you blend those 2 together, you actually get below that specific penalty and so it improves that overall quality.

In terms of payables and premiums, different between both sites, but we think those will withstand, and you definitely see that built into the synergy calculation.

James McGee at Goldman Sachs. Just staying on Collahuasi. You talked about 2026 progressing ahead of the deal completing. Can you just help me understand how that JV agreement works or your understanding of it given Anglo's share plus Japan's share, obviously, a majority. And the last time I heard Gary Nagle talk, he was talking about fourth line at Collahuasi as an option for them. So just trying to think about the mechanics of, assume a vote goes through on the -- in December, how you're thinking about the kind of attribution of the decision making process there.

Yes, sure. Look, I mean, I won't talk about the specifics of the Collahuasi JV. That's a better question to be answered by them. But they are -- it is an incorporated joint venture, meaning that Collahuasi is the entity with which we work predominantly. It's different on the QB side where we're in an incorporated joint venture and Teck is the operator in that sense. So there's a slight nuance in that.

In terms of the work that we can continue to do independently, that would be quite significant. We've been sharing information, as I mentioned before, that's given us the insight into the into the synergies that we've outlined today and previously with respect to the operation. Sorry, just remind me what the other part of your question was, James? There was a specific piece you wanted me to unpack.

No. I was just trying to understand, obviously, there's an alignment between yourselves and Anglo in terms of the agreement that's being done. So I'm just trying to think about how the market should anticipate the next leg of sort of the conversation.

Yes. Look, I think the other thing you mentioned was just the fourth line at Collahuasi and discussion about that. Part of the reason why we think the timing of this merger and the timing of working together at QB-Collahuasi makes so much sense is both assets have a strong stand-alone expansion pathway. It's the fourth line at Collahuasi and, of course, we have the option for mill expansions at QB.

Now we think both of those options will be significantly more capital-intensive than the combination that we've outlined here at around 11,000 per tonne of copper produced. And therefore, we think the returns from what we're outlining here through these synergies will be much better than either asset can realize on a stand-alone basis. And those decisions will have to be made in the near term because, of course, once one side or the other commits to a major expansion, you've sort of lost the ability to capture the value, which is why we think the timing for the merger is now and the timing for the cooperation between QB and Collahuasi is now.

I mean, ultimately, Collahuasi will have to approve the path forward here. But our view is that it is so much more attractive to capture these low capital-intensive synergies than it is to take the additional capital and the inherent risks in a major project like building a new mill that would exist on a stand-alone basis.

So as I said before, there's work to be done, of course, to ultimately define the commercial framework between the 2 assets, but the incentives on both sides should be very much aligned here if we're all acting in the best interest of our shareholders.

Anita Soni, CIBC. I just wanted to understand the tailings dam a little bit more about this construction here. So there's a fourth and fifth -- a fourth is being constructed right now and then a fifth rock bench. Is that fifth one is also a vertical, or is that the top one, the crest [ captor ]?

The fourth one -- or sorry, the fifth one will follow the same angle or the same growth trajectory as the fourth one, just like the fourth follow the third and the second and the first.

So what would you say is the actual confining, like when you're looking at your throughput rates for next year and the combining factors on that, would you say it's the building of the top crest? Or is it the rock or is it the sand that's a combining factor?

So the whole purpose of building the rock benches is to create a wide enough platform to keep growing the crest of the tailings dam. And really the limiting factor and the source of the downtime is how fast we can build those rock benches to create the width of the crest to be able to build -- to build our tailings dam. So for next year, there is time put aside within our guidance to be -- to ensure we're able to achieve that rock bench construction and to be able to build our crest height to be able to achieve our production levels as per the guidance of next year.

Okay. So seeing no more questions, so that wraps up our presentation. Oh, there is one at the back there. There's Ian.

Ian Rossouw from Barclays. Just on the assumptions, Jonathan, where you were saying you assume one of the QB lines will treat the Collahuasi ore, why not 2? What prevents you from doing it at both of the lines? And are there any constraining factors?

Look, I think the constraining factor ultimately is the rate of mining at Collahuasi. There's a strip ratio there of more than 4 to 1. So the increase in the rate of mining that's required to supply the material to the QB mill is significant. So as we've looked at that from a first step in terms of synergy capture, it makes sense to us to go with one line at QB processing only Collahuasi ore. Of course, there's nothing in the future to stop us looking at additional configurations, but Collahuasi is already a very, very large mine. There'll need to be fairly significant additional fleet operating in that mine ultimately to achieve the ore supply that's required to add the 175,000 tonnes of annual copper production through the QB mill. But as I said, we can continue to analyze potential further upside in the future. But we think this is the optimal configuration for the first phase of synergies.

Sorry, just coming back again to the sand and drainage. The presence of ultrafines, now that you've had a chance to digest what's happened in the last couple of years, what's the root cause of missing this from the construction perspective? Like you're giving me the impression that you were surprised by the presence of ultrafines. So was that -- was that a defect in the early metallurgical testing before the operation was built? Or sort of how is this -- what's the root cause of the miss here? I guess I'm trying to understand.

So I think from the perspective is how the ultrafines are behaving within the cyclones. So the presence of Ultrafine isn't necessarily a surprise. But what happens to them within the cyclones is clearly the question, which then impacts how the sand behaves and drains in the paddocks. So what we're learning, and this is unique relative to many of our other operations in Chile, but certainly, the sharing we've had with Quellaveco, is the cyclone -- depending on your cyclone technology, you can concentrate your ultrafines impacting your sand drainage. And that is something that we've learned through the course of the -- recently, and this is the work -- the reason why we're changing our cyclone technology and certainly encouraged by our results to date, seeing that improvement in sand drainage, and now looking forward to translate that on operating performance.

Thank you. And then back to Richard, I think, for the final question now.

Just a question. I guess part of Teck's history has been doing kind of minority stakes with Japanese partners, coal and now with them, QB. With all of the synergies that you can see by combining this and all of the upside potential, is there any interest as a combined entity to buy back the minority stake that you sold back in 2018, so you have more share of the upscale pie?

Look, that's something we're not considering at this point in time. We're working through the completion of the merger with Anglo American. We're working through the combination of QB and Collahuasi and capturing the synergies that are available. We don't have any broader considerations beyond that for the time being.

Partnerships with the Japanese are usually very good. They're very long-term, stable supporters of these operations, including, of course, contributing their share to capital of any future expansions of these operations. And of course, they always provide very good long-term partners for offtake of concentrate from these sorts of operations. So I don't see a need to do anything different in that regard. We're very happy with our partnerships with the Japanese, particularly at QB.

Okay. Well, with that, I will this time wrap up the presentation for the afternoon. Thank you again for joining us, both in Santiago and on the webcast. We look forward to showing QB to those of you who are here in person. It will be a very engaging and enlightening day tomorrow, I'm sure. Wish you all a good afternoon and evening. Thank you very much.

Ladies and gentlemen, thank you for standing by. Welcome to Teck's Third Quarter 2025 Earnings Release Conference Call. [Operator Instructions] This conference call is being recorded on Wednesday, October 22, 2025.

I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Teck's Third Quarter 2025 Conference Call. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward-looking statements. Please refer to Slide 2 for the assumptions underlying our forward-looking statements. We will reference no-GAAP measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website.

On today's call, Jonathan Price, our CEO, will provide third quarter 2025 highlights. Crystal Prystai, our CFO, will follow with further details on the quarter. Jonathan will then wrap up with closing remarks and an opportunity for Q&A.

Over to you, Jonathan.

Thank you, Emma, and good morning, everyone. Starting with highlights from our third quarter 2025 results on Slide 4. The most significant highlight of the quarter was our September 8 announcement of a merger of equals agreement with Anglo American. This is a unique opportunity to create a global leader in critical minerals and a top 5 copper producer, and I could not be more excited about it, particularly about a substantial value creation that could be generated.

Anglo Teck will have an industry-leading portfolio with more than 1.2 million tonnes of annual copper production underpinned by 6 world-class copper assets and outstanding future growth optionality. This will make Anglo Teck one of the world's leading investable copper opportunities, offering both scale and quality with over 70% copper exposure. This transformative combination will unlock significant value for shareholders through compelling adjacencies generated by integrating the resources and infrastructure of QB and neighboring Collahuasi and through meaningful corporate synergies.

Anglo Teck will work with stakeholders to optimize the value of the adjacencies. We expect to produce 175,000 tonnes of incremental copper and generate an annual average underlying EBITDA uplift of at least USD 1.4 billion per year for at least 20 years on a 100% basis. Working together as Anglo Teck will materially derisk and accelerate our ability to realize this value opportunity with aligned incentives on both the QB and Collahuasi sites.

Over USD 800 million in recurring annual synergies have also been identified and we expect approximately 80% of that to be achieved by the end of the second year following completion. In addition, the combined company is expected to have a strong balance sheet supported by a larger, more diversified asset and cash flow base, including premium iron ore and zinc. Anglo Teck's scale and balance sheet will expand the opportunity set as we optimize the approach to growth. through the combination of 2 significant project pipelines that will compete for capital based on risk-adjusted returns.

Both Anglo American and Teck believe the merger will enhance portfolio quality, financial and operational resilience and strategic positioning, and it will be highly attractive for our respective shareholders and stakeholders.

Another key highlight of the quarter was completion of our comprehensive operational review. The focus of our review is on improving performance through a detailed QB action plan and identifying opportunities to enhance operational practices across the portfolio. This included a detailed assessment of operational plans for all our assets with review and input from third-party technical experts and independent advisers and with oversight by the safety, operations and projects Committee of our Board of Directors.

As a result, we now have updated risk-adjusted operational plans that are reasonable, achievable and more conservative as we embed assumptions based on demonstrated performance rather than design rates.

At QB, our revised operational plan reflects ongoing work on development of the tailings management facility, or TMF and the resulting constraint on our mill. In the QB action plan, our near-term priority remains enabling safe, unconstrained production by raising the [indiscernible] of the dam and working on solutions to improve sand drainage towards design targets. We are confident that we have thoroughly assessed and understood the issues at QB, and we have a defined and measurable path forward. And from the beginning of 2027 onwards, we expect that the TMF development work will no longer be a constraint on the mill.

Overall, in the third quarter, our profitability improved compared to the same period last year to $1.2 billion of adjusted EBITDA. Our established operations performed well, particularly Red Dog & Trail, with Red Dog sales exceeding guidance and continued improvement in Trail's profitability. Performance also improved at Highland Valley and CdA compared with Q3 2024. Excluding QB, our copper production increased from the same period last year.

Our balance sheet remains very strong with $9.5 billion of liquidity, including $5.3 billion in cash. And the Board sanctioned the Highland Valley mine life extension in July, which will extend production from a core asset to 2046.

Turning to safety and sustainability on Slide 5. Year-to-date through September 30, our high potential incident frequency rate was 0.06 at Teck Controlled Operations. Safety performance is considered a key indicator of stable operating performance, and we have seen a strong improvement with our HPI rate trending 50% below the annual rate last year. And we were thrilled to see our Chilean operations reach 100% renewable power on October 1 when our long-term clean power agreement for QB's electricity supply came into effect. We signed that agreement some time ago when there was not enough renewable capacity in place in Chile to be able to make that switch. The agreement enabled our partner to put additional renewable capacity in place and it's great to see the benefit of that come to fruition.

And with that, I'll turn it over to Crystal.

Thanks, Jonathan. Good morning, everyone. I will start with our third quarter 2025 financial performance on Slide 7. Our adjusted EBITDA increased by 19% in the quarter compared to a year ago to $1.2 billion, driven by higher base metals prices, byproduct revenues and significantly stronger copper -- significantly lower copper smelter processing charges as well as strong performance across our established operations, most significantly in our zinc business.

Red Dog, zinc sales and another profitable quarter from Trail operations drove an increase in our adjusted EBITDA, although this was partially offset by higher operating costs at QB. And while we completed a $144 million of share buybacks in July, we have not executed share buybacks since July 25 and will not be permitted to execute further buybacks through the closing of our proposed merger with Anglo American. Importantly, we will continue to return cash to shareholders through our annual base dividend of $0.50 per share, which is paid quarterly.

Slide 8 summarizes the key drivers of our financial performance in the third quarter compared to the same period in 2024. Our adjusted EBITDA increased by $185 million to $1.2 billion. In Q3, we realized higher copper and zinc prices as well as higher byproduct revenue, lower smelter processing charges and an increase in sales volumes. This was partially offset by an increase in royalties at Red Dog due to strong profitability and higher operating costs at QB. Our Q3 2024 EBITDA was impacted by a post-tax impairment charge on Trail operations.

Now looking at each of our reporting segments in greater detail and starting with copper on Slide 9. In the third quarter, gross profit before depreciation and amortization from our copper segment improved 23% to $740 million compared with the same period last year, primarily due to higher base metals prices and lower smelter processing charges. QB production was constrained due to TMF development work, but we expect to see less downtime impacting performance in the fourth quarter.

Excluding QB, our production increased from Q3 2024, driven by higher throughput and grades at Highland Valley and higher grades and recoveries at Carmen de Andacollo. Antamina's production reflects a higher proportion of copper zinc ore this year as expected in the mine plan. Our copper net cash unit costs improved by USD 0.16 per pound, despite higher operating costs at QB primarily due to lower smelter processing costs and increased byproduct credits, including QB molybdenum.

Following board sanction of the Highland Valley mine life extension in July, the project has entered the execution phase. Engineering and procurement activities are well underway and site mobilization has begun. Our outlook for our copper segment is aligned with our October 7 news release. For 2025, we expect annual copper production of 415,000 to 465,000 tons and copper net cash unit costs of USD 2.05 to USD 2.30 per pound.

Turning to our zinc segment on Slide 10. In the third quarter, gross profit before depreciation and amortization for our zinc segment improved 27% to $454 million compared to the same period last year. This was primarily due to higher byproduct revenues, higher zinc prices and lower zinc treatment charges, partially offset by higher adjusted cash cost of sales and higher royalties tied to Red Dog's profitability. Red Dog and Trail operations both had a strong quarter of performance.

At Red Dog, zinc sales of 273,000 tons were above our guidance range of 200,000 to 250,000 tons following a successful shipping season as we experienced favorable weather conditions. Production reflected lower grades as expected in our mine plan. In the third quarter, Red Dog inventories were drawn down by approximately USD 200 million. However, this was more than offset by elevated trade receivables of USD 570 million at quarter end, due to the volume of sales in Q3 and higher zinc prices. We expect Red Dog's trade receivables will be substantially reduced in the fourth quarter, providing a source of cash through the reduction in working capital. As of October 21, approximately USD 350 million of Red Dog receivables were collected, driving an increase in our cash balance post Q3.

Our zinc net cash unit cost improved by USD 0.08 per pound, driven by lower smelter processing charges and higher byproduct credits. We reported another quarter of profitability at Trail operations reflecting our focus on improving Trail's profitability and cash generation through prioritizing processing of residues over maximizing refined zinc production. Processing residues enables us to reduce concentrate purchases in the low treatment charge environment.

Looking forward, we expect Red Dog zinc sales to be between 125,000 to 140,000 tons in the fourth quarter reflecting normal seasonality. Red Dog's shipping season commenced on July 11 and was completed yesterday. Our outlook for our zinc segment is aligned with our October 7 news release. For 2025, as a result of Red Dog's strong year-to-date performance, we expect Red Dog's zinc production to come in towards the top end of our guidance range of 430,000 to 470,000 tonnes. We continue to expect our total zinc production to be 525,000 to 575,000 tonnes, including Antamina. We also expect to be at the high end of our annual refined zinc production guidance range for Trail operations.

We continue to expect zinc net cash unit costs of $0.45 to USD 0.55 per pound. With Red Dog's strong performance, we continue to build the Nano Royalty Accrual, which is expected to be a source of working capital in Q4 and a use of working capital in Q1 2026 [indiscernible].

Turning to our balance sheet on Slide 11. We have maintained a strong balance sheet and currently have liquidity of $9.5 billion, including $5.3 billion of cash. Our cash balance has increased by approximately $500 million in the month of October so far, particularly due to the collection of Red Dog receivables built in Q3. Our use of cash through the end of September reflects significant cash returns to shareholders of over $1.2 billion as well as the payment of taxes related to the sale of the steelmaking coal business and the advancement of our copper growth options, including the start of the execution of the Highland Valley mine life extension.

And while we completed a $144 million of share buybacks in July, we have not executed buybacks since July 25 and will not be permitted to execute further buybacks through the closing of our proposed merger with Anglo American. Importantly, though, we will continue to return cash to shareholders through our annual base dividend of $0.50 per share, which is paid quarterly. Overall, our very strong balance sheet ensures we maintain our resilient position.

Back to you, Jonathan.

Thanks, Crystal. Looking forward on Slide 13, our priorities are disciplined execution across our operations and projects and on progressing our transformative merger of equals with Anglo American. We are advancing approvals for the transaction, and both Anglo American and Teck strongly believe it is a significant value creation opportunity for our respective shareholders and stakeholders. At the same time, we are laser-focused on delivering against our operational guidance provided following completion of the comprehensive operational review. This includes continuing to progress the QB action plan and the necessary work on QB's tailings management facility to complete the ramp-up of the operation.

At QB, there are multiple paths to value and significant upside potential beyond our current guidance, and we aim to realize the full value of this Tier 1 asset. And finally, our Highland Valley mine life extension project to extend production from a core asset 2046 has moved into the execution phase, and we are progressing early works.

Turning to the outlook for QB on Slide 14. Significant work has been undertaken to improve sand drainage times and complete the TMF development work. We have started the implementation of the new cyclone technology in one of the cyclone stations, and we are seeing positive early results. We have finished the construction of the new panic designs where we are also seeing improvements in sand drainage. Collectively, these results give us confidence that we are on the right track to finding solutions to improve sand drainage.

We currently expect to be well positioned to catch up on the construction of the sand dam, and we aim to install the permanent infrastructure that will hydraulically deposit tailings and sand, replacing the current mechanical process by the end of 2026. This will allow us to push QB to run at steady state from the beginning of 2027 onwards.

Turning to Slide 15. Importantly, QB remains a world-class Tier 1 asset. The foundation of QB's potential is its large long-life deposit with around 10 billion tonnes of reserves and resources. The operation has the advantage of a very low strip ratio, which enables competitive all-in sustaining costs. And QB has a tax stability agreement in place through 2037. QB has previously demonstrated that it is capable of operating at design recovery and throughput levels when there is no constraint on the mill. The design, construction and operational capability of the plant was previously validated by independent specialists through completion testing and found to be robust.

Beyond our current guidance for QB, there is significant upside potential. Optimization and debottlenecking offers the potential for efficient near-term throughput uplift to at least 165,000 tonnes per day with a potential to go to 185,000 tonnes per day. We are working on improving recoveries towards our design recovery rates of 86% to 92% with more consistent plant online time and geometallurgical testing to optimize reagents and drive improvements in recovery rates. And while we expect 2028 to be impacted by transition ores, average grades are expected to improve on average for the 5 years thereafter.

Overall, we have multiple potential paths to create value for our shareholders through QB, including the potential adjacencies with neighboring Collahuasi and the value of QB continues to be validated by Anglo American through their due diligence for our merger of equals. We look forward to welcoming many of you to QB on November 3 and 4, and we are confident that you will see the significant progress that has already been made and that QB remains a world-class Tier 1 asset.

Turning to Slide 16. I'll wrap up where I started with the merger of equals with Anglo American. The combination is truly compelling and will lead to significant value creation opportunities for shareholders. Together, we will become a leading critical minerals producer with a top 5 global copper portfolio. We will deliver tangible corporate synergies of USD 800 million per year with a road map to unlock an additional USD 1.4 billion of annual underlying EBITDA uplift from the substantial adjacencies between QB and Collahuasi. And we will have the resilience and enhanced financial capacity to balance shareholder returns with valuable investment opportunities from this incredible suite of assets.

The scale of the combined entity will increase the company's relevance in the global capital markets and could see a significant multiple rerating that will further increase the value generation of the combined Anglo Teck.

Slide 17 is a reminder of the expected time line and required approvals for the transaction. We expect completion within 12 to 18 months from announcement. Both boards support and recommend this merger and there will be concurrent separate votes by the shareholders of Teck and Anglo American on December 9. We expect to publish our circular in mid-November, and it will be available on our website at teck.com. The transaction will then be subject to regulatory approval and customary closing conditions, including approval under the Investment Canada Act to competition and antitrust approvals and various other applicable regulatory approvals globally. We are excited at the potential of Anglo Teck to create a global leader in critical minerals with substantial value creation opportunity for shareholders.

With that, operator, please open the line for questions.

[Operator Instructions] The first question comes from Liam Fitzpatrick with Deutsche Bank.

Jonathan and team, I've got 2 questions. The first one is just on the deal and whether any preliminary discussions have started with Glencore over the JV of the 2 assets? And if not, any rough guidance on when that could begin? And the second question is just on the guidance or the updated guidance for 2025. It looks like you're tracking towards the low end across unit cost guidance and CapEx guidance. I just wanted to check if that's the case or whether there's something we should be looking out for in Q4?

Thanks, Liam. It is indeed morning here in Vancouver. Starting with your first question, just on the QB Collahuasi synergies. Of course, with this being structured as a friendly deal between ourselves and Anglo American, it did give us significant ability to understand the capability of both assets and comprehensively assess the potential opportunities that could be generated from cooperation, both through the operations and of course, through the extensive infrastructure. As we've said, much of that value comes from the processing of the higher-grade, softer Collahuasi ore through the QB plant, and it's a very capital-efficient way to add low-cost production into the combined portfolio. These synergies, of course, were also reviewed and validated by external advisers in order for them to be published. So there's a good deal of rigor that's been put around that.

But we think this will be the benefit to significant benefit of the owners of QB and of Collahuasi, and we expect all parties to be motivated to work together to generate this value for their shareholders. And of course, much of that work in terms of the commercial agreements and the structure of the agreements going forward remains ahead of us. But as I said, we think this is a compelling opportunity, and we do expect all shareholders to be engaged here to capture that value for their shareholders.

Crystal, maybe if you'd just like to comment on Liam's second question in terms of where we're trending on the guidance?

Yes, sure. Liam, just in the context of CapEx first, I think the guidance ranges remain reasonable as we look at where we're trending with our growth capital as we continue to progress the HVC mine life extension program through the fourth quarter, I'd expect us to come in within that range. Similarly, on the capitalized stripping side of things. And then on the sustaining capital side of the guidance, we are obviously continuing to progress the work on the TMF and expect that spending to continue into the fourth quarter. So I would suggest you continue to use a midpoint on the CapEx aspects.

Similarly on unit costs for the copper business, I would expect us to come in towards the middle of the range. I would be using the low point. And for zinc, I think -- you're probably -- it's probably reasonable to be using somewhere between the low and the mid case just based on where we're tracking there. But there is different -- there isn't anything anomalous in those numbers.

Okay. Jonathan, if I could briefly follow up, just point taking really the discussions are ahead of you. Should we be thinking about the discussions will get going post deal completion which is well into next year? Or is the plan to begin those earlier?

Look, there's nothing that requires the deal to be completed to enable discussions between QB and Collahuasi. I mean I think over the past couple of months since the announcement of the merger of equals with Anglo American, we've clearly surfaced the value here that's available to all of the owners of both QB and Collahuasi, and I think that creates a good platform for engagement.

The next question comes from Myles Allsop with UBS.

Great. Maybe just [indiscernible] up slightly from Liam's question first on QB Collahuasi. I presume that all shareholders need to agree to the joint venture to be able to execute if Glencore or another shareholder gets difficult you can't force them into a joint venture?

No, there's no way of forcing anybody into a joint venture. I think it will require the agreement of all parties. Of course, Collahuasi isn't incorporated entity. So unlike QB, which is unincorporated where tech is clearly the operator and takes the lead. Collahuasi have to engage as a consolidated entity. As we've said before, we think there's a significant advantage from the cross ownership that will be created through this merger of equals with 60% of QB being owned by Anglo Teck and 44% of Collahuasi being owned by Anglo Teck, and we consider that to be a significant derisking and accelerating factor in capturing these synergies over time.

But again, as I've just said, all shareholders of both assets should be highly motivated to work together to capture what we think is significant new value for our shareholders.

Yes. And it was not [indiscernible] quite excited about it. Could you -- just on QB, where should we think -- like I guess it's hypothetical now, but when production normalizes in '27, '28, where will unit costs normalize? What's your best guess? Is it in the $1.50 or $1.52? What's the kind of new norm based on your current best estimate?

So Myles, there's no structural change to the asset based on the guidance we've previously given for QB, -- of course, there's the impact of inflation that is across the whole of the industry at the moment. So we would expect that to develop over time. But structurally, we've said we see the asset capable of performing at the levels that we've used previously to define unit cost guidance. And I think that's probably the best indication I can give you at this stage.

What was the original normalized unit costs when you took the feasibility [indiscernible]?

So we were using USD 140 to USD 160 per pound previously. Obviously, that's predicated on the plant running at full capacity, on hitting the design recovery rates, on the full production of molybdenum and of course, operating the port through our ship loader, which is a situation we expect to return to in the first quarter of next year. And of course, as I mentioned before, they are unescalated numbers, as in they don't reflect the impact of inflation over the coming years.

The next question comes from Anita Soni with CIBC.

The first one, I just wanted to -- if you could give us some more color in terms of the improvement in sand drainage rates? Could you quantify that? And I think previously it was like -- was thinking about 7 days for the sand to drain, is that -- has that improved from -- did you quantify it in the number of days?

Anita, thanks for the question. I'll hand this over to Dale. We won't quantify that, but I can get Dale to give a description of the work that's ongoing and some of the progress that we have seen, particularly in the underlying drivers of sand drainage.

Thank you very much, Jonathan, and thank you for the question. I think as Jonathan mentioned earlier, we've made a few changes to the operations since our start-up in October. One, we have started the replacement of cyclone technology. And with that change, we are starting to see improvements in sand drainage in the products. And that, at the same time, as was changing some of our operational practices and design of the products as well. And those together indicating some good initial results. But it's still too early to tell in terms of what magnitude of improvement is other than we're on the right track, and that's giving us some confidence on the path for going forward -- where we sit today.

Yes. And I would say, Anita, of course, there are some opportunity to see this [indiscernible] in 2 weeks' time with far more detail around the work that's ongoing and how we see this developing.

Yes. I will be attending the tour. And then my second question is with respect to the mill productivity rates. I think previously, you talked about -- well, I can't remember off the top of my head, but the utilization and the availability, could you put it in context of what you've seen over up to October, October to date in terms of when you provided the guidance for Q3 results, yes, I think it was -- I don't want to say it correctly, but I think it was like 61% availability or/and 70% utilization. But can you just tell us what the old one was and what you've seen to date in October?

Yes. So year-to-date, when we communicated a couple of weeks ago, we've seen 87% availability in the mill, but only 70% utilization because of the constraint put on the mill by the downtime associated with the TNF. Since starting up in early October, we've seen very good availabilities. I won't quantify that right now, but very strong.

Okay. And then am I correct in thinking when you're looking at the 87 and the 70, you should be multiplying those to get to your total capacity? Is that correct?

No, it doesn't quite work like that. I mean the utilization is a function ultimately of that availability, but we were only able to utilize the mill 70% of the time. Ultimately, you don't need to multiply the 2 things.

The next question comes from Lawson Winder with Bank of America Securities.

Thank you for today's update. If I could come back to the merger. Can I ask to what extent Teck and/or Anglo American have engaged with Investment Canada on the transaction? And is there any indication that moving the combined head office is sufficient? And then just a follow-up to that, if you could address, what you would perceive as sort of the bottleneck from an antitrust and other approval point of view once the vote is done?

Yes. Thanks, Lawson. Thanks for those questions. Look, we are engaging on an ongoing and collaborative basis with the Canadian government here. Those discussions have been frequent and productive. As we've said, we've put forward what we believe to be a very strong and comprehensive package of commitments to Canada, in particular. As you noted, a key element of that is Anglo Teck having its headquarters in Canada in perpetuity. And that's in addition to the significant capital spending commitments we've made of $4.5 billion over 5 years and other assurances and meaningful undertakings associated with the activities of the new company. So those conversations are ongoing and they're productive, and we're very pleased in the way that they're unfolding at the moment.

We don't see a particular bottleneck here, Lawson, necessarily. We'll work through the shareholder vote, of course, in early December. We'll continue in parallel to work with the Canadian government under the Investment Canada Act. And of course, then this week, we will complete all of our regulatory filings related to antitrust and competition regulators globally. And of course, then those processes will unfold in due course. So a lot of activity going on, a lot of engagements underway, and we hope to continue that in a very productive and to the extent possible expedited fashion.

The next question comes from Chris LaFemina with Jefferies.

Just wanted to follow up another question on the QB Collahuasi synergies. So the shareholder vote is going to be on December 9. But at that time, we won't know whether the JV is certainly going to happen, and we won't know what the economic split would be between Teck Anglo and your partners and those assets. And obviously, that JV is a big component of this deal. And my first question would be, whether you think it's a compelling merger even if you cannot get that JV down? I understand that it's compelling from all parties involved. But under the assumption that, that JV doesn't happen, it's still a very good deal for Teck? That's my first question. I have a follow-up as well.

Yes. Thanks for that, Chris. So look, absolutely. I mean we think the creation of this new company, the fifth largest copper producer in the world, 6 world-class assets, 1.2 million tonnes of annual copper production, a company of both scale and quality. We expect this to trade very, very well in equity markets. In addition to that, of course, we've got the $800 million of synergies that we will work through coming through the corporate combination coming from marketing, coming from procurement. In addition to that, of course, Teck shareholders will gain access to synergies being created through the agreement that Anglo American has put in place with Codelco [indiscernible], et cetera. There are lots of sources of value creation here.

We do think that the QB Collahuasi, of course, is a very meaningful component of the value creation here. And as I mentioned before, I would expect all of the owners of both QB and Collahuasi to be highly motivated on behalf of their shareholders to work collaboratively to capture that value that's ahead of us.

Right. That makes sense. And then in terms of a framework for how you value the split of the economics in that JV, have you had discussions with partners regarding just generally how to think about that? Because -- and obviously, each partner is going to want to maximize their cap for the economics. And I would assume that's going to be a sticking point. So how do you think about the framework to evaluate each partner involved?

Look, so that needs to be worked out, Chris, and that is part of the commercial agreements we have ahead of us. Of course, again, with Anglo Teck, it's 60% of QB and Anglo [indiscernible] Teck at 44% of Collahuasi. You can see a win-win there on both sides of this transaction. We will get into the nuts and bolts of this in the period ahead of us. But again, I would expect all owners of both assets to be highly motivated to capture this value on behalf of their shareholders.

There being no further questions, I will now pass the call back to Jonathan for closing remarks. Please go ahead.

Thank you, operator, and thanks again to everyone for joining us today. As mentioned, we look forward to seeing many of you at our QB site visit and to many others joining us via webcast on November 3. Wish you all a good day. Thank you.

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

Good morning, everyone, and thank you for joining us at short notice. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Teck does not assume the obligation to update any forward-looking statements. Please refer to Slide 2 for the assumptions underlying our forward-looking statements.

We will reference non-GAAP measures throughout this presentation. Explanations and reconciliations are in the latest press release on our website.

On today's call, Jonathan Price, our President and CEO, will start with an overview of our comprehensive operational review. Dale Webb, our SVP of LatAm Operations, will provide an update on the QB Action Plan. Jonathan will then discuss our revised operational outlook and wrap up with closing remarks followed by a Q&A session.

Over to you, Jonathan.

Thank you, Emma, and good morning, everyone. In August of this year, we launched a comprehensive operations review, which has now been completed. The focus of this review was on improving performance through a detailed QB Action Plan identifying opportunities to enhance operational practices across the portfolio and setting out plans that are reasonable, achievable and based on demonstrated performance. This included a detailed assessment of operational plans for all of our assets with review and input from third-party technical experts and independent advisers and with oversight by the Safety, Operations and Projects Committee of our Board of Directors.

We focused on redefining ranges of outcomes for key inputs and value drivers, often building in a greater degree of conservatism. We've also reassessed and quantified risks to establish production and cost ranges for each operation based on demonstrated performance as well as identifying improvement opportunities to preserve and enhance asset value.

Specific to QB, we have reflected the ongoing QB Action Plan. In particular, the impact of our ongoing work on sand drainage solutions and mechanical construction of rock benches at the Tailings Management Facility, or TMF, have been captured in our operational plans for 2025 and 2026. This has resulted in changes to our guidance outlook to reflect our updated risk-adjusted operational plans. Later in the presentation, I will come back to the updated outlook.

We've also redefined and implemented enhanced monitoring and tracking of operational performance to plan. At the same time, we have strengthened executive oversight of operational activities, and the SVPs of Operations for LatAm and North America have been reporting directly to me since the beginning of September.

I will now pass over to Dale to provide more details on the QB Action Plan.

Thank you, Jonathan, and good morning, everyone. Turning to Slide 5 and QB's 2025 performance. The primary limitation to QB's production this year has been the pace of the TMF development work and the resulting constraint placed on our mill. This has led to additional downtime in the concentrator to manage the rate of tailings raise in the tailings dam pond. The chart on the left-hand side illustrates this well.

Year-to-date to the end of September, QB's mill availability to process ore 87% of the time, close to the design mill availability of 92%. However, due to the TMF-related constraints, we have only been able to utilize the mill 70% of the time. The lower utilization rates continue throughout the third quarter, particularly in September, when additional downtime for the TMF-related development was required. Looking forward, as we continue to progress the TMF development work, downtime is expected to be less in the fourth quarter, resulting in improved mill availability. We also expect the mill utilization rate to gradually improve through 2026.

The chart on the right-hand side shows that on recoveries, we saw 4 sequential quarters of improving recoveries in 2024, approaching our design rate of 86% to 92% in the fourth quarter of last year. This year, recoveries have been impacted by transition ores and intermediate stoppages in the mill due to ongoing TMF development work. Higher recoveries generally have strong correlation with more consistent and stable online time, which has been impacted by the TMF-related constraint.

We have been conservative in our revised forward-looking plans at QB to have made recoveries based on demonstrated performance rather than design rates. However, we are going to progress additional geo-metallurgical testing, will optimize plant operating parameters. With more consistent plan on the line time, we could see upside to recoveries towards our design rates of 86% to 92%.

Turning to Slide 6. Teck's near-term priority remains enabling safe, unconstrained production by raising the crest height of the dam. This diagram highlights the key work streams we are undertaking to complete the TMF development work. As background, sand is separated from the slimes at the cyclone station. When separated, the sand is placed downstream in paddock configuration. At that point, we drain water from this end, allowing us to place, compact and reapply sand, gradually building the sand dam.

This process depends on water being liberated from the sand at a specific rate. If that rate isn't achieved, the sand cannot be compacted until it dries sufficiently, extending the amount of time it takes to build the sand dam. That is currently our key issue.

Ultimately, a sand dam will be constructed using hydraulically placed sand as shown in the image as Item #1, which is expected to enable steady-state TMF operation. We are constructing additional rock benches to mechanically increase the height of the tailings dam, as shown in the image as item #3, while continuing to progress efforts to improve sand drainage to support construction of the downstream sand dam.

The sand currently being produced meets design specifications. However, slower drainage caused by the presence of ultra-fines has delayed progress in the development of the sand dam. As a result, the mechanical construction on the rock benches continues, and this has led to additional downtime in 2025, particularly in the third quarter and is expected to result in incremental downtime in 2026.

Significant work has been undertaken in 2025 to improve sand drainage times with improvement realized to date. However, further progress is needed to reach design targets. In particular, 2 key initiatives were advanced in the third quarter of this year. Firstly, the removal of ultra-fines through test work in collaboration with cyclone manufacturers, third-party experts and industry peers. Initial tests have shown positive results in improving sand drainage, and we are modifying the cyclone facility this quarter to incorporate alternative technologies designed to remove ultra-fine material, as others in the industry have also done to address this issue.

Secondly, we have been working on refining sand placement techniques. This includes improvements in paddock design as well as sand placement and drying, which we expect to enhance drying and drainage efficiency. Lastly, another key element is upstream beaching as shown as Item #2 on the image. This is done by placing sand followed by rock fill, and this, by design, is to support the growth of the dam.

Now, turning to some photos that showcase the TMF development work at QB starting with Slide 7. The left photo shows the paddock redesign work that has been implemented for the construction of the sand dam. This picture shows our paddocks and current redesign, which now includes 5 main paddocks, where we'll be depositing sand. This redesign is the result of extensive testing and iteration, drawing on a range of methods and lessons learned, not only from within Teck, but also from broader industry experience and input from multiple technical experts.

The goal of configuration is to improve sand recovery efficiency, support consistent dam growth and maintain operational flexibility. From this angle view, you can clearly see location of the paddocks relative to the top of the dam. This layer will be a key focus as we continue building and raising the dam structure. The right photo is a drone view of our tailings dam. It shows the upstream beaching to support the widening of the tailings crest to design. We have progressed mechanically building the crest using sand and rock as per design. This visual helps illustrate progress made in developing the beach in front of the dam to support dam stability and dam crest growth.

Now turning to Slide 8. The photo on the left-hand side shows the progress of the rock bench construction on the downstream side of the crest of the tailings dam wall. At this time, we are working on our fourth bench with 1 more bench planned to be completed in the second quarter of 2026. The rock bench construction helps to both support the downstream side of the tailings dam and will facilitate the raising of the tailings dam wall by widening the tailings crest, which is at the top of the tailings dam wall.

In the photo on the right side, you can see 2 existing cyclone banks with a total of 44 cyclones. Through the fourth quarter, we'll be replacing the 44 cyclones, as shown as the yellow components with new technology to extract ultra-fine from the sand. It's a relatively simple fix to swap these cyclones out. The capital associated with this is minimal and embedded in our TMF-related capital guidance.

Now turning to Slide 9, which summarizes our TMF development plans. This slide sets out key work streams and expected timeline for completion. You can see that we've made considerable progress already this year. We have completed the initial upstream beaching supporting the growth of the dam. Construction of the mechanical rock benches planned for this year is in progress and with completion expected later this year. And we have completed redesigning the products, which will commence implementation this month. And we've also completed trials with new cyclone technologies and will begin installation this month.

We will continue with the TMF development work into 2026 with a focus on further construction of 1 additional rock bench to be completed in the second quarter of next year. We're also doing an evaluation of a secondary sand cleaning system to further enhance ultra-fines removal, which is in progress with the timing of expected completion to be confirmed in early 2026. With these initiatives underway, we expect to be well positioned to catch up on construction of the sand dam based on our current assessment of sand drainage solutions.

And finally, we aim to install permanent infrastructure, which will hydraulically deposit tailings and sand and replace the currently -- the current mechanical process, which expected timing for completion to be confirmed in late 2026. We expect that the TMF development work will no longer be constrained on the mill from 2027 onwards.

Now I'll hand the call back to Jonathan.

Thanks, Dale. So turning to Slide 11. The ongoing TMF development work at QB as well as the completion of the comprehensive operational review have resulted in changes to our previously disclosed guidance ranges for the operation. The primary driver of the changes is a slower ramp-up as work focuses on ensuring that the TMF is set up to support optimal long-term performance from 2027 onwards. Lower recoveries are now also being assumed, consistent with recent performance. You will recall that QB operations has previously demonstrated that it is capable of operating at design recovery and throughput levels when there is no constraint on the mill.

Despite the guidance changes, the underlying potential of QB remains intact and the design, construction and operational capability of the plant was previously validated by independent specialists through completion and testing and found to be robust. Further, the underlying synergies between QB and the adjacent Collahuasi operation, which we proposed to realize through our announced merger of equals with Anglo American, have the potential to unlock value in a capital-efficient manner. There are several work streams underway to enhance near-term performance and to enable the operation to deliver its full potential, which the current guidance period no longer reflects, and therefore, is potential additional upside.

This work is focused on 4 key areas. Firstly, we continue to believe that design recovery rates of 86% to 92% remain achievable compared to the approximately 82% to 85% currently assumed. Further geo-metallurgical work is ongoing to support achievement of design recovery rates. Secondly, we are reviewing opportunities to incorporate higher-grade material later in the guidance period by optimizing the revised mining sequence aligned with the new throughput profile. Irrespective of these 2 work streams, we expect grades to increase after 2028 for the following few years.

Thirdly, under the revised plan, the 5% to 10% throughput optimization, previously targeted, is no longer included within the guidance period. However, we remain confident in delivering this improvement overtime. Finally, we intend to review a range of measures to optimize operating costs based on the revised production profiles. Again, these improvements represent potential upside beyond the scope of our current guidance.

I'll now provide some context into how our guidance ranges have changed starting with QB in 2026. As Dale has noted, we will continue with TMF development work in 2026, which will result in additional downtime, and therefore, lower mill availability. This work is expected to be completed in 2026 with no TMF-related constraint on the mill from 2027 onwards. As a result of the TMF development work and our more conservative approach, we have pushed out the optimization of QB to be fully reflected beyond the current guidance period of 2025 to 2028.

We expect that the average grade at QB will be approximately 0.59% in 2026. The low end of our guidance represents minor improvements to asset utilization next year while maintaining a conservative recovery assumption of 81% compared with the 82% to 83% recoveries we've seen during this year. Our midpoint of guidance reflects only marginal improvements to throughput and mill availability and a slight increase in recoveries to 82%, in line with our 2025 year-to-date performance.

And our high end of guidance reflects a faster ramp-up of the plant in 2026 as the TMF-related constraint is lifted earlier. This assumes an increase in mill availability to 86%. This remains lower than design rates and reflects the normal cadence of maintenance shutdowns and some impact from TMF development work. This leads to a slightly higher throughput rate and a slight increase to our year-to-date recovery level to 82.5%. As a result, we now expect QB's annual 2026 copper production to be 200,000 to 235,000 tonnes compared with 280,000 to 310,000 tonnes previously.

And as a result of these production changes, we now expect QB net cash unit costs to be $2.25 per pound to $2.70 per pound in 2026. However, we will continue to work on identifying opportunities to further optimize the cost base. In addition, we have provided capital guidance that TMF development work will result in CAD 420 million in capital in 2026. This includes the additional mechanical movement of material to raise the tailings wall and widen the damn crest as well as costs associated with implementing the various sand drainage initiatives that Dale mentioned earlier. The additional capital is associated with all of the TMF development work planned at QB, and we should be in a position from 2027 to revert to normalized levels of sustaining capital.

So turning to QB's 2027 and 2028 guidance on Slide 12. It is currently expected that from 2027 onwards, the TMF development should no longer be a constraint to the mill. We have embedded conservative throughput and recovery rates below design rates into guidance. For 2027, we now expect an average annual grade of 0.64%. As a result, annual 2027 copper production for QB is expected to be 240,000 to 275,000 tonnes compared to our previous guidance range of 280,000 to 310,000 tonnes.

Our 2028 annual copper production for QB is expected to be impacted by mining in a lower grade area of the pit, and we continue to embed conservative throughput and recovery rates. We also expect a partial benefit from optimization to start to come through in 2028. On this basis, 2028 copper production is expected to be 220,000 to 255,000 tonnes compared to our previous guidance range of 270,000 to 300,000 tonnes. Grades are anticipated to increase in years beyond 2028, during which we expect to complete the implementation of optimization initiatives to enable an incremental 5% to 10% improvement in throughput.

At the same time, we will continue progressing work towards achieving design recovery rates of 86% to 92%. Consistent with our previous disclosures, debottlenecking the QB plant, which could result in an increase in throughput to between 165,000 and 185,000 tonnes per day has not been embedded into our guidance, as we focus on ramping up the assets. While study work on QB debottlenecking continues, we do not expect to submit permit applications before the end of 2026.

Turning to the comprehensive operational review of the 2 most material assets in our portfolio after QB, Highland Valley and Red Dog, on Slide 13. At HVC, we are currently mining through the higher-grade Lornex pit as our dominant ore source. We are currently mining through a fault in the Lornex pit, which has resulted in a variation in grade compared to our block model, lowering average grades in Q3 and for the remainder of 2025. The block model has been reviewed and reconciled, and we expect that we will complete mining the Lornex fault by Q1 2026.

We also had reduced mill online time because of unplanned maintenance in the quarter, reducing expected production for 2025. The changes to HVC production guidance beyond 2025 are driven by a resequencing of mine plans, which sees slightly lower grade expected in 2026, with higher grades shifting into 2027 and 2028. In addition, we have slightly adjusted the mine sequencing to align with our current levels of mill online time.

Red Dog has had strong performance in 2025 year-to-date, and we expect to come in at the higher end of our 2025 guidance of 430,000 to 470,000 tonnes of zinc in concentrate. The changes in our Red Dog production guidance reflect greater risk embedded in our operational plans and lower grades within the mine plan as we advance towards end of life in 2032. Higher-than-anticipated precipitation events have caused slippage along a known fault in the Aqqaluk pit. We will have to mine in lower grade areas, resulting in lower production of zinc in concentrate at Red Dog in 2026, '27 and '28.

Beyond 2028, production is expected to continue at similar levels to the end of mine life in 2032. The Red Dog mine life extension could extend the life of mine beyond 2032. It is currently in the pre-feasibility study stage, and we are progressing construction of an all-season road to access and drill the deposits that are critical to the mine life extension.

Now back to QB on Slide 14. Despite the guidance ranges, QB remains a world-class Tier 1 asset. It is important to note that 2028 is a year of low grade impacted by a resequencing of the mine plan and moving into an area of transitional material. Longer term, we expect to continue to drive the operational performance of QB up towards design parameters. In the example on the slide, you can see the benefit of including throughput and recoveries in line with those design parameters.

In addition, the average grade from 2029 to 2034 should be higher than 2028 at an average of 0.57%. With the benefit of debottlenecking at a conservative 165,000 tonnes per day, we aim to achieve our longer-term annual production of around 300,000 tonnes. The short-term nature of the TMF development work and our continuous progress towards design rates in QB does not impact on our ability to drive future value uplift from the QB Collahuasi synergies.

I also want to highlight that QB continues to be a Tier 1 asset with significant potential and a world-class resource. In addition, Anglo American continues to validate the value of QB. The TMF development work is a short-term constraint on the mill that we expect to be eliminated. It does not impact the ability to unlock the substantial incremental value achievable by sharing the resources and infrastructure of QB and Collahuasi and create potentially the largest copper complex in the world. These are the most compelling industrial adjacencies in our industry right now, which we proposed to realize through our announced merger of equals with Anglo American.

Working together at Anglo Teck, we will materially derisk and accelerate our ability to realize this value opportunity with aligned incentives on both the QB and Collahuasi sites, and we continue to believe that the merger of equals will create the most value for Teck shareholders.

So now wrapping up on Slide 15. As I have outlined in this presentation, we are confident that we have thoroughly assessed and understood the issues and we have a defined and measurable path forward. The completion of the comprehensive operational review with validation by independent specialist advisers has resulted in plans that are reasonable, achievable and based on demonstrated performance. The result is more conservative assumptions and risk adjustments embedded into our guidance.

From the Board to management to local operations, we are laser-focused on execution. To this end, I have ensured greater direct oversight over operations with both the SVP of Operations for LatAm and North America reporting directly to me. The Safety, Operations and Projects Committee of the Board continue their oversight of operational execution with a more frequent level of engagement. We continue to focus on TMF development work, which should be completed by the end of 2026 and no longer be a constraint on the mill from 2027.

QB continues to be a world-class Tier 1 asset, and we will continue to drive improvements to get to design rates. And finally, with the confidence we have in the execution of our plans at QB, we believe that we will drive incremental value with the realization of synergies between the QB and Collahuasi operations through our merger of equals with Anglo American.

Thank you. And with that, operator, please open the line for questions.

[Operator Instructions] The first question comes from Orest Wowkodaw with Scotiabank.

A question around your recovery assumptions on the new guidance. If the TMF is not expected to constrain throughput beyond '26, why do you expect recoveries to be so much below design in '27 and '28?

I mean -- thanks, Orest, for the question. As I said in my remarks just now, we've taken a very prudent approach here to anchor those assumptions around previously demonstrated performance. We do believe, as I've said, that we can and will achieve the design rates ultimately of 86% to 92% recoveries. But to ensure that we provide you and our investors with a forward view of guidance that we believe is reasonable and achievable, we've anchored those assumptions to demonstrated performance rather than planned or future design performance.

Okay. So you still think you can get to the 86% to 91%. Is there -- are you considering perhaps going to a coarser ore to try to deal with the ultra-fines, which could negatively impact that design long term?

Well, let me hand over to Dale. Obviously, that shift potentially to coarser ore is part of the TMF initiatives in terms of improving sand drainage. So Dale, maybe you could address that for Orest, please.

Sure. So as I mentioned before, our TMF improvement plan really focuses around the cyclones and how we can address the presence of ultra-fines. So certainly our expectation is with the test work we've done to date that we expect to see improvement with replacement of the cyclones in this quarter. We are looking at different plant operating parameters and what we can do to further improve and/or reduce the amount of ultra-fines. At this point, that hasn't achieved the necessary improvement that we've seen in the tailings dam.

Recognizing this technology works, then that allows us to unlock and separate suboptimizing the plant to be able to achieve the targets in our TMF. Ultimately, our concentrator and our targets for the concentrator will be all around driving the most value of the facility as we progress, and first and foremost, achieving stable operation by resolving the TMF first.

Okay. And just a quick one, if I could. I appreciate you gave us some TMF CapEx guidance for next year for QB. Could you give us an estimate for total QB CapEx for next year?

I think in addition to that, Orest, it would be, what I would call, our normal sustaining capital levels in the budget for next year. Crystal, I don't know if you want to provide any further color on that.

No, I think you've largely covered it. I think the only continued project that we have into '26 will be in relation to the truck shop that we're continuing construction on, expect to complete that in 2026. So it will be slightly elevated, but I think you can use 2025 numbers removing TMF, and then, of course, adding what we've guided to for the TMF for 2026.

The next question comes from Liam Fitzpatrick in Deutsche Bank.

I've got 2 questions. First is just to clarify, at the current pace of dam construction, what level the mine can produce at on an annualized basis? Is it fair to assume that it's pretty close to what you're now guiding to for 2025?

And then the second question is on the modifications. In a sort of downside scenario, if they don't work and you have to complete the sand dam tailings work mechanically, how long would that take to complete? And how long could that construction phase be as a constraint on the mill?

Yes. To your first question, Liam, I don't think sort of this year's tailings development is a good means of viewing the forward potential run rate for the assets. As we've highlighted, we've been having to build rock benches this year to allow us to raise the height of the crest and create the free board that we need to operate. That has resulted in some fairly significant intermittent outages associated with our production, particularly in September, and that's why the Q3 number has been so impacted.

Of course, the plan here, as you highlighted, is to transition to a sand dam, so we would be operating under a very different tailings condition and a very different set of assumptions for the TMF on a go-forward basis. And we've said we'll need 2026 to work our way through those issues to steady state, and we'd expect to see that steady state operation in 2027, when we find ourselves then unimpeded by the TMF development and pace of the facility.

In terms of your other question, I mean, we do currently expect that then we've had some good signals from the early test work that we've done that we will see improvements to sand drainage and that we will transition to that steady state dam construction on a go-forward basis. Of course, if we're not able to do that within the timeframe expected, then we might see additional impacts through 2026 and into 2027, but that is not our base case right now. Based on the test work that we've done, based on the plan modifications we're going to make to the cyclones that Dale has outlined, we're confident that we can move forward into steady state sand dam construction from 2027 onwards.

The next question comes from Bill Peterson with JPMorgan.

On QB, too, you talked about the $420 million for 2026. Any indication of how we should think about CapEx associated with the TMF for 2027 or beyond, as you noted, with what you're calling permanent infrastructure, for example?

No, there's nothing specific in that regard. Bill, again, we expect to move to a steady-state operation of sand dam construction on a go-forward basis. That is essentially more operating cost than it is capital. The construction of the permanent infrastructure is already captured inside the 2026 guidance, so there's nothing new or additional in that regard. And that infrastructure, as we've discussed previously, is the construction of these palisades on top of the crest of the dam, where we will be able to hydraulically deposit both tailings and sand into a steady-state continuous operation, which ultimately is the design condition intended for the QB TMF.

Okay. Okay. My second question is actually on Highland Valley. Can you go into a little bit further detail on what's changed in the guidance? I guess, when was this Lornex issue uncovered? And is this downgrade for Lornex in part for contributing to lower production in 2026? Or is it the resequencing you spoke to, that's also, in fact, improving production in 2027? Just trying to get a sense of the 2025 issues related to the resequencing you mentioned.

Yes. I mean, the 2025 is mainly due to the fault that I mentioned in the Lornex ore body, and therefore, we were mining and processing lower grade material than had previously been predicted by the block model. So that is really the change there. The resequencing beyond that has been to match higher grade material when we expect to have higher throughput through the plant, so we can be optimizing production in those years. But we've got Brock Gill on the line, our SVP of Operations for North America. So Brock, please provide any additional color there for Bill.

Yes. Thanks, Jonathan. Jonathan has covered those both off correctly. I think to add a little additional color, on the Lornex fault, essentially, that's a known anomaly that we mined through actually 5x over the last 50 years. And at this point, at the bottom of the fault, the fault basically had a small dog leg in the bottom of it and basically sterilized some resources off the bottom end of it. That was the largest contributor to 2025. Jonathan has covered off how that flows through to 2026.

The next question comes from Anita Soni with CIBC.

Firstly, just looking at the Slide 6, if I go back to this cross-section of the tailings dam that you have here, I'm just looking at the overall angle for, I guess, where it's the sand construction is, it looks like about a 45-degree and you're currently at about -- near about 60. The next phase, you said this year, you're finishing doing that last rock bench, and then, next year, there's a fourth rock bench. Is that the case, and that's to widen the crest? Have people signed off on the design and the current construction? And how safe that is right now?

Yes. I mean, on your first question, I'll just say the diagram is indicative and illustrative rather than anything you should look to with any degree of precision with respect to the angle of the sand wedge.

On the second question, I'll pass that over to Dale, please.

Sure. So I guess to reiterate Jonathan's point, the diagram is illustrative only. Our rock benches follow the same angle as the starter dam. We are currently doing our fourth rock bench and plan to start a fifth rock bench early next year.

All our work is reviewed not only internally, but have external verification and approval through engineer on record, our designer and our third-party overview as well as per all tailings dams and all the requirements around that. So it's important to appreciate that all these reviews and the level of detail going through to ensure what we're doing is safe, and through all circumstances, our dam integrity is maintained through our processes.

Okay. So asking the question a different way, how -- in terms of elevation, how high up is this sand dam now relative to the current crest height?

Dale, do you have an answer to that?

Yes. So right now, where this current paddock configuration is set, we're about 60 meters away from the top of the dam crest. And then what we'll be working towards building over the next period of time is a 3:1 angle as we build up the sand wedge over this period of time.

Okay. And then just a second question on the $420 million that you're spending next year, is that just solely the rock bench? Or what else is being spent in $420 million?

No. There's a range of things in that, Anita, that essentially go to everything that's required here to -- for TMF resolution. So the rock bench is part of that. There's some capital in there for sand construction. Some of the modifications that Dale mentioned, for example, to the cyclones and other engineering associated with the facilities would all be included there. So there's a range of components of that. And this is work, of course, that we don't expect to see continuing beyond '26 into '27.

The other point I just wanted to come back to with respect to your first question, it's important to note that the design of the dam, which is a centerline dam, is not changing. So while we're building the beach upstream and while we're building additional rock benches on the downstream side, ultimately, this will continue to be a centerline dam, and we will continue to develop this in such a way that, that maintains that critical design parameter.

There are no further questions. I will now hand the call back over to Jonathan Price for closing remarks.

Thank you, operator, and thanks again to everyone for joining us at the last minute this morning. We appreciate the opportunity to discuss the results of our comprehensive operations review and the path forward with you. We also look forward to welcoming many of you to our QB site visit on November 3 and 4. Please reach out to Emma Chapman and our IR team for further information on the site visit or if you have any follow-up questions.

Thank you again, and enjoy the rest of your day.