QB2 will allow the Quebrada Blanca mine to double production, making it one of the top five mines
in the world.

The consideration consists of US$1.2 billion contribution for a 30% indirect interest in QBSA; US$800 million earnin contribution; US$400 million matching contribution; US$50 million to Teck upon QB2 achieving optimized target mill throughput of 154,000 metric tons per day (mt/d) by December 31, 2025, subject to adjustment; and a contingent contribution of 12% of the incremental NPV of a major expansion project (QB3) upon approval of construction, subject to adjustment.

“QB2 is one of the world’s premier undeveloped copper assets and this transaction further confirms the value of the project,” said Don Lindsay, president and CEO of Teck. “This partnership significantly de-risks Teck’s investment in the project, enhances our project economics, and preserves our ability to continue to return capital to shareholders and reduce bonds currently outstanding.”

The combination of proceeds from the transaction and proposed project financing reduces Teck’s share of equity contributions toward the un-escalated US$4.739 billion estimated capital cost of the QB2 project to US$693 million with Teck’s first contributions not required until late 2020. In light of the significant reduction in QB2 funding required from Teck due to the transaction proceeds and Teck’s reduced project interest, the Teck Board will consider an additional return of capital to shareholders following closing of the transaction.

“QB2 will be a long-life, low-cost operation with major expansion potential, including the option to double production or more, to become a top five global copper producers,” said Lindsay. “The copper growth from QB2 will, over time, help to balance our portfolio so that the contribution of our copper business could be similar to our world-class steelmaking coal business.”