Teck Resources Earnings Call Showcases Copper‑Led Surge
Teck Resources (($TSE:TECK.B)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Teck Resources’ latest earnings call struck an upbeat tone, underscoring a sharp rebound in profitability and cash generation powered by copper. Management highlighted a 125% jump in adjusted EBITDA, record copper sales, recovering zinc and Trail results, and solid balance sheet strength, while acknowledging project execution risks and cost pressures from energy markets.
Adjusted EBITDA Surges on Copper and Trail
Adjusted EBITDA more than doubled year over year to $2.1 billion in the first quarter of 2026, delivering a margin above 50%. The company attributed the performance to record copper sales volumes, stronger commodity prices, and an optimized feed strategy at its Trail metallurgical complex, which boosted by‑product revenues.
Cash Generation and Liquidity Strengthen
Operating cash flow reached $1.0 billion in the quarter, and Teck’s net cash position climbed by $338 million to $488 million, with a further $276 million generated in April. Total available liquidity now stands at $9.8 billion, giving the company ample financial flexibility for capital projects and to navigate commodity price volatility.
Copper Segment Delivers Record Margins
Copper production rose 32% year over year to 140,000 tonnes, with copper gross profit before depreciation and amortization rising 158% to $1.8 billion. The copper gross profit margin before D&A expanded to 52% from 47%, underscoring strong leverage to higher prices and improved operating performance.
QB Achieves Record Copper Sales Despite Maintenance
At Quebrada Blanca, Teck produced 56,000 tonnes of copper and delivered record quarterly sales of 70,000 tonnes by drawing down inventories. Mill availability of 92% and asset utilization of 87% were achieved despite planned maintenance and a shorter operating month, and management reaffirmed that full‑year guidance remains on track.
Trail Operations Stage a Strong Profit Recovery
Trail’s gross profit before D&A surged to $258 million from $80 million a year earlier, a jump of about 222%. The turnaround was driven by a more profitable feed mix and higher by‑product prices, contributing meaningfully to segment earnings and enhancing overall portfolio diversification beyond primary copper.
Zinc Segment Improves but Faces New Cost Reality
Zinc gross profit before D&A increased 72% year over year to $387 million, aided by a 16,000‑tonne rise in refined zinc output at Trail and Red Dog sales of 52,000 tonnes above guidance. However, management also highlighted that Red Dog’s lower grades and structural changes mean zinc net cash unit costs are guided significantly higher than last year.
Unit Costs Trend Lower on By‑Product Credits
Company‑wide net cash unit costs fell as higher by‑product credits and greater volumes helped offset inflationary pressures. Copper net cash unit costs decreased by $0.27 per pound year over year, while zinc net cash unit costs fell by $0.08 per pound, supporting margins in the current strong price environment.
Highland Valley Mine Life Extension on Schedule
Teck reported strong progress on the Highland Valley Mine Life Extension, with detailed engineering over 90% complete and procurement above 95%. The company invested $188 million in the quarter, reaffirmed 2026 capex guidance of $900 million to $1.2 billion and total project costs of $2.1 billion to $2.4 billion, targeting mine life to 2046.
QB Tailings Management Facility Advancing
At QB, Rock Bench 4 of the tailings management facility was completed in the quarter, and Rock Bench 5 is expected by the end of the second quarter. Sand deposition rates have improved following a new cyclone installation, and a secondary cyclone has been approved to further enhance sand quality and operational robustness.
Commodity Prices Provide Powerful Upside
The average copper price in the first quarter was a record $5.83 per pound, highlighting a favorable backdrop for Teck’s expanding copper platform. Management illustrated that if copper averages $5.50 per pound for the full year, EBITDA could reach roughly $6.6 billion, rising to about $7.1 billion if copper holds near $6.00.
Safety Performance Remains Near Best‑Ever Levels
Teck reported a high‑potential incident frequency rate of 0.05 in the quarter, better than the 2025 annual rate of 0.06. This matched the company’s best‑ever result and reinforced management’s message that safety performance remains a core focus alongside growth and financial returns.
Anglo Merger and Indexation Uncertainty
The merger of equals with Anglo American progressed, with approval received from South Korea and regulatory review in China moving normally, while integration planning is underway. However, the outcome and timing of potential TSX and S&P index inclusion for the combined entity remain uncertain and will depend on regulatory and market timelines.
Operational Availability and TMF Execution Risks
Operational availability at QB dipped modestly due to scheduled maintenance and calendar effects, but management insisted that production guidance remains intact. Even so, they emphasized that significant tailings management facility work remains and that permanent infrastructure timing, potentially around 2027, still carries execution risk.
Zinc Volumes Downshift, Costs Move Higher
Red Dog’s zinc production reflected planned lower grades, contributing to a different cost and output profile for the segment. Annual zinc net cash unit cost guidance jumped to $0.65 to $0.75 per pound from roughly half that level last year, driven by reduced volumes and structural changes across the zinc business.
Seasonal Working‑Capital Build Damps Cash Flow
Working capital increased by $834 million in the quarter, driven by seasonal outflows, including royalty payments, and higher receivables linked to stronger volumes and prices. This build partially muted the translation of strong earnings into free cash flow but is expected to ease as the year progresses.
Inflation and Energy Markets Add Cost Risk
Management flagged ongoing inflationary and supply chain risks tied to geopolitical tensions and diesel supply into Chile, which affect its South American operations. With guidance based on a much lower oil price assumption than current spot levels, moves in WTI remain a key swing factor for unit costs and margins.
Conservative Assumptions Could Add Volatility
Teck’s guidance uses conservative by‑product and commodity assumptions that are below current spot prices for items like silver. While this provides some cushion if markets stay strong, it also means realized unit costs could be more volatile as prices fluctuate, creating both upside and downside risk.
Forward‑Looking Guidance and 2026 Outlook
Teck reiterated its 2026 production and cost guidance, projecting full‑year EBITDA of about $6.6 billion and operating cash of $5.5 billion at a $5.50 copper price, with further upside at higher prices. Copper output is guided between 455,000 and 530,000 tonnes with net cash unit costs of $1.85 to $2.20 per pound, while zinc volumes and costs were maintained despite the structurally higher cost band.
The call painted a picture of a miner firmly on the front foot, with copper driving profits, cash and strategic flexibility even as large projects and energy markets add complexity. Investors will watch how Teck executes on QB and Highland Valley, manages zinc’s new cost base and delivers on the Anglo merger, but for now the momentum and tone remain clearly positive.
