Name of the Project
Quebrada Blanca Phase 2 (QB2) copper project.

Location
Tarapacá region, in northern Chile.

Project Owner/s
On March 29, 2019, Teck Resources concluded a transaction where SMM/SC subscribed to a 30% indirect interest in QBSA, which owns the QB2 copper development. SMM/SC contributed $966-billion to QBSA on closing of the transaction and a further $336-million over the remainder of 2019, including $38-million for interest on the loan advances during 2019.

In the fourth quarter of 2019, Teck closed the $2.5-billion limited recourse project financing to fund the development of QB2.

Project Description
QB2 is one of the world’s largest undeveloped copper resources.

The project proposes to develop the hypogene resource at Quebrada Blanca to increase yearly copper production and extend the mine’s production life by more than 25 years.

The project is expected to include the construction of a 140 000 t/d concentrator, tailings storage facility, concentrate pipeline, water supply pipeline, desalination plant, concentrate filtration plant and port to produce copper and molybdenum concentrates.

QB2 is expected to produce 316 400 t/y of copper equivalent for the first five years of mine life. The project is expected to have an initial 28-year mine life.

Potential Job Creation
About 15 000 people are working on the QB2 project with 2 000 ongoing direct and indirect jobs during operation.

Net Present Value/Internal Rate of Return
Not stated.

Value
$5.26-billion.

Duration
QB2 will start up in the second half of 2022, doubling Teck’s consolidated copper production by 2023.

Latest Developments
Teck Resources has increased Covid-19 capital guidance for the QB2 project by up to $500-million, citing cost pressures because of absenteeism and labour inefficiencies related to the pandemic.

The company expects that the impacts of Covid-19 will not end before the completion of construction and that it has to counter the adverse effects associated with construction in this environment.

As a result, Teck has announced a new Covid-19 capital cost guidance of $900-million to $1.1-billion, up from the previous estimate of $600-million. The miner has said that it has put in place a variety of mitigation measures and incentives, many of which are aimed at attracting talent, employee retention and minimising absenteeism.

Non-Covid-19 cost pressures pertaining to weather and subsurface conditions also require an additional contingency of up to 5% of the QB2 capital estimate of $5.26-billion.

Teck has stated that it will spend between C$2.2-billion and C$2.5-billion of QB2 development capital on a consolidated basis in 2022, inclusive of Covid-19 capital.

Key Contracts and Suppliers
None stated.

Contact Details for Project Information
Teck Resources senior communications specialist Chris Stannell, tel +1604699 4368 or email Chris.Stannell@teck.com.
Teck Resources investor relations, tel +1604699 4257 or email investors@teck.com.