TORONTO (miningweekly.com) – Canada’s largest diversified miner Teck Resources has reported a surprise profit for the three months ended March 31, reporting headline earnings attributable to shareholders of $18-million, or $0.03 a share, compared with a forecast loss of $0.03 a share.

Vancouver-based Teck, the largest metallurgical coal producer in North America, said its performance during the quarter was underpinned by its cost reduction measures and maintaining production volumes, while a weaker Canadian dollar partially softened the dual blows of lower coal and copper prices.

"Notwithstanding that the commodity cycle continues to be challenging, we are encouraged by the change in direction in steelmaking coal and zinc prices," president and CEO Don Lindsay stated.

Net profit attributable to the company rose to C$94-million, or C$0.16 a share, for the first quarter ended March 31, compared with C$68-million, or C$0.12 a share, a year earlier.

The company’s revenue fell by 16% to C$1.7-billion.

Teck advised that it had reached agreements with the majority of its steelmaking coal customers for the second quarter of 2016, based on a quarterly benchmark of $84/t for the highest-quality product, expecting total sales in the current quarter, including spot sales, to be at least 6.5-million tonnes of steelmaking coal, in line with sales during the first quarter.

“As current spot prices are significantly higher than the quarterly contract price, we expect our realised price for the second quarter to be within 95% of the current quarterly benchmark,” the company stated.

Teck also noted that it continued to achieve significant reductions of its cash unit costs at its operations. Steelmaking coal unit costs, including transportation charges, decreased to C$77/t in the first quarter, compared with C$85/t a year earlier, and it sold it at prices realised in the US of $75/t. Copper cash unit costs after by-product credits declined to $1.29/lb, from $1.53/lb from a year earlier, and the company sold copper at $1.12/lb, down 20% year-over-year.

Meanwhile, construction of the Fort Hills oil sands project was more than 55% complete and progressing substantially on budget and according with the project schedule. As at April 25, the remaining cash funding to complete the C$13.5-billion Fort Hills project was $1-billion.

As at March 31, Teck’s total debt rose marginally to $6.97-billion, slightly higher than $6.96-billion at the end of last year. It had $5.1-billion in available liquidity, including $1.3-billion in cash at April 25, and $3-billion of undrawn, committed credit facilities.

Teck’s TSX-listed stock on Tuesday gained as much as 7% to C$13.69 apiece, having gained 160% in value since the start of the year.