Teck Cominco

Transcription

Teck Cominco

Teck Cominco
Strong,
g, Diversified And Growing
g
COPPER - COAL - ZINC - GOLD - ENERGY
TECK COMINCO - A DIVERSIFIED RESOURCES COMPANY
Forward Looking Information
Both these slides and the accompanying oral presentation contain certain forward-looking
statements within the meaning of the United States Private Securities Litigation Reform Act of 1995
and forward-looking information within the meaning of the Securities Act (Ontario).
Forward looking statements can be identified by the use of words such as “plans”
Forward-looking
plans , “expects”
expects or
“does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or “does not anticipate”, or “believes”, or variation of such words and phrases or state
that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken,
occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or achievements of Teck
C i
Cominco
t be
to
b materially
t i ll different
diff
t from
f
any future
f t
results,
lt performance
f
or achievements
hi
t expressed
d
or implied by the forward-looking statements. These forward-looking statements include estimates,
forecasts, and statements as to management’s expectations with respect to, among other things,
business and financial prospects, the size and quality of Teck Cominco’s development projects,
mineral reserves and mineral and oil and gas resources, future trends, plans, strategies, objectives
and
a
de
expectations,
pectat o s, including
c ud g with
t respect
espect to future
utu e ope
operations
at o s a
and
dp
projects,
ojects, p
progress
og ess in de
development
e op e t
of mineral and oil sands properties, future production, capital and mine production costs, demand
and market outlook for commodities, future commodity prices and the financial results, cash flows
and operations of Teck Cominco.
These forward-looking statements involve numerous assumptions, risks and uncertainties and
actual results may vary materially. These statements are based on a number of assumptions,
including but not limited to,
including,
to assumptions regarding general business and economic conditions,
conditions
interest rates, the supply and demand for, inventories of, and the level and volatility of prices of
zinc, copper, coal and gold and other primary metals and minerals produced by Teck Cominco as
well as oil, natural gas and petroleum products, the timing of receipt of regulatory and
governmental approvals for Teck Cominco’s development projects and other operations, the
g for Teck Cominco’s development
p
projects
p
j
on reasonable terms,
availabilityy of financing
Teck Cominco’s costs of production and production and productivity levels, as well as those of its
2
Forward Looking Information
competitors, power prices, market competition, the accuracy of Teck Cominco’s reserve and
resource estimates (including with respect to size, grade and recoverability) and the geological,
operational and price assumptions on which these are based, tax benefits, the resolution of
environmental and other proceedings, our ongoing relations with our employees and partners and
j i t venturers,
joint
t
and
d the
th future
f t
operational
ti
l and
d financial
fi
i l performance
f
off the
th company generally.
ll The
Th
foregoing list of assumptions is not exhaustive.
Events or circumstances could cause actual results to differ materially. Factors that may cause
actual results to vary include, but are not limited to: unanticipated developments in business and
economic conditions in the principal markets for Teck Cominco’s products or in the supply, demand,
and prices for metals and other commodities to be produced,
produced changes in power prices,
prices changes in
interest and currency exchange rates, inaccurate geological or metallurgical assumptions (including
with respect to the size, grade and recoverability of mineral or oil and gas reserves and resources),
changes in taxation regimes, legal disputes or unanticipated outcomes of legal proceedings,
unanticipated operational difficulties (including failure of plant, equipment or processes to operate in
accordance with specifications or expectations, cost escalation, unavailability of materials and
equipment government action or delays in the receipt of permits or government approvals,
equipment,
approvals
industrial disturbances or other job action, and unanticipated events related to health, safety and
environmental matters), decisions made by our partners or co-venturers, political risk, social unrest,
lack of available financing for Teck Cominco or its partners or co-venturers, and changes in general
economic conditions or conditions in the financial markets.
Certain of these risks are described in more detail in the annual information form of the company
available at www.sedar.com and in public filings with the SEC. The company does not assume the
obligation to revise or update these forward-looking statements after the date of this document or to
revise them to reflect the occurrence of future unanticipated events, except as may be required
under applicable securities laws.
3
Diversified Mining
Revenue by Business Segment
Pogo
Red Dog
Fort Hills
Coal
15%
Highland Valley
Elk Valley
Gold
2%
Trail
Smelting
& Refining
29%
Pend Oreille
Hemlo
Duck Pond
Zinc
Mining
20%
Copper
Moly
34%
Antamina
Quebrada Blanca
Andacollo
Revenue C$6.4 B
Lennard Shelf
Refinery
Mine
Advanced Project
•
Market Cap: ~C$20 Billion
•
Stock symbols:
TSE: TCK.B
FY 2007
NYSE: TCK
4
Review of Strategic Actions
Completed / Announced Actions

Copper …….. HVC Extension, Aur, Relincho
Coal ………... Fording 11.25%
11 25% interest
Oil Sands ….. Fort Hills 5%, Equinox & Frontier
No Action

Zinc
Uranium
5
Solid Growth in Value
Market Capitalization & Dividends Paid
$ Millions
25 000
25,000
Market Capitalization
Dividends
20,000
15,000
10,000
5 000
5,000
0
31/12/2002
31/12/2003
31/12/2004
31/12/2005
31/12/2006
31/12/2007
6
Growth in Copper
Production Growth
1,000
Million Lbs
800
Duck Pond
Andacollo
Cathode &
Concentrate
+74%
QB
600
Antamina
400
HVC
200
-
2007
2011
7
Highland Valley Growth
2013 Mine Extension
Production - Contained Copper
400
Million Lbs
300
200
2019 Mi
Mine E
Extension
i
100
2007
2008
2009
2010
2011
8
Value Creation at Highland Valley
Due to Mine Life Extension
2500
$Millions
$
High
NAV estimates of 5
reporting analysts
2000
Low
1500
Value
Increased
by >$2 Bn
1000
500
Ext 2019 $300M
Ext 2013 $190M
0
Capex
NAV
9
Antamina

A top global
Cu/Zn mine

Production
expansion
10
Copper in Chile - A New Core Business

Quebrada Blanca & Carmen de Andacollo

Great Jurisdiction

Committed 4x growth at CdA
Prospective 2.5x growth at QB
Mining a core industry
Attractive tax regime
Large exploration land position
Plus Operating & Development Teams
Plus +$700 million in Cash
Pl R
Plus
Relincho
li h ((anticipate
ti i t closing
l i early
l JJuly)
l )
11
Andacollo Growth
P d ti - Contained
Production
C t i d Copper
C
250
Million Lbs
200
150
100
50
2007
2008
Cathode
2009
2010
2011
Concentrate
12
Quebrada Blanca Growth
~ 400 M lbs/yr of contained Copper production
Heap
Leach
SX EW Plant
SX-EW
Pl t
Supergene
Open Pit
Hypogene Inferred
Resource Pit
Dump
Leach
Cut-off
0.3%
Tonnes
1,030,000,000
Cu (%)
0.50
Mo (%)
0.020
13
Copper Development Pipeline:
Relincho
Resource

612 Mt @ 0.44% Cu & 0.02% Mo Indicated
389 M
Mt @ 0
0.43%
43% C
Cu & 0
0.02%
02% M
Mo IInferred
f
d
low overall strip ratio of < 1:1
higher grade starter pit
Location/Infrastructure

Central Chile near Vallenar
Low Altitude (1,500-2,000 m)
Water available
120 Km to Port , 70 Km to Power
14
Copper Development Pipeline:
p
Chile Exploration

L
Largest
t private
i t exploration
l
ti
land
l d holder
h ld in
i Chile
Chil

3rd largest holdings after Codelco & Soquimich
¾

~1
1 million hectares
Growing pipeline of quality drill targets
¾
10 drill projects in 2007
¾
12 d
drill projects
p ojects planned
p a ed for
o 2008
008
15
Copper Reserves & Resources Per Share
$150
Resources
Reserves
Incl.
Relincho
Project
$100
$50
$0
2005
2007
Value of metal in Proven & Probable Reserves plus Measured & Indicated Resources at $1.50 Copper
Relincho Project includes indicated & inferred Resources as noted on slide 12
16
Growth in Coal
Massive Reserves and Resources
TCK Share of Production (MM t)*
+26% *
14
12.5
Reserves
627 million clean tonnes
12
10 7
10.7
Measured and
Indicated Resources
4.5 billion in situ tonnes
10
9.9
8
Inferred Resources
3.2 billion in situ tonnes
6
2006
2007
2008
25+ years of reserves
~ 100 years of M&I resources
~ 190 years of MI&I resources
* Based on Total Economic Interest
17
Value Creation in Coal
Purchase of 11.25% of Fording
1500
$Millions
$
Value
range
1000
500
$600M
0
Investment
Value
18
Coal Reserves & Resources Per Share
$350
$300
Resources
Reserves
$250
$200
$150
$100
$50
$0
2005
2007
Value of clean coal in Proven & Probable Reserves plus Measured & Indicated Resources at $80/t coal
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Red Dog
Exceptional zinc grades
The largest & richest zinc mine in the world
Outstanding exploration potential
Aqqaluk
53 million t @ 17% zinc, 4% lead
16 million t @ 20% zinc,
5.5% lead
Main Pit
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Refined Zinc Stocks: Still Low
Refined Metal Stocks Low
1400
000’s t
days consumption
LME
1200
SHFE
Producer
Consumer& Merchant
50
days consumption
25 year average – 39 days
40
1000
800
30
600
20
400
10
200
0
0
'00
'01
'02
'03
'04
'05
'06
'07
Source : ILZSG, LME, Teck Cominco
21
Building an Energy Business
Regulatory Approval
Q1 2006 Drilling Success
Other Oil Sands Leases
Q1 2007 Drilling Success
Lease Holdings
L514
L514
L915
L615
L511
L510
L509
L837
L840
L513
50%WI
Frontier
L614
L611
L610
50%WI
L471L470
L470 L477
L311
L311
L468
L469L468
L423 L422
L14
L438 L437
Equinox
L438 L437 L634
30%WI 30%WI 30%WI
L 5, 8 & 52
20%WI
L 5, 8 & 52
Fort
McMurray
Fort
Hills
30%WI
22
Uncovering Value in Energy
$ Millions
UTS Energy
Market Cap
3,000
2,000
Teck Cominco value lower than UTS due to funding commitment
TCK Oil Sands
Spending $529 million
1,000
0
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
23
Value Creation in Oil Sands
Rolling NPV @ 8% for Fort Hills Project (100%)
NPV @ 8% (C$Billion)
$
$100
US$ 120/ bbl
“The Size of the Prize”
US$ 105/ bbl
$80
US$ 90/ bbl
$60
US$ 75/ bbl
$40
US$ 60/ bbl
Teck’s 20%
interest could be
worth ~$18 Bn
in 2014 at
current oil
prices
$20
$0
2008
2009
2010
2011
2012
2013
2014
2015
24
Oil Resources Per Share
$250
$200
Frontier
(Leases 311+)
$150
$100
Equinox
(Lease 14)
$50
Fort Hills
$0
2005
2007
Future
Fort Hills & Equinox values are value of Teck’s share of recoverable oil in estimated contingent Resources at $50 oil.
Frontier value is value of Teck’s share of recoverable oil based on managements best estimate of contingent resources at $50 oil
25
Total Reserves & Resources Per Share
$640
Oil
Gold
Moly
Lead
$480
Zinc
Copper
$320
Coal
$160
$0
2005
Not Including Potential Additions from
Relincho Copper and Frontier Oil Sands
2007
Value of Teck's share of metal in Proven & Probable Reserves plus Measured &
Indicated Resources and of recoverable oil in estimated Resources at constant prices
26
Growth of Reserves
Per Share since 2005
100%
97%
TCK Teck Cominco
POT Potash Corp
CCJ Cameco
PCU Southern Copper
KGC Kinross
53%
50%
GG
41%
ABX Barrick
41%
FCX Freeport
3 %
31%
20%
0%
TCK
POT
CCJ
PCU
GoldCorp
KGC
GG
17%
14%
ABX
FCX
Teck Cominco
Canadian Peers
Copper Peers
Source: JP Morgan, FactSet, Capital IQ and other
publicly available information
27
Peer Comparison
Dividend Yield %
25
2.5
2.0
1.5
1.0
0.5
-
Anglo
American
Teck
Cominco
Rio Tinto
BHP
Xstrata
Cameco
Inmet
Potash Corp Agrium
Teck Cominco: Superior Investment Metrics
Note: Market data as of 4/27/08
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Strong, Diversified And Growing

Growth in Copper

Growth in Coal

Growth in Energy

Superior Long-Term Growth Potential

Increasing Value Per Share
29
30