Q3 2023 Teck Resources Ltd Earnings Call

Speaker 1: additional colour on the quarter. Jonathan will conclude today's session with a brief update on our value creation strategy before we open the lines to questions. With that, I'll turn the call over to Jonathan.

I wanted to conclude today's session with a brief update on our value creation strategy before we open the lines to questions with that I'll turn the call over to Jonathan.

Speaker 2: Thank you, Fraser, and good morning, everyone. I'm speaking to you today from Iqique in the Tarapaca region of northern Chile, where we're gathering this week to celebrate the opening of our flagship QB2 operation.

Thank you Fraser and good morning, everyone I'm speaking to you today from a key K in the tariff pocket region of Northern Chile, where we're gathering this week to celebrate the opening of our flagship QB two operation.

Speaker 2: This is a momentous event for Tech, with Cravada Blanca as the cornerstone of our copper growth strategy. More on that later.

This is a momentous event protect with Toronto Blanka is the cornerstone of our copper growth strategy more on that later.

Speaker 2: So starting on slide four, our positive financial performance in the third quarter reflects continued strong pricing for copper and steelmaking coal, in addition to higher base metal sales volume.

Starting on slide four.

Our positive financial performance in the third quarter reflects continued strong pricing for copper and steel, making coal in addition to higher base metal sales volumes.

Speaker 2: Adjusted EBITDA of 1.2 billion reflects lower than expected steel making coal sales in the quarter and a localized geotechnical event at Highland Valley in August .

Adjusted EBITDAR of $1 2 billion reflect lower than expected steelmaking coal sales in the quarter and our localized geotechnical event at Highland Valley in August .

Speaker 2: During the quarter we made significant progress to unlock the value of our industry leading copper portfolio.

During the quarter, we made significant progress to unlock the value of our industry, leading copper portfolio.

Speaker 2: Our QB2 project continues to ramp up and is expected to achieve design throughput and recovery rates by year end.

Our <unk> project continues to ramp up and is expected to achieve design throughput and recovery rates by year end.

Speaker 2: The assets are performing well and we are pleased with the strong operational performance we have seen to date.

The assets are performing well and we are pleased with the strong operational performance, we have seen to date.

Speaker 2: We have a line of sight to double our consolidated copper production when QB2 reaches full capacity. And we continue to advance our actionable portfolio development options to position tech for our next phase of copper growth.

We have a line of sight to double all consolidated copper production when QB two reaches full capacity and we continue to advance our actionable portfolio development options to position Teck for our next phase of copper growth.

Speaker 2: Importantly, we ended the quarter in a strong financial position, with $7 billion of liquidity included $1.5 billion in cash.

Importantly, we ended the quarter in a strong financial position with $7 billion of liquidity included $1 $5 billion in cash.

Speaker 2: and we return $65 million to shareholders through the payment of our quarterly base dividend.

And we returned $65 million to shareholders through the payment of our quarterly base dividend.

Speaker 2: In the third quarter we continue to make steady progress against our sustainability goals.

In the third quarter, we continued to make steady progress against our sustainability goals.

Speaker 2: We announced an agreement with Norden to reduce emissions in our steelmaking coal supply chain.

We announced an agreement with northern to reduce emissions in our steelmaking coal supply chain.

Speaker 2: The agreement is expected to reduce annual emissions from tech shipments handled by Norden by 25%.

The agreement is expected to reduce annual emissions from tech shipments handled by northern by 25%.

Speaker 2: and our reported high potential incident frequency remained low at a rate of 0.13. Turning the key on the left here is painting the bed that was

On a reported high potential incident frequency remained low at a rate of 0.13.

Now turning to <unk> on slide five.

Speaker 2: We made solid progress on the ramp up during the quarter. And as I just mentioned, we're seeing strong asset performance with the QB2 plant performing well.

We made solid progress on the ramp up during the quarter and as I. Just mentioned, we're seeing strong asset performance with the QB two plant performing well.

Speaker 2: At the end of the third quarter, it had been operating consistently at 70% of design capacity. Both line one and line two are now operating at 70% capacity.

At the end of the third quarter. It had been operating consistently at 70% of design capacity.

Both line one online two are operating well.

Speaker 2: Success so far with line two reflects a faster and more effective commissioning as a result of leveraging the learnings from line one.

Success, so far with line to reflect the faster and more effective commissioning as a result of leveraging the learnings from line one.

Speaker 2: As a result, we generated our first quarterly gross operating profit at QB2. Though modest, it is a key milestone in the development of the project.

As a result, we generated our first quarterly gross operating profit at QB. Two so modest it is a key milestone in the development of the project.

Speaker 2: While we are pleased with the performance of the assets so far, we are not pleased with what we have had to increase capital guidance to US $8.6 to $8.8 billion from $8 to $8.2 billion previously.

While we are pleased with the performance of the asset. So far we are not pleased with what we have had to increase capital guidance to U S. Eight six to $8 $8 billion from eight to $8 2 billion previously.

Speaker 2: The increase was driven by delays in construction of both the molybdenum plant and the port offshore facilities, as well as costs associated with contract claims and slower than planned demobilization.

The increase was driven by delays in construction of both the molybdenum plant and the port offshore facilities as well as costs associated with contract claims and slower than planned demobilization.

Speaker 2: The last two outstanding pieces of construction at QB2 are the Bali plant and the Port offshore facility.

The last two outstanding pieces of construction at QB, two other bally plants and the port offshore facilities.

Speaker 2: The molly plant will be completed by the end of the fourth quarter and the port will be complete in the first quarter of 2024.

The moly plant will be completed by the end of the fourth quarter and the ports will be complete in the first quarter of 2024.

Speaker 2: and significant efforts are ongoing to mitigate risks and cost pressures.

And significant efforts are ongoing to mitigate risks and cost pressures.

Speaker 2: Importantly, we continue to expect to be operating at design throughput and recovery rates by year end, although we expect to be near the lower end of QB2's 2023 annual copper production guidance range of 80,000 to 100,000 tons.

Importantly, we continue to expect to be operating at design throughput and recovery rates by year end, although we expect to be near the lower end of <unk> 2023 annual copper production guidance range of 80000 to 100000 tons.

Speaker 2: Turning to slide six, where we outline a summary of our key 2023 operational guidance update.

Turning to slide six where we outline a summary of our key 2023 operational guidance updates.

Speaker 2: In our copper business unit, we decreased our annual production guidance for Highland Valley by 10,000 tons to reflect the impact of the localised geotechnical event in August .

In our copper business unit, we decreased our annual production guidance for Highland Valley by 10000 tonnes to reflect the impact of the localized geotechnical event in August .

Speaker 2: We did not expect any impact of this event to carry beyond 2023, and our unit cost guidance remains unchanged.

We did not expect any impact of this event to carry beyond 2023, and our unit cost guidance remains unchanged.

Speaker 2: Copper capitalised stripping guidance was revised to $395 million, up from $295 million.

Copper capitalized stripping guidance was revised to $395 million up from $295 million the.

Speaker 2: The increase reflects additional stripping at QB2 while they're concentrated within ramp-up, as well as additional stripping at Antamina, and the change in the mine plan at Highland Valley due to the localized geotechnical events.

The increase reflects additional stripping at QB, two while the concentrated with a ramp up as well as additional stripping it onto Mena and the change in the mine plan at Highland Valley due to the localized geotechnical event.

Speaker 2: And in still making coal, we lowered our 2023 production guidance to 23 to 23.5 million tons down from 24 to 26 million tons to reflect the intermittent plan challenges we've experienced this year. Our unit cost guidance remains unchanged.

And in steelmaking coal, we lowered our 2023 production guidance to 23 to $23 5 million tonnes.

<unk> from 24 to 26 million tonnes to reflect the intermittent plant challenges we've experienced this year.

Our unit cost guidance remains unchanged.

Speaker 2: With major maintenance activities completed and the implementation of our plant improvement initiative, we saw an improvement in plant reliability in the third quarter relative to the first half of this year.

With major maintenance activities completed and the implementation of our plant improvement initiative, we saw an improvement in plant reliability in the third quarter relative to the first half of this year.

Speaker 2: are still making coal operations the well-positioned in the fourth quarter and into 2024.

Our steelmaking coal operations are well positioned in the fourth quarter and into 2024.

Speaker 2: Strong raw coal inventories are also expected to provide additional product flexibility and optionality going forward.

Strong raw coal inventories are also expected to provide additional product flexibility and optionality going forward.

Speaker 2: Across our businesses, we remain laser focused on execution.

Across our businesses, we remain laser focused on execution.

Speaker 2: We intently manage our key business drivers and continuously enhance our operating practices, while rigorously managing our controllable costs.

We intensely manage our key business drivers and continuously enhance our operating practices, while rigorously managing our controllable costs.

Speaker 2: For external risks outside of our control, we have solid mitigation plans, such as supply chain recovery and strategic sourcing to mitigate inflationary cost of pressure.

For external risks outside of our control, we have solid mitigation plans, such as supply chain recovery and strategic sourcing to mitigate inflationary cost pressures.

Speaker 2: As ever, our focus is to drive reliable operational performance and maintain our competitive low-cost position.

Our focus is to drive reliable operational performance and maintain a competitive low cost position.

Speaker 2: With that, I will now hand it over to Crystal for additional color on the quarter.

Unknown Executive: and additional color on the quarter.

With that I will now hand, it over to crystal for additional color on the quarter.

Jonathan Price: Jonathan will conclude today's session with a brief update on our value creation strategy before we open the lines to questions. With that, I'll turn the call over to Jonathan. Thank you, Fraser, and good morning, everyone.

Thank you Jonathan.

Speaker 3: Starting with an overview of our third quarter financial results on slide 8.

Jonathan Price: I'm speaking to you today from a key K in the tariff packet region of northern Chile, where we're gathering this week to celebrate the opening of our flagship QB2 operation. This is a momentous event for tech with Crabada Blanca as the cornerstone of our copper growth strategy, more on that later. For starting on slide four, our positive financial performance in the third quarter reflects continued strong pricing for copper and steelmaking coal, in addition to higher base metal sales volumes.

Starting with an overview of our third quarter financial results on slide eight.

Jonathan Price: Adjusted EBITDA of 1.2 billion reflects lower than expected steelmaking coal sales in the quarter and are localized to a technical event at Highland Valley in August. During the quarter, we made significant progress to unlock the value of our industry leading copper portfolio. Our QB2 project continues to ramp up and is expected to achieve design throughput and recovery rates by year end. The efforts are performing well and we are pleased with the strong operational performance we have seen to date.

Speaker 3: We generated $1.2 billion in adjusted EBITDA, or 76 cents of adjusted diluted EPS, with contributions from each of our business units.

We generated $1 2 billion and adjusted EBITDA are 76000 of adjusted diluted EPS with contributions from each of our business yet.

Speaker 3: However, we fell short of consensus analyst estimates for adjusted EBITDA and EPS in the quarter. The variance was primarily driven by the localized geotechnical event at Highland Valley, consensus expectations for QBQ's ramp-up profile, the impact of lower steelmaking coal sales volume, and higher than consensus corporate costs.

However, we fell short of consensus analyst estimates for adjusted EBITDA and EPS in a quarter.

The variance was primarily driven by the localized geotechnical event at Highland Valley.

Consensus expectations for cubic huge ramp up profile.

Top of lower steelmaking coal sales volume and higher than consensus corporate call.

Speaker 3: This is partially all set by strong sales at Red Dog in the quarter.

This is partially offset by strong sales at Red dog in the quarter.

Speaker 3: Looking forward, we are well positioned for strong fourth quarter results for a number of reasons.

Looking forward, we are well positioned for a strong fourth quarter results for a number of reasons.

Speaker 3: First, steelmaking coal prices remain robust, driven by supply constraints and strong demand, particularly from India and China. Prices rose through the third quarter and into October , and FOB premium spot prices currently stand at US $343 per tonne.

Steelmaking coal prices remain remained robust driven by supply constraints and strong demand.

Generally from India and China.

Rice's ROE through the third quarter and into October and F&B premium spot prices currently stand.

$43 per ton.

Speaker 3: As a result of pricing, plant reliability improvements and inventory levels, our high margin steelmaking coal business unit is well positioned to deliver strong financial performance in Q4.

As a result of pricing.

Flat reliability improvements on inventory levels are high margin steelmaking coal business unit is well positioned to deliver strong financial performance in Q4.

Speaker 3: And at current copper prices, we expect QB2 to generate a gross profit in the fourth quarter as the ramp-up continues in production rates.

And at current copper prices, we expect <unk> to generate a gross profit in the fourth quarter as we ramp up continues as the ramp up continues and production rate.

Speaker 3: Turning to the key drivers for our financial performance on slide 9.

Turning to the key drivers for our financial performance on slide nine.

Speaker 3: Adjusted eva d'at in the third quarter decrease compared to the same period last year, primarily driven by considerably lower commodity prices for steel making coal and zinc, reduced sales volumes of steel making coal as well as copper at highland valley and higher operating cost.

Adjusted EBITDA in the third quarter, a decrease compared to the same period last year, primarily driven by considerably lower commodity prices for steelmaking coal and zinc.

<unk> sales volumes of steelmaking coal as well as copper at Highland Valley and higher operating costs.

Speaker 3: These items were partially offset by higher copper prices, positive pricing adjustments and a weaker Canadian dollar.

These items were partially offset by higher copper prices positive pricing adjustments and a weaker Canadian dollar.

Speaker 3: We continue to experience inflationary pressures in the cost of peace supplies, including mining equipment, tires, labor, and contractors, despite the decline in diesel and other fuel costs compared to the same period last year.

We continue to experience inflationary pressures at Mcarthur key supply, including mining equipment tires labor and contractors.

Fight the decline in diesel and other fuel call compared to the same period last year.

Speaker 3: This is reflected in our sustaining capital expenditures and full year unit cost guidance ranges which are both unchanged.

This is reflected in our sustaining capital expenditures and full year unit cost guidance range guidance ranges, which are both unchanged.

Speaker 3: Our underlying mining drivers remain relatively stable and we remain highly focused on managing our controllable operating expenditure.

Our underlying mining drivers remained relatively stable and we remain highly focused on managing our controllable operating expenditures.

Speaker 3: Turning to each of our business units in more detail and starting with copper on slide 11.

Jonathan Price: We have a line of sight to double our consolidated copper production when QB2 reaches full capacity and we continue to advance our actionable portfolio development options to position tech for our next phase of copper growth. Importantly, we ended the quarter in a strong financial position with $7 billion of liquidity included $1.5 billion in cash and we return $65 million to shareholders through the payment of our quarterly base dividend. In the third quarter, we continue to make steady progress against our sustainability goals.

Turning to each of our business units in more detail and starting with copper on slide 11.

Speaker 3: Copper prices were up 8% year over year. Copper production volumes in the third quarter, including QB2, increased by 8% while sales volumes, including QB2, increased by 3% compared to last year.

Jonathan Price: We announced an agreement with Norton to reduce emissions in our steelmaking coal supply chain. The agreement is expected to reduce annual emissions from tech shipments handled by Norton by 25%. And our reported high potential incident frequency remained low at a rate of 0.13. Turning to QB2 on slide 5, we made solid progress on the ramp up during the quarter and as I just mentioned we are seeing strong asset performance with the QB2 plan performing well.

Copper prices were up 8% year over year.

Jonathan Price: At the end of the third quarter, it had been operating consistently at 70% of design capacity. Both line 1 and line 2 are operating well. Success so far with line 2 reflects a faster and more effective commissioning as a result of leveraging the learnings from line 1. As a result, we generated our first quarterly gross operating profit at QB2. Though modest, it is a key milestone in the development of the project.

Copper production volumes in the third quarter, including QQ increased by 8%, while sales volumes, including keeping Q increased by 3% compared to last year.

Speaker 3: At QB2, we produced 18,300 tons of copper in concentrate, more than half of which was produced in the month of September .

At <unk>, we produced 18300 tonnes of copper in concentrate more than half of which was produced in the month of September .

Speaker 3: Sales volumes of 14,300 tons drove our first quarterly growth profit before depreciation and amortization for QB2 of 19 million in line with our expectations.

Sales volumes of 14300 tons drove our first quarterly gross profit before depreciation and amortization for <unk> of $19 million in line with our expectation.

Speaker 3: However, as mentioned earlier, production at Highland Valley was impacted by a localized geotechnical event in the self-end of the Valley Pit in August , which required processing of lower-grade stockpiled ore for the remager of the porter.

However, as mentioned earlier production at Highland Valley was impacted by a localized geotechnical event on the south end of the valley pit at AGA, which required processing of lower grade stockpiled ore for the remainder of the quarter.

Speaker 3: In early October , the valley pit was safely reopened and mining of higher grade ore recommenced.

In early October the valley pit was safely reopen and mining of higher grade ore reconnect.

Speaker 3: A complete analysis of the failure resulted in a revised mine plan to mitigate production losses for the fourth quarter.

A complete analysis of the failure resulted in a revised mine plan to mitigate production losses for the fourth quarter.

Speaker 3: Production at Anne DeCoeil was also impacted by a 14-day unplanned shutdown in August , which was due to a conveyor failure.

Production on the coil was also impacted by a 14 day unplanned shutdown in August .

It was due to a conveyor failure.

Speaker 3: Copper net cash unit cost increased as a result of lower production at Highland Valley and Carmen to Andecoyo And overall increase in maintenance and repair costs as well as lower zinc and Molly cash margins for buy products Despite this, our full year operating cost guidance for our copper business unit is unchanged

Copper net cash unit costs increased as a result of lower production at Highland Valley, and Carmen down to coil and overall increase in maintenance and repair costs as well as lower zinc and Molly cash margins for byproducts. Despite this our full year operating cost guidance for our copper business unit is unchanged.

Speaker 3: Looking forward, we decreased our 2023 copper production guidance for Highland Valley to 100,000 to 108,000 tons to reflect the impact of the localized geotechnical event in August .

Looking forward, we decreased our 2023 copper production guidance for Highland Valley to 100000 to 108000 tonnes to reflect the impact of the localized geotechnical event in August .

Speaker 3: KB2 production guidance is unchanged at 80,000 to 100,000 tons, although we expect to be at the lower end of this range.

<unk> production guidance is unchanged at 80000 to 100000 times, although we expect to be at the lower end of this range.

Jonathan Price: While we are pleased with the performance of the efforts so far, we are not pleased with what we have had to increase capital guidance to US $8.6 to $8.8 billion. The increase was driven by delays in construction of both the molybdenum plant and the port offshore facilities as well as costs associated with contract claims and slower than planned demobilization. The last two outstanding pieces of construction at QB2 are the body plants and the port offshore facilities.

Speaker 3: We have also lowered our total molybdenum production guidance for the full year due to the delay in construction of the QBQ moly plant.

We have also lowered our total molybdenum production guidance for the full year due to the delay in construction of the Cuba to Mali class.

Speaker 3: For QB2, as a result of recent changes to IFRS, we are required to recognize sales proceeds and related costs associated with product sales during the ramp-up and commissioning phase through our earnings rather than capitalizing these amounts.

Jonathan Price: The molly plant will be completed by the end of the fourth quarter and the port will be complete in the first quarter of 2024. And significant efforts are ongoing to mitigate risk fan cost pressures. Importantly, we continue to expect to be operating at design throughput and recovery rates by year end. Although we expect to be near the lower end of QB2, QB2's 2023 annual copper production guidance range of 80,000 to 100,000 tons.

For Q2 as a result of recent changes to <unk>. We are required to recognize sales proceeds and related costs associated with products sold during the ramp up and commissioning phase three of our earnings rather than capitalizing these amounts.

Speaker 3: In addition, as QB2 continues to ramp up production, we incur costs that are capitalized because they relate to bringing the asset to its design capacity operating level. These costs are referred to as capitalized.

Jonathan Price: Turning to slide six, where we outline a summary of our key 2023 operational guidance updates. In our copper business unit, we decreased our annual production guidance for Highland Valley by 10,000 tons to reflect the impact of the localized geotechnical event in August. We do not expect any impact of this event to carry beyond 2023, and our unique cop guidance remains unchanged. Copper capitalized stripping guidance was revised to $395 million up from $295 million.

In addition, as Cupid two continues to ramp up production, we incur costs that are capitalized because they relate to bringing the asset to its designed capacity operating level.

These costs are referred to as capitalized wrap up call.

Speaker 3: We have capitalized 561 million of these costs as of September 30. For the fourth quarter, we expect capitalized wrap-up call to be lower than those capitalized in the third quarter.

Capitalized $561 million of these costs as of September 30th.

For the fourth quarter, we expect capitalized wrap up call to be lower than those capitalized in the third quarter.

Speaker 3: As mentioned earlier, we expect to be treated to generate a cross profit in the fourth quarter as ramp up continues and at current corporate prices.

As mentioned earlier, we expect <unk> to generate a gross profit in the fourth quarter as ramp up continues and at current copper prices.

Moving to zinc on slide 11.

Speaker 3: Profitability was impacted by zinc prices, which were 26% lower compared with the same period last year.

Profitability was impacted by zinc prices, which were 26% lower compared with the same period last year.

Speaker 3: This was partially offset by higher zinc premiums on our contracted refined zinc sale.

This was partially offset by higher zinc premiums on our contracted refined zinc sales.

Speaker 3: Reddough has had a strong shipping season this year and Zinking Concentrate sales increased 14% year-over-year to 269,700 tons, which was within our guidance range.

Red Dog has had a strong shipping season, this year and zinc in concentrate sales increased 14% year over year to 269700 tons, which was within our guidance range.

Speaker 3: However, Reddom's Inc. Concentrate Production was driven by reduced male throughput as a result of equipment failure.

Red dog zinc concentrate production was driven by reduced mill throughput as a result of equipment failure.

Speaker 3: At trail operations, refining zinc production was impacted by reduced concentrate supply.

At trail operations refined zinc production was impacted by reduced concentrate supply.

Speaker 3: and refined lead production continues to be impacted by the kids at Burnet that is nearing the end of its life. A replacement is slated for 2024.

And refined lead production continues to be impacted by the kids that furnace that is nearing the end of its life.

Replacement is slated for 2024.

Speaker 3: Looking forward, we expect Red Dog Q4 Zinc sales of 130,000 to 150,000 tonnes, reflecting the normal seasonal pattern.

Looking forward, we expect Red dog Q4 sales of 130000 to 150000 tonnes, reflecting the normal seasonal pattern.

Speaker 3: And while our overall full year think production guidance remains unchanged, we made minor revisions to our site guidance.

And while our overall full year zinc production guidance remains unchanged, we made minor revisions to our site guidance.

Speaker 3: A 5,000 ton decrease in red dog guidance due to production issue is offset by a corresponding increase in antimina's guidance due to higher that expected production. Turning now to

Our 5000 ton decrease in Red dog's guidance due to production issues is offset by a corresponding increase in <unk> guidance due to higher than expected zinc production.

Turning now to steelmaking coal on slide 12.

Speaker 3: While prices for the quarter were lower than that particularly strong third quarter last year, prices remain robust and are well above historical averages.

While prices for the quarter were lower than that particularly strong third quarter last year prices remain robust at or well above historical averages.

Production was impacted by planned maintenance outages at two of our operations, including Fording River our largest operation.

Sales of $5 2 million tonnes were below our guidance range of $5 $6 6 million tons due to a slower than anticipated supply chain recovery. Following the impact of BC wildfires, the labor disruptions at the seaport and intermittent plant challenges.

Speaker 3: Adjustive site cast cost of sales per ton was impacted by lower sales volume and increased maintenance activities associated with the planned outages while transportation costs were slightly higher to merge and port charges related to lingering impacts from the labor disruption at DC ports and the DC wildfires

Adjusted site cost cost of sales per tonne was impacted by lower sales volume and increased maintenance activities associated with the planned outages, while transportation costs reflect higher demurrage and port charges related to lingering impact from the labor disruption at BC ports M. D C wildfires.

Looking forward, we expect Q4 sales to be between five eight to $6 2 million tonnes maximizing use of available inventory.

Jonathan Price: The increase reflects additional stripping at QB2, while the concentrated within ramp up, as well as additional stripping at Antimena, and the change in the mine plan at Highland Valley due to the localized geotechnical event. And in still making coal, we lowered our 2023 production guidance to 23 to 23.5 million tons down from 24 to 26 million tons to reflect the intermittent plan challenges we've experienced this year. Our unit cost guidance remains unchanged.

And as mentioned earlier, we lowered our annual production guidance to 23 to $23 5 million tonnes for the remainder of the year.

Speaker 3: The slower level of production is expected to put upward pressure on our adjusted site cost of sales and transportation unit cost. And we now expect both to be at the upper end of our guidance ranges for the full year.

This lower level of production is expected to put upward pressure on our adjusted site cost of sales and transportation unit call and we now expect both to be at the upper end of our guidance ranges for the full year.

Jonathan Price: With major maintenance activities completed and the implementation of our plant improvement initiative, we saw an improvement in plant reliability in the third quarter relative to the first half of this year. Our still making coal operations are well positioned in the fourth quarter and into 2024. Strong raw coal inventories are also expected to provide additional product flexibility and optionality going forward. Across our businesses, we remain laser focused on execution. We intently manage our key business drivers and continuously enhance our operating practices while rigorously managing our controllable cost.

Overall, our steelmaking coal business is well positioned to continue delivering strong financial performance for the remainder of the year with average steelmaking coal prices above U S $355 per ton month to date.

That reliability improvement and current inventory levels.

Jonathan Price: For external risks outside of our control, we have solid mitigation plans such as supply chain recovery and strategic sourcing to mitigate inflationary cost pressures. As ever, our focus is to drive reliable operational performance and maintain our competitive low cost position.

Our financial position remained strong as shown on slide 13.

Speaker 3: Our liquidity is currently $7 billion, including $1.5 billion of cash, and we continue to maintain investment-grade credit ratings from S&P, Moody's, and Fitch.

Our liquidity is currently 7 billion, including $1 5 billion of cash and we continue to maintain investment grade credit ratings from S&P, Moody's and Fitch.

We have no note maturities due until 2030 in.

Speaker 3: In the third quarter, we paid our quarterly-based dividend of 12.5 cents per share.

In the third quarter, we paid our quarterly base dividend of 12, and a half cents per share.

Speaker 3: year to date and in accordance with our capital allocation framework, we have paid 451 million in dividend, purchased 85 million in class fee shares, and advanced are ongoing, and will be delivering with debt repayment of 457 million.

Year to date and in accordance with our capital allocation framework, we have paid $451 million in dividend part.

$85 million in class B shares and advanced our ongoing deleveraging with debt repayment of $457 million.

Speaker 3: We remain focused on balancing our investment and growth against returning capital to shareholders while maintaining a strong balance sheet.

We remain focused on balancing our investment and growth against returning capital to shareholders, while maintaining a strong balance sheet with that I'll turn it back over to Jonathan.

Crystal Prystai: With that, I will now hand it over to Crystal for additional color on the quarter. Thank you, Jonathan. Starting with an overview of our third quarter financial results on flight to eat. We generated 1.2 billion in adjusted EBITDA or 76 cents of adjusted diluted EPS with contributions from each of our business units. However, we fell short of consensus analyst estimates for adjusted EBITDA and EPS in a quarter. The variance was primarily driven by the localized geotechnical event at Highland Valley.

Speaker 2: Thanks, Crystal. Before I wrap up, I want to provide an update on separation.

Thanks Crystal.

Before I wrap up I wanted to provide an update on separation.

Speaker 2: With responsible value creation as our North Star, we continue to engage with the number of parties that have expressed interest in our still making coal business.

Crystal Prystai: Consensus expectations for QBQ's ramp-up profile, the impact of lower steel making coal sales volume and higher than consensus corporate cost. This is partially offset by strong sales at red dog in the quarter. First, feel making coal prices remain robust, driven by supply constraints and strong demand, particularly from India and China. Prices rose through the third quarter and into October, and FOB premium spot prices currently stand at US $343 per ton. An inventory level, our high margin, steel making coal business unit is well positioned to deliver strong financial performance in Q4. And at current copper prices, we expect QB2 to generate a gross profit in the fourth quarter as the ramp up continues in production rates.

With responsible value creation is our north star, we continue to engage with a number of parties that have expressed interest in our steelmaking coal business.

Speaker 2: We're evaluating a range of potential options guided by several objectives.

Crystal Prystai: Turning to the key drivers for our financial performance on slide nine, adjusted EBITDA in the third quarter decreased compared to the same period last year. Primarily driven by considerably lower commodity prices for steel making coal and zinc, reduced sales volumes of steel making coal, as well as copper at Highland Valley, and higher operating costs. These items were partially offset by higher copper prices, positive pricing adjustments, and a weaker Canadian dollar. We continue to experience inflationary pressures in the cost of key supplies, including mining equipment, tires, labor, and contractors, despite the decline in diesel and other fuel costs compared to the same period last year. This is reflected in our sustaining capital expenditures and full year unit cost guidance ranges, which are both unchanged. Our underlying mining drivers remain relatively stable, and we remain highly focused on managing our controllable operating expenditures.

We are evaluating a range of potential options guided by several objectives.

Speaker 2: Based on extensive shareholder feedback throughout this process, one of our core objectives is to achieve a full separation of our base metals and steelmaking coal business.

Based on extensive shareholder feedback throughout this process one of our core objectives is to achieve a full separation about base metals and steelmaking coal businesses.

Speaker 2: This is key to unlocking the value of our unrivaled copper growth portfolio.

Jonathan Price: Turning to each of our business units in more detail and starting with copper on slide 11. Copper prices were up 8% year over year. Copper production volumes in the third quarter, including QB2, increased by 8%, while sales volumes, including QB2, increased by 3% compared to last year. At QB2, we produced 18,300 tons of copper and concentrate, more than half of which was produced in the month of September. Sales volumes of 14,300 tons drove our first quarterly growth profit before depreciation and amortization for QB2 of 19 million in line with our expectations.

This is key to unlocking the value of our unrivaled copper growth portfolio.

Jonathan Price: However, as mentioned earlier, production at Highland Valley was impacted by a localized geotechnical event in the south end of the valley pit in August, which required processing of lower grade stockpiled or for the remainder of the quarter. In early October, the valley pit was safely reopened and mining of higher grade ore recommenced. A complete analysis of the failure resulted in a revised mine plan to mitigate production losses for the fourth quarter.

Speaker 2: We will ensure tech is well capitalized and positioned to pursue our copper growth potential and deliver strong returns to shareholders while maintaining a strong balance.

We will ensure tankage, well capitalized and positioned to pursue our copper growth potential and deliver strong returns to shareholders, while maintaining a strong balance sheet.

Speaker 2: At the same time we aim to realize the full value of our steel making coal business for our shell.

At the same time, we aim to realize the full value of our steelmaking coal business for our shareholders.

Speaker 2: An important consideration will be the certainty of achieving separation, including receipt of the required regulatory approval.

An important consideration will be the certainty of achieving separation, including receipt of the required regulatory approvals.

Speaker 2: And it is also critical that the transaction allows us to maintain social and environmental commitments to stakeholders in the old valley.

And it is also critical of the transaction allows us to maintain social and environmental commitments to stakeholders in the Elk Valley.

Speaker 2: Overall, the Board and Special Committee are pleased with the progress we have been making.

Overall, the board and Special Committee are pleased with the progress we've been making.

Speaker 2: Separation remains a priority and we are moving through the process as expeditiously as possible.

Separation remains a priority and we are moving through the process as expeditiously as possible.

Speaker 2: Driving organic growth through development of our copper project pipeline remains central to our value creation journey. Looking at slide 16, we have made meaningful progress on our near-term development projects during the quarter.

Jonathan Price: Production at Anticoil was also impacted by a 14-day unplanned shutdown in August, which was due to a conveyor failure. Copper net cash unit costs increased as a result of lower production at Highland Valley and carbon to Anticoil, and overall increase in maintenance and repair costs, as well as lower zinc and molly cash margins for byproducts. Despite this, our full year operating cost guidance for our copper business unit is unchanged. James. Looking forward, we decreased our 2023 copper production guidance for Highland Valley to 100,000 to 108,000 tons to reflect the impact of the localized geotechnical event in August.

Driving organic growth through development of our copper project pipeline remains central to our value creation journey.

Looking at Slide 16, we have made meaningful progress on our near term development projects during the quarter.

Speaker 2: We furthered the feasibility studies for San Nicholas and the Crivarada Blanket Mill expansion project.

We furthered the feasibility studies for some Nicholas provider Blanco mill expansion project.

Speaker 2: And we completed the feasibility study for HPC 2040 in Q3 with the submission of the project environmental assessment in October .

And we completed the feasibility study for <unk> 2040 in Q3.

With the submission of the project environmental assessment in October .

Speaker 2: Looking forward, we are targeting key milestones for these projects in the fourth quarter, including completion of the feasibility study for QBME.

Looking forward, we are targeting key milestones for these projects in the fourth quarter, including completion of the feasibility study for <unk> submission.

Speaker 2: submission of the MIAR permit application for San Nicolas, and commencement of detailed engineering.

Submission of the MAA, our permit application for San Nicolas.

And commencement of detailed engineering for that for now.

Speaker 2: As shown on slide 17, we have an unrivaled suite of copper growth opportunities for thisified by geography, scale and time to develop.

As shown on slide 17, we have an unrivaled suite of copper growth opportunities diversified by geography scale them time to development.

Speaker 2: There is significant work underway to advance development of each of these projects, including resource definition, engineering and design, permitting and stakeholder engagement.

There is significant work underway to advanced development of each of these projects.

Including resource definition engineering, and design permitting and stakeholder engagement and.

Speaker 2: And we have de-risked product delivery, financially and operationally, through a partnership approach, such as in the case of San Nicolas.

And we have de risked project delivery financially and operationally through a partnership approach such as in the case of San Nicolas.

Speaker 2: The projects we have in place double our copper production in the near term, with the potential to deliver one million tons of annual production by the end of the decade to drive substantial new intrinsic value.

The projects, we have in place double our copper production in the near term with the potential to deliver 1 million tons of annual production by the end of the decade to drive substantial new intrinsic value.

Speaker 2: In prioritizing our growth options, we take into consideration multiple investment criteria, including strong financial returns, balance sheet capacity and financing options, project readiness, project development capacity and the social, political and environmental context.

In prioritizing our growth options, we take into consideration multiple investment criteria.

Including strong financial returns balance sheet capacity and financing options project readiness project development capacity on the social political and environmental context.

Speaker 2: And importantly, each of these projects will have to compete for capital with the rest of the business and generate strong returns.

And importantly, each of these projects will have to compete for capital with the rest of the business and generate strong returns.

Speaker 2: While permitting is a major gating factor in determining potential sanction dates, we are largely in control of project timing. And we will continue to apply our disciplined capital allocation framework that balances growth with returns to shell.

Well permitting is a major gating factor in determining potential sanction dates we are largely in control of project timing.

And we will continue to apply our disciplined capital allocation framework that balances growth with returns to shareholders.

Speaker 2: In closing, on slide 18, this is a very exciting time for tech as we continue our pursuits of responsible value creation for our shareholders.

In closing on Slide 18. This is a very exciting time for tech as we continue our pursuit of responsible value creation for our shareholders.

Speaker 2: We are continuing to evaluate options for a separation that would realise fair value for our wheel-class steel-making coal business and unlock the full potential of our base metals.

We are continuing to evaluate options for a separation that would realize fair value for our world class steelmaking coal business and.

Unlock the full potential of our base metals business.

Speaker 2: We continue to make significant progress against our copper growth strategy with the ramp-up of QB2 and advancements in our near-term development project.

Jonathan Price: QB2 production guidance is unchanged at 80,000 to 100,000 tons, although we expect to be at the lower end of this range. We have also lowered our total molytonum production guidance for the full year due to the delay in construction of the QB2 Molly class. For QB2 as a result of recent changes to IFRS, we are required to recognize sales proceeds and related costs associated with product sold during the ramp-up and commission phase through our earnings, rather than capitalizing these amounts.

And we continue to make significant progress against our copper growth strategy.

The ramp up of QB, two and advancements in our near term development projects.

Speaker 2: Guided by our Capital allocation framework, we are committed to balancing our opportunities for growth with financial resilience while providing cash returns to sharehold.

Jonathan Price: In addition, as QB2 continues to ramp-up production, we incur costs that are capitalized because they relate to bringing the asset to its design capacity operating level. These costs are referred to as capitalized ramp-up costs. We have capitalized 561 million of these costs as of September 30. For the fourth quarter, we expect capitalized ramp-up costs to be lower than those capitalized in the third quarter. As mentioned earlier, we expect QB2 to generate a gross profit in the fourth quarter as ramp-up continues and at current corporate prices.

Guided by our capital allocation framework, we are committed to balancing our opportunities for growth with financial resilience, while providing cash returns to shareholders.

Speaker 2: At the same time, we are focused on execution and ensuring we pursue responsible value creation for shareholders. Thank you, operator.

Jonathan Price: Moving to zinc on slide 11. Profitability was impacted by zinc prices, which were 26% lower compared to the same period last year. This was partially offset by higher zinc premiums on our contracted refined zinc sales. Red Dough has had a strong shipping season this year and zinc and concentrate sales increased 14% year-over-year to 269,700 tonnes, which was within our guidance range. However, Red Dough's zinc concentrate production was driven by reduced milk throughput as a result of equipment failure.

At the same time, we are focused on execution and ensuring we pursue responsible value creation for shareholders.

Jonathan Price: At trail operations, refined zinc production was impacted by reduced concentrate supply. And refined lead production continued to be impacted by the kids at furnace that is nearing the end of its life. A replacement is slated for 2024. Looking forward, we expect Red Dough Q4 zinc sales of 130,000 to 150,000 tonnes reflecting the normal seasonal pattern. And while our overall full-year zinc production guidance remains unchanged, we made minor revisions to our slight guidance. A 5,000 ton decrease in Red Dough's guidance due to production issues is offset by a core-fawning increase in antimina's guidance due to higher-than-expected zinc production.

Thank you operator, please open the line for questions.

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Jonathan Price: Turning now to steel-making coal on slide 12. While prices for the quarter were lower than that particularly strong third quarter last year, prices remain robust and are well above historical averages. Production was impacted by planned maintenance outages at two of our operations, including Forting River, our largest operation. Sales of 5.2 million tonnes were below our guidance range of 5.6 to 6 million tonnes due to a slower than anticipated supply chain recovery, following the impact of DC wildfires, the labor disruptions at DC ports and intermittent plant challenges.

If you wish to remove yourself from the question queue. You May Press Star then two.

Speaker 4: The first question comes from Oris Wacado with Scotia Bank.

The first question comes from Oren <unk> with Scotiabank.

Jonathan Price: A justice-like cash cost of sales per ton was impacted by lower sales volume and increased maintenance activities associated with the planned outages, while transportation costs reflect higher to merge and port charges related to lingering impacts from the labor disruptions at DC ports and the DC wildfires. Looking forward, we expect Q4 sales to be between 5.8 to 6.2 million tons, maximizing use of available inventory. And as mentioned earlier, we lowered our annual coal production guidance to 23 to 23.5 million tons for the remainder of the year.

Please go ahead.

Speaker 5: Hi, good morning. Jonathan, so follow up questions if I could on the plan, coal separation. I mean, obviously this has been going on now for some time. Can you give us a better idea of where you are in that process? Like are we close to the finish line? Or do you think this could just take a lot longer given more interested parties coming to the table? And could it spill in the next year?

Jonathan Price: This lower level of production is expected to put upward pressure on our adjusted site cost of sales and transportation unit costs, and we now expect both to be at the upper end of our guidance ranges for the full year. Overall, our steel making coal business is well positioned to continue delivering strong financial performance for the remainder of the year with average steel making coal prices above US $355 per ton months to date, plant reliability improvement and current inventory levels.

Hi, good morning.

Crystal Prystai: Our financial position remains strong as shown on slide 13. Our liquidity is currently $7 billion, including 1.5 billion of cash, and we continue to maintain investment-grade private ratings from S&P, Moody and Fitch. We have no note luxurities due until 2030. In the third quarter, we paid our quarterly-based dividend of 12.5 cents per share. Year to date and in accordance with our capital allocation framework, we have paid $451 million in dividend, purchased 85 million in-class fee shares, and advanced are ongoing deleveraging with debt repayment of $457 million. We remain focused on balancing our investment growth against returning capital to shareholders while maintaining a strong balance sheet.

Jonathan for follow up questions, if I could on the planned separation.

Jonathan Price: With that, I'll turn it back over to Jonathan. Thanks, Crystal.

Obviously this has been going on now for some time can you give us a better idea of where you are in that process like or are we close to the finish line or do you think this could just take a lot longer given more interested parties coming to the table that could spill into next year.

Jonathan Price: Before I wrap up, I want to provide an update on separation. With responsible value creation as our north star, we continue to engage with a number of parties that have expressed interest in our steel making coal business. We are evaluating a range of potential options guided by several objectives. Based on extensive shareholder feedback throughout this process, one of our core objectives is to achieve a full separation of our base metals and steel making coal businesses.

Speaker 2: Hi RS, thanks for the question. Look out, we're making very good progress here. I'm very happy as to where we are at present. We have a competitive process, which is the most important thing here to ensure we have options ahead of us to realize a good outcome.

Yeah, Hi, thanks, Thanks for the question.

We're making very good progress here I'm very happy.

To where we are a presence.

We have a competitive process, which is which is the most important thing here to ensure we have options ahead of us to realize a good outcome.

Speaker 2: As I've mentioned a couple of times recently, I believe we'll be in a position to make a decision before the end of the year. That hasn't changed.

As I've mentioned, a couple of times recently.

You know I believe we will be in a position to make a decision before the end of the year.

Speaker 2: The key thing for us is to ensure we make the best decision here possible rather than rush the process. But as I said, we're well positioned right now. We're happy with the level of competition we have and I'm confident we can get a good outcome for shareholders.

It hasn't changed.

The key thing for US is to ensure we make make the best decision here possible.

Rather than rush the process, but as I said, we're well positioned right now where we're happy with the level of competition, we have and I'm confident we can get a good outcome for shareholders.

Speaker 5: Okay, and just as a follow-up, you spoke to the fact that certainty of achieving separation is a key criteria here including regulatory approval. Do you think that a partial sale would be easier from a regulatory approval perspective than a full sale?

Jonathan Price: This is key to unlocking the value of our unrivaled copper growth portfolio. We will ensure techies well capitalized in position to pursue our copper growth potential and deliver strong returns to shareholders while maintaining a strong balance sheet. At the same time, we aim to realize the full value of our steel making coal business for our shareholders. An important consideration will be the certainty of achieving separation, including receipt of the required regulatory approvals.

Okay, and just as a follow up your you spoke to the fact that the certainty of achieving separation is a key criteria here, including regulatory approval do you think that a partial sale.

Jonathan Price: And it is also critical that the transaction allows us to maintain social and environmental commitments to stakeholders in the old valley. Overall, the board and special committee are pleased with the progress we have been making. Dean, separation remains a priority and we are moving through the process as expeditiously as possible. Driving organic growth through development of our copper project pipeline remains central through our value creation journey. Looking at slide 16, we have made meaningful progress on our near-term development projects during the quarter.

Be easier from a regulatory approval perspective than a wholesale.

Speaker 2: Look, I think every you know every different option here has its has its unique characteristics in in terms of what that means from an approvals perspective. You know the overarching focus here is on the delivery of shareholder value. You know that has to come first and foremost. In considering that delivery of shareholder value of course we have to consider the certainty of execution and the risks associated with any transaction.

Look I think every you know every.

Every different options here has it has its unique characteristics in terms of what that means from an approvals perspective.

Jonathan Price: We furthered the feasibility studies for Sun Nicholas and the Kravada Blanket Mill expansion project and we completed the feasibility study for HPC 2040 in Q3 with the submission of the project environmental assessment in October. Looking forward, we are targeting key milestones for these projects in the fourth quarter including completion of the feasibility study for QBME, submission of the MIAR permit application for Sun Nicholas and commencement of detailed engineering for Zafranau. As shown on slide 17, we have an unrivaled suite of copper growth opportunities for thisified by geography, scale and time to development.

The overarching focus here is on the delivery of shareholder value.

Jonathan Price: There is significant work underway to advance development of each of these projects including resource definition, engineering and design, permitting and stakeholder engagement. And we have peer-risk project delivery, financially and operationally through a partnership approach such as in the case of Sun Nicholas. The projects we have in place double our copper production in the near-term with the potential to deliver one million tons of annual production by the end of the decade to drive substantial new intrinsic value.

Has to come first and foremost.

Jonathan Price: In prioritising our growth options, we take into consideration multiple investment criteria including strong financial returns, balance sheet capacity and financing options, project readiness, project development capacity and the social, political and environmental context. And importantly, each of these projects will have to compete for capital with the rest of the business and generate strong returns. But permitting is a major gating factor in determining potential sanction dates. We are largely in control of project timing and we will continue to apply our discipline capital allocation framework that balances growth with returns to shareholders.

In considering that delivery of shareholder value of course, we have to consider the certainty of execution and the risks associated.

With any transaction.

Speaker 2: You know, the requirement for regulatory or other approval is a function of the nature of any transaction. And ultimately, we will do what we believe is in the best interest of our shareholders having regard for those regulatory and approval requirements.

The the requirement for regulatory or other approvals is a function.

The the nature of any transaction.

And ultimately we will do what we believe is in the best interest of our shareholders, having regard for those regulatory and approval requirements.

Speaker 5: Okay, thank you. One more bite to squeeze it in. Just if you decide to do the partial fail option, would it be your goal to put control of EVR into the public market or control with an owner?

Okay. Thank you and one more if I could squeeze it in just if you decide to do the partial fail.

Option.

Would it be your goal to put control of E V or into the public market or control with it.

Older.

Speaker 2: Look, I won't be specific on that, Orest, at this point in time. I mean, I think...

Look I won't be specific on that.

Or is that at this point in time, I mean I think.

Jonathan Price: In closing, on slide 18, this is a very exciting time for tech as we continue our pursuits of responsible value creation for our shareholders. We are continuing to evaluate options for a separation that would realise fair value for our world-class steel-making coal business and unlock the full potential of our base metals business. And we continue to make significant progress against our copper growth strategy with the ramp up of QB2 and advancements in our near-term development projects.

Speaker 2: You know the we we've discussed the the range of options that we have before us here You know with a with a full sail at one end of the the spectrum and a in a partial sail and a spin at the other end of the spectrum with the latter providing ongoing exposure to our

We've discussed the the range of options that we have before us.

With a full sale at one end of the spectrum in a in a partial sale and the spin at the other end of the spectrum with the latter providing ongoing exposure to our to all shareholders in respect of both the steelmaking coal market fundamentals, which are look very attractive going forward and of course, a quality high margin business.

Speaker 2: to our shareholders in respect of both the still making coal market, the fundamentals of which are very attractive going forward. And of course, a quality high margin business like EVR, you know, ultimately the

Jonathan Price: Guided by our capital allocation framework, we are committed to balancing our opportunities for growth with financial resilience while providing cash returns to shareholders. At the same time, we are focused on execution and ensuring we pursue responsible value creation for shareholders.

Like E V O O.

Ultimately the the specifics of any transaction will be a subject of the conclusion of this process. So so I want to say more on that now other than as I mentioned before we're happy with the options in front of US and we believe we are well set to drive a competitive outcome.

Speaker 2: you know the specifics of any transaction will be a subject you know of the conclusion of this process so I won't say more on that now other than as I mentioned before we're happy with the options in front of us and and we believe we're well set to drive a competitive outcome.

Unknown Executive: Thank you.

Unknown Executive: Operator, please open the line for questions. Certainly, to join the question, please press star then one on your touchstone telephone. You will hear a tone, acknowledge your request.

Thank you very much.

Unknown Executive: We ask that you please limit yourself to one question and one follow-up. If you are using a speaker phone, please ensure you lift the headset before pressing any keys.

Thanks Ross.

Orest Wowkodaw: If you wish to remove yourself from the question cue, you may press star, then to the first question comes from Orest Wakodaw with Scotia Bank. Please go ahead.

Speaker 4: The next question comes from Liam Fispatrick with Georgia Bank. Please go ahead.

The next question comes from Liam Fitzpatrick with Deutsche Bank. Please go ahead.

Speaker 6: Moin' Jonathan, a couple on QD2. It's clearly a hefty capex increase given.

Jonathan Price: Hi, good morning. Jonathan, so follow-up questions if I could on the plan-cool separation. I mean, obviously this has been going on now for some time. Can you give us a better idea of where you are in that process, like are we close to the finish line, or do you think this could just take a lot longer given more interested parties coming to the table, and could it spill in the next year?

Good morning, Jonathan just a couple on QB two.

It's clearly a hefty capex increase given you only re guided earlier this year.

Speaker 6: You're only regguided as early as this year. And we're only talking about a three month delay.

We're only talking about a three months delay.

Speaker 6: for two parts of the project. So the question is, were these issues not largely loan known about earlier in the year? And then can you outline what the major component is?

Two parts of the project. So the question is whether these issues not largely loan known about earlier in the year and then can you outline what the major component is.

Speaker 6: behind this increase. And the follow-up...

Behind this increase.

And the follow up.

Speaker 6: kind of links to that and your future growth strategy because clearly a lot of it is based around the next crop of copper projects.

Links to that and your future growth strategy, because it's clearly a lot of it is based around the next Crawford.

For projects so.

Speaker 6: What sort of changes are you making or have you made to ensure that we're not going to be faced with similar issues in the future? Thank you.

What sort of changes.

You're making or how do you make to ensure that we're not going to be faced with similar issues in the future. Thank you.

Okay.

Speaker 2: uh... thanks for the questions uh... leham all i'll come back to the second question in a moment and i'll hand off the uh... the first question uh... to red conger uh... our president in chief operating officer just to preface that i will say you know the the issues that have caused us to reguide

Jonathan Price: Hi, Orest. Thanks for the question. Okay, we're making very good progress here. I'm very happy to where we are at present. We have a competitive process, which is the most important thing here to ensure we have options ahead of us to realize a good outcome. As I've mentioned a couple of times recently, I believe we'll be in a position to make a decision before the end of the year. That haven't changed.

Thanks for the questions Oh.

Jonathan Price: The key thing for us is to ensure we make the best decision here possible, rather than rush the process. But as I said, we're well positioned right now. We're happy with the level of competition we have, and I'm confident we can get a good outcome for shareholders. Okay, just as the follow-up, you spoke to the fact that certainty of achieving separation is a key criteria here, including regulatory approval. Do you think that a partial sale would be easier from a regulatory approval perspective than a full sale?

I'll come back to the second question in a moment and I'll handle the first question to ask of Red Conger Press.

Jonathan Price: Okay, I think every different option here has its unique characteristics in terms of what that means from an approval perspective. The overarching focus here is on the delivery of shareholder value. That has to come first and foremost. In considering that delivery of shareholder value, of course, we have to consider the certainty of execution and the risks associated with any transaction. The requirement for regulatory or other approval is a function of the nature of any transaction.

President and Chief operating Officer, Ed just to preface that I will say you know the issues that have caused us to re guide.

Jonathan Price: Ultimately, we will do what we believe is in the best interest of our shareholders having regard for those regulatory and approval requirements. Okay, thank you. One more if I could squeeze it in. Just if you decide to do the partial sale option, would it be your goal to put control of EVR into the public market, or control with an owner? Okay, I won't be specific on that, Horace, at this point in time.

Speaker 2: The QB2 capex as we have done today are issues that arose...

The the QB two capex as we have done today or issues that arose in the third quarter and their issues that created impacts to both schedule and costs, but I'll I'll hand over to red to unpack that in greater detail.

Speaker 2: in the third quarter and there are issues that created impacts to both schedule and costs but I'll hand over to Red to unpack that in greater detail Morrigalium

Jonathan Price: I mean, I think we've discussed the range of options that we have before us here, with a full sale at one end of the spectrum and a partial sale and a spin at the other end of the spectrum with the latter providing ongoing exposure to our shareholders in respect of both the steelmaking coal market, the fundamentals of which are very attractive going forward. And of course, a quality high margin business like EVR, ultimately the specifics of any transaction will be a subject of the conclusion of this process.

Jonathan Price: So I won't say more on that now, other than as I mentioned before, we're happy with the options in front of us and we believe we're well set to drive a competitive outcome. Thank you very much. Thanks, Orest.

Good morning Liam.

Speaker 1: We are focusing on delivering reliable and robust copper circuit. I mean, that is first and foremost in our actions and several unknown.

We are focusing on delivering reliable and robust copper circuit that is first and foremost in our interactions and several other unknowns.

Liam Fitzpatrick: The next question comes from Liam Fitzpatrick with Georgia Bank. Please go ahead. Morning, Jonathan. A couple on QV2. It's clearly a hefty capex increase given you only regguided earlier this year and we're only talking about a three month delay for two parts of the project. So the question is, were these issues not largely loan-known about earlier in the year? And can you outline what the major component is behind this increase? And the follow-up kind of links to that and your future growth strategy because clearly a lot of it is based around the next crop of copper projects.

Speaker 1: presented themselves during the third quarter. Let me give you a couple examples of those and what we had to do to address them. We commissioned the tailings return water facility early in the third quarter.

<unk> themselves during the third quarter, let me, let me give you a couple of examples of those and what we have to do to address them.

Liam Fitzpatrick: So what sort of changes are you making or how do you make to ensure that we're not going to be faced with similar issues in the future? Thank you. Thanks for the questions. Liam, I'll come back to the second question in a moment and I'll hand off the first question to Red Konga. Our president's in chief operating officer. Just to preface that, I will say, the issues that have caused us to regguide the QV2 capex as we have done today are issues that arose in the third quarter and there are issues that created impacts to both schedule and costs.

Liam Fitzpatrick: But I'll hand over to Red to unpack that in great detail. Yeah, morning, Liam. We are focusing on delivering reliable and robust copper circuit. I mean, that is that is first and foremost in our in our actions and several unknowns presented themselves during the third quarter. Let me give you a couple examples of those and what we had to do to address them. We commissioned the tailings return water facility early in the third quarter.

We commissioned the tailings return water facility early in the third quarter.

Speaker 1: And we found that all 16 of these huge taling water return pumps

Liam Fitzpatrick: And we found that all 16 of these huge tailing water return pumps had an internal manufacturing defect that evidenced only when they were operating at full low, all of those pre-option testing, etc, was unable to detect this default. So once, you know, overheating. So we had to do discovery work to understand what that was. We had two responses there. We had to run them at at lower rated capacity to prevent the overheating.

And we found that all 16 of these huge tailing water return pumps had an internal manufacturing defect that evidenced only when they were operating at full load all of the pre ops testing et cetera.

Speaker 1: had an internal manufacturing defect that evidenced only when they were operating at full level, all of those pre-option testing, et cetera.

Speaker 1: was unable to detect this default.

It was what was unable to detect this this default. So once you know once we got them up and running at full load they were overheating.

Speaker 1: So once we got them up and running it full load, they were overheating. So we had to do discovery work too.

So we had to do discovery work to us.

Speaker 1: understand what that was. We had two responses there. We had to run them at low rated capacity to prevent the overheating. And then once we discovered what the defect was in the original casing, we had to take out each pump.

Understand what what that was we had two responses there we had to run them. It has lower rated capacity to prevent the.

The overheating and then once once we discovered what the defect was in the original casing were to take out each other.

Liam Fitzpatrick: And then once we discovered what the defect was in the original casing, we had to take out each pump, send it down to a machine shop, have it modified for design specs, then bring it back up to the site, get them installed again. And, you know, I'm happy to say they're all running appropriately now. So that fifth has cured the problem. But, you know, there's a major system where you essentially had to build it twice and do some of the manufacturing on the pumps that, you know, should have arrived to us in working order and ready to go.

Speaker 1: Send it down to a machine shop, have it modified for design specs, then bring it back up to the site, get them installed again, and you know, I'm happy to say there.

Send it down to a machine shop habit modified per design specs than bring it back up to the site get them installed again and.

I'm happy to say they are.

Speaker 1: They're all running appropriately now, so that that fits, has cured the problem. But, you know, there's a major system where you essentially had to build it twice and do some of the manufacturing on the pumps that should have arrived to us.

They're all running.

Running appropriately now so that that fits has because cure the problem but.

There is there is a major system, where you essentially have to build it twice.

And.

Do some of the manufacturing on the on the pumps that you know should have arrived to us.

Speaker 1: and working order and ready to go. So that was a...

And in working order and ready to go so that there was a.

Liam Fitzpatrick: So that was a... A major unplanned piece of work for us, and of course you take resources off of other planned work that you had during the border to do that rework. So that's one example of something that we discovered and addressed and successfully completed. Additionally, the last jetty pile that we're drilling out in the port area, the drill bit failed subsurface in the ocean floor, took us two months to get that unit out of the ground and out of our way.

Speaker 1: a major unplanned piece of work for us. And of course, you take resources off of other planned work that you had during the quarter to do that rework. So that's...

A major.

Plan piece of work for US and of course, you take resources off of other planned work that you had during the quarter due to do that rework. So that's that's one example of something that we discovered and addressed and successfully completed.

Speaker 1: That's one example of something that we discovered in a draft and successfully completed. Additionally, the last jetty pile that we're drilling out in the port.

Additionally, our glass JD pile that we're drilling out in the in the port.

Speaker 1: area that the drill bit failed subsurface in the ocean.

The drill bit failed.

Subsurface and the ocean floor.

Speaker 1: floor, it took us two months to...

Took us two months too.

Speaker 1: to get that unit out of the ground and out of our way. We were unable to drill the pile in an alternate location because of the critical.

To get that unit crowding out of the ground and in and out of our way we were unable to drill them.

Liam Fitzpatrick: We were unable to drill the pile in an alternate location because of the critical nature of the drill. That was just something you had to power through and get done, you know, no way we could forecast that or know that that was going to occur. And that has delayed the port from, you know, completion from the end of this port border into the end of first quarter of next year. We've fired two additional contractors to work on completion of other offshore areas, mooring boys, et cetera offshore.

The pilot.

The alternative location because of the critical.

Speaker 1: nature of the load bearing requirements there. So that was

The nature of the of the load bearing requirements. There so that you know that.

It was just something that you have to power through and get done.

Speaker 1: Just something that you had to power through and get done. No way we could forecast that or know that that was going to occur. And that has delayed the port from completion from the end of this fourth quarter into the end of first quarter of next year. We've hired two additional contractors.

No way, we could could forecast that or I don't know that that was going to occur.

And that has delayed the port.

From completion from the end of the fourth quarter into the end of first quarter of next year, we acquired two additional contractors too.

Speaker 1: to work on completion of other offshore areas, mooring boys, et cetera offshore. So those again, those are...

To work on the completion of other offshore areas mooring boys et cetera offshore. So those again those are scare.

Liam Fitzpatrick: So again, those are scheduled delays, overhead continues. You have to have more contractors to cover in behind and, you know, significant cost increases associated with that. And then we have a variety of claims that contractors have submitted that are associated with costs that they believe they've incurred due to owner-directed changes in work plans. So we've got a significant amount of work that we need to do to review all those claims, reconcile those, and you know, determine what settlements are appropriate in order for, you know, to be complete and truly assess the full impact of that.

Speaker 1: schedule delays, overhead continues. You have to hire more contractors to cover in behind and significant cost increases associated with that.

Schedule delays overhead continues you have to hire more contractors to cover in behind and significant cost increases associated with that.

Okay and then.

Speaker 1: We have a variety of claims that contractors have submitted.

We have a variety of claims that contractors have submitted.

Speaker 1: that are associated with cost that they believe they've incurred due to owner directed changes in in work plans. So we've got a significant amount of work that we need to do to review all those claims, reconcile those and determine what what settlements are appropriate in order for, you know, presate particular fine representation and release for real estate operated property.

That are associated with cost that they believe they've incurred due to owner directed changes in and work plans. So we've got a significant amount of work that we need to do to review all of those claims.

A reconcile those two.

Determine what.

What settlements are appropriate.

In order for.

For us to be complete in and.

Speaker 1: truly assess the full impact of that. We've put all of those claim figures into the forecast now, even though we know some of them may not be settled for exactly what was applied for. This is all of this rework, et cetera. It's intentionally delayed the Molly Plan, so that again, in preference to the...

Truly assess the full impact of that we've we've put all of those claim figures into the forecast now even though we know some of them may or may not be settled for exactly what was applied for it.

Liam Fitzpatrick: We've put all of those claim figures into the forecast now, even though we know some of them may not be settled for exactly what was applied for. This is all of this rework, et cetera, is intentionally delayed the molly plan so that, you know, again, in preference to the reliability of the copper circuit. And, you know, that approach has served us very well. We're seeing substantial improvements month to month in plant throughput and performance and really very excited about how the plan is performing with the future holds for different moments for that plan.

This is all of this rework et cetera.

Essentially delayed to the moly plant so that we can.

In preference to the.

Speaker 1: the reliability of the copper circuit and that approach has served us very well. We're seeing substantial improvements month to month in plant throughput and performance and really very excited about how the plant is performing.

The reliability of the copper circuit.

That approach has served us very well were seeing substantial improvements month to month in plant throughput and performance.

We're really very excited about how the plant is performing.

Speaker 1: what the future holds for the performance of that plan.

What the future holds for the performance of that plan.

Speaker 2: Yeah, thanks, Red. And just, you know, to sort of reiterate there, Liam, you know, as we said, the only major areas of construction outstanding now are the molly plant and the port. In the guidance that we provided today, we have included all known risks, as Red has said, and we've included those risks pre any mitigation.

Yeah, Thanks, Brett and just to sort of reiterate the Liam.

Liam Fitzpatrick: Yeah, thanks, right. And just, you know, to sort of reiterate there, Liam, you know, as we said, the only major areas of construction outstanding now are the molly plants and the port in the guidance that we've provided today. We have included all known risks, as red has said, and we've included those risks pre any mitigation. And, of course, we've included some allowance in here for unknown risks. We do believe that the guidance we've put forward today will capture all remaining capex through to the completion of the project at this stage.

We said the only major areas of construction outstanding now with the moly plant in the port.

In the guidance that we provided today. We have included all known risks as Red has said and we've included those risks pre any mitigation.

Speaker 2: And of course, we've included some allowance in here for unknown risks. So we do believe that the guidance we've put forward today will capture all remaining capex through to the completion of the project at this stage.

And of course, we've included some allowance for unknown risks. So we do believe that the guidance. We put forward today, we'll we'll capture all remaining capex through to the completion of the project at this stage.

Speaker 2: So you're your second question on future growth and implications here. Firstly, of course, you know, we will undertake a detailed lessons learned process from the QB2 experience and make sure that those lessons and assumptions are carried forward to future projects.

Liam Fitzpatrick: So, your second question on future growth and implications here. Firstly, of course, you know, we will undertake a detailed lessons learned process from the QB2 experience and make sure that those lessons and assumptions are carried forward to future projects. You know, both in terms of either capital assumptions we make, but also how those projects are delivered. You know, one example that we've referenced many times through the course of this project has been the challenges we've had with labor productivity.

Your second question on future growth and implications here.

Liam Fitzpatrick: Now, some of that, of course, you know, could be a function of COVID, and the hangover from COVID, and some of that, of course, could be a function of the environment in which this project has been built, you know, in at 44-100 metres. It's a challenging place to deliver a major project, but we will take those assumptions forward and make sure that they're reflected in future projects. Otherwise, I think if you look at the project in our portfolio, it's just worth noting that, you know, they are an order of magnitude simpler in terms of their complexity in terms of their scale, and in terms of their scope.

<unk> of course, we will undertake a detailed lessons learned.

<unk> from from the QB two.

Experience and make sure that those lessons and assumptions are carried forward forward to future projects.

Speaker 2: you know both in terms of the the capital assumptions we make but also the how those projects are delivered. You know one example that we've referenced many times through the course of this project has been the challenges we've had with labor productivity.

You know both in terms of the the capital assumptions, we make but also the.

Those projects are delivered.

One example that we've referenced many times through the course of this project has been the challenges we've had with labor productivity now.

Speaker 2: Now some of that of course could be a function of COVID and the hangover from COVID and some of that of course could be a function of the environment in which this project has been built in at 44, 100 meters, it's a challenging place to deliver a major project. But...

Now some of that of course, it could be a function of of Covid and the hangover from Covid and some of that of course could be a function of the environment in which this project is being built you know and at 44.

Metres I'd say, its a challenging place to deliver a major project, but we will take those assumptions forward and make sure that they're reflected in future projects otherwise I think if you look at the projects in our portfolio. It is worth noting that they are in order of magnitude simpler.

Speaker 2: We will take those assumptions forward and make sure that they're reflected in future projects.

Speaker 2: Otherwise, I think if you look at the projects in our portfolio, it's just worth noting that they are an order of magnitude simpler in terms of their complexity, in terms of their scale, and in terms of their scope. You know, when you look at QB2 and the full scope of that, it's really 5 or 6 major projects that are rolled into one with Port-D South Pipelines mine concentrated tailings.

In terms of that complexity in terms of their scale and in terms of the scope.

Liam Fitzpatrick: You know, when you look at QB2 and the full scope of that, it's really five or six major projects that are rolled into one with port, diesel, pipelines, mine, concentrated tailings, you know, all at world-class scale. The other projects you see in the pipeline here, some of them with capital costs, you know, closer to a billion dollars, you know, reflect a very different, very different propositions of the company, but that said, there's a lot to learn to, for QB2, we'll make sure we understand both lessons well before we sanction our next project.

You look at QB, two and the full scope of vantage really five or six major projects are rolled into one.

With Port Decile pipelines mine concentrator tailings all of it.

Speaker 2: you know, all at world-class scale. The other projects you see in the pipeline here, some of them with capital costs.

World Class scale.

The other projects you see in the pipeline here some of them with capital costs.

Speaker 2: you know, closer to a billion dollars. You know, reflect a very different, a very different proposition for the company, but that said, there's a lot to learn there to, for QB2, we'll make sure we understand those lessons well before we sanction our next project.

Twice or two to a $1 billion.

You know reflected very different a very different proposition for the company, but that said, there's a lot of linzess for QB two we'll make sure. We we understand those lessons well before we sanction on next project.

Speaker 6: Thank you for the colour. If I'm allowed, a very brief follow-up, just on your EVR comments. I just wanted to make sure I'm understanding it correctly, because you mentioned execution risk was key. It's kind of what's being implied here is that I guess a spin of some form is the lower execution routes, or are you just kind of outlining that it's basically a call between the execution risk on a spin versus a cell to a single part.

Liam Fitzpatrick: Thank you for the colour. If I'm allowed, a very brief follow-up, just on your EVR comments. I just wanted to make sure I'm understanding it correctly because you mentioned execution risk was key. It's kind of what's being implied here is that I guess a spin of some form is the lower execution routes, or are you just kind of outlining that it's basically a call between the execution risk on a spin versus a fail to a single party.

Thank you for the color if I'm allowed a very brief follow up just on your <unk> comments.

Comments I just wanted to make sure I'm understanding it correctly, because you mentioned.

On execution risk was was was key.

Kind of what's being implied here is that kind of.

I guess a span of some form as the lower execution routes or are you just kind of outlining that it's basically a call between the execution risk on a spin versus a sale to a single policy.

Speaker 2: So look, I think Liam, it's intended to be a general comment. It's not intended to point at anything, anything specific here. You know, when when assessing, you know, the creation of value for shareholders, you've got a sort of...

Liam Fitzpatrick: So look, I think the image intended to be a general comment. It's not intended to point at anything specific here, you know, when, when assessing, you know, the correction of value for shareholders, you've, you've got a sort of, you know, look at that in the broader sense. And of course, you know, the certainty or the risk to delivery of that value is, is a key consideration and, you know, risks and risks and approvals on those sorts of things can manifest in a number of ways.

So look I think limits intended to be a general comment is not intended to pointed anything anything specific here you know when when assessing the creation of value for shareholders, you've got a sort of look.

We look at that in the broader sense and of course, you know the certainty or the risk to delivery of that value is a key consideration and.

Risks and risks and approvals and those sorts of things can manifest in a number of ways. So it's not intended to be a direct comments to favor one option over another just to sort of give some some color to the thought process here that.

Liam Fitzpatrick: So it's not intended to be a direct comment to favor one option over another, just to sort of give some colour to the thought process here that, you know, headline, headline price and headline value is important, but as is the certainty of the delivery of that value. Thank you. Thanks Liam.

Headline headline pricing headline value is important but as is the certainty of the delivery.

Got you.

Understood. Thank you.

Thanks Liam.

Speaker 4: And the next question comes from Dalton Beretto with Canada Corp Genuity. Please go ahead.

Dalton Baretto: And the next question comes from a thousand bretto was kind of cordiunity. Please go ahead. Thank you.

And the next question comes from Dalton <unk> with Canaccord Genuity.

Please go ahead.

Thank you good morning, Jonathan that team.

Jonathan Price: Good morning, Jonathan and team. I want to say on that, on that separation topic of conversation there. And I guess my first question, Jonathan, is given where coal prices are, as well as the implied valuation on the BHP white hape and Dale. Has the thinking on valuation between you and your potential buyers changed at all relative to what was on the table earlier this year? Thanks for the question, Dolphin. Look, I mean, it's fair to say that, you know, I think the view of the market has evolved, you know, since February when when we announced our prior separation.

Wanted to say on that on that separation topic of conversation there and.

And I guess my first question, Jonathan is given where coal prices are as well as the implied valuation on the BHP Whitehaven deal has the thinking on valuation between you and your potential buyers changed at all relative to what was on the table earlier this year.

Speaker 2: Thanks for the question, Dolphin. Look, I mean, it's fair to say that, you know, I think the view of the market has evolved You know since February when when we announced our our prior separation You know the the outlock the outlook to still making coal has definitely improved I think a you know a recognition here of the a favorable structure for that market Going forward with you know now I think a greater understanding of the long term needs for the role of Blast furnaces in the production of steel and and limited New Met coal supply expected to come to the market and of course the you know the growth of Blast furnace capacity in India as well is something

Thanks for the question Dalton looking I mean, it's fair to say that you know I think the view of the market has evolved.

Since February one when we announced our prior to separation.

Jonathan Price: You know, the outlook, the outlook to still making coal has definitely improved, I think, you know, a recognition here of the favorable structure for that market going forward with, you know, now, I think a greater understanding of the long term need for the role of blotternises in the production of steel and limited new Met coal supply expected to come to the market. And of course, the growth of blotternise capacity in India as well is something that is particularly interesting for those structural dynamics.

The outlook the outlook for steelmaking coal is definitely improves I think our you know our recognition here of the favorable structure for that market going forward with now I think a greater understanding of the long term need for the role of the blast furnaces in the production of steel and limited.

New met coal supply expected to come to the market and then of course, the you know the growth of blast furnace capacity in India as well is something that.

Speaker 2: that is particularly interesting for those structural dynamics. So I think the view of the market has changed long term. You know, well, for spot prices is very encouraging right now. You know, we look through that and we look to the long term assumptions here that underpin the business.

That is particularly interesting for those structural dynamics. So I think the the view of the market has changed long term whilst the spot prices is very encouraging right. Now you know we look through that and we look to the long term assumptions that underpin the business I think as well.

Jonathan Price: So I think the view of the market has changed long term, you know, well for spot prices is very encouraging right now, you know, we look through that and we look to the long term assumptions here that underpin the business. I think as well, you know, both the discussions we had earlier in the year regarding separation, the appreciation for EVR as a long life high margin producer of a very high quality hard coating coal has increased in the market as well.

Speaker 2: I think as well, you know, post the discussions we had earlier in the year regarding separation.

Most of the discussions we had earlier in the year regarding separation the appreciation for <unk> as a long life high margin producer of very high quality hard coking coal has increased in the market as well. So look I think there has been a move and expectations.

Speaker 2: the appreciation for EVR as a long life high margin producer of a very high quality hard-coding coal has increased in the market as well. So, look, I think there has been a move in expectations.

Jonathan Price: So look, I think there has been a move in expectations, you know, over the over the last six or eight months as a result of those two factors. And of course, you know, in discussions with our shareholders which have been ongoing throughout that period, you know, they convey to us their expectations here as well. And that's something, of course, we take on board as we think through the options in front of us.

Speaker 2: You know, over the last six or eight months as a result of those two factors. And of course, you know, in discussions with our shareholders which have been ongoing throughout that period, you know, they convey to us their expectations here as well. And that's something, of course, we take on board as we think through the options in front of us.

Over the over the last six or eight months as a result of those two factors.

And of course, you know in discussions with our shareholders, which have been ongoing throughout that period, you know they convey to us their expectations here as well and that's something of course, we take onboard as we think through the options in front of us.

Jonathan Price: Davis. Great, thanks for that, Jonathan, and then just maybe as a follow-up in terms of getting a deal done before year end. If you do opt for a partial sale as well as a spin co, do you anticipate those happening together or could we see an announcement on a partial sale by year end? And then just some sort of a lag on the spin co that will allow you to recoup some of these high coal prices?

Speaker 7: Great, thanks for that, Jonathan. And then just maybe as a follow-up, in terms of getting a deal done before Uren. If you do opt for a partial scale as well as a spin co, do you anticipate those happening together or could we see an announcement on a partial scale by Uren? And then just some sort of a lag on the spin co that will allow you to recoup some of these high-call prices.

Great. Thanks for that Jonathan and then just maybe as a follow up.

In terms of getting a deal done before year end.

If you do off for a partial partial sale as well as the spin co.

You anticipate those happening together or could we see an announcement on a partial sale by year end and then just some sort of a lag on the spin co that will allow you to.

Recoup some of these high coal prices.

Jonathan Price: I think, you know, that Dalton R proposal here is, you know, if and when we step forward with a with a transaction, we would expect a step forward with a complete solution for the separation of EVR from the base metals business. Thanks for that, and there's maybe one last one on QB2. As you wrap it up, where is the bottleneck currently? Is it at the mine? Is it at the mail? Is it at the supporting infrastructure?

Speaker 2: I think, Dalton, our proposal here is if and when we step forward with a transaction, we would expect to step forward with a complete solution for the separation of EVR from the base metals.

Okay, I think adults and a proposal here as you know if and when we stepped forward with a with a transaction we would expect to step forward with a complete solution solution for the separation of <unk> from from the base metals.

Business.

Speaker 7: Thanks for that. Maybe one last one on QB2. As you wrap it up, where is the bottleneck currently? Is it at the mine? Is it at the mail? Is it at the supporting infrastructure? And what is the primary hurdle to get to full design capacity?

[laughter] alright, thanks for that and then just maybe one last one on <unk> as you wrap it up do you where is the bottleneck currently isn't at the mine at the mill is supporting infrastructure and.

Jonathan Price: And, you know, what is the primary hurdle to get to full design capacity? Yeah, Dalton, I'll hand you over to Shazad Bharmal RSVP in the copper business unit here, who is responsible for the ramp up and future operation of QB2. Thanks, Jonathan. You know, as Rhett mentioned, we are very pleased with the plan to design and the robustness of the design and the performance so far. And the insights and lessons from line one, we we translated that to line two and as we started treating line two in August, we were up and making copper within, you know, in less than a month, so very excited about that part.

What is the primary.

Hurdle to get to full design capacity.

Speaker 2: Yeah, Dalton, I'll hand you over to Shazad Balmala RSVP in the copper business unit here who is responsible for the other ramp up and future operation of QB2. Thanks, John .

Yeah, adult and I'll I'll hand, you over to issues that the amount of RSVP.

Off a business unit here, who is responsible for the ramp up in the future operation as Q2, Thanks Jonathan.

Speaker 8: You know, as Red mentioned, we are very pleased with the project design and the robustness of the design and the performance so far. And the insights and lessons from line one, we translated that to line two. And as we started treating line two in August , we were up and making copper within, you know, and less than a month. So very excited about that part.

As Ed mentioned, we are very pleased with the plant design and the robustness of the design and the performance so far.

The insights and lessons from line one we translated that to align to and as we started treating line two in August we were up at making copper within <unk>.

Less than a month's so very excited about that part.

Speaker 8: And as part of the commissioning, when we took line to down to retort the mills, track the gap and the air settings on the motors, we also took the opportunity to make some adjustments to the plant.

Jonathan Price: And as part of the commissioning, when we took line two down to, you know, retort the mills, check the gap and the air settings on the motors. We also took the opportunity to make some adjustments to the plant, you know, in our conveyors and shoots and everything else. And, you know, it's that reliability of the little things that has been our focus, not the design and the throughput of each of the units in the plant.

And as part of the commissioning when we.

Line two down to <unk>.

The mills check the gap and the air shedding on.

Motors, we also took the opportunity to make some adjustments to the plant.

Speaker 8: You know, not conveyors and shoots and everything else. And you know, it's that reliability of the little things that has been our focus, not the design and the throughput of each of the units in the plant. So we don't see anything that prevents us from getting two design rates. And in fact, after we started up after that shutdown, we have hit above design rates on each of the lines and of the plants together, you know, over 140, 140,000, 43,000 tons a day.

Im not conveyors and shoots and everything else.

Reliability of the little things that that has been our focus not the design and the throughput of each of the units in the plant itself, we don't see anything that prevents us from getting.

Jonathan Price: So, we don't see anything that prevents us from getting to design rates. And in fact, after we started up after that shutdown, we have hit above design rates on each of the lines and of the plants together, you know, over 140, 143,000 tons a day. We have achieved that. And so really to answer your question, it is the reliability and making sure that the small shutdowns are avoided. And we are making great progress on that with respect to mine operations.

Two design rates and in fact, after we started it up after that shutdown.

We have hit.

Above design rates on each of the lines and off the plans together.

Over 140, <unk> hundred 43000 tonnes a day.

Speaker 8: We have achieved that. And so really to answer your question, it is the reliability and making sure that the small shutdowns are avoided. And we are making great progress in that. With respect to mine operations, we have hit our target numbers regularly. So really, the autonomous fleet is operating really well. The crusher is not about like at all. And as Redd,

We have achieved that.

And so really the to answer your question it is.

The reliability.

Reliability, and making sure that the small shutdowns.

Our appointed and were making great progress on that with respect to mine operations that we have.

Jonathan Price: We have hit our target numbers regularly. So really, you know, the autonomous fleet is operating really well. The pressure is not a bottleneck at all. And as Red mentioned on the tailing side, the return water system, which is part of, you know, the water recovery and the dilution water for sand is operating really well. The sand quality quantity is within spec and we're, you know, that's been de-risk as well. So the team is really energized, you know, we're heading records, you know, every regularly we make another record on our journey towards full ramp up. And it's this reliable delivery that we hope to achieve by year end. Craig, thank you for taking my questions. Thanks, Dolson.

Our target numbers regularly so really the autonomous fleet is operating really well the crushers.

Not a bottleneck at all.

And as we had mentioned on the tailing side.

Speaker 8: the return water system, which is part of the water recovery and the dilution water for sand is operating really well. The sand quality, quantity is within spec and where that's been de-risked as well. So the team has really energized, we're heading records. Every regularly, we make another record on our journey towards full ramp up and it's this reliable delivery that we all can achieve by year end.

The return water system, which is part of.

The water recovery and the dilution water or sand is operating really well the sand quality quantity is within spec and where.

That's been Derisked as well so.

So the team is really energized.

Setting records every regularly we would make another record on our journey towards full ramp up and reliable delivery that'd be hope to achieve by year end.

Great. Thank you for taking my questions.

Speaker 9: Thanks though.

Thanks Nelson.

Speaker 10: And the next question comes from Chris Luffamino with Jeffries. Please go ahead. Hi. Thanks for taking my question. I just wanted to ask about.

Chris LaFemina: The next question comes from Chris LaFemina with Jeffries. Please go ahead. Hi, thanks for taking my question. I just wanted to ask about, sorry, back on QB2 on the CAPEX budget there. So the $8.6 to $8.8 billion CAPEX guidance is for the project. And then you have this ramp up CAPEX. And then you also have the operating cost. And presumably the copy sales and making in the normal course of business, the offsetting costs are expense and I capitalized.

The next question comes from Chris <unk> with Jefferies. Please go ahead, Hi, hi, Thanks for taking my question I just wanted to ask about sorry back on QB two on the on the Capex budget. There. So the eight six to $8 8 billion dollar Capex guidance is for the project and then you have.

Chris LaFemina: So I'm trying to first understand exactly what is included in the ramp up CAPEX. And secondly, do you have a guidance with that ramp up CAPEX will be before all the costs are ultimately expense because I'm not sure if that ramp up CAPEX was ever guided to earlier on in the project. It seems like that sort of came out of nowhere and it's adding to the overall CAPEX to the project. So just trying to understand what comprises that is going to happen.

Speaker 10: Sorry, back on QB2 on the cat-x budget there. So the $8.68, $28,000 cat-x guidance is for the project. And then you have...

Speaker 10: This ramp up cat-ex and then you also have the operating cars and presumably the copper sales and making In the normal course of business the offsetting cost they are expense did not capitalize

This ramp up Capex and then you also have the operating caution, presumably the Cabo sheltering I'm, making.

In the normal course of business, the offsetting costs that were expensed and not capitalized.

Speaker 10: So, I'm trying to first understand exactly what is included in the ramp-up capex. And secondly, do you have a guidance for what that ramp-up capex will be before all the costs are ultimately expensed, because I'm not sure if that ramp-up capex was ever guided to earlier on in the project. It seems like that sort of came out of nowhere, and it's adding to the overall capex of the project. So, just trying to understand what comprises that and what that number should ultimately get to before it ends. Thank you.

I'm trying to first understand exactly what is included in the ramp up Capex and secondly, do you have a guidance of what that ramp up cash capex will be before all the costs are ultimately expense.

I'm not sure if that ramp up capex was ever guided to earlier on in the project. It seems like that's sort of.

Came out of nowhere and its adding to the overall capex for the projects I'm just trying understand what comprises that and what that number should ultimately get to before it ends. Thank you.

Chris LaFemina: And with that membership, we'll get you before it ends. Thank you. Yeah, thanks for the question, Chris. I'm going to hand you over to Chris. On this one given the, you know, the relation to the interest treatment of the cost during ramp up. So over to you, Chris. Thanks, Chris. I think maybe I'll take your question in a couple of pieces as you sort of framed it. I think the first is being the change in eye for us that now requires us to obviously recognize.

Speaker 2: Yeah, thanks for the question, Chris. I'm going to hand you over to Chris Thor on this one, given the relation to the Everest treatment of these costuring ramp up. So over to you Chris.

Yeah. Thanks for the question, Chris I'm going to hand, you over to Crystal.

On this one given the you know the relation to the.

Treatment of these costs during ramp up so over to you crystal.

Speaker 3: Thanks, Chris. I think maybe I'll take your question in a couple pieces as you've sort of framed it. I think the first just being this change in IFRS that now requires us to obviously recognize.

Thanks, Chris.

Maybe I'll take your question in a couple of pieces of us sort of frame that I think the first just being the change in <unk> that now requires us to obviously recognize cost through earnings as we sell products, but we've done that in English.

Speaker 3: cost through earnings as we sell products. So we've done that in, in the third quarter, as we've had sales volume come through. So those amounts are in the P&L, and you can see what our margins are, and you can see the breakdown in our, in our mine operations reporting that we've included in the MDNA.

Chris LaFemina: Cost through earnings as we sell products, so we've done that in in the third quarter, as we've had sales volume come through so that those amounts are are in the P&L and you can see. See what our margins are and you can see the breakdown in our in our mine operations reporting that we've included in the MDNA. And then in the context of the ramp up capital during the time where we're ramping up operational rates to to designed capacity.

In the third quarter as we've had sales volume countries. So those amounts are are in the P&L and you can see see what our margins are and you can see the breakdown in our in our mine operations reporting that we concluded in the MD&A.

Speaker 3: And then in the context of the ramp up capital, during the time where we're ramping up operational rates to designed capacity, we're trying to get to a minimum threshold. And at that time, we're incurring cost to operate the assets, but we aren't producing at the levels where we expect to be producing. And so during that time, we capitalized those costs.

And then in the context of.

The ramp up capital during a time, where we're ramping up operational rates too to designed capacity, we're trying to get to a minimum.

Chris LaFemina: We're trying to get to a minimum minimum threshold and at that time we're incurring costs to operate the assets, but we aren't producing at the levels where where we expect to be producing. And so during that time, we we capitalize those costs. If we were producing at higher levels, those costs would be going into inventory and then and then going through the P&L. We haven't guided to that amount just given that obviously the ramp up is is ongoing and it's a hard number to to predict, but I can say that as we, you know, get to higher levels of production.

Minimum threshold and at that time, we're incurring cost to operate the assets, but we aren't producing at the levels, where where we expect to be producing and so during that time, we capitalize those costs. If we were producing at higher levels of cost would be going into inventory and then and then going through the P&L.

Chris LaFemina: And the amounts that we capitalize in in that ramp up capital bucket are lower. And so I expect them to come down in the fourth quarter compared to what was capitalized in in the third quarter. And and as we get to the end of the year and we're at full production rates, we won't be sending any further amounts capitalized in that bucket. So that amount has peace and I expect it's going to come down over the rest of the year.

Speaker 3: If we were producing at higher levels, those costs would be going into inventory and then going through the P&L. We haven't guided to that amount, just given that obviously the ramp-up is ongoing and it's a hard number to predict, but I can say that as we get to higher levels of production.

We havent guided to that amount just given that obviously the ramp up.

It's ongoing and it's a hard number to keep predict but I can say that as we you know get.

Get to higher levels of production the amount that we capitalized in in that ramp up capital bucket or are lower and so I expect that will come down in the fourth quarter compared to what was capitalized in the third quarter end.

Speaker 3: the amounts that we capitalized in that ramp up capital bucket are lower. And so I expect them to come down in the fourth quarter compared to what was capitalized in the third quarter. And as we get to the end of the year and we're at full production rates, we won't be seeing any further amounts capitalized in that bucket. So that amount has peaked and I expect it's going to come down over the rest of the year.

And as we get to the end of the year and we're at full production rates, we won't be seeing any further announced capitalized in that bucket. So that amount has peaked and I expect that's going to come down.

Over the rest of the year.

Speaker 10: Does that answer your question? Well, I guess, sort of. So, if you're operating the asset and you're selling copies.

Chris LaFemina: So if you're operating in the asset and you're selling copper. I'm a little bit confused as to why expenses would then be capitalized if they're not, if they're associated with actually operating the asset and selling copper. I mean, what exactly comprises that cap X is stripping is it is an investment in the infrastructure? What exactly is going for that bucket? It's all the cost of operating those assets until you reach a minimum operational threshold.

Does that answer it.

Yeah.

I guess, if you're operating in the asset and you're selling copper.

Speaker 3: I'm not sure why. I'm a little bit confused as to why expenses would then be capitalized if they're not if they're associated with actually operating the asset and selling copper. I mean what exactly comprises that capex? Is it stripping? Is it an investment in the infrastructure? What exactly is going into that bucket? It's all the cost of operating those assets until you reach a minimum operational threshold. So any cost associated with the products being sold is going into into your cost of sales number.

I'm not sure what.

I'm a little confused as to why expenses would then be capitalized if they're not if they are associated with actually operating the asset until in copper I mean, what exactly comprises that capex is just stripping as it.

As an investment in the infrastructure and what exactly is going into that bucket.

But it's all the cost of operating those assets until you reach a minimum operational threshold, so any costs associated with the products being sold.

Chris LaFemina: So any cost associated with the product being sold is going into into your cost of sales number. Sir, none of the costs associated with the sales are going into expense or going into catbacks. Sir, going into expense, that's right, into cost of sales on the income statement. Okay, thanks. Maybe I'll just apologize for offline. Thank you for that. I appreciate it. Thanks, Chris. Yeah, the answer is accounting. I think so.

Going into your into your cost of sales number.

Speaker 3: So none of the costs associated with the sales are going, sorry, so the costs associated with the sales are going into expense or going into catbacks. They're going into expense. That's right. Into cost of sales on their own income savings.

So none of the costs associated with the shelves are going because I'm sorry, so the cost associated with the sales are going into expense are going into capex share going into extend battery and cost of sales on the on the income statement.

Speaker 10: Okay, thanks. I'll just follow up offline. Thank you for that. I appreciate it.

Okay.

I'll just follow up offline. Thank you for that I appreciate it okay.

Speaker 2: Thanks Chris, yeah the answer is accounting, I think. So we'll take the next question please.

Thanks, Chris Yeah, the answer is our accounting.

So I will take the next question please.

Speaker 4: The next question comes from Bryce Adams with CIBC. Please go ahead.

Bryce Adams: We'll take the next question, please. The next question comes from Bryce Adams with C-A-B-C. Please go ahead.

The next question comes from Bryce Adams with CIBC. Please go ahead.

Speaker 11: Good morning and thanks for taking my question. It's one more on the ramp up So the low end of QB2 guidance for the concentrated 80,000 tons of copper and we are guided to the low end So that implies Q4 production of just under 60,000 tons

Bill Peterson: Good morning. Thanks for taking my question. It's one more on the ramp up. So the low end of QV2 guidance for the concentrated 80,000 tonnes of copper. And we are guided to the low end. So that implies Q4 production of just under 60,000 tonnes. What from the ramp up so far gives you confidence that that's possible. 60,000 per quarter is not the full run, right? But it's getting closer to it. So just looking for some more colour on your Q4 expectations for the ramp up.

Hi, good morning, and thanks for taking my question, it's one more on the ramp up.

So the low end of <unk> guidance for the concentrate 80000 tonnes of copper and we are guided to the low end. So that implies Q4 production of just under 60000 tons.

Speaker 11: What from the ramp up so far gives you confidence that that's possible? 60,000 per quarter is not the full run rate, but it's getting closer to it. So just looking for some more color on your queue for expectations for the ramp up. Yeah, thanks.

What from the ramp up so far gives you confidence that.

That's possible.

<unk> thousand per quarter, it's not the full run rate, but it's getting closer to it.

Looking for some more color on your Q4 expectations for the ramp up.

Bill Peterson: Yeah, thanks, Bryce. Packish is that on that one. Thanks, Bryce. So as I mentioned in early in Q4, we did the modifications and we have been running well since then. And really it's ramp up from October, getting closer in November and then finally getting to pretty much pull rates by the end of the year. And you know, one is one is the throughput aspect, which we are relatively bullish on. And then the other is the recovery.

Yeah, Thanks, Bryce practices out on that one thanks.

Speaker 8: Thanks, Rice. So as I mentioned in early in Q4, we did the modifications and we have been running well since then. And really it's ramp up from October , getting closer in November and then finally getting to pretty much full-race by the end of the year. And you know, one is...

Right.

As I mentioned in early in Q4, we did the modifications and we have been running well since then and really it's a ramp up from October getting closer in November and then finally getting to pretty much full rates by the end of the year and one is one is that throughput aspect, which we are relatively bullish.

Speaker 8: One is the throughput aspect which we are relatively bullish on. The other is the recovery. Our recoveries have been pretty strong as well. As we ramp up all our analyzers and our control systems now, which is really the process of doing actually this week. And then forward, we're looking at some good gains on recovery as well.

And then the other is the recovery I recoveries have been have been pretty strong as well and as we ramp up all our analyzers and controlled systems now which is we are in the process of doing.

Bill Peterson: Our recoveries have been have been pretty strong as well. And as we ramp up all our analysers and our control systems now, which is really the process of doing actually this week. And then forward, we're looking at some good gains on recovery as well. And of course, the last factor being great. You know, based on our mine sequence, we're looking at good shape there. And so with those three things, we think we'll be able to get that the $59,000.

This week.

And then moving forward.

We're looking at some good gains on recovery as well of.

Speaker 8: And of course the last factor being great, you know, based on our mind sequence, we're looking at good shape there and so with those three things, we think we'll be able to hit that the T8 of 59,000 tons.

Of course, the last factor being grade.

Based on our mine sequence.

We're looking in good shape, there and so with those three things.

We think we'll be able to hit that 50 859000 tons.

Speaker 2: I think it's also worth noting that it won't be a straight line through the next two months here that sort of week on it would be expecting production rates to improve into the end of the year.

Bill Peterson: Yeah, I think it's also with noting that it won't be a straight line through the next two months here. That sort of week on that we'd be expecting production rates to improve into the end of the year. Yep, got it. Okay, thanks for that. Looking forward to the Q4 update. I think if you get that $59,000, $60,000 in Q4, that's a good set up for next year. So the rest of my questions are answered. That's it for me. Thanks so much. Thanks, Bryce.

Yes, I think so.

Noting that it won't be it won't be a straight line through the next two months it sort of week on mix, we'd be expecting production rates to improve into the end of the year.

Speaker 11: Yep, got it. Okay, thanks for that. Looking forward to the Q4 update. I think if you get that 59, 60,000 tons in Q4, that's a good setup for for next year. So the rest of my questions are answered. That's it for me. Thanks so much.

Yes got it okay. Thanks for that looking forward to the Q4 update so I think if you get that 59.

60000 tonnes in Q4, that's a good setup for next year.

So the rest of my questions are answered that's it for me. Thanks, so much.

Thanks Bryce.

Speaker 4: The next question comes from Bill Peterson with JP Morgan. Please go ahead.

Bill Peterson: The next question comes from Bill Peterson with J.P. Morgan. Please go ahead. Yeah, hi. Good morning. Thanks for taking my questions. A lot of questions. That's TV2 and Elk Valley been answered. But we're going to talk more about the near term development project.

The next question comes from Bill Peterson of J P. Morgan Steve go ahead.

Speaker 12: Yeah, hi, good morning. Thanks for taking my questions. A lot of questions on TV too and Elk Valley have been answered. But we're going to talk more about the near-term development project. So I guess first, you know, when do you expect the project environmental assessments through the mine extension for Highland Valley to be approved? And hopefully get a bit more color on the expectations for the permitting and feasibility studies for the near-term growth project, especially and if it's not, I believe we can study the Taste Technificarka Green at Highland Valley quickly and

Yeah, Hi, good morning, and thanks for taking my questions a lot of questions Ive seen too in our Elk Valley had been answered, but I wanted to talk more about.

Near term development projects, So I guess first one.

Jonathan Price: So I guess first, you know, when when do you expect the project environmental assessments for the mine extension for Highland Valley to be approved? And hopefully get a bit more color on the expectations for the permitting and feasibility studies for the for the near term growth project. Especially the end of the year so forth. Yeah, thanks for that question. Bill, I'll just start with which is out on the HPC piece. And then I'll hand you over to Tyler Mitchell for RSVP is responsible for copper growth to talk a bit more about the other projects in the portfolio and their state.

When do you expect the project Environmental Festival for the mine extension for Highland Valley to be approved and hoping to get a bit more color on the expectations for the permitting and feasibility studies for the for the near term growth projects, such as chemical TV and so forth.

Speaker 2: Yeah, thanks for that question, Bill. I'll just start with wood shizzard on the HPC piece, and then I'll hand you over to Tyler Mitchell from RSVP of responsible for copper growth to talk a bit more about the other projects in the portfolio in their state.

Yeah. Thanks for that question Bill, although I'll, just start with which is that on the H P. C pace and then I'll hand, you over to Tyler Mitchelson RSVP is responsible for copper grows to talk a bit more about the other projects in the portfolio in that status.

Jonathan Price: So Bill on Harlan Valley, as we said, we were able to submit our EA, it was a long process and it was really quite robust and we do expect approval by the end of 2024 before the end of 2024. And then of course there will be a decision for the board on sanctioning that my life extension. Sure, thanks.

Speaker 8: So Bill on Harlan Valley, as we said, we were able to submit our EA, it was a long process and it was really quite robust. And we do expect approval by the end of 2024, before the end of 2024. And then of course, there'll be a decision for the board on sanctioning that my life extension.

So bill on the Highland Valley as we said we were able to submit our EAA.

It was a long process and it was really quite robust and we do expect approval by the end of 2024 before the end of 2024.

And then of course that'll be a decision for the board on sanctioning that mine life extension.

Speaker 2: Okay, thanks Shazad, Tyler. Can you handle the balance of the question, please?

Okay. Thanks for that.

Tyler.

Can you can you handle the bounds of the question. Please.

Speaker 5: Sure, thanks. I think, you know, the year-term projects, if you start a sad Nicolas, down in Mexico, working through the feasibility study as we speak and work targeting KMSHOT in the first half of 2024. The permit.

Sure.

Tyler Mitchelson: Look, I think when I will be key near-term projects, if you start to send Nicholas down to Mexico, working through the feasibility study as we speak and we're targeting the shot in the first half of 2024. The permit is working and everything's been prepared for just doing a lot of stakeholder engagement right now. Ensuring that you've got the right things lined up before we submit the permit to be anticipated in that permit and in future for public history.

Look I think.

The key near term projects that you're starting to San Nicolas.

In Mexico.

Looking to the feasibility study as we speak and more targeting taking a shot.

First half of 'twenty 'twenty four.

Permit.

Speaker 5: The gates of work and everything's been prepared for just doing a lot of stakeholder engagement right now.

The work and everything has been prepared we're just doing a lot of stakeholder engagement right now.

Speaker 5: I'm sure that we've got the right things lined up before we submit the appointment to be anticipated in that permit in Q4 of Code 23. On Vapornal, we're-

Sharing that we've got the right things lined up before we submit the Puma anticipate putting that permit.

In Q4 victory.

Tyler Mitchelson: On staff for now, working through the Catholics and offerings update with a little bit more engineering, we should have that first part of 2024. We do have the permit in place for that one, we've got that in May of 23. Next, that's on the permit perspective, the staff for now, the Peru would be the construction permit, which we need to do a bit of engineering for and we intended. We would apply for that mid 2024.

On that for now working through the Capex and Opex up a little bit more engineering, we should have that.

Speaker 5: the graphics and off-site update with a little bit more engineering. We should have that done first part of 2024. We do have the permit in place. For that one, we've got that in May of 23. Next, that's on the permit perspective. The Zappanale, the Peru would be the construction permit, which we need to do a bit of engineering for and the intent is.

First part of 'twenty four we do have the protocols in place for that but we'll get that in may of 'twenty. Three next step from a permitting perspective.

Who would be the construction permit which we need to do a bit of engineering floor and we intend to.

Speaker 5: We would apply for that mid 2024.

Apply for that.

Mid 2024.

Speaker 5: And then the other near-term one is QBME, Progressing the Feasibility Study. We should be done that in the fourth quarter of this year and still working through the permitting process there as well. So a lot of the other longer dated projects, we're doing some of the early work on baseline work and working through some of the technical aspects of the early stage study work on that. But those are the key near-term projects we're working through.

Tyler Mitchelson: And then the other near-term one is QDME, progressing the feasibility study. We should be done that in the fourth quarter of this year and still working through the through the permitting process there as well. So a lot of the other longer dated projects were doing some of the early work on baseline work and working through some of the technical aspects of the early stage study work on that. Opposing the key near-term projects we're working through. So that's the question. Yeah, thanks for that update.

And then the other near term on an H <unk> progressing the feasibility study we should be done that in the fourth quarter of this year.

And still working through the through the permitting process there as well.

So a lot of the other longer dated projects, we're doing some of the early work on baseline board.

And working through some of the.

Technical aspects of the early stage study work on that.

But those are the key near term projects were working through.

That answers the question.

Speaker 12: Yeah, thanks for the update. You know, I guess more on the near-term working capital. So how should we think about the cadence through the remainder of this year and then the next year as QB2 ramps more meaningfully? I guess are you still expecting a build for the year?

Yeah. Thanks for the update you know I guess.

Crystal Prystai: You know, I guess more on the near-term working capital. So how should we think about the cadence through the remainder of this year and then the next year as QB2, you know, wraps more meanfully. I guess are you still expecting a bill for the year? Crystal, can you pick up that one place on working capital for QB2? Yes, sure. Thanks, Bill. I think we are at the working capital levels. We expect to be obviously we're building some inventories on stage as we produce and where we move things into into sales.

More on the near term working capital. So how should we think about the cadence through the remainder of this year and into next year excuse me two more reps more meaningfully I guess are you still expecting to grow for the year.

Speaker 2: Crystal can you pick up that one place on working capital for QB2?

Crystal Prystai: But I don't expect there to be a material change in in working capital outside of our normal sort of timing of sales and. I think we're looking to kind of achieve about a $400 million level there. Okay, yeah, thanks for that. Thanks, Bill.

Krystal can you pick up that one please on working capital for QB two.

Speaker 3: Yes, sure. Thanks Bill. I think we are at the working capital levels we expect to be. Obviously we're building some inventories on site as we produce and we're we move things into into sales but I don't expect there to be a material change in in working capital outside of our normal sort of timing of sales and the council table.

Brian Macarthur: The next question comes from Brian McArthur with Raymond James. Please go ahead.

Yes sure. Thanks, Bill I think we are.

Our working capital levels, we expect to be obviously, we're building.

Some inventories on site as we produce and where we move things into your into sales, but but I don't expect there to be a material change in in working capital outside of our normal sort of timing of sales and.

Accounts payable.

Speaker 3: I think we're looking to kind of achieve about a $400 million level there.

I think what we're looking to kind of achieve about a $400 million level there.

Okay, yeah, thanks for that.

Speaker 4: Thanks Bill. The next question comes from Brian MacArthur with Raymond James. Please go ahead.

Thanks Bill.

Next question comes from Brian Macarthur with Raymond James. Please go ahead.

Speaker 13: Good morning, my two questions I apologize are in QB2 as QB as well. But just my first one was sort of the last question. Just crystal that increase in CAFX through all the accounting.

Crystal Prystai: Good morning, my two questions I apologize are in QB2 as QB as well. So just my first one was sort of a last question just crystal that increase in capex through all the accounting. Does that include some of that working capital? So originally there was a capital cost investment and then there was going to be this 400 million working capital. Is that working capital on top of the new guidance or how do I think about that?

Hi, Good morning, My two questions I apologize.

<unk> two in Q b as well. So just my first one was sort of a last question just crystal that increase in Capex.

Through all the accounting.

Speaker 13: Does that include some of that working capital? So originally there was a, you know, there was a capital cost investment and then there was going to be this 400 million working capital. Is that working capital on top of the new guidance or how do I think about that? And I guess it gets a little bit toxic.

Does that include some of that working capital because originally there were the capital cost investment.

It's $400 million working capital is that working capital on top of the new.

Guidance or how do I think about that and I guess it gets a little bit back to Chris's question.

Crystal Prystai: I guess it gets a little bit back at Chris's question. So the corner, a million of working capital is not included in ramp up capital and it's always been the amount that we've communicated. So there isn't a change in that amount based on what we've communicated today.

Speaker 3: It's just so the corner, a million of working couples not included in ramp up capital and it's always been the amount that we've communicated so there isn't a change in that amount based on what we've communicated.

Unknown Executive: Okay, great. Thanks.

So the $400 million of working capital is not included.

Ramp up ramp.

<unk> capital.

It's always been the amount that we've we've communicated so there isn't a change in that amount based on what we communicated today.

Speaker 13: Okay, great thanks. And my second question was back, John , have any talked about permitting being a challenge? And we talked a little bit of QB, ME expansion. There wasn't report, I think, earlier this week in the tire park or region sort of recommending a gate expansion. Does that, can that impact the timing of your feasibility for that expected in Q4, or I don't know what you should comment on that situation?

Okay, great. Thanks, and my second question goes back Jonathan you talked about permitting being a child and can we talk a little bit of QB Ami.

Jonathan Price: And my second question was back. Jonathan, you talked about permitting being a challenge and we talked a little bit of QB, Emmy expansion. There wasn't report, I think, earlier this week in the tire packer region, you know, sort of recommending against expansion. Does that can that impact the timing of your feasibility for that expected in Q4 or I don't know what you should comment on that situation? Yeah, thanks for our question, Brian.

Spansion there wasn't report I think Les earlier, this week and the Paramount reason sort of recommending against expansion does that could that impact the timing of your feasibility for that expected in Q4 or I don't know what you can comment on that situation.

Speaker 2: Yeah, thanks for our question, Brian , yes. You know, there was a report issued recently with respect to the permitting process. That process is ongoing. There hasn't been a decision taken yet. You know, I would say that, you know, as I've mentioned before, it's sort of the normal course for the permitting of major projects. The, your question around the feasibility, you know, it won't impact that. We continue to progress the feasibility study and expect to have that done in the current quarter.

<unk>.

Yes, Thanks for that question, Brian Yes.

Jonathan Price: Yes, you know, there was a report issue recently with respect to the permitting process. That process is ongoing. There hasn't been a decision taken yet. You know, I would say that, you know, I've mentioned before is for the normal course for the permitting of major projects. The your question around the feasibility, you know, it won't impact that we continue to progress the feasibility study and expect to have that done in the current quarter.

A report issued recently with respect to the the permitting process.

That process is ongoing there hasnt been a decision taken yet.

I would say that you know as I've mentioned before is sort of the normal course of the permitting is of major projects.

The your question around the feasibility you know it wont impact that we continue to progress the feasibility study and expect to have that done in the current quarter.

Great. Thanks very much.

Brian Macarthur: Great. Thanks very much. Thanks, Brian.

Thanks, Brian .

Speaker 4: I will now hand the call back over to Jonathan Price for closing remarks.

Jonathan Price: I will now hand the call back over to Jonathan Price for closing remarks. Thank you, operator, and thanks to everyone for joining us on the call today. As I mentioned, with thrilled to be in Chile and officially opening QB2 this week, which is a momentous event for tech. We look forward to doubling our consolidated copper production as it ramps up to design throughput and recovery rates as well as to our next phase of copper growth beyond QB2. As always, please reach out to Fraser and our IR team if you have any further questions.

I will now hand, the call back over to Jonathan price for closing remarks.

Speaker 2: Thank you operator and thanks to everyone for joining us on the call today. As I mentioned with Thrill to be in Chile and officially opening QB2 this week, which is a momentous event for tech. We look forward to doubling our consolidated copper production as it ramps up to design throughput and recovery rates as well as to our next phase of copper growth beyond QB2. As always, please reach out to Fraser and our IR team if you have any further questions. Thank you all very much and have a good day.

Thank you operator, and thanks to everyone for joining us on the call today as I mentioned, we're thrilled to be in Chile, and officially opened in QB. Two this week, which is a momentous event for Teck, we look forward to doubling our consolidated copper production as it ramps up to design throughput and recovery rates as well as to our next phase of copper growth beyond.

<unk>.

As always please reach out to Fraser and our IR team. If you have any further questions. Thank you all very much and have a good day.

Unknown Executive: Thank you all very much and have a good day.

This concludes today's conference.

Yeah.

Yes.

Yeah.

Yeah.