Teck to search for QB2 JV partner
Canadian miner Teck Resources, with operations in Peru and Chile, said it plans to look for a partner for its 300,000t/y Quebrada Blanca (pictured) second stage project.
Teck aims to retain a 60-70% stake in the Chilean copper project known as QB2 and hopes to close a transaction in Q4, the Vancouver-based company said in a statement. Teck, which acquired an additional 13.5% stake in QB2 from Chile's Imsa in April, will stage a roadshow in the US, Canada and Europe after a development decision, CEO Don Lindsay said.
The company estimated investment in project work including engineering studies at US$250mn through Q3, with a government decision on its social and environmental impact assessment expected in August.
"To get hold of a good clean project like this is extremely tough, and the temptation is to keep it all," Lindsay said on a conference call with investors to discuss financial earnings. "But this will free up US$2bn in capital required going forward. That makes for a stronger project."
Teck added it expects to started work in Q3 on a 12-month feasibility study for the Nueva Unión copper-gold project in Atacama, Chile, a JV with Goldcorp. Drilling work also progressed at the property's La Fortuna orebody in Q2, it said.
Other projects include the Zafranal copper-gold property in Peru, where a feasibility study is due for completion in Q4, and a prefeasibility study for the San Nicolás copper-zinc project in Zacatecas, Mexico to be completed in the second half of 2019 following a 32,500m drill program, the company said.
Earnings
Teck posted a Cdn$634mn (US$488mn) second quarter profit compared with a Cdn$580mn profit the previous year as sales rose to around Cdn$3.02bn from Cdn$2.83bn, Teck said.
Copper prices jumped to US$3.12/lb, while zinc ran at US$1.41/lb in Q2, compared with US$2.57/lb and US$1.18/lb a year earlier, respectively. Costs including product credits fell to US$1.21/lb copper in Q2 from US$1.26/lb a year earlier.
Teck's copper production rose to 75,000t in the quarter from 70,000t a year ago, while zinc gained to 188,000t from 158,00t and coal was down to 6.3Mt from 6.8Mt, Teck said.
The Antamina mine in Peru, in which Teck holds a 22.5% stake, produced 106,300t copper (-10%) and a record 126,500t zinc (+24%) in the quarter, according to Teck. The company didn't report molybdenum output.
In Chile, the Carmen de Andacollo mine produced 16,000t copper (-6%) in Q2, while Quebrada Blanca produced 6,900t copper (+29%).
Teck raised 2018 production guidance to 280,000-290,000t copper and 655,000-670,000t zinc from earlier forecasts of 270,000-285,000t copper and 645,000-670,000t zinc, Teck said.
Markets
Copper demand remains robust in the US and China, while demand for zinc rose in Q2 due to gains in the galvanized steel industry, according to Teck. Concerns over the US-China trade war, however, may threaten global growth, Lindsay said.
"Demand for our products and the underlying fundamentals of our commodities markets remain strong. US steel mills are running at high rates," Lindsay said. "The zinc market is still tight."
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