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Teck Reports Unaudited First Quarter Results for 2017 – Part 8


/T/

Copper Unit Cost Reconciliation

/T/

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Three months ended March 31, (CAD$ in millions, except where noted) 2017 2016

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Revenue as reported $ 513 $ 479 By-product revenue (A) (1) (70) (32) Smelter processing charges 41 55 ----------------------------------------------------------------------------
Adjusted revenue $ 484 $ 502 ----------------------------------------------------------------------------
Cost of sales as reported $ 470 $ 420 Less: Depreciation and amortization (152) (121) Inventory write-downs (7) - Collective agreement charges (2) (15) By-product cost of sales (B) (1) (13) (10) ----------------------------------------------------------------------------
Adjusted cash cost of sales $ 296 $ 274 ----------------------------------------------------------------------------
Payable pounds sold (millions) (C) 137.0 173.0

Adjusted per unit cash costs - CAD$/pound

Adjusted cash cost of sales $ 2.16 $ 1.58 Smelter processing charges 0.30 0.32 ----------------------------------------------------------------------------
Total cash unit costs - CAD$/pound (D) $ 2.46 $ 1.90
Cash margin for by-products - CAD$/pound ((A - B)/C) (1) $ (0.42) $ (0.13) ----------------------------------------------------------------------------
Net cash unit cost CAD$/pound (2) $ 2.04 $ 1.77 ----------------------------------------------------------------------------
US$ AMOUNTS Average exchange rate (CAD$ per US$1.00) (E) $ 1.32 $ 1.37

Adjusted per unit costs - US$/pound (3)

Adjusted cash cost of sales $ 1.63 $ 1.15 Smelter processing charges 0.23 0.23 ----------------------------------------------------------------------------
Total cash unit costs - US$/pound (1) $ 1.86 $ 1.38
Cash margin for by-products - US$/pound $ (0.31) $ (0.09) ----------------------------------------------------------------------------
Net cash unit costs - US$/pound $ 1.55 $ 1.29

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Notes:
(1) By-products includes both by-products and co-products. By-product costs
of sales also includes cost recoveries associated with our streaming
transactions.
(2) Net unit cost cash cost of principal product after deducting co-product
and by-product margins per unit of principal product and excluding
depreciation and amortization.
(3) Average period exchange rates are used to convert to US$/lb equivalent.

/T/

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to in this news release as "forward-looking statements"). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements, including under the headings "Outlook," that appear in this release, include estimates, forecasts, and statements as to management's expectations with respect to, among other things, anticipated cost and production forecasts at our business units and individual operations and expectation that we will meet our production guidance, sales volume and selling prices for our products (including settlement of steelmaking coal contracts with customers), our expectation of improved coal logistics chain performance and demand and coal per unit costs, capital expenditure guidance, plans and expectations for our development projects, the targeted capital cost and mine life of Quebrada Blanca Phase 2, expected production, production capacity of Quebrada Blanca Phase 2, and the estimated key project operating parameters and project economics of that project, expectation that grades at Highland Valley Copper will improve, the potential to extend the Pend Oreille mine life beyond early 2018, the expected amount that PILT payments would increase by if the Borough approves the arrangement with Teck Alaska, the impact of currency exchange rates, the expected timing and amount of production at the Fort Hills oil sands project, total Fort Hills project capital costs, the expected amount and timing of Teck's share of costs, the timing of completion and commissioning of the secondary extraction units, the expected average production rate and timing of achieving 90% of the expected production rate and demand and market outlook for commodities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially.

These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and steelmaking coal and other primary metals and minerals as well as oil, and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, our steelmaking coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, our ongoing relations with our employees and business partners and joint venturers. Assumptions regarding Quebrada Blanca Phase 2 are based on current project assumptions and the final feasibility study. Assumptions regarding Fort Hills are based on the approved project development plan, as revised including by the updated schedule and project cost projections and the assumption that the project will be developed and operated in accordance with that plan, assumptions regarding the performance of the plant and other facilities at Fort Hills and the operation of the project. Assumptions regarding the impact of foreign exchange are based on current commodity prices. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially.

Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes, political risk, social unrest, failure of customers or counterparties (including logistics suppliers) to perform their contractual obligations, changes in our credit ratings, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, and changes or further deterioration in general economic conditions. Our Fort Hills project is not controlled by us and construction and production schedules and costs may be adjusted by our partners.

Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies. Statements regarding anticipated steelmaking coal sales volumes and average steelmaking coal prices for the second quarter depend on timely arrival of vessels and performance of our steelmaking coal-loading facilities, as well as the level of spot pricing sales.

We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2016, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F.

WEBCAST

Teck will host an Investor Conference Call to discuss its Q1/2017 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Tuesday, April 25, 2017. A live audio webcast of the conference call, together with supporting presentation slides, will be available at our website at www.teck.com. The webcast will be archived at www.teck.com

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Teck Resources Limited

Condensed Interim Consolidated Financial Statements

For the Three Months Ended March 31, 2017
(Unaudited)

Teck Resources Limited
Consolidated Statements of Income
(Unaudited)

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Three months ended March 31, (CAD$ in millions, except for share data) 2017 2016

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Revenues $ 2,894 $ 1,698
Cost of sales (1,707) (1,543) ----------------------------------------------------------------------------
Gross profit 1,187 155

Other operating expenses

General and administration (32) (25) Exploration (10) (11) Research and development (12) (11) Other operating income (expense) (Note 2) 12 10 ----------------------------------------------------------------------------
Profit from operations 1,145 118
Finance income 3 8 Finance expense (Note 3) (79) (96) Non-operating income (expense) (Note 4) (145) 90 Share of income (losses) of associates and joint ventures 1 1

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Profit before taxes 925 121
Provision for income taxes (345) (26) ----------------------------------------------------------------------------
Profit for the period $ 580 $ 95 ----------------------------------------------------------------------------

Profit attributable to:

Shareholders of the company $ 572 $ 94 Non-controlling interests 8 1 ----------------------------------------------------------------------------
Profit for the period $ 580 $ 95 ----------------------------------------------------------------------------

Earnings per share

Basic $ 0.99 $ 0.16 Diluted $ 0.97 $ 0.16
Weighted average shares outstanding (millions) 577.2 576.3 Shares outstanding at end of period (millions) 577.6 576.3 ----------------------------------------------------------------------------

Teck Resources Limited
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

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Three months ended March 31, (CAD$ in millions) 2017 2016

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Profit for the period $ 580 $ 95

Other comprehensive income (loss) in the
period

Items that may be reclassified to profit Currency translation differences (net of taxes of $(9) and $(57)) (16) (61) Change in fair value of available-for-sale financial instruments (net of taxes of $(1) and $(2)) 7 14 Share of other comprehensive loss of associates and joint ventures (4) - ----------------------------------------------------------------------------
(13) (47) Items that will not be reclassified to profit Remeasurements of retirement benefit plans (net of taxes of $(8) and $26) 26 (55) ----------------------------------------------------------------------------
Total other comprehensive income (loss) for the period 13 (102) ----------------------------------------------------------------------------
Total comprehensive income (loss) for the period $ 593 $ (7) ----------------------------------------------------------------------------

Total other comprehensive income (loss)
attributable to:

Shareholders of the company $ 14 $ (99) Non-controlling interests (1) (3) ----------------------------------------------------------------------------
$ 13 $ (102) ----------------------------------------------------------------------------

Total comprehensive income (loss) attributable
to:

Shareholders of the company $ 586 $ (5) Non-controlling interests 7 (2) ----------------------------------------------------------------------------
$ 593 $ (7) ----------------------------------------------------------------------------

Teck Resources Limited
Consolidated Statements of Cash Flows
(Unaudited)

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Three months ended March 31, (CAD$ in millions) 2017 2016

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Operating activities

Profit for the period $ 580 $ 95 Depreciation and amortization 341 309 Provision for income taxes 345 26 Gain on sale of investments and assets (11) (16) Foreign exchange gains (12) (88) Loss on debt repurchase 178 - Gain on debt prepayment options (21) - Finance expense 79 96 Income taxes paid (124) (44) Other 35 24 Net change in non-cash working capital items (97) (29) ----------------------------------------------------------------------------
1,293 373 Investing activities Property, plant and equipment (356) (298) Capitalized production stripping costs (152) (159) Expenditures on financial investments and other assets (39) (22) Proceeds from the sale of investments and other assets 77 17 ----------------------------------------------------------------------------
(470) (462) Financing activities Repayment of debt (1,511) (6) Debt interest and finance charges paid (176) (209) Issuance of Class B subordinate voting shares 7 - Distributions to non-controlling interests (13) (1) ----------------------------------------------------------------------------
(1,693) (216)
Effect of exchange rate changes on cash and cash equivalents (1) (97) ----------------------------------------------------------------------------
Decrease in cash and cash equivalents (871) (402)
Cash and cash equivalents at beginning of period 1,407 1,887 ----------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 536 $ 1,485 ----------------------------------------------------------------------------

Teck Resources Limited
Consolidated Balance Sheets
(Unaudited)

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March 31, December 31, (CAD$ in millions) 2017 2016 ----------------------------------------------------------------------------

ASSETS

Current assets

Cash and cash equivalents $ 536 $ 1,407 Current income taxes receivable 84 97 Trade accounts receivable 1,437 1,585 Inventories 1,634 1,673 ----------------------------------------------------------------------------
3,691 4,762
Financial and other assets 1,067 1,034 Investments in associates and joint ventures 958 1,012 Property, plant and equipment 27,913 27,595 Deferred income tax assets 112 112 Goodwill 1,110 1,114 ----------------------------------------------------------------------------
$ 34,851 $ 35,629 ----------------------------------------------------------------------------

LIABILITIES AND EQUITY

Current liabilities

Trade accounts payable and other liabilities $ 1,598 $ 1,902 Current income taxes payable 292 199 Debt 83 99 ----------------------------------------------------------------------------
1,973 2,200
Debt 6,801 8,244 Deferred income tax liabilities 5,013 4,896 Deferred consideration 711 723 Retirement benefit liabilities 654 643 Other liabilities and provisions 1,489 1,322 ----------------------------------------------------------------------------
16,641 18,028 Equity Attributable to shareholders of the company 18,039 17,442 Attributable to non-controlling interests 171 159 ----------------------------------------------------------------------------
18,210 17,601 ----------------------------------------------------------------------------
$ 34,851 $ 35,629 ----------------------------------------------------------------------------

Teck Resources Limited
Consolidated Statements of Changes in Equity
(Unaudited)

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Three months ended March 31, (CAD$ in millions) 2017 2016

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Class A common shares $ 7 $ 7
Class B subordinate voting shares Beginning of period 6,637 6,627 Issued on exercise of options 10 - ----------------------------------------------------------------------------
End of year 6,647 6,627
Retained earnings Beginning of period 10,183 9,174 Profit for the period attributable to shareholders of the company 572 94 Remeasurements of retirement benefit plans 26 (55) ----------------------------------------------------------------------------
End of period 10,781 9,213
Contributed surplus Beginning of period 193 173 Share option compensation expense 4 5 Transfer to Class B subordinate voting shares on exercise of options (3) - ----------------------------------------------------------------------------
End of period 194 178
Accumulated other comprehensive income (loss) (Note 6(b)) Beginning of period 422 426 Other comprehensive income (loss) 14 (99) Less remeasurements of retirement benefit plans recorded in retained earnings (26) 55 ----------------------------------------------------------------------------
End of period 410 382
Non-controlling interests Beginning of period 159 230 Profit for the period attributable to non- controlling interests 8 1 Other comprehensive income (loss) attributable to non-controlling interests (1) (3) Acquisition of AQM Copper Inc. 18 - Other - (6) Dividends or net distributions (13) (1) ----------------------------------------------------------------------------
End of period 171 221 ----------------------------------------------------------------------------
Total equity $ 18,210 $ 16,628 ----------------------------------------------------------------------------


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