Teck Resources’ shares were down sharply after the Canadian miner raised the forecast cost for its flagship copper mine in Chile with construction delays and logged weaker-than-expected earnings for the latest quarter.
In morning trading, the shares were 5.4% lower at C$50.35 in Toronto, for a drop of 1.6% so far this year. On the New York Stock Exchange, the shares were 5.1% weaker at $36.89.
Teck, which earlier this year rejected a takeover approach from commodities giant Glencore, on Tuesday said it now expects the cost for its Quebrada Blanca Phase 2 project to come in at between $8.6 billion and $8.8 billion, a jump from its most recent estimate of $8 billion to $8.2 billion.
It said efforts are ongoing to mitigate the risks and cost pressures following delays in construction of the molybdenum plant and port offshore facilities, though production for the full year was set to come in at the lower end of its expectations for the full year.
The QB2 project is part of Teck’s push to become a major copper producer and reduce its reliance on the production of steelmaking coal. The company said construction of the QB2 molybdenum plant is now expected by the end of the year, and the port offshore facilities are expected to be completed in the first three months of 2024.
For 2023, Teck is now looking at output of copper, molybdenum and coal to each be below what it had previously forecast.
After difficulties at its Highland Valley Copper operation in western Canada in August, copper production is set to be between 320,000 and 365,000 metric tons, down from the earlier target of 330,000 to 375,000 tons. Copper output at QB2 is set to come in at the lower end of its 80,000 to 100,000 tons target.
The delay in building the QB2 molybdenum plant means production is expected to be 3 million to 3.8 million pounds of molybdenum, down from prior guidance of 4.5 million to 6.8 million.
Teck also said plant challenges have reduced its annual steelmaking coal production guidance to 23 million to 23.5 million tons, from 24 million to 26 million tons previously.
The company’s profit from continuing operations fell to 276 million Canadian dollars ($201.6 million), or C$0.52 a share, from C$741 million, or C$1.40, a year earlier.
On an adjusted basis, earnings fell to C$0.76 a share, below the C$1.06 mean estimate of analysts polled by FactSet.
Revenue for the quarter was 16% lower at C$3.6 billion, missing the C$3.65 billion expected.