Teck Resources (TCK) Announces Submission of Quebrada Blanca Phase 2 Regulatory Application

September 26, 2016 11:45 AM EDT

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Teck Resources Limited (NYSE: TCK) has, as part of the regulatory process, submitted the Social and Environmental Impact Assessment (SEIA) for its Quebrada Blanca Phase 2 Project (QB Phase 2) in northern Chile to the Region of Tarapaca Environmental Authority, consistent with the timing previously noted in the company's second quarter 2016 release.

As previously outlined, the proposed QB Phase 2 Project would extend the life of the existing mine as a large scale concentrate producing operation. The updated feasibility study including capital and operating cost estimates for the project is expected to be completed in the first quarter of 2017.

A decision to proceed with development would be contingent upon regulatory approvals and market conditions, among other considerations. Given the timeline of the regulatory process, such a decision is not expected before mid-2018.

Project optimization work currently underway targets capital costs in the range of US$4.5 to $5 billion with an initial mine life of 25 years, consistent with the capacity of the revised tailings facility which is located closer to the mine. This compares to the 2012 feasibility study estimate of US$5.6 billion. The new capital cost estimate will include a 140,000-tonne per day concentrator and related facilities; a new port facility and desalination plant; and concentrate and desalinated water pipelines. QB Phase 2 is expected to have an annual production capacity of over 250,000 tonnes of copper and 8,000 tonnes of molybdenum in concentrate for the first 10 years of mine life. On the basis of copper equivalent production of approximately 280,000 tonnes per year, this equates to a capital intensity of approximately US$16,000 to $17,850 per annual tonne.

"Quebrada Blanca Phase 2 is a long-life asset that will operate through multiple price cycles and generate significant value for many years," said Don Lindsay, President and CEO. "Our regulatory submission outlines the significant economic and social benefits that this project would generate for the region, as well as extensive proposed environmental mitigation measures, including the first large-scale use of desalinated seawater for mining in Chile's Tarapaca Region."

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