The Teck Resources logo is seen on a podium before the company’s special meeting of shareholders, in Vancouver, B.C., Wednesday, April 26, 2023. THE CANADIAN PRESS/Darryl Dyck · The Canadian Press
Shares of Teck Resources gained on Wednesday, after the Canadian mining company announced a pause on major growth projects amid delays and issues at its flagship project in northern Chile. The company says its growth plans will stay on hold until its Quebrada Blanca (QB) copper project can achieve its targets.
In a statement issued Tuesday, Vancouver-based Teck announced it launched a comprehensive review of its operations in August aimed at bolstering investor confidence in its operations. At QB, the company plans to address slow drainage issues, which have delayed development and production.
At the same time, Teck says chief operating officer Shehzad Bharmal will retire after more than three decades. Additionally, the heads of its Latin American and North American operations will now report directly to president and CEO Jonathan Price.
Toronto-listed Teck (TECK-B.TO) shares gained as much as 3.8 per cent in early trading on Wednesday.
RBC Capital Markets analyst Sam Crittenden called for shares to fall in a Wednesday morning note to clients. He maintains a $67 price target on Toronto-listed shares, with an “Outperform” rating.
“We expect a negative reaction to Teck’s operations review and management changes, as while these changes could ultimately lead to better operational performance, they create uncertainty until the October guidance update,” Crittenden wrote.
In its statement on Tuesday, Teck said it will finish its comprehensive operations review by October 2025. The company says it will publish its guidance no later than its Q3 results.
Teck cut its 2025 annual production guidance for QB in July, when it reported its previous financial results. The company lowered its expectations to a range of 210,000 to 230,000 tonnes, from 230,000 to 270,000 tonnes.
“We believe the tailings issue could linger into 2026,” Crittenden wrote. “There is also uncertainty around the long-term run rate of the mine reaching the target level of 300,000 tonnes.”
Located high in the Andes mountains, QB is one of the largest new copper developments in the world. Teck owns a 60 per cent stake, Japan’s Sumitomo owns 30 per cent, and Chile’s government owns 10 per cent through a state-owned company.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.
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