Canadian Minerals and Materials

Canadian Minerals and MaterialsBUS 417 - 1121By: Kyle Woo, David Toljanich, Sherwin Pasha, and Jonas Wang

General Economic Information

Canadian Minerals and Materials contributed roughly $54 Billion to Canadian gross domestic product in 2010 This is an increase of $3 billion from 2009. These numbers are expected to increase further for 2011.

This is a chart showing total GDP contribution of the mining and materials industry sector in Canada. It is the 9th largest contributor to total GDP in Canada.4Canada was the global leader for exploration budgets in 2010 an increase from 2009

In 2009, Canada held 16% of the total global mineral exploration budget. In 2010, they accounted for 19%, making them the global leader in mineral exploration expenditure. An aggressive exploration budget may indicate that Canada will continue to seek global dominance in mineral exploration. Another note: the United States increased their exploration budget, passing Peru in 2010.5Metals and non metals account for 87% of the Canadian mining and materials industry.

Specifically, metals and non metals account for 35.7 million out of 41.2 million of the total mineral production in 2010. Coal falls into its own subsection of the mining industry. We will focus this presentation on metals and non metals.6

The value of Canadian Mineral products has increased over the last 10 years.This table shows that between 2000 and 2010, the top ten mineral products in Canada have increased in value. Metallic minerals (precious and base) increased in production value by 34% from 2009 to 2010 (NRCAN website). Potash remains the most valuable mineral product of Canada, followed cold and iron ore. 7Uranium Mining

Value of Uranium produced (Tonnes U/ $000) 2008-2010Uranium was not in the top ten mineral products mined in Canada in 2011. However, it is an important part of the Canadian Minerals and Materials industry as Canada is a global leader in Uranium. Canada produced 10785 tonnes(?) in 2011. The value of Uranium produced accounted for roughly 1.2 billion dollars in 2010. 2011 statistics were not available, but from the first table we can see that uranium production was less in 2011.8NI43-101Governs the quality of information shared by mining companies in the Canadian industry.Disclosure is based on the advice of a qualified personEntitles investors to a standard of information to evaluate investment potentialBefore we begin an Industry cross section and evaluate investment opportunities, I will explain the NI43-101 regulation, which governs all information disclosure for Canadian minerals and mining companies. National Instrument 43-101 (NI 43-101) is a rule developed by the Canadian Securities Administrators (CSA) and administered by the provincial securities commissions that govern how issuers disclose scientific and technical information about their mineral projects to the public. It covers oral statements as well as written documents and websites. It requires that all disclosure be based on advice by a "qualified person" and in some circumstances that the person be independent of the issuer and the property. This rule is important to understand because it sets the standard for all companies involved in this sector. Reliance on a qualified person This standard is currently under revision,9Industry Cross SectionDetailed examination of operations in the Canadian materials industry relies on a cross section of Industry leaders.3 companies are considered: Teck Resources, Goldcorp and CamecoThis cross section will provide an opportunity to focus our attention on the cost drivers of producing top minerals in Canada. 10Teck Resources

Copper

Coal

ZincGold Corp

GoldCameco

UraniumFor this cross sectional look at the industry, we have chosen Teck, Gold Corp, and Cameco. These three companies are industry leaders in their respective mineral operations. Copper, Coal, Zinc and Gold are all in the top ten minerals products in Canada. As mentioned before, Canada plays an important role in the global Uranium market, and Cameco is among the worlds top producers. These companies will be expanded on later in this presentation. This part of the industry cross section will focus on the costs surrounding the mining of these minerals.11CopperSymbol Cu Current spot price: 3.77US/lb (Comex, Feb 21, 2012)Value produced in 2010: 3.83 Billion CANThis is roughly 10 percent of all metal and non metal production for 2010. Copper, symbol Cu, trades on the Commodity exchange of the NYMEX, and is currently priced at 3.77US/lb. In 2010, roughly 10 percent of all metal and non metal mineral production was in copper. 3.83 Billion CAN was produced in 2010.12Copper outlook 2012

Copper has a variety of uses, including electronics and building. As global economic conditions improve, the demand for Copper is expected to increase in 2012. Experts predict copper to be the top performing base metal of 2012, making it a valuable contributor to the materials and mining industry in Canada (FP, 2011).13

The 5 year copper spot rate: Prices declined in early 2009, but have since recovered to pre crash levels. Within the last few months, copper has been trending upwards, which may be indication of an increased global demand as recession conditions improve globally. Manufacturing sectors, particularly construction and electronics, both which rely heavily on copper, are expectred to improve in 2012, which will bolster demand increase industry revenue.

14Futures Price of Copper

Need some help interpreting this slide.15CoalThere are different types of coal: Lignite--aka. brown coal; used as fuel for electric power generationSub-bituminous coal--used as fuel for steam-electric power generation and in the chemical synthesis industryBituminous coal-used as fuel for steam-electric power generation and used to make coke (which is used as a fuel and to smelt iron ore in blast furnaces; very little smoke under combustion conditions)Anthracite-hard, glossy, black coal; used mainly for commercial and residential space heatingGraphite-difficult to ignite (therefore, not used as fuel very commonly); primarily used in pencils and as a lubricant (when powdered)

CoalCanadian exports of coal tend to bituminous coalCurrent spot price of bituminous coal: 118.05US per tonValue produced in 2010: 5.54 Billon CANThis is roughly 13% of all mineral production in Canada in 2010.Coal Outlook 2012

The outlook for thermal coal is strong into 2012. China is expected to drive demand for the second year in a row. Thermal coal as an energy production method is expected to decline slightly in the more developed nations as natural gas becomes a cheaper, more viable energy alternative. However, the developing markets are expected to continue to thrive into 2012, making thermal coal a valuable export in Canada.18Coal pricing

Coal, in particular Metallurgical coal known as steelmaking or coking coal, accounts for the majority of coal production in Canada. Also known as thermal coal, the Canadian industry competes directly with Australia, the global leader in thermal coal production. Observing the Australian spot price for thermal coal, we notice that prices are trending upwards. Since Canadian coal exports trade in the same market, the rising price will have a positive impact on coal in the mining and materials industry in Canada.19ZincSymbol ZnCurrent Spot price: 0.9104US/lb (Feb 21, 2012)Value produced in 2010: 1.34 Billion CANRoughly 4% of all metals and non metals producedZinc trades on the LME commodity exchange, as well as the NYSME. The current spot price of zinc is 91 cents per lb. In 2010 roughly 4% of all metals and non metals produced in Canada was in the form of zinc, accounting for 1.34 billion dollars.20Zinc Outlook 2012

Zinc has a variety of uses, mostly used in different metal finishing processes. However, several reports indicate that zinc does not have as positive an outlook as other materials in the Canadian mining and materials industry. Zinc is a good example of a more risky commodity that potentially will devalue as the global supply of zinc continues to rise. The outlook for zinc is rather uncertain, as demand has not shown any signs of decreasing as supplies increase. Prices ended 2011 on a downward trend. Canada contributes roughly 6% of the global supply of zinc. 21

Gold Outlook 2012Observing the 5 year spot rate for zinc, we see that zinc prices recovered well from the 2008 recession. However, since then, they have fallen slightly and only began to recover into early 2012. As mentioned before, the volatility of zinc as global supplies increase make it difficult to determine where prices will head into 2012.22GoldSymbol: AuCurrent Spot price: 1753US/oz (Feb 21, 2012)Value produced in 2010: 3.92Billion CADRoughly 11% of all metals and non metals produced in CanadaGold, symbol AU, is currently trading at the price of 1753US/oz. In 2010, Canada produced 3.92 Billion worth of gold, 11% of its total industry production/23Gold Outlook 2012

The outlook for Gold is generally positive for 2012, with investment professionals like Sachs and Morgan Stanley predicting an increase in price in the upcoming year. The price has fallen in March.24Gold Pricing

2012 so far has seen a massive upward trend in the price of Gold. The price has fallen slightly into March, but the outlook is still positive and global economic recovery may increase demand as governments attempt to refill reserves that were emptied during the 2008 recession.25UraniumUranium is sold in a variety of commodities Value is determined by qualityValue Produced in 2010 in Canada: 1.2 Billion

Uranium Outlook 2012

The demand for Uranium is currently exceeding supply in the global market. Uranium prices fell slightly as demand was effected by the Japanese earthquake. As stability is restored, the global demand is increasing, with China as a targeted global demand leader. There are concerns that the volatility of the price will continue. We can see on this slide that McArthur River continues to be the highest grade producer of Uranium in the world. There is a strong BUY singnal for the commodity.27Uranium pricing

Uranium pricing globally suffered during the Japanese Disaster, and prices fell over the next year for the commodity. However, the pricing has been relatively stable at this point. Increased demand forecasts suggest that the commodity is going to rise into 2012.28

Stock Metrics

1 Year Price Movement

1 Year vs. S&P/TSX Composite

1 Year vs. S&P/TSX Metals & Mining Index

1 Year 50 + 200 Day Moving Averages

1 Year vs. GLD Gold ETF (SPDR Gold Trust)

1 Year vs. GC (Comex Gold Futures)

5 Year Price Movement

5 Year vs. S&P/TSX Composite

5 Year vs. S&P/TSX Metals & Mining Index

5 Year 50 + 200 Day Moving Averages

5 Year vs. GLD Gold ETF (SPDR Gold Trust)

5 Year vs. GC (Comex Gold Futures)

P/E Rationever analyze a precious-metals company based on the price-to-earnings ratio. In general, a high P/E means high projected earnings in the future, but all gold stocks have high P/E ratios. The P/E ratio for a gold stock doesn't really tell us anything because precious metals companies need to be compared by assets, not earnings. Unlike buildings and machinery, gold companies have large amounts of gold in their vaults and in mines throughout the world. Gold on the balance sheet is unlike other capital assets; gold is seen as currency of last resort. Investors are therefore willing to pay more for a gold company because it is the next best thing to physically holding the gold themselves.

There are a fewvaluation techniques that analysts use when comparing various precious metal companies. The most popular and widely used ratio is market capitalization per ounce of reserves (market cap divided by reserves). This indicates to investors what they are paying for each ounce of reserves. Obviously, a lower price is better.

http://www.investopedia.com/features/industryhandbook/metals.aspMarket Cap/Au EqDecreasing Mcap Mcap/Au EqBarrick Gold Corporation (ABX) $135.23Goldcorp Inc. (G) $222.03Kinross Gold Corporation (K)$117.30Yamana Gold Inc. (YRI) $242.33Eldorado Gold Corporation (ELD) $255.78Agnico-Eagle Mines Limited (AEM)$155.70New Gold Inc. (NGD)$145.58Market Cap/Au Eq Decreasing Mcap/Au EqEldorado Gold Corporation (ELD) $255.78Yamana Gold Inc. (YRI) $242.33Goldcorp Inc. (G) $222.03Agnico-Eagle Mines Limited (AEM)$155.70New Gold Inc. (NGD)$145.58Barrick Gold Corporation (ABX) $135.23Kinross Gold Corporation (K)$117.30

OverviewSenior, Vancouver-based, gold producer with silver, copper, zinc, and, lead by productsLeading gold producer engaged in operation, exploration, development and acquisition of precious metal properties in Canada, US, Mexico, and Central and South AmericaOperations in Canada, USA, Argentina, Mexico, and GuatemalaLow cost producer with low political riskNo hedging of gold pricePayment of dividends to shareholders since year 2003Institutional shareholders including Fidelity Management & Research (6.73%), RBC Asset Management, Inc. (3.49%), Van Eck Associates Corporation (2.94%), BlackRock Investment Management (UK) Ltd. (2.82%)Gold production of 2,514,700 ounces in 2011Expect annual gold production to reach4.2 millionounces by 2016, an increase of 70% over the next 5 years

History1989: Began when Robert McEwen bought control of two mining companies1990: he hired new management and changed the board of directors for both companies1994: four mining companies merged to create Goldcorp Inc.Transformed Goldcorp from a collection of small companies into a mining powerhouseOvercame many challenges: bid to extract the gold he believed all along was at Red Lake, lawsuits, family feud, debilitating strike, and a death threat.

Recent Acquisitions/DispositionsOn March 31, 2006, Goldcorp acquired the Eleonore gold project in Quebec from Virginia Gold Mines Ltd.On May 12, 2006, Goldcorp completed the purchase of a number of Placer Dome assets from Barrick Gold for approximately $1.6 billion.In August 2006, Goldcorp acquired Glamis Gold to create one of the worlds largest gold companies.On February 14, 2008, Goldcorp completed the disposition of 108 million common shares of Silver Wheaton to a syndicate of underwritersOn September 25, 2008, Goldcorp acquired Gold Eagle Mines Ltd.On February 16, 2010, Goldcorp completes the acquisition of 70% interest in El Morro project

Operations/Projects

Results of Operations

Production Highlights

Cash Margins + By-Product Cash Costs

Growth of Gold Reserves

Reserves and Resources

Cash Flow, Earnings, Reserves /share Growth

Financial Position

Strong Growth Profile

Robust Development Pipeline

Red LakeGoldcorp invested $7 million in exploration costs in 1995 and found a high-grade gold mineralization

Canadas largest gold mine

One of the worlds richest mines and lowest cost producer

2012 gold production forecast of 650,000 ounces

2012 exploration budget $38M-Focus on High Grade Zone extension

Pueblo ViejoLocated in the Dominican Republic

One of the largest gold assets in the world with a projected mine life of more than 25 years

Partnership with Barrick Gold Corporation

23.7 million ounce proven and probable gold reserve

Goldcorps interest represents 9.5 million ounces

First gold expected mid-2012

Goldcorp's 40% share of estimated annual gold production in its firstfive years is415,000-450,000ounces at a total cash cost of $250-$275 per ounce.

ManagementCharles Jeannes, President & CEOAppointed President & CEO in December 2008Previously was Executive Vice President, Corporate DevelopmentFormer Executive Vice President, Administration, General Counsel and Secretary of Glamis Gold (1999 -2006)Broad experience in mining transactions, public and private financing, permitting and international regulationB.A. from University of Nevada and Law degree from University of Arizona

ManagementLindsay Hall, Executive Vice President & CFOAppointed Executive Vice-President and CFO on April 2006

Previously held the position of Vice-President, Finance, for Westcoast Energy

Chartered Accountant with extensive experience in senior financial positions in the energy industry

B.A. in Economics and a Bachelor of Commerce from the University of Manitoba

Financial Statement AnalysisFinancial Highlights

Balance Sheet

Income Statement

Statements of Cash Flows

Gold Price ForecastGold forecasted to increase or stay high until 2014-2015 when interest rates are expected to increase and the U.S. central bank to start unwinding asset purchases

Negative real interest rates a big factor in golds strength

The central bank does not plan to unwind its portfolio until it starts to raise interest rates, meaning that it currently projects that the first asset sales would happen no sooner than early in 2015.http://www.nytimes.com/2012/02/16/business/economy/fresh-asset-purchases-unlikely-fed-minutes-show.htmlRecommendation

Buy & Hold 2-3 Years

Market profile

P/E is 22.61Forward P/E is 15.98Annual Dividend 0.4Yield is just 1.6However, there was a huge buying on the market recently72Stocks

1-year stock price

1 year stock price Vs. S&P/TSX

5-year Stock Price

Because of the events in Japan in March 2011, the stock price decreased sharply.Today, it is like a recovery which is rebounding from the bottom.765-year Return Vs. S&P/TSX

It is certainly underperformed, but the shape is similar.775-year Return Vs. M&M

MM stands for the mining industry.It is still underperformed compared to m&m.785-year Return Vs. Price of Uranium

From this graph, we can see that the poor performance is mainly due to the huge decrease on the Uranium price.Uranium price decreased almost 70% from 2009 to 2010 and just rebounded back to 60% in 2011.That really hurts for a company selling uranium.79Overviewhead office is in Saskatoon, Saskatchewan. one of the worlds largest uranium producers, with uranium assets on three continents. Nuclear energy plants around the world use our uranium products to generate one of the cleanest sources of electricity available today. Its operations and investments span the nuclear fuel cycle, from exploration to electricity generation.Business SegmentsIt has three segments:UraniumFuel servicesElectricity

Uranium has the highest profit margin.It is certainly the major business of Cameco.81UraniumOne of the worlds largest uranium producers and in 2011 accounted for about 16% of the worlds productionHave controlling ownership of the worlds largest high-grade reserves, with ore grades up to 100 times the world average, and low-cost operationsMineral reserves: approximately 435 million pounds proven and probableMineral resources: approximately 254 millon pounds measured and indicated and 318 million pounds inferred

Fuel ServicesIt is and integrated uranium fuel supplier, offering refining, conversion and fuel manufacturing services.It has a 24% interest in Global Laser Enrichment. GLE is testing a third-generation technology that, if successful, will use lasers to commercially enrich uranium.This is a very interesting part, because the other investor of this company is GE. It has 50% interest in this company. If this technology works, this 24% interest will worth a lot.85ElectricityGenerate clean electricity through 31.6% interest in the Bruce Power Limited Partnership (BPLP) which operates four nuclear reactors.Can generate 3,260 megawatts (about 18% of Ontarios electricity)Strengthsa large portfolio of low-cost mining operations and geographically diverse uranium assetscontrolling interests in the worlds largest high-grade uranium reservesextensive mineral reserves and resources located near our existing infrastructureexcellent growth potential from existing assets, combined with an advanced global exploration programmultiple sources of conversion and the ability to adjust production in response to changing market signalsa worldwide marketing presence and a strong, creditworthy customer basean extensive portfolio of long-term sales contracts supported by long-life assetsinnovative technology and experience operating in technically challenging environmentsa leader in corporate social responsibilitybuilding long-term, trusting relationships with communities impacted by our operationsan enterprise-wide risk management system tied directly to our strategy and objectivesbalanced financial management focused on adding value for our shareholders while positioning us for growthamong the first to build relationships in emerging markets Industry Prices

It reflects the increase of uranium price from 2010 to 2011.88Uranium Prices

The long-term price is more smooth compared to spot price.89World uranium production and consumption

After the events in Japan, a number of reactors were taken offline and a number of new reactor startups were delayed as in creased safety checks were required.

It is expected that world consumption will increase by 6% in 2012 as delayed new reactors come online.It looks like the production is catching up with the consumption90New reactor outlook96 net new reactors will start up by 2021.

Today there are 63 reactors under construction around the world. China continues to lead the growth, with 26 reactors under construction and dozens more planned.

China needs efficient clean new energy during its development. Nuclear power would be its best chooice.91StrategyIncrease annual uranium production to 40 million pounds by 2018 and to invest in opportunities across the nuclear fuel cycle that we expect will complement and enhance our business.Our exploration efforts have increased uranium mineral reserves and resources at our operations. We have direct interests in almost 75 active exploration projects in eight countries, over 110 experienced professionals searching for the next generation of deposits, and ownership interestshave a dedicated team looking for acquisition opportunities that we expect will further add to our production support our sales activities, and complement and enhance our business in the nuclear industryManagement

Management

Management

Financial Statement AnalysisBalance Sheet

Income Statement

Cash Flows

Recommendation

Buy

Stock StructureTwo types of stocks:Class ARight to 100 votes per shareTCK AOption of the holder to convert to a 1 Class B stockAllowed to issue unlimited number of Class A stocks without par valueAs of February 8, 2012 (release of 2012 statements), 9,353,470 shares outstanding

Class BRight to 1 votes per shareTCK BAllowed to issue unlimited number of Class A stocks without par valueAs of February 8, 2012 (release of 2012 statements), 576,597,478 shares outstanding

Difference between TCK A and TCK B stocks. Explain why we are using TCK B.

Both stocks share rank equally102Stock Snapshot (Feb 22, 2012)

Stock Price 1 Year Price Movement

Overall trend up to October 2011 is decreasing a series of collective agreement renewals outstanding, electrolyte leaks, and a strike notice. but afterwards it started to turn into an upwards trend announcement of acquisition. Resolution of all 2011 renewals. 1041 Year TCK vs. TTMN

TCK.b. is orange and TTNM is 1

Follows capped index TCK is diversified across multiple minerals and materials so it helps stay close to the index.

1051 Year TCK vs. S&P/TSX Composite

TCK is orange. Composite is blue. It is clear that TCK changes in price is larger than the composite but generally follows the trend of the industry.

106Technical Analysis50 (cyan) and 200 (yellow) moving averages 1 Year Horizon

Over the past year, theyve had a long downward trend. Only one signal is present between june 2011 and july 2011 -> the shorter MA crosses the longer MA from above indicating a short position. 107Stock Price 5 year Price Movement

The 2008 financial crisis clearly affected TECK as indicated by the drop in stock prices. However, overall, they have greatly improved since then to approximately the same level prior. 1085 Year TCK vs. TTMN

Same reason as before1095 Year TCK vs. S&P/TSX Composite

TCK is orange. Composite is blue. It is clear that TCK changes in price is larger than the composite but generally follows the trend of the industry. 110Technical Analysis50 (cyan) and 200 (yellow) day moving averages 5 Year Horizon

Overall, this company has long-lasting trends. 1112011 HighlightsRecord annual revenues of $11.5 billionRecord annual copper productionAnnounced a 33% increase of semi-annual dividend on class A common and class B subordinatePurchased for cancellation approximately 4.8M of class B subordinate for $171 millionIn November 2011 submitted regulatory application for the Frontier oil sands projectIn Jan 2012, announced agreement to acquire SilverBirch Energy Corporation (full ownership of SilverBirch) for bitumen

This slide contains positive 2011 highlights1122011 HighlightsOperating costs increased due to higher input costs, lower grades and higher stripping ratios at many of their mines. Coal sales have declined though due to the decline in steel prices, making steel producers hesitant in the purchase of raw materials.

This slide contains negative 2011 highlights113Operations

Teck Resources focuses on mining copper, Coal, and Zinc, including refining these mineral. Currently, these mines exist in North and South America but they have offices positioned globally.

Teck recently started investing into the energy sector with its first operations in the Wintering Hills wind power project in a joint venture with Suncor Energy. The Frontier and Equinox project in the oil sands located above Fort McMurray is expected to begin in 2021 and the Fort Hills Project is anticipated to go-live in 2016 if approved; these projects are for the extraction of bitumen, commonly known as asphalt.

114Mines and RefineriesHighland Valley CopperOwns 97.5% of the mine/refineryAnnual copper production ranges between 100,000-150,000 tonnesApproved $58 million project to increase throughput up to an estimated average of 125,000 per yearAntaminaOwns 22.5% of the min/refineryProduced 333,700 tonnes of Copper (10.6% more than the previous year)Zinc production decreased by 64% to 235,400 tonnesPlanned mill expansion to increase mine productivity

115Mines and RefineriesQuebrada BlancaOwns 76.5% of the mine/refineryTransitioning to a lower grade dump leach operationEstimated average of 65,000 to 70,000 tonnes of copper for 2012

Carmen de AndacolloOwns 90.0% of the mine/refineryEstimated average of 70,000 to 75,000 tonnes of copper for 2012Studies to increase copper throughput are planned to continue and complete after the first quarter of 2012

116Mines and RefineriesDuck PondProduced less copper in 2011 by 13% to 13,200 tonnes when compared to 2010Produced more zinc in 2011 by 5.45% to 21,300 tonnes when compared to 2010

Teck Coal PartnershipIncreased productivity by increasing mobile equipment and replacing older haul trucks and shovelsHowever, 2011 coal production (22,785, 000) was less than the previous year (23,109,000)

Mines and RefineriesTrailProduces Zinc (291,000 tonnes in 2011), Lead (85,600 tonnes in 2011), and Silver (21,7 million ounces in 2011)Estimated average of 280,000 290,000 tonnes of zinc, 85,000 tonnes of lead, and 21 million ounces of silver for 2012

Red DogProduces Zinc (572,200 tonnes in 2011) and Lead (84,000 tonnes in 2011)Installed 2 isaMills to improve recovery of zinc throughout the 2011 fiscal yearEstimated average of 525,000 545,000 tonnes of zinc and 70,000 tonnes of lead for 2012

Energy InvestmentsWintering Hills Wind Power ProjectOwns 30% of this project with SuncorWent into production in November 2011Installed 55 1.6MW wind turbinesTeck Resources Limited share of expected power is 80GWhs, which will offset approximately 50,000 tonnes of carbon-dioxide equivalentsProduction in Tonnes (000s)

Note 1 states that the values displayed is the total resources gathered although they may only own a portion of one and more mines.

Note 2 states that pre-commercial copper from Carmen de Andacollo mining site ending on September 30, 2011 were included in the fourth quarter calculation under copper.

Although they produced less copper cathode and coal was produced, revenues were greater than 2011 because of price increases as noted in the highlights.

120Recent NewsJune 22, 2011Approval by the TSX to repurchase up to 40 million Class B shares (8.47% of outstanding Class B shares as of June 15, 2011)

October 26, 2011Announced a dividend of $0.40 per share on Class A and B shares, payable on January 3, 2012A 33% increase compared to the previous dividend payment (announced on April 19, 2011)

Recent NewsJanuary 9, 2012Announced to acquire SilverBirch EnergyPrimary goal is to gain the other 50% of the frontier project

February 16, 2012Announced to issue $500 million USD of senior unsecured notes at 3.00% due 2019Announced to issue $500 million USD of senior unsecured notes at 5.200% due 2042To raise funds, in addition to its current cash, to repay outstanding principle ($530 million USD) on 9.75% notes due 2014 and approximately half of the principle on 10.75% notes due 2019 ($521 million USD) on March 19, 2012

Future ProjectsMill Modernization

Quebrada Blanca Phase 2

Relincho

Galore CreekMill Modernization project - complete in 2013 4th quarter to improve throughput by 10% of the Highland Valley Copper mill.

Quebrada Blanca Phase 2 ongoing feasibility studies to increase production of Quebrada Blanca in 2016

Relincho Ongoing research on this mine with expectation estimates of 180 000 tonnes per year of copper and 6 000 of molybdenum per year

Galore Creek Study completed in 2011 approved a $25 million budget for 2012 to investigate and perform field work on feasibility of this option for copper production.

123Future ProjectsFrontier and Equinox project

Fort Hills project

Quintette projectFrontier project: expected capacity 277 000 barrels per day of bitumen and equinox would be a satellite location. Currently under review and can take up to three years for approval. As previously mentioned, they have announced to acquire 100% of this operation.

Forthills project: research and feasibility research on increase bitumen production at their current fort hills project location

Quintette project:

124Norman B. KeevilChairman of the Board since 2001

Joined as the Vice President of Exploration in 1962 and then became the Executive Vice President in 1968 until 1981. Afterward, he became the president and CEO until 2001.

Bachelors of Science from the University of Toronto and a Ph.D. from The University of California at Berkeley.

Afterward, he received a Doctors of Law (LL.D.) honorary degree from the University of British Columbia

Director of the Mining Association of Canada and has been in the Canadian Mining Hall of Fame since 2004

Donald R. LindsayPresident and CEO of Teck Resources Limited

Joined as the Present in January 2005 and later as the CEO in April 2005

Bachelor of Science, Honors from Queens University and received a MBA from Harvard Business School

Currently a Chairmen of International Zinc Association and is a director of Manulife Financial Corporation

Financial Statement AnalysisProfit by Location

Highland Valley Copper gross profit is low due to a $44 million labour settlement charge

Invested into mobile equipment and workforce for expansion in coal productionAlthough they produced less copper cathode and coal was produced, revenues were greater than 2011 because of price increases as noted in the highlights.

Overall, revenues have grown for all business areas.

128Balance Sheet

Raising cash for buyout.

129Statement of Income

The totals from the previous slide is summarized in the statements of income 130Statement of Income Notes

131Cash Flow Statements

Recommendation

BuyReferencesUranium Information: http://world-nuclear.org/info/inf49.htmlCopper Spot rate graph: http://www.kitcometals.com/charts/copper_historical_large.htmlCopper top pick headline: http://business.financialpost.com/2011/12/22/copper-and-oil-top-picks-in-2012-scotia/Coal price chart: http://www.indexmundi.com/commodities/?commodity=coal-australian&months=60Coal outlook: http://coalinvestingnews.com/4564/2012-coal-market-outlook-china-demand-price/Zinc current price: http://www.lme.com/zinc.aspCanadian Zinc Info: http://www.nrcan.gc.ca/minerals-metals/business-market/canadian-minerals-yearbook/2009-review/4166Most industry figures: http://www.mining.ca/site/index.php/en/Gold Pricing: http://www.kitco.com/scripts/hist_charts/yearly_graphs.plxUranium notes: http://contraryinvesting.com/commodities/uranium/why-uranium-is-still-a-buy-maybe-now-more-than-ever/