Teck Sources Restricted (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) immediately issued a letter to shareholders reaffirming the sturdy rationale for its pending separation and responding to Glencore’s newest try to frustrate worth creation for Teck shareholders.

• Glencore’s opportunistic proposal hasn’t modified – similar low worth, similar flawed construction, similar materials execution dangers
• Teck has beforehand engaged extensively with Glencore – for six months on basically the identical proposal – and repeatedly decided it isn’t in the most effective curiosity of Teck shareholders
• The selection for shareholders is evident: vote FOR Teck’s separation plan to create the world’s pre-eminent, pure-play base metals firm with a larger array of worth creating alternatives

The complete textual content of the letter is as follows:

April 19, 2023

Pricey Shareholders,

A vote for the separation is a vote to create two world-class, pure play mining corporations, offering each unparalleled publicity to a premier base metals platform and a lovely alternative to stay invested in a high-quality, high-margin steelmaking coal enterprise. Voting FOR the pending separation opens the door to worth maximizing alternatives and offers certainty with no execution danger. In actual fact, separation may be accomplished in as little as six weeks from immediately and the separation – and the additional path to worth – has the clear assist of our class A shareholders.

Glencore’s proposal is just not a practical or viable choice. Its newest presentation and open letter embody no adjustments from its earlier presents, which now we have rigorously reviewed and rejected. This can be a distraction – a clear and opportunistic try to disrupt our separation plan with an ill-defined and extremely unsure proposal. Importantly, Glencore admits that they’re uniquely positioned to make a proposal for Teck in its present type; the pending separation will right that by opening up a wider vary of alternatives for worth enhancement.

Nothing has modified – similar low worth, similar flawed construction, similar materials execution dangers

Glencore’s motivation is apparent – they’re looking for to opportunistically frustrate the vote and pre-empt a aggressive future panorama, which is nice for Glencore, and unhealthy for Teck’s shareholders. Glencore’s proposal is complicated, ill-defined, with the chance of considerable tax impacts, and worth loss for our shareholders if it had been to proceed. It additionally carries important execution danger, requiring intensive regulatory approvals, and wouldn’t shut for as much as two years, if ever. In distinction, Teck’s pending separation can be accomplished in as little as six weeks.

The premium in Glencore’s proposal continues to undervalue Teck, relies on a extremely unstable share-based consideration, and doesn’t replicate the worth of the bottom metals portfolio that can be unlocked by the creation of Teck Metals. Underpinned by a beneficial long-term copper worth development and copper development pipeline, Teck Metals can be distinctive within the business as a pure-play, high-growth copper car, with important worth upside, which shareholders would notice along with possession of EVR. Compared, the Glencore proposal seeks to amass that worth pre-emptively for pennies on the greenback. It’s a clear try to switch worth from Teck’s shareholders to Glencore’s.

Glencore’s proposal additionally fails to deal with materials dangers that now we have repeatedly recognized, together with publicity to important oil buying and selling within the base metals enterprise, extreme execution danger and regulatory uncertainty, and unacceptable jurisdictional and ESG danger. Below Glencore’s proposal, the bottom metals enterprise can be completely contaminated by one of many world’s largest oil buying and selling companies which might contribute tens of billions of {dollars} in income to the mixed firm. This important oil publicity would destroy worth within the base metals portfolio.

Teck has extensively engaged with Glencore

Glencore complains that Teck has refused to have interaction, which is just not true. Teck’s Board has now rigorously reviewed the 2 latest and considerably related proposals from Glencore, each of which it rejected. We clearly communicated our issues and rationale for rejecting the proposals in letters to the Chairman of Glencore’s Board.

These proposed transactions had been solely barely modified from Glencore’s proposal from 2020, which we engaged on with Glencore for over six months earlier than figuring out it – like Glencore’s subsequent proposals – was not in the most effective pursuits of our shareholders. Additional discussions in late 2022 and early 2023 confirmed their proposal remained basically unchanged, with the identical flaws, dangers and uncertainties.

Teck’s separation creates choices for additional worth enhancement

Glencore acknowledges the strategic optionality that can be created by our separation, which is why they’re performing now. Glencore says in its letter: “We consider there are a restricted variety of events which are prepared or capable of purchase each materials metals and coal money flows – Glencore’s proposal is exclusive on this regard…”. That’s the state of affairs immediately, pre-separation, which is precisely why transacting with Glencore now could be inadvisable.

One of many largest challenges within the business immediately is the efficient separation of base metallic belongings from carbon-intensive belongings. That is precisely what our separation will obtain, tax successfully, and in lower than six weeks’ time. Additional, the royalty and most popular shares in our transition capital construction are enticing and liquid devices. There are many avenues post-separation for Teck Metals to monetize the transition capital construction, within the context of a company transaction or in any other case, to create additional worth.

Dr Keevil’s place is evident

Dr. Keevil’s formal assertion was clear:

“I’d assist a transaction – whether or not or not it’s an working partnership, merger, acquisition, or sale – with the appropriate companion, on the appropriate phrases for Teck Metals after separation. Primarily based on my many years of expertise constructing a profitable mining firm, I consider that pursuing a sale or merger transaction now would rob our shareholders of serious post-separation worth.

I absolutely agree with Teck’s Board that there isn’t any deal to be accomplished pre-separation with Glencore or some other celebration.”

Conclusion

Now is just not the appropriate time to pursue a transaction with Glencore. We absolutely consider that Glencore’s proposals are nothing greater than an opportunistic try to intrude with the vote at Teck’s annual and particular assembly of shareholders on April twenty sixth to their profit and to the detriment of our shareholders.

The selection for shareholders is evident: vote FOR Teck’s separation plan to create the world’s pre-eminent, pure-play base metals firm with a larger array of worth creating alternatives.

For info on find out how to vote, go to www.teckagsm.com .

Sincerely,

Jonathan Value
CEO, Teck

Cautionary Notice Concerning Ahead-Wanting Statements
This information launch incorporates sure info which constitutes “forward-looking statements” and “forward-looking info” throughout the that means of relevant Canadian securities legal guidelines. Any statements which are contained on this information launch that aren’t statements of historic reality could also be deemed to be forward-looking statements. Ahead-looking statements are sometimes recognized by phrases resembling “could”, “ought to”, “anticipate”, “count on”, “potential”, “consider”, “intend” or the unfavourable of those phrases and related expressions. Ahead-looking statements on this information launch embody, however are usually not restricted to: statements concerning Teck’s deliberate separation transaction, together with the timing thereof, and Teck’s expectations concerning the impacts of any such transaction by way of creating worth for shareholders; statements associated to anticipated dangers of Glencore’s proposal, together with with respect to execution, timing and publicity to thermal coal and oil buying and selling, and Teck’s evaluation thereof as in comparison with its personal deliberate separation transaction; statements associated to the chance for future transactions involving Teck Metals or EVR; statements concerning timing and manufacturing ranges of Teck’s QB2 copper mission; statements concerning Teck’s expectations concerning ESG commitments and decarbonization tendencies; and statements with respect to Teck’s enterprise and belongings and its technique going ahead. Readers are cautioned to not place undue reliance on forward-looking statements. Ahead-looking statements contain recognized and unknown dangers and uncertainties, most of that are past the Teck’s management. A number of elements may trigger precise outcomes to vary materially from these expressed within the forward-looking statements, together with, however not restricted to: future actions taken by Glencore in reference to its unsolicited proposal; fluctuations in provide and demand in steelmaking coal, base metals and specialty metals markets; adjustments in aggressive pressures, together with pricing pressures; timing and receipt of requisite shareholder and courtroom approvals; the latest international banking disaster and situations and adjustments in credit score markets; adjustments in capital markets; adjustments in forex and alternate charges; adjustments in and the results of, authorities coverage and laws; and earnings, alternate charges and the choices of taxing authorities, all of which may have an effect on efficient tax charges. Further dangers and uncertainties may be present in our Annual Data Type dated February 21, 2023 underneath “Threat Elements”. Ought to a number of of the dangers or uncertainties underlying these forward-looking statements materialize, or ought to assumptions underlying the forward-looking statements show incorrect, precise outcomes, efficiency or achievements may fluctuate materially from these expressed or implied by the forward-looking statements.

The forward-looking statements contained herein are made as of the date of this launch and, aside from as required by relevant securities legal guidelines, the Firm doesn’t assume any obligation to replace or revise them to replicate new occasions or circumstances. The forward-looking statements contained on this launch are expressly certified by this cautionary assertion.

Investor Contact:
Fraser Phillips
Senior Vice President, Investor Relations & Strategic Evaluation
604.699.4621
fraser.phillips@teck.com

Media Contact:
Dale Steeves
Director, Stakeholder Engagement
604.699.4514
dale.steeves@teck.com