Teck Resources warns of $1.13B assign if Frontier oilsands cave rejected

Teck Resources Ltd. says it will take an spoil assign of about $1.13 billion if a sovereign supervision decides not to approve a due Frontier oilsands mining plan in northeastern Alberta.

An spoil cost can be enclosed underneath losses when a book value of an item exceeds its recoverable amount, reflecting the diminishment of a asset’s quality, strength or value.

A preference on a $20.6-billion, 260,000-barrel-per-day plan in northeastern Alberta, that is approaching to furnish about 4 million tonnes of hothouse gas emissions per year over 40 years, is approaching before a finish of a month.

At a discussion in Banff in January, Teck CEO Don Lindsay pronounced building a plan requires “three P’s” — tube access, a partner and a right commodity prices.

On Friday, a association pronounced a Frontier plan has been optimized with softened record and is believed to be “technically possibly and commercially viable,” notwithstanding revoke commodity cost projections.

“Assuming a certain sovereign preference statement, we intend to pursue serve optimization studies and have not identified an spoil indicator as during Dec. 31, 2019,” a Vancouver-based miner said.

“A disastrous preference would outcome in an spoil of approximately $1.13 billion in a entertain in that a preference is received.”

$999 million in after-tax spoil charges

On a discussion call Friday to plead a company’s fourth-quarter results, Lindsay had small to contend about Frontier.

“It’s right before sovereign cupboard now,” he said. “We don’t know what a decision’s going to be and, we think, we’ve come this far, we’re only going to wait and see what a answer is.”

Teck reported $999 million in after-tax spoil charges for a 3 months finished Dec. 31.

That enclosed a assign of $910 million due to revoke expectations for destiny oil prices for prolongation from a 21.3 per cent interest in a Fort Hills oilsands cave operated by partner Suncor Energy Inc.

Teck’s financial earnings from Fort Hills will approaching arise over a subsequent integrate of years as some-more tube trade ability comes online and as Suncor boosts outlay with incremental projects, Lindsay said.

But he combined that a association will demeanour during spinning off or offered Fort Hills — along with Frontier — if those improvements aren’t famous by a marketplace in Teck’s share price.

Teck shares down

Shares in Teck were down $2.48 or about scarcely 15 per cent during $14.61 in trade on a Toronto Stock Exchange after a association reported Friday a detriment attributable to shareholders of $891 million or $1.62 per diluted share for a entertain finished Dec. 31. That compared with a distinction of $433 million or 75 cents per diluted share a year earlier.

Revenue fell to scarcely $2.66 billion compared with scarcely $3.25 billion in a fourth entertain 2018.

On an practiced basis, a association reported a distinction attributable to shareholders was $122 million or 22 cents per diluted share compared with an practiced distinction attributable to shareholders of $500 million or 86 cents per diluted share in a fourth entertain of final year.

Analysts had approaching an practiced distinction of 40 cents per share, according to financial markets information organisation Refinitiv.

Teck said it has motionless to close down a Neptune shipping depot on a West Coast for 5 months from May to Sep to compare pier ability with reduced spark prolongation and allege construction on a Neptune enlargement approaching to be finished in early 2021.

It pronounced it started 2020 with high levels of steel-making spark register from a mines and is shortening prolongation amid fears a novel coronavirus could revoke direct and out of regard ongoing rail blockades continue to miscarry shipping.

Coal prolongation in 2020 is now approaching to sum between 23 million and 25 million tonnes, down from tangible outlay of 25.7 million in 2019.

Article source: https://www.cbc.ca/news/canada/british-columbia/teck-resources-warns-of-1-13b-charge-if-frontier-oilsands-mine-rejected-1.5471732?cmp=rss