Teck set a number of financial and operating milestones in 2011:

• Annual revenues were up 25 percent from 2010 to a record C$11.5 billion;

• Gross profit, before depreciation and amortization, was a record C$5.8 billion – a 30 percent increase over 2010;

• Record annual profit attributable to shareholders of C$2.7 billion – up 47% from 2010;

• Cash flow from operations, before working capital changes, was a record C$4.6 billion – a 37 percent increase over 2010; and

• Record annual copper production of 321,000 metric tons – up from 313,000 metric tons in 2010.

“2011 was another strong year for Teck. Higher average commodity prices combined with strong operating results contributed to new records for each of revenue, gross profit, profit and cash flow from operations. This allowed us to increase our annualized dividend rate to C80 cents per share. We ended the year with C$4.4 billion in cash, which puts us in a strong position to advance our various expansion projects,” said Teck President and CEO Don Lindsay.

Copper Unit

Gross profit before depreciation and amortization from Teck’s copper business unit decreased by C$102 million in the fourth quarter compared with a year ago, as a result of lower copper prices and a one-time pre-tax C$44 million labor settlement charge at our Highland Valley Copper mine. These items were partly offset by a 12 percent increase in sales volumes due to higher production levels and timing of shipments last year.

Teck’s copper production in the fourth quarter rose by five percent to 89,000 metric tons compared with a year ago, primarily as a result of improved production at Highland Valley Copper, Carmen de Andacollo and Antamina. Copper prices averaged US$3.40 per pound in the fourth quarter of 2011, a decrease of 13 percent from US$3.92 per pound in the same period a year ago.

Teck and NovaGold Resources Inc. completed prefeasibility study for the Galore Creek copper project in July of 2011. Work was completed in the fourth quarter on an advanced engineering program to consider additional development options. As a result of this work, the project partners have approved a C$25 million work program for 2012, which will focus primarily on field work such as infill and geotechnical drilling to support these development options. Some additional engineering and environmental studies will also continue.

In December of 2011, NovaGold announced that it intends to sell its 50 percent interest in Galore Creek.

Coal Unit

Gross profit before depreciation and amortization from Teck’s coal business unit increased by C$209 million in the fourth quarter compared with a year ago, primarily due to significantly higher coal prices. Lower sales volumes and higher unit operating costs partially offset the higher coal prices. Coal production was on target in the fourth quarter, increasing by 11 percent over last year to 6.7 million metric tons. This was the result of the company’s significant investment in mobile equipment and workforce to implement planned expansion.

Unit cost of coal sold in the fourth quarter, before transportation and depreciation charges of C$65 per metric ton, increased C$11 per metric ton, or 20 percent, over the same quarter of 2010 due primarily to increased contractor costs, higher strip ratios and significantly higher prices for diesel and explosives. Teck says that though per-unit production cost is up compared to a year ago, it is down from previous quarters in 2011.

Coal sales of 5.5 million metric in the fourth quarter were below production levels and 7 percent lower than the same period last year. The decrease in fourth quarter sales volume compared with the same quarter in 2010 reflects the weaker market conditions. Global economic conditions and softer steel prices have caused many steel producers to slow their production and be cautious in purchasing raw materials. While Teck continues to develop our production capacity, the company says its plans allow for flexibility to adapt to changes in demand.

Teck realized an average coal price of US$253 per metric in the fourth quarter, which was lower than the record high prices achieved earlier in 2011, but still up 27 percent over the same period a year ago.

Zinc Unit

Gross profit before depreciation and amortization from Teck’s zinc business unit decreased by C$25 million in the fourth quarter compared with a year ago partly due to lower zinc and lead prices and lower sales volumes from Red Dog. Zinc and lead sales volumes from Red Dog declined by 11 percent and 20 percent, respectively, as customers had accelerated deliveries of zinc and lead in the fourth quarter of 2010.

Lead sales were also lower due to reduced annual lead production levels as a result of lower ore grades from the Aqqaluk pit.

Refined zinc and lead production from Trail increased by six percent and 71 percent, respectively, compared with a year ago as a result of improved performance in all areas of the plant, increased throughput, and the impact of maintenance shutdowns in the fourth quarter of 2010.

Red Dog

Red Dog's gross profit before depreciation and amortization decreased by C$54 million in the fourth quarter compared with the same period last year, primarily due to lower metal prices and reduced sales volumes.

Zinc sales volumes from the Northwest Alaska mine in the fourth quarter decreased by 11 percent compared with the same period a year ago as customers had accelerated deliveries of zinc and lead in the fourth quarter of 2010. Lead sales volumes decreased by 20 percent, partly reflecting reduced 2011 annual production levels and acceleration of sales in the fourth quarter of 2010.

Zinc production of 135,300 metric tons rose four percent compared with the same period a year ago primarily as a result of higher throughput. Lead production increased to 22,100 metric tons compared with 17,300 metric tons in the fourth quarter of 2010 as grades and recoveries were affected when mining initial ore from Aqqaluk in the fourth quarter of 2010.

For the year, a new record was achieved for mill throughput at 3.67 million metric tons, three percent higher than the previous year. The higher mill throughput and zinc grades were partially offset by lower recoveries resulting in an additional 34,000 metric tons of zinc production in 2011, a six percent increase over 2010. Lead production for 2011 declined by 26,000 metric tons, as the higher throughput was offset by the lower grade and recovery of the near surface Aqqaluk ore.

A major capital project was successfully commissioned in December with the installation of the two IsaMills in the zinc re-grind circuit. During 2012, circuit performance will be optimized to take advantage of a finer grind to allow for improved recovery of the Aqqaluk ore in comparison to processing the same ore through the older tower mills.

Zinc from Red Dog available for sale from Jan. 1 to the beginning of the 2012 shipping season totals 205,000 metric tons. Zinc sales volumes in the first quarter of 2012 are estimated to be approximately 95,000 metric tons. All offsite lead inventories had been sold as of the end of the year.

Red Dog’s production of contained metal in 2012 is expected to be in the range of 525,000 to 545,000 metric tons of zinc and 70,000 metric tons of lead.