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Teck Assets warns of $1.13B mark if Frontier oilsands mine rejected


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Teck Assets warns of $1.13B mark if Frontier oilsands mine rejected

Teck Resources Ltd. says it will take an impairment charge of about $1.13 billion if the federal government decides not to approve its Frontier oilsands mining project.The Frontier oilsands mine is a proposed 292-square-kilometre open-pit operation, located between Fort McMurray and Fort Chipewyan, pictured above, in northeastern Alberta. (Jeff McIntosh/CP)Teck Resources Ltd. says it will take an…

Teck Assets warns of $1.13B mark if Frontier oilsands mine rejected

Teck Assets Ltd. says this would possibly gain an impairment mark of about $1.13 billion if the federal authorities decides now to not approve its Frontier oilsands mining project.

The Frontier oilsands mine is a proposed 292-square-kilometre start-pit operation, located between Castle McMurray and Castle Chipewyan, pictured above, in northeastern Alberta. (Jeff McIntosh/CP)

Teck Assets Ltd. says this would possibly gain an impairment mark of about $1.13 billion if the federal authorities decides now to not approve its proposed Frontier oilsands mining project in northeastern Alberta.

An impairment mark would possibly possibly perhaps also even be included below expenses when the book worth of an asset exceeds its recoverable quantity, reflecting the diminishment of the asset’s quality, energy or worth.

A dedication on the $20.6-billion, 260,000-barrel-per-day project in northeastern Alberta, which is anticipated to maintain about four million tonnes of greenhouse gasoline emissions per one year over 40 years, is anticipated sooner than the tip of the month.

At a conference in Banff in January, Teck CEO Don Lindsay acknowledged building the project requires “three P’s” — pipeline access, a accomplice and the coolest commodity costs.

On Friday, the firm acknowledged the Frontier project has been optimized with improved technology and is believed to be “technically feasible and commercially viable,” regardless of lower commodity mark projections.

“Assuming a definite federal dedication observation, we intend to pursue extra optimization experiences and indulge in no longer identified an impairment indicator as at Dec. 31, 2019,” the Vancouver-basically basically based miner acknowledged.

“A antagonistic dedication would lead to an impairment of roughly $1.13 billion within the quarter wherein the dedication is received.”

$999 million in after-tax impairment costs

On a conference name Friday to focus on the firm’s fourth-quarter outcomes, Lindsay had tiny to claim about Frontier.

“It be honest correct sooner than federal cupboard now,” he acknowledged. “We manufacture no longer know what the dedication’s going to be and, I center of attention on, now we indulge in reach this a ways, we’re honest going to relieve and seek what the acknowledge is.”

Teck reported $999 million in after-tax impairment costs for the three months ended Dec. 31.

That included a mark of $910 million due to lower expectations for future oil costs for production from its 21.3 per cent stake within the Castle Hills oilsands mine operated by accomplice Suncor Energy Inc.

Teck’s financial returns from Castle Hills will likely upward thrust over the following couple of years as extra pipeline export skill comes online and as Suncor boosts output with incremental initiatives, Lindsay acknowledged.

But he added that the firm will inquire of at spinning off or selling Castle Hills — along with Frontier — if those improvements are no longer identified by the market in Teck’s allotment mark.

Teck shares down

Shares in Teck had been down $2.48 or about on the subject of 15 per cent at $14.61 in shopping and selling on the Toronto Inventory Alternate after the firm reported Friday a loss attributable to shareholders of $891 million or $1.62 per diluted allotment for the quarter ended Dec. 31. That compared with a profit of $433 million or 75 cents per diluted allotment a one year earlier.

Income fell to on the subject of $2.66 billion compared with on the subject of $3.25 billion within the fourth quarter 2018.

On an adjusted basis, the firm reported a profit attributable to shareholders used to be $122 million or 22 cents per diluted allotment compared with an adjusted profit attributable to shareholders of $500 million or 86 cents per diluted allotment within the fourth quarter of ultimate one year.

Analysts had anticipated an adjusted profit of 40 cents per allotment, in retaining with financial markets details agency Refinitiv.

Teck acknowledged it has made up our minds to shut down its Neptune shipping terminal on the West Fly for five months from May perhaps perhaps also to September to test port skill with reduced coal production and come construction on the Neptune expansion anticipated to be executed in early 2021.

It acknowledged it started 2020 with high stages of metal-making coal stock from its mines and is decreasing production amid fears the unusual coronavirus would possibly possibly perhaps decrease seek details from and out of self-discipline ongoing rail blockades continue to interrupt shipping.

Coal production in 2020 is now anticipated to total between 23 million and 25 million tonnes, down from actual output of 25.7 million in 2019.

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