TECK

Teck Resources Ltd Class B

$53.76 USD 26.3B market cap February 1, 2026

Teck Resources Ltd Class B TECK BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

Price$53.76

Market CapUSD 26.3B

EVUSD 28.7B

Net DebtUSD 2.4B

Shares481M

2 BUSINESS

Teck Resources is a Canadian diversified miner transforming into a pure-play copper company through its 2024 steelmaking coal divestiture ($8.6B) and pending Anglo American merger. The company operates the QB2 copper mine in Chile (ramping to 270K tons), zinc operations at Red Dog (Alaska) and Trail (BC smelter), plus interests in Antamina (copper/zinc, Peru) and Highland Valley (copper, BC). Revenue is generated from copper concentrate sales (~60%), zinc concentrate and refined zinc (~30%), and byproducts (molybdenum, lead, silver).

Revenue: USD 9.1B Organic Growth: Copper production +7% YoY (excluding QB2 ramp-up)

3 MOAT NARROW

Cost advantage from QB2's low strip ratio and world-class 10 billion ton reserve base providing 25+ year mine life. Tax stability agreement in Chile through 2037. Post-Anglo merger, combined entity will be top-5 global copper producer with 1.2M tons annual production. QB/Collahuasi adjacency creates $1.4B annual synergy potential. However, copper is ultimately a commodity - moat is cost position on the global supply curve, not true pricing power. Moat expected to widen to MODERATE post-merger completion.

4 MANAGEMENT

CEO: Jonathan Price (since 2022)

Strong financial discipline: Successfully executed $8.6B steelmaking coal sale at 5x EBITDA, returned $1.8B to shareholders in 2024, executing $3.25B buyback program (70% complete). Approved Highland Valley mine life extension (C$2.1-2.4B). Mixed operational execution at QB2 with repeated guidance cuts. Insider ownership modest at 2.3%.

5 ECONOMICS

-0.1% (2024, depressed by QB2 ramp costs) Op Margin

3-4% (current), target 12-15% at full production ROIC

USD 0.15B (2024) FCF

~3.0x (manageable) Debt/EBITDA

6 VALUATION

FCF/ShareUSD 0.31

FCF Yield0.6%

DCF RangeUSD 50 - 65

Base case: QB2 reaches 270K tons by 2027 at $2.20/lb cash cost, copper price averages $4.25/lb, 10% discount rate, 2% terminal growth. Bull case adds Anglo merger synergies ($800M+) and QB/Collahuasi adjacencies ($1.4B EBITDA uplift). Bear case assumes continued QB2 underperformance and copper below $3.75/lb.

7 MUNGER INVERSION -21%

Kill Event	Severity	P()	E[Loss]
Copper price collapse (<$3/lb for 2+ years)	-50%	15%	-7.5%
QB2 permanent impairment (geological/technical failure)	-40%	10%	-4.0%
Anglo American merger fails (regulatory rejection)	-25%	15%	-3.75%
Chile nationalization or adverse taxation	-35%	5%	-1.75%
China demand destruction (property collapse)	-40%	10%	-4.0%

Tail Risk: Multiple risks could compound: merger failure + copper crash + Chile policy change could result in 60-70% permanent capital loss. However, strong balance sheet ($7.6B cash) provides cushion against all but extreme scenarios.

8 KLARMAN LENS

Downside Case

Anglo merger terminated, QB2 continues to underperform (150K tons instead of 270K), copper price drops to $3.25/lb during global recession. Stock falls to $25-30 (0.5-0.6x book value), reflecting stranded asset concerns and destroyed management credibility.

Why Market Wrong

Market is frustrated with repeated QB2 guidance misses and values Teck on depressed current earnings (32x P/E). The Anglo merger transforms scale and competitive position. QB2 issues are engineering challenges, not geological problems - the 10B ton resource base is real. David Einhorn's 3.8% position validates the copper transition thesis.

Why Market Right

ROE has been structurally below cost of capital for most of Teck's history. QB2 has disappointed at every turn - why believe management now? Copper prices are elevated and China property weakness could pressure demand. Anglo merger adds complexity and may not close. The market may correctly see Teck as a capital-intensive, low-return business even with good assets.

Catalysts

1. Anglo merger close (expected H1-H2 2026) - 85% probability 2. QB2 reaches steady state production (Q4 2026-2027) - 70% probability 3. QB/Collahuasi synergy realization (2027-2028) - 60% probability 4. Copper price sustained above $4.50/lb - 40% probability

9 VERDICT WAIT

B+ T2 Resilient

Strong Buy$35

Buy$42

Sell$80

Teck Resources offers compelling copper exposure with world-class assets (QB2's 10B ton resource base), superinvestor validation (Einhorn 3.8%), and transformative merger catalyst (Anglo American creates top-5 global copper producer). However, current valuation of 32x depressed earnings and 1.55x book provides insufficient margin of safety for a business with 1.6% ROE, significant execution risk, and cyclical commodity exposure. WAIT for 22%+ pullback to $42 (Accumulate) or 35% pullback to $35 (Strong Buy).

🧠 ULTRATHINK Deep Philosophical Analysis

TECK - Ultrathink Analysis

The Real Question

What are we actually solving by owning Teck Resources?

At its core, this is a bet on whether the global energy transition's insatiable copper demand will reward patient owners of world-class, long-lived copper assets. The question isn't whether copper is essential - it obviously is. The question is whether Teck can convert its geological advantage (QB2's 10 billion ton resource base) into sustainable shareholder returns, and whether we're paying the right price for that optionality.

The deeper question: Is Teck a copper company with temporary operational problems, or an operationally challenged company that happens to own copper?

David Einhorn's 3.8% position suggests the former. Management's track record suggests... we're not sure yet.

Hidden Assumptions

Assumptions the Market is Making

QB2 will eventually work. The market prices in eventual success at QB2, just delayed. What if it never reaches design capacity? The $8B+ investment could be permanently impaired.
The Anglo merger closes. Regulatory risk in Chile, Canada, UK, and elsewhere is being dismissed. What if national interest concerns in Chile about foreign ownership of critical minerals derail the deal?
Copper prices remain elevated. At $4.25/lb, copper is near all-time highs. The market assumes energy transition demand justifies these prices structurally. What if recycling, substitution, or new supply (Kamoa-Kakula, Resolution) breaks the supply-demand thesis?
Management can be trusted on timelines. They've missed QB2 guidance repeatedly. Why believe them now on 2027 steady-state?

Assumptions I Might Be Making Wrong

That current earnings don't matter. I'm dismissing 32x P/E as "depressed earnings." But what if QB2 costs are structural, not temporary?
That David Einhorn is right. Great investors make mistakes. Einhorn's record in mining is limited. His position could be wrong or sized for different reasons than mine.
That the merger is value-accretive. Large mergers often destroy value. Anglo American has its own problems. 1+1 might equal 1.5.

The Contrarian View

What would have to be true for the bears to be right?

The bear case isn't crazy. Here's the steelman:

Teck has never been a consistently profitable business. Look at the 10-year ROE history: it averages below cost of capital. The company has earned exceptional returns only during commodity super-cycles (2021-2022), and even then, those returns were fleeting.

QB2 is the biggest bet in Teck's history, and it's stumbling. The tailings management facility issues aren't just "engineering challenges" - they represent a fundamental underestimation of operational complexity in Chilean high-altitude mining. The fact that management keeps missing guidance suggests either incompetence or a structural problem they're not disclosing.

The Anglo merger is a desperation move by two companies that can't compete with the true copper giants (Codelco, BHP, Freeport). Scale doesn't automatically create value - it often just creates bureaucracy. The $800M synergy target is management's estimate, not reality.

Most damning: copper mining has no moat. It's a cost-curve business. Teck isn't the lowest-cost producer. In a downturn, the marginal producers die, and Teck is closer to the margin than investors realize.

If this analysis is correct, Teck could trade at $25-30 (0.5x book) for years, like it did from 2015-2020.

Simplest Thesis

Teck is a bet on copper demand exceeding supply through 2030, with QB2's world-class resource base providing leverage to copper prices - but only if management can finally execute.

That's it. Everything else - the merger, the synergies, the zinc business, the dividends - is noise. If copper rips and QB2 works, Teck is a multi-bagger. If either fails, it's dead money or worse.

Why This Opportunity Exists

The mispricing (if it exists) stems from:

Operational credibility gap: Management has missed QB2 targets repeatedly. Institutional investors have moved on to Freeport, Southern Copper, or First Quantum. Teck is in the "prove it" penalty box.
Merger uncertainty: Event-driven investors hate complex cross-border mining mergers with regulatory risk. They'd rather wait until it closes.
Commodity volatility premium: Mining stocks always trade at discounts to DCF because investors demand premium returns for volatility. Teck's beta of 1.54 means it amplifies market moves, which institutions avoid.
Canada discount: Canadian-listed companies (Teck also trades on TSX) often trade at discounts to US peers due to smaller investor base and currency concerns.

Will this mispricing correct?

The merger catalyst is real. If Anglo Teck becomes a $50B+ market cap, top-5 copper company, it will attract index flows and institutional ownership that Teck alone never could. The merger is the forcing function that could close the valuation gap.

But... this only matters if the merger closes AND QB2 works. Two contingent events, not one.

What Would Change My Mind

I would abandon this thesis immediately if:

Anglo merger terminated - removes the scale catalyst and validates market skepticism
QB2 production falls below 150K tons annualized in any quarter - suggests structural impairment
Chile implements >50% effective royalty - destroys unit economics at QB2
Copper price falls below $3.50/lb for 6+ months - suggests demand thesis is wrong
Management sells significant personal holdings - reveals lack of confidence
Another major copper producer announces QB2-sized discovery - undermines scarcity thesis

I would significantly increase confidence if:

QB2 hits 60K+ tons in two consecutive quarters - proves operational capability
Anglo merger receives all regulatory approvals - removes execution risk
Copper price sustained above $4.75/lb - validates demand thesis
Einhorn increases position - suggests continued conviction despite delays

The Soul of This Business

Teck Resources sits at the intersection of two powerful forces:

Force 1: The Geological Lottery. Copper deposits of QB2's size and quality are rare. You can't manufacture them. Whoever owns them has a permanent advantage - if they can extract it economically.

Force 2: The Operational Challenge. Mining is hard. High-altitude, remote locations with water scarcity and environmental constraints make execution brutal. Capital requirements are immense. Mistakes are measured in billions.

The soul of Teck is this tension: world-class assets, average execution.

The bears see a company that has never figured out how to convert geological advantage into shareholder returns. The bulls see a company that finally has the scale (via merger) and the assets (QB2) to break through.

Buffett would probably pass. The ROE is too low, the capital intensity too high, the commodity exposure too volatile. He'd want a business that generates returns regardless of copper prices.

Munger might be interested. The merger creates a "lollapalooza" of multiple favorable factors: scale + synergies + copper demand + undervaluation + superinvestor validation. When multiple positive forces combine, outcomes can be extraordinary.

Klarman would demand a lower price. At $53, there's no margin of safety for the execution risk. At $35-42, the bet becomes asymmetric.

Final Meditation

The honest answer is: I don't know if Teck will work.

The assets are real. The copper demand thesis is sound. The merger catalyst is legitimate. David Einhorn is smart.

But the execution track record is poor. The commodity exposure is extreme. The valuation provides no cushion.

This is not a "sleep well at night" investment. It's a calculated bet on copper and operational improvement, with a defined catalyst (merger) and a defined timeline (2026-2027 for QB2 steady state).

At $53.76, the risk/reward is unfavorable. At $35-42, it becomes interesting.

The patient investor's path: Set alerts for $42, revisit if QB2 hits 60K tons quarterly, and wait for either a market panic or another operational disappointment to create the buying opportunity that the thesis deserves.

"Price is what you pay, value is what you get. But in mining, what you get depends on things you can't control - commodity prices, geology, and management execution. Be sure you're being compensated for all three uncertainties."

TECK - Teck Resources Ltd Class B

Executive Summary

3-Sentence Investment Thesis

Teck Resources is transforming from a diversified miner into a pure-play copper company through its 2024 steelmaking coal divestiture ($8.6B) and pending Anglo American merger, which will create a global top-5 copper producer with 1.2M tons annual production. The QB2 copper mine ramp-up challenges have depressed current profitability (ROE 1.6%) and created investor frustration, but the asset base remains world-class with 10 billion tons of reserves/resources at QB alone. David Einhorn's 3.8% position and the Anglo merger (37.6% Teck ownership of combined entity) provide validation, but current P/E of 32x on depressed earnings and operational execution risk require patience for a better entry.

Key Metrics Dashboard

Metric	Value	Assessment
Current Price	$53.76	8% below 52-week high
Market Cap	$26.3B	Large-cap miner
P/E (TTM)	32.2x	Expensive on depressed earnings
P/B	1.55x	Reasonable for resource base
EV/EBITDA	11.65x	In line with peers
ROE (Latest)	1.6%	FAILS Buffett 15% test
ROE (5yr Avg)	6.3%	Cyclical business
Net Debt/EBITDA	~3.0x	Elevated but manageable
Dividend Yield	0.86%	Modest income
Beta	1.54	High volatility

Recommendation


VERDICT	WAIT - Quality copper exposure via merger catalyst, but no margin of safety at current price
Strong Buy Price	$35 (35% below current)
Accumulate Price	$42 (22% below current)
Fair Value Estimate	$50-55
Quality Grade	B+
Tier	T2 Resilient

Phase 0: Opportunity Identification (Klarman Framework)

Why Does This Opportunity Exist?

QB2 Execution Frustration: The flagship Quebrada Blanca 2 copper mine has faced persistent tailings management facility (TMF) issues, causing repeated guidance cuts (original 270K tons -> 190K tons for 2025). Investors have lost patience with management credibility on timelines.
Merger Arbitrage Complexity: The Anglo American merger creates uncertainty about ultimate structure, regulatory approvals, and synergy realization. Some investors prefer to wait for deal closure.
Commodity Cyclicality: Copper prices are volatile, and Teck's earnings swing dramatically with commodity cycles (2022 net margin 19.2% vs 2024 net margin 4.5%).
Transition Period Earnings: The steelmaking coal sale (2024) and QB2 ramp-up costs create abnormally depressed current earnings, making traditional valuation metrics misleading.

Is This a Permanent or Temporary Problem?

TEMPORARY - The QB2 issues are engineering/construction challenges, not geological or structural business problems. Management expects TMF constraints to end by 2027. The merger provides a catalyst for value realization.

Phase 1: Risk Analysis (Munger Inversion)

"How Could This Investment Lose 50%+ Permanently?"

Copper Price Collapse: A severe global recession dropping copper below $3/lb for extended period would devastate Teck's economics. QB2 cash costs of ~$2.20/lb provide limited cushion.
QB2 Permanent Impairment: If TMF issues prove unsolvable or new geological/geotechnical problems emerge, the $8B+ QB2 investment could be written down significantly.
Anglo Merger Failure: Regulatory rejection (especially Chile or UK) would eliminate the synergy catalyst and potentially leave Teck as a smaller, less competitive standalone entity.
China Demand Destruction: 57% of copper demand is China-linked. A China property collapse or trade decoupling could structurally lower copper demand.
Nationalization/Taxation: Chile (QB2 location) has politically volatile mining policies. Royalty increases or adverse regulation could impair asset values.

Risk Quantification

Risk Event	Probability	Impact	Expected Loss
Copper price collapse (<$3/lb, 2+ years)	15%	-50%	-7.5%
QB2 permanent impairment	10%	-40%	-4.0%
Anglo merger failure	15%	-25%	-3.75%
Chile nationalization/adverse regulation	5%	-35%	-1.75%
China demand destruction	10%	-40%	-4.0%
TOTAL EXPECTED DOWNSIDE			-21%

Bear Case Summary (3 Sentences)

Teck is trading at 32x depressed earnings for a business with 1.6% ROE that has failed to execute on its flagship $8B copper project. The Anglo merger adds execution risk and may not close, while copper prices face headwinds from China property weakness and potential global recession. Management has repeatedly missed QB2 guidance, eroding credibility and suggesting structural operational issues rather than temporary challenges.

Inversion Questions

Q: What would make me sell immediately (non-price triggers)?

Anglo merger terminated
QB2 declared permanently impaired
Chile implements 50%+ royalty regime
CEO resignation during ramp-up
Copper price sustained below $3/lb for 6+ months

Q: Can I state the bear case better than the bears? Yes - the bear case is legitimate. Teck's ROE has been structurally below cost of capital for most of its history, and the company is betting everything on copper at a time when prices are elevated. However, the merger addresses scale concerns and the asset base is genuinely world-class.

Phase 2: Financial Analysis

Historical Performance (5-Year Summary)

Year	Revenue ($B)	Op Margin	Net Margin	ROE	FCF ($B)
2020	8.95	-10.2%	-9.7%	-4.3%	-2.06
2021	12.77	39.0%	22.5%	12.5%	0.03
2022	17.32	40.3%	19.2%	13.0%	2.52
2023	6.48	3.4%	37.2%	8.9%	-0.26
2024	9.06	-0.1%	4.5%	1.6%	0.15

Key Observations:

Revenue highly cyclical (ranged $6.5B to $17.3B)
Operating margins swing from -10% to +40%
5-year average ROE of 6.3% fails Buffett 15% test
FCF inconsistent due to massive QB2 CapEx ($4-5B annually in 2022-2023)

Balance Sheet Strength

Metric	2024	Assessment
Total Assets	$47.0B	Substantial resource base
Total Equity	$26.1B	Book value = $50/share
Cash	$7.6B	Strong post-coal-sale
Total Debt	$10.0B	Manageable
Net Debt	$2.4B	Conservative leverage
D/E Ratio	0.76	Acceptable

DuPont ROE Decomposition (2024)

ROE = Net Margin × Asset Turnover × Equity Multiplier
1.6% = 4.5% × 0.19 × 1.80

The low ROE is driven by:

Depressed net margins (QB2 costs, coal business sold)
Low asset turnover (massive capital invested in QB2 not yet producing)

Owner Earnings Calculation

Owner Earnings (2024) = Net Income + D&A - Maintenance CapEx
                      = $406M + $1,726M - ~$1,200M
                      = ~$932M

Per Share (481M shares) = $1.94
At 15x multiple = $29/share (well below current price)
At 20x multiple = $39/share (still below current)

Note: Current earnings are not normalized. At full QB2 production (2027+), owner earnings could be $2-3B annually.

Normalized Earnings Power (2027E Estimate)

Assuming:

QB2 at 270K tons copper @ $2/lb cash cost
Highland Valley, Antamina, Carmen de Andacollo stable
Zinc segment contribution
Copper price $4.25/lb average

QB2 EBITDA: 270K tons × 2000 lbs × $2.25 margin = $1.22B
Other Copper: ~$1.5B
Zinc: ~$0.5B
Corporate/Other: -$0.4B
---
Normalized EBITDA: ~$2.8B (Teck standalone)

With Anglo merger synergies ($800M+): Could exceed $4B+

Valuation Analysis

Method	Value/Share	vs Current ($53.76)
Book Value	$50.00	-7%
Current Owner Earnings (10x)	$19.40	-64%
Current Owner Earnings (15x)	$29.10	-46%
Normalized Owner Earnings (15x)	$58-65	+8-21%
EV/EBITDA (8x on normalized)	$55-60	+2-12%
Anglo merger implied	$47-55	-12% to +2%

Graham Number:

Graham Number = sqrt(22.5 × EPS × BVPS)
              = sqrt(22.5 × $1.67 × $50)
              = sqrt($1,879)
              = $43.35

Conclusion: At $53.76, Teck is trading above Graham Number ($43) and near the upper end of fair value estimates. There is limited margin of safety.

Phase 3: Moat Analysis

Moat Sources

Moat Type	Present?	Strength	Evidence
Cost Advantage	Yes	MODERATE	QB2 low strip ratio, Pilbara-quality ore body
Scale	Yes	NARROW (growing)	480K tons copper currently, 1.2M+ post-merger
Asset Irreplaceability	Yes	STRONG	10B tons QB reserves, 25+ year mine life
Network Effects	No	-	Commodity business
Switching Costs	No	-	Copper is fungible
Regulatory	Partial	MODERATE	Long-term permits, but regulatory risk too

Moat Width: NARROW (widening to MODERATE post-merger)

Supporting Evidence:

QB2 has one of the world's largest undeveloped copper resources
Tax stability agreement in Chile through 2037
2027 QB/Collahuasi adjacency synergies ($1.4B annual EBITDA potential)
Post-merger scale will be #5 global copper

Erosion Forces:

Chile political risk (royalty increases)
New copper supply coming (Kamoa-Kakula, Resolution)
Technological substitution (aluminum in some applications)
Chinese copper production increasing

Moat Durability: 10-15 years

The QB2 ore body and reserve base provide durable competitive advantage, but copper mining does not have true moats - it's a cost curve business where the lowest-cost producers win.

Phase 4: Management & Decision Synthesis

Management Assessment

CEO: Jonathan Price (since 2022)

Former CFO, strong financial background
Navigated steelmaking coal sale successfully
Mixed operational execution at QB2

Capital Allocation Track Record:

$8.6B coal sale at good price (5x EBITDA)
$1.8B returned to shareholders (2024)
$3.25B buyback program (70% executed)
Highland Valley MLE approved (C$2.1-2.4B)

Insider Ownership: 2.3% (modest, not exceptional)

Compensation: Reasonable relative to peers

Superinvestor Validation

David Einhorn (Greenlight Capital): 3.8% position

Einhorn is known for deep value, contrarian positions
His track record is strong on cyclical/special situation investments
Provides validation of the copper transition thesis

Catalyst Assessment

Catalyst	Timeline	Probability	Impact
Anglo merger close	H1-H2 2026	85%	+15-20%
QB2 reaches steady state	Q4 2026-2027	70%	+10-15%
QB/Collahuasi synergies realized	2027-2028	60%	+5-10%
Copper price sustained >$4.50/lb	Uncertain	40%	+20-30%

Position Sizing Formula

Base Allocation: 3%
× MOS Adjustment (0% MOS / 20% target): 0.5x
× Quality Score (B+ = 75/100): 0.75x
× (1 - Risk Score 0.21): 0.79x
× Catalyst Multiplier (strong catalyst): 1.2x

Position Size = 3% × 0.5 × 0.75 × 0.79 × 1.2 = 1.1%

Recommendation: At current prices, no position. Wait for 20%+ pullback.

Expected Return Probability Tree

Scenario	Probability	Return	Weighted
Bull (merger + copper rally)	20%	+60%	+12%
Base (merger closes, QB2 normalizes)	45%	+20%	+9%
Bear (execution issues persist)	25%	-15%	-3.75%
Disaster (merger fails, copper crash)	10%	-45%	-4.5%
Expected Return	100%		+12.75%

Monitoring Triggers

Metric	Current	Threshold	Action
QB2 quarterly production	55K tons	<40K tons	Reassess thesis
Copper price	~$4.25/lb	<$3.50/lb	Increase caution
Anglo merger status	Approved by shareholders	Regulatory rejection	Exit immediately
Net debt/EBITDA	~3x	>4x	Pause accumulation

Explicit Sell Triggers

Thesis Break: Anglo merger terminated or QB2 declared permanently impaired
Moat Erosion: Chile implements confiscatory taxation (>50% effective rate)
Management Failure: CEO departure during critical transition period
Valuation: Price exceeds $80 (50%+ above normalized fair value)

Conclusion

Final Verdict: WAIT

Teck Resources represents a compelling copper exposure vehicle with world-class assets, superinvestor validation, and a transformative merger catalyst. However, the current valuation of 32x depressed earnings and 1.55x book value provides insufficient margin of safety for a business that:

Has failed Buffett's ROE test for most of its history
Faces significant execution risk at QB2
Operates in a cyclical commodity business

Entry Strategy:

Strong Buy: $35 (35% pullback, ~0.7x book value)
Accumulate: $42 (22% pullback, Graham Number area)
Watch List: Current price of $53.76

The Anglo merger is likely to close (85% probability), which would create a more investable global copper champion. However, patient investors should wait for either:

A copper price pullback that drags shares lower
Another QB2 disappointment creating a buying opportunity
Broader market correction

David Einhorn's 3.8% position validates the copper transition thesis, but even great investors time entries carefully. At current prices, the risk/reward is unfavorable.

Sources

AlphaVantage MCP: Company Overview, Financial Statements, Earnings Transcripts (Q4 2024, Q1-Q3 2025)
Historical Prices: AlphaVantage TIME_SERIES_DAILY_ADJUSTED
Anglo American merger press releases (Sept-Dec 2025)
Teck Resources investor presentations and news releases

Analysis completed with AI assistance. All conclusions represent independent first-principles analysis, not reliance on analyst reports or price targets.