No mention of Schaft Creek in the Teck conference call but plenty of mention of QB2....and those comments indirectly affect the timing of any Schaft Creek development.
Jorge Beristain - Deutsche Bank - Analyst
I just wanted to follow up as well on QB2 a little bit. And how should we think about the CapEx on that project if you were permitted effective tomorrow?
How should we think about the balance sheet to accommodate that level of CapEx? And should we think about maybe the actual hard dollars on QB
being pushed until you are done with Fort Hills?
Don Lindsay - Teck Resources Limited - President and CEO
I may start with that and then turn it over to Tim or Ian. But we don't need to think about the latter part of the question. There is no chance that a project
would be permitted today. We don't see a need to even review how we're going to fund it for at least about 21 months, a year and three quarters. So a
lot can happen in the meantime. So that kind of scenario is just not something that we need to stress test our balance sheet for. We probably will be on a
schedule where Fort Hills will be just about finished before any major CapEx needs to be devoted to QB2.
Now, in terms of the rest of the rest of the question, Tim, do you want to take that?
Tim Watson Teck Resources Limited - SVP, Project Development
Sure. In terms of when the decision is actually made to begin to move forward with the execution phase of the project, we would actually see the ramp
up in capital spending probably over about an 18-month period. So we would probably see, in that first year, a doubling or tripling of the capital
expenditure levels of what we are seeing today as we begin to ramp back up on the engineering front and the procurement of the long-lead equipment.
And following that, we would go back to the capital expenditure profiles that we had previously identified for the project over the remaining 48 months of
the project.
Don Lindsay - Teck Resources Limited - President and CEO
I might just clarify just to -- you heard the words doubling and tripling, but that's from today's amount of about CAD90 million. So if you got to 2017,
which is the last half a year of construction of Fort Hills, which is about CAD400 million, you might start QB2 at that stage with CAD200 million or
CAD300 million and then in 2018 you would start getting into a larger amounts. So it looks like a pretty good sequence at the moment.
Jorge Beristain - Deutsche Bank - Analyst
And if I could just follow up, by drilling this down, what I'm asking concretely is, is there a risk that QB1 effectively runs out of production before you can
fully ramp QB2 and have a seamless handoff? Or is there the risk that maybe in 2019 you are without copper production if you have to defer the CapEx
on QB2 because of Fort Hills and/or permitting issues?
Ian Kilgour - Teck Resources Limited - EVP and COO
We have looked at the mine plan for QB1 and identified several mechanisms to lengthen the life span of the supergene project, including maximizing
material to the heap leach and looking at retreating other materials available on site. So at this stage we think we would be able to achieve continuity to
QB2.
FEBRUARY 12, 2015 / 04:00PM GMT, TCK.B.TO - Q4 2014 Teck Resources Ltd Earnings Call
FEBRUARY 12, 2015 / 04:00PM GMT, TCK.B.TO - Q4 2014 Teck Resources Ltd Earnings Call
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