Gross profit from our copper business unit was $156 million in the first quarter compared with $170 million a year ago. Gross profit before depreciation and amortization(1) (2) decreased by $21 million compared with a year ago (see table below) primarily due to lower copper prices, partially offset by substantially lower total cash unit costs supported by our cost reduction program and favorable foreign exchange rates. Contributions from zinc, molybdenum and other by-products were the same as a year ago. Substantially higher zinc production and resulting sales volumes from Antamina were offset by lower zinc prices and higher smelter processing charges.

Copper production of 70,600 tonnes in the first quarter was similar to a year ago, as higher production at Carmen de Andacollo and Highland Valley Copper offset decreases at Antamina and Quebrada Blanca.

We continue to respond and take action on the challenges presented by COVID-19 to protect the safety and health of our employees, contractors and the communities in which we operate.

Until April 13, Antamina maintained production with a reduced workforce staying in the camp for an extended period. The operation has now been temporarily suspended to support Peruvian COVID-19 response efforts and to facilitate a change in workforce. Antamina has completed the safe demobilization of the workforce from site, including implementing COVID-19 testing of employees and contractors. Antamina has implemented protocols to ensure the health and safety of all workers and is coordinating its response with public health authorities. The company is working towards a restart, but timing on resuming operations is uncertain at this time. The Peruvian state of emergency has been extended until April 26, 2020.

At Highland Valley Copper, we reduced on-site workforce by up to 50% for an initial two week period and temporarily scaled back operations accordingly. These measures reduced our production to approximately 85% of normal levels. We are continuing to monitor the situation with the goal of increasing on-site staffing levels when it is safe to do so. In Chile at our Carmen de Andacollo and Quebrada Blanca operations, we have maintained normal production levels while reducing the on-site workforce where possible and working with our contractors and the local communities to ensure adequate preventative measures are in place.

Gross profit from our zinc business unit was $119 million in the first quarter compared with $151 million a year ago. Gross profit before depreciation and amortization decreased by $18 million compared with a year ago (see table below) primarily due to lower zinc prices, partially offset by lower royalties and lower adjusted cash costs of sales.

At Red Dog, zinc and lead production in the first quarter increased by 17% and 23%, respectively, compared to a year ago. The higher production was primarily due to substantially higher mill throughput, which offset lower grades and recoveries. In the first quarter last year, mill operations were negatively affected by a 20-day shutdown due to the effects of severe winter weather. At Trail Operations, production of refined zinc was 6% higher than a year ago, while lead production was similar to a year ago.

We continue to respond and take action on the challenges presented by COVID-19 to protect the safety and health of our employees, contractors and the communities in which we operate.

At our Trail Operations, we have maintained production levels while reducing the workforce on site on weekdays by over 40% through restructured shift schedules and people working from home. At Red Dog, we have implemented significant travel restrictions and modified schedules due to the fly-in, fly-out nature of the operation. To date, we have maintained normal production levels at Red Dog.

PRODUCTION, SALES AND PRICES

BUSINESS UNIT RESULTS

Source: Teck