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News Article | February 15, 2017
Site: www.marketwired.com

DUBLIN, IRELAND--(Marketwired - Feb. 15, 2017) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC) is pleased to announce that Origin Energy Resources Limited ("Origin"), Falcon's 35% joint venture partner, has submitted the Results of Evaluation of the Discovery and Preliminary Estimate of Petroleum in Place for the Amungee NW-1H Velkerri B Shale Gas Pool ("Report") to the Northern Territory Government. The submission follows the completion of extended production testing at the Amungee NW-1H exploration well of the "B Shale" member of the Middle Velkerri Formation. In addition, Origin undertook a resource study based on the Amungee NW-1H well results and other key wells in the Beetaloo Basin including regional seismic data to determine a 2C contingent gas resource estimate for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117. The Report was submitted in compliance with Section 64 of the Northern Territory Petroleum Act (2016) and as per the Reporting a Petroleum Discovery Guideline. The Report follows the initial submission of the notification of discovery and an initial report on discovery in October 2016. The Report provides the following volumetric estimates and recovery / utilisation factor for the B Shale member of the Middle Velkerri Formation within permits EP76, EP98, and EP117. Understanding the factors controlling deliverability and recovery as well as spatial variation within the gas play/shale pool are in their infancy. A quantitative assessment of the aggregated estimated recoverable resource of the gas play that can handle these complexities will require a statistically significant number of wells testing the gas play. As there is only a single production test within the gas play Origin decided upon a qualitative assessment approach instead to estimate the technically recoverable resource. Factors considered in the qualitative assessment of technically recoverable hydrocarbon resource in the gas play were the SRV recovery factor range, the subsurface utilization factor range and surface utilization factor range. Origin's Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117 Origin has prepared a contingent gas resource estimate using probabilistic methods and reservoir evaluation data, in addition to regional seismic data. As noted in Origin's press release the "The contingent resource estimates contained in [their] report are based on, and fairly represents, information and supporting documentation that have been prepared by Alexander Côté who is a full-time Origin employee and a Qualified Reserves and Resource Evaluator. Mr Côté is a registered professional engineer with specialised unconventional gas resource characterisation and development experience. Mr Côté has consented to the form and context in which these statements appear". Mr Côté is a member of the Association of Professional Engineers and Geoscientists of Alberta. On 14 September 2016, the Northern Territory Government introduced a moratorium on hydraulic fracturing, and subsequently established an independent scientific inquiry. Pending the outcome of this independent inquiry, Origin has requested a suspension of all drilling operations with the DPIR. We await their formal response to the request. "The submission of a discovery evaluation report supporting the existence of a material gas resource in the Beetaloo Basin coupled with Origin's best estimate assessment of a gross contingent gas resource of 6.6 TCF for the Middle Velkerri B shale pool surrounding and adjacent to the Amungee NW-1H exploration well are exciting developments for Falcon. Additional exploration and appraisal activity will be required to refine the pool size and better assess the recoverable resource range and ultimately the commerciality of the play. However, it is interesting to note that in Origin's opinion the Marcellus and Barnett Shales in the USA are analogous, commercially-productive fields that are similar to the Middle Velkerri B Shale reservoir." Please refer to Appendix A for a copy of Origin's ASX/Media Release "Beetaloo Basin drill results indicate material gas resource". This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 of the European Parliament and of the Council. Further information relating to disclosure of resources Certain information in this press release may constitute forward-looking information. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information typically contains statements with words such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "outlook", "budget", "hope", "support" or the negative of those terms or similar words suggesting future outcomes. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Such information may include, but is not limited to, comments made with respect to the type, number, schedule, stimulating, testing and objectives of the wells to be drilled in the Beetaloo basin Australia, the prospectivity of the Middle Velkerri play and the prospect of the exploration programme being brought to commerciality, risks associated with the introduction of a moratorium, fluctuations in market prices for shale gas; risks related to the exploration, development and production of shale gas reserves; general economic, market and business conditions; substantial capital requirements; uncertainties inherent in estimating quantities of reserves and resources; extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations; the need to obtain regulatory approvals before development commences; environmental risks and hazards and the cost of compliance with environmental regulations; aboriginal claims; inherent risks and hazards with operations such as mechanical or pipe failure, cratering and other dangerous conditions; potential cost overruns; variations in foreign exchange rates; competition for capital, equipment, new leases, pipeline capacity and skilled personnel; the failure of the holder of licenses, leases and permits to meet requirements of such; changes in royalty regimes; failure to accurately estimate abandonment and reclamation costs; inaccurate estimates and assumptions by management and their joint venture partners; effectiveness of internal controls; the potential lack of available drilling equipment; failure to obtain or keep key personnel; title deficiencies; geo-political risks; and risk of litigation. Readers are cautioned that the foregoing list of important factors is not exhaustive and that these factors and risks are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Falcon assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Falcon. Additional information identifying risks and uncertainties is contained in Falcon's filings with the Canadian securities regulators, which filings are available at www.sedar.com, including under "Risk Factors" in the Annual Information Form. This announcement has been reviewed by Dr. Gábor Bada, Falcon Oil & Gas Ltd's Head of Technical Operations. Dr. Bada obtained his geology degree at the Eötvös L. University in Budapest, Hungary and his PhD at the Vrije Aniversiteit Amsterdam, the Netherlands. He is a member of AAPG and EAGE. Falcon Oil & Gas Ltd is an international oil & gas company engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets, with the current portfolio focused in Australia, South Africa and Hungary. Falcon Oil & Gas Ltd is incorporated in British Columbia, Canada and headquartered in Dublin, Ireland with a technical team based in Budapest, Hungary. For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com Origin Energy (ASX:ORG) is the leading Australian integrated energy company with market leading positions in energy retailing (approximately 4.3 million customers), power generation (approximately 6,000 MW of capacity owned and contracted) and natural gas production (1,093 PJ of 2P reserves and annual production of 82 PJe). To match its leadership in the supply of green energy, Origin also aspires to be the number one renewables company in Australia. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing Australia's biggest CSG to LNG project based on the country's largest 2P CSG reserves base. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. To view Appendix A - Origin's ASX/Media Release, please visit the following link:


News Article | February 15, 2017
Site: globenewswire.com

DUBLIN, IRELAND--(Marketwired - Feb. 15, 2017) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC) is pleased to announce that Origin Energy Resources Limited ("Origin"), Falcon's 35% joint venture partner, has submitted the Results of Evaluation of the Discovery and Preliminary Estimate of Petroleum in Place for the Amungee NW-1H Velkerri B Shale Gas Pool ("Report") to the Northern Territory Government. The submission follows the completion of extended production testing at the Amungee NW-1H exploration well of the "B Shale" member of the Middle Velkerri Formation. In addition, Origin undertook a resource study based on the Amungee NW-1H well results and other key wells in the Beetaloo Basin including regional seismic data to determine a 2C contingent gas resource estimate for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117. The Report was submitted in compliance with Section 64 of the Northern Territory Petroleum Act (2016) and as per the Reporting a Petroleum Discovery Guideline. The Report follows the initial submission of the notification of discovery and an initial report on discovery in October 2016. The Report provides the following volumetric estimates and recovery / utilisation factor for the B Shale member of the Middle Velkerri Formation within permits EP76, EP98, and EP117. Understanding the factors controlling deliverability and recovery as well as spatial variation within the gas play/shale pool are in their infancy. A quantitative assessment of the aggregated estimated recoverable resource of the gas play that can handle these complexities will require a statistically significant number of wells testing the gas play. As there is only a single production test within the gas play Origin decided upon a qualitative assessment approach instead to estimate the technically recoverable resource. Factors considered in the qualitative assessment of technically recoverable hydrocarbon resource in the gas play were the SRV recovery factor range, the subsurface utilization factor range and surface utilization factor range. Origin's Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117 Origin has prepared a contingent gas resource estimate using probabilistic methods and reservoir evaluation data, in addition to regional seismic data. As noted in Origin's press release the "The contingent resource estimates contained in [their] report are based on, and fairly represents, information and supporting documentation that have been prepared by Alexander Côté who is a full-time Origin employee and a Qualified Reserves and Resource Evaluator. Mr Côté is a registered professional engineer with specialised unconventional gas resource characterisation and development experience. Mr Côté has consented to the form and context in which these statements appear". Mr Côté is a member of the Association of Professional Engineers and Geoscientists of Alberta. On 14 September 2016, the Northern Territory Government introduced a moratorium on hydraulic fracturing, and subsequently established an independent scientific inquiry. Pending the outcome of this independent inquiry, Origin has requested a suspension of all drilling operations with the DPIR. We await their formal response to the request. "The submission of a discovery evaluation report supporting the existence of a material gas resource in the Beetaloo Basin coupled with Origin's best estimate assessment of a gross contingent gas resource of 6.6 TCF for the Middle Velkerri B shale pool surrounding and adjacent to the Amungee NW-1H exploration well are exciting developments for Falcon. Additional exploration and appraisal activity will be required to refine the pool size and better assess the recoverable resource range and ultimately the commerciality of the play. However, it is interesting to note that in Origin's opinion the Marcellus and Barnett Shales in the USA are analogous, commercially-productive fields that are similar to the Middle Velkerri B Shale reservoir." Please refer to Appendix A for a copy of Origin's ASX/Media Release "Beetaloo Basin drill results indicate material gas resource". This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 of the European Parliament and of the Council. Further information relating to disclosure of resources Certain information in this press release may constitute forward-looking information. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information typically contains statements with words such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "outlook", "budget", "hope", "support" or the negative of those terms or similar words suggesting future outcomes. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Such information may include, but is not limited to, comments made with respect to the type, number, schedule, stimulating, testing and objectives of the wells to be drilled in the Beetaloo basin Australia, the prospectivity of the Middle Velkerri play and the prospect of the exploration programme being brought to commerciality, risks associated with the introduction of a moratorium, fluctuations in market prices for shale gas; risks related to the exploration, development and production of shale gas reserves; general economic, market and business conditions; substantial capital requirements; uncertainties inherent in estimating quantities of reserves and resources; extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations; the need to obtain regulatory approvals before development commences; environmental risks and hazards and the cost of compliance with environmental regulations; aboriginal claims; inherent risks and hazards with operations such as mechanical or pipe failure, cratering and other dangerous conditions; potential cost overruns; variations in foreign exchange rates; competition for capital, equipment, new leases, pipeline capacity and skilled personnel; the failure of the holder of licenses, leases and permits to meet requirements of such; changes in royalty regimes; failure to accurately estimate abandonment and reclamation costs; inaccurate estimates and assumptions by management and their joint venture partners; effectiveness of internal controls; the potential lack of available drilling equipment; failure to obtain or keep key personnel; title deficiencies; geo-political risks; and risk of litigation. Readers are cautioned that the foregoing list of important factors is not exhaustive and that these factors and risks are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Falcon assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Falcon. Additional information identifying risks and uncertainties is contained in Falcon's filings with the Canadian securities regulators, which filings are available at www.sedar.com, including under "Risk Factors" in the Annual Information Form. This announcement has been reviewed by Dr. Gábor Bada, Falcon Oil & Gas Ltd's Head of Technical Operations. Dr. Bada obtained his geology degree at the Eötvös L. University in Budapest, Hungary and his PhD at the Vrije Aniversiteit Amsterdam, the Netherlands. He is a member of AAPG and EAGE. Falcon Oil & Gas Ltd is an international oil & gas company engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets, with the current portfolio focused in Australia, South Africa and Hungary. Falcon Oil & Gas Ltd is incorporated in British Columbia, Canada and headquartered in Dublin, Ireland with a technical team based in Budapest, Hungary. For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com Origin Energy (ASX:ORG) is the leading Australian integrated energy company with market leading positions in energy retailing (approximately 4.3 million customers), power generation (approximately 6,000 MW of capacity owned and contracted) and natural gas production (1,093 PJ of 2P reserves and annual production of 82 PJe). To match its leadership in the supply of green energy, Origin also aspires to be the number one renewables company in Australia. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing Australia's biggest CSG to LNG project based on the country's largest 2P CSG reserves base. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. To view Appendix A - Origin's ASX/Media Release, please visit the following link:


News Article | February 15, 2017
Site: www.marketwired.com

All dollar amounts expressed in this news release are in Canadian dollars unless otherwise noted. Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) ("Teck") reported unaudited record fourth quarter adjusted profit attributable to shareholders of $930 million, or $1.61 per share, compared with $16 million, or $0.03 per share, in the fourth quarter of 2015. Annual adjusted profit attributable to shareholders for 2016 was $1.1 billion, or $1.91 per share, compared with $188 million, or $0.33 per share in 2015. "We had a very good year in 2016. We came through one of the longest and deepest down cycles our industry has faced and emerged as a stronger company," said Don Lindsay, President and CEO. "We set a number of production and sales records while continuing to reduce our costs. We used the significant increase in cash generated by the higher steelmaking coal and zinc prices to reduce our debt by over $1.0 billion in the last few months." This news release is dated as at February 14, 2017. Unless the context otherwise dictates, a reference to "Teck," "the company," "us," "we," or "our" refers to Teck and its subsidiaries. Additional information, including our annual information form and management's discussion and analysis for the year ended December 31, 2015, is available on SEDAR at www.sedar.com. This document contains forward-looking statements. Please refer to the cautionary language under the heading "CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION" below. We achieved record cash flow from operations of $1.5 billion, record gross profits of $2.0 billion, before depreciation and amortization, and record gross profits of $1.6 billion in the fourth quarter. This performance was a result of significantly higher realized steelmaking coal prices in the quarter and, to a lesser extent, higher zinc prices. Steelmaking coal spot prices peaked in mid-November, exceeding US$300 per tonne for the third time in the last eight years. Our realized steelmaking coal price in the fourth quarter of US$207 per tonne exceeded the quarterly benchmark price of US$200 per tonne settled in early October, as the spot priced component of our sales reflected the market trend. Tight steelmaking coal supply and increased demand from steel mills during the fourth quarter drove prices up and the quarterly benchmark price for the first quarter of 2017 was settled at US$285 per tonne in mid-December. Steelmaking coal prices have since retreated. Prices on the spot market are more than 45% below the first quarter benchmark price and are currently trading at approximately US$155 per tonne. Despite increased supply from existing producers and a number of mine restarts, spot pricing levels remain nearly double what they were a year ago. The improved prices provided additional profits and cash flow and we took the opportunity to strengthen our balance sheet by repurchasing US$759 million (CAD$1.0 billion) principal amount of our outstanding notes in September and October. Since the beginning of 2016 through to early 2017, we have reduced our debt by US$793 million. Our debt to debt-plus-equity ratio declined from 37% at the start of 2016 to 32% at December 31, 2016. We may purchase further debt from time to time on an opportunistic basis. Construction of the Fort Hills oil sands project as of year end has surpassed 76% of completion, with two of the six major project areas (mining and infrastructure) turned over to operations. All major plant equipment and materials are on site, and all major vessels and process modules have been installed. Mobilization for operation has begun and the project remains on track to produce first oil in late 2017. The revised total project capital forecast is approximately 10% above the project sanction estimate, excluding foreign exchange impacts. Our share of project capital costs through to completion (including foreign exchange) is now expected to be $805 million, of which approximately $640 million will be spent in 2017. Due to the increase in capital cost, we recorded a pre-tax impairment charge of $222 million in our fourth quarter results. Profit attributable to shareholders was $697 million, or $1.21 per share, in the fourth quarter compared with a loss of $459 million or $0.80 per share in the same period last year. In the fourth quarter of 2015, we recorded asset impairment charges on a number of our assets that totaled $536 million on an after-tax basis ($736 million on a pre-tax basis). During the fourth quarter of 2016 we recorded asset impairment charges primarily relating to our investment in Fort Hills. These charges totalled approximately $268 million on a pre-tax basis (after-tax $198 million), of which $222 million related to Fort Hills, and also include the write-off of costs relating to the halted fuming furnace project at Trail. Adjusted profit attributable to shareholders, after adjusting for the items identified in the table below, was a record $930 million, or $1.61 per share, in the fourth quarter compared with $16 million or $0.03 per share in the same period in 2015. The substantial rise in our adjusted profit was primarily due to significantly higher realized steelmaking coal prices in the quarter compared with a year ago and partly due to higher zinc prices. In addition to the items described above, our results include gains and losses due to changes in market prices and interest rates in respect of pricing adjustments, commodity derivatives, share based compensation and changes in the discounted value of decommissioning and restoration costs of closed mines. Taken together, these items resulted in a $27 million after-tax charge ($28 million before tax) in the fourth quarter, or $0.05 per share. We do not adjust our reported profit for these items as they occur on a regular basis. Our revenues, gross profit before depreciation and amortization, and gross profit by business unit are summarized in the table below. Gross profit from our steelmaking coal business unit in the fourth quarter was $1.2 billion compared with $29 million a year ago. Gross profit before depreciation and amortization increased by $1.1 billion in the fourth quarter compared with the same period in 2015 (see table below) due to significantly higher realized steelmaking coal prices. Fourth quarter production of 7.3 million tonnes was 14% higher than the same period a year ago and set a second consecutive quarterly production record. Annual production of 27.6 million tonnes also represents an all-time production record. This performance in the quarter and year was the result of record fourth quarter production from four of our six operations and record annual production from Elkview, Greenhills and Line Creek. We also settled five-year collective agreements at Fording River and Elkview during the quarter. Sales volumes of 6.9 million tonnes in the fourth quarter was 6% higher than the same period in 2015 and represented the third highest quarterly sales in our history and best ever fourth quarter. Annual sales of 27.0 million tonnes also represents an all-time record high. This strong performance resulted from a combination of tightness in supply and robust demand in all market areas. The table below summarizes the gross profit changes, before depreciation and amortization, in our steelmaking coal business unit for the quarter: Property, plant and equipment expenditures totaled $27 million in the fourth quarter. Capitalized stripping costs were $63 million in the fourth quarter compared with $103 million in the same period in 2015. We are continuing to strip at all operations based on their respective mine plans, however, as a result of the sequencing in the fourth quarter of 2016, we mined in lower strip ratio areas at a number of sites and therefore capitalized a lower amount of costs. Our realized price of US$207 per tonne in the fourth quarter was greater than the reported benchmark price of US$200 per tonne for the quarter. With spot prices briefly exceeding US$300 per tonne for our top quality products, the blended realized pricing across our products was higher than the benchmark in the fourth quarter. Our realized sales price for any quarter reflects a mix of quarterly contract sales and spot sales concluded in the current and previous quarter on carry over tonnage. Steelmaking coal prices for the first quarter of 2017 have been agreed with the majority of our customers that price off of the quarterly benchmark based on US$285 per tonne for the highest quality products. This is consistent with prices reportedly achieved by our competitors. Since the quarterly contract benchmark price of US$285 per tonne for the first quarter of 2017 was established in early December 2016, spot prices for coal have declined to current levels of approximately US$155 per tonne. We sell about 40% of our volume on the basis of the quarterly contract price and about 60% on shorter term pricing mechanisms. The average realized price for the first quarter is now expected to be in the range of 70-75% of the quarterly contract price, reflecting this business mix. Sales volumes have also been lower than expected in the first half of the quarter reflecting the lower demand which is also influencing current spot prices. Customers apparently bought coal volumes in the fourth quarter in anticipation of ongoing global supply constraint issues into the first quarter which did not materialize and therefore, they are relatively well supplied in the short term. In addition, demand has been reduced during the Chinese lunar new year period. Winter weather conditions in southern British Columbia and logistics performance have impacted port and mine inventories, production and sales. In particular, poor rail and terminal performance has reduced port inventories and has required production cutbacks as mine inventories reached critical levels. Mine inventories remain high and achieving our planned production and sales will depend upon the performance of the rail transportation network and port loading facilities. We do expect coal sales volumes to increase in the latter half of the quarter, but not sufficiently to result in more than approximately 6.0 million tonnes of sales in the quarter. Our Greenhills Operation set a new quarterly production record in the fourth quarter and, along with Elkview and Line Creek Operations, set new annual production records in 2016. Unit cash production costs at the mines were 9% higher this quarter than in the fourth quarter of 2015. We experienced increased costs for labour at our largest mines because of settlements under collective agreements and utilized additional contractors to maximize production in order to capture the increased profit margin arising from the higher coal prices. Our continuous improvement initiatives delivered significant results in our 2016 focus areas capturing cost efficiencies in maintenance and supply. In addition, throughout the year we made gains in equipment and labour productivity and will continue to concentrate effort there in 2017. In the fourth quarter of 2016, we continued to experience the positive effects of lower diesel prices compared with 2015, although diesel prices have increased relative to the first nine months of 2016. Combined with reduced usage from a number of our cost reduction initiatives and slightly shorter haul distances, diesel costs per tonne produced decreased by 5% compared to the fourth quarter of 2015. Our West Line Creek active water treatment facility is operating consistent with design parameters and in compliance with permit limits. We are continuing to investigate an issue regarding selenium compounds in effluent. Work is ongoing to assess the potential implications of this issue and, if associated environmental impacts are identified, modifications to operating parameters or facilities may be required. The cost of modifications may be material and permitting of future mine expansions may be delayed and design and construction of additional water treatment facilities will likely be delayed while we determine the significance of the issue and how to address it. Site cost of sales in the fourth quarter of 2016, before transportation, depreciation and one-time collective agreement settlement costs at our largest mines, increased by $3 to $44 per tonne. Despite the higher costs this quarter, on an annual basis costs were $2 per tonne lower than in 2015. This was primarily the result of lower diesel prices, reduced consumption of maintenance parts and decreased contractor costs as we were successfully able to reduce spending and increase productivity in key areas throughout the year. Our total cost of sales for the quarter also included a $12 per tonne charge for the amortization of capitalized stripping costs and $12 per tonne for other depreciation. We are expecting sales volumes in the first quarter of 2017 to be approximately 6.0 million tonnes. As steel mills draw down on inventories built up in the fourth quarter, we are expecting sales to be weighted towards the back of the quarter, with the result that we expect our first quarter realized price to be approximately 75% of the benchmark price. Our sales volumes in the first quarter of each year are typically lower than other quarters in the year due to winter weather-related issues and Lunar New Year holidays in China. Vessel nominations for quarterly contract shipments are determined by customers and final sales and average prices for the quarter will depend on product mix, market direction for spot priced sales and timely arrival of vessels as well as the performance of the rail transportation network and port loading facilities. Poor rail performance in the fourth quarter of 2016 and in 2017 to date has reduced port inventories and has required production cutbacks as mine inventories reached critical levels at some sites. Steelmaking coal production in 2017 is expected to be between 27 and 28 million tonnes. As in prior years, annual volumes produced will be adjusted if necessary to reflect market demand for our products. Meeting this production target will require adequate rail and port service. Assuming that current market conditions persist, production from 2018 to 2020 is expected to remain similar to 2017, despite the closure of the Coal Mountain Operation in late 2017. We intend to maintain total production at this level by increasing production at our other Elk Valley mines. We received permits in the latter half of 2016 to commence mining in new areas at the Fording River, Elkview and Greenhills mines which will extend the lives of these mines and allow us to increase production. This will require some investment in the processing plants and the transfer of mining assets from Coal Mountain in order to develop the recently permitted mining areas at each of the sites. The strip ratios in these new areas will be higher as they are developed and we may require some additional mining capacity to balance coal production targets. With this additional mining activity, we expect our site costs in 2017 to be in the range of $46 to $50 per tonne (US$35 to US$39). This range is higher than in 2016, primarily as the result of the efforts described above to maintain total production after the closure of Coal Mountain, which will require use of additional equipment and labour. We also anticipate increased costs for inputs, including diesel. Additionally, as we did in the fourth quarter of 2016, we plan to spend funds as required to maximize production and sales in the current market environment, while maintaining appropriate cost discipline. Transportation costs in 2017 are expected to be approximately $35 to $37 per tonne (US$27 to US$29). Strip ratios vary as mining progresses, and with the accelerated mining activity as described above, we expect our overall mining costs to increase from 2016 levels and a higher proportion of mining costs are expected to relate to capitalized stripping as we enter into the new mining areas at Fording River, Elkview, Greenhills and Line Creek in preparation for the mine life extensions. As a result, we expect an increase in capitalized stripping from $277 million in 2016 to $430 million in 2017. Capital spending planned for 2017 also includes $140 million for sustaining capital and $120 million for major enhancement projects, the latter of which largely relates to the initial development costs to enter into the new mining areas mentioned above at our Elk Valley operations. Gross profit in the fourth quarter from our copper business unit was $52 million compared with $76 million a year ago. Gross profit before depreciation and amortization from our copper business unit increased by $23 million in the fourth quarter compared with the same period in 2015 (see table below). This was primarily due to successful cost reduction efforts and higher realized copper and by-product prices, which more than offset significantly lower sales volumes. In addition, due to the improving copper price environment and reduced unit costs, we reversed $23 million of previously recorded inventory write-downs in the quarter compared with $20 million of write-downs a year ago. These inventory adjustments were primarily related to our Quebrada Blanca Operation. Fourth quarter copper production decreased by 24% from a year ago primarily due to reduced production at Highland Valley Copper as a result of lower ore grades, as anticipated in the mine plan. Significant cost reduction efforts at our operations substantially reduced the effect of lower copper production on our cash unit costs, after by-product margins, which only increased by 6% to US$1.45 per pound compared with the same period in 2015. The table below summarizes the changes in gross profit, before depreciation and amortization, in our copper business unit for the quarter: Property, plant and equipment expenditures totaled $65 million, including $48 million for sustaining capital and $16 million for new mine development related to the Quebrada Blanca Phase 2 project. Capitalized stripping costs were $38 million in the fourth quarter, lower than $50 million in the same period in 2015, with the reduction primarily due to lower strip ratios in current mining areas and lower operating costs at Highland Valley Copper. LME copper prices averaged US$2.39 per pound in the fourth quarter of 2016, up 10.5% from the third quarter, and up 8.0% compared with the fourth quarter of 2015. LME copper prices averaged US$2.21 per pound for 2016, down 13% over the previous year. In early November, copper prices rallied over US$0.50 per pound in two weeks after being on a downward trend since February 2011 when prices peaked above US$4.60 per pound. Total reported exchange stocks remained essentially unchanged during the quarter at 0.5 million tonnes. Total reported global copper exchange stocks are now estimated to be eight days of global consumption, well below the estimated 25 year average of 12 days of global consumption. Copper stocks fell on the LME by 50,000 tonnes and copper stocks on the Shanghai Futures Exchange and the Nymex rose by 51,000 tonnes in aggregate. Copper consumption continues to rise at better than projected rates, although still lower than in 2015. Chinese demand growth is now projected by Wood Mackenzie to reach 4% for 2016 and 2.5% in 2017. Stronger than expected construction and automotive growth have offset manufacturing declines. Demand growth in the fourth quarter in both the U.S. and Europe was above previous forecasts on record automotive sales, while the stronger U.S. dollar continues to impact U.S. manufacturing exports. Wood Mackenzie is forecasting slightly higher global demand growth in 2017 at 2.1% compared to 2% in 2016. The large increases in global mine production growth over the past two years are now mostly complete and mine production growth is forecast by Wood Mackenzie to fall in 2017. Despite the recent rally in prices and stable metal stocks, the market remains cautious in the short to medium-term. Longer term, the lack of investments made during the past six year downward trend in prices is expected to constrain new production growth for some time. As anticipated in the mine plan, copper production declined by 45% to 22,500 tonnes in the fourth quarter due to lower copper grades and lower recoveries. As the mix of the mill feed shifted from harder Valley pit ore to softer and lower grade Lornex pit ore, mill throughput increased by 4% from last year. The transition to more Lornex ores progressed during the final quarter of 2016 as the current high grade phase of the Valley pit was exhausted. Molybdenum production in the fourth quarter of 2.2 million pounds was more than twice the amount produced a year ago as a result of higher grades. Operating costs in the fourth quarter declined by $9 million, or 7%, compared with the same period a year ago as a result of significant cost reduction efforts and lower diesel and consumable costs. Our labour agreement at Highland Valley Copper expired at the end of the third quarter, and negotiations are ongoing. As anticipated in the mine plan, production at Highland Valley Copper will vary considerably over the next few years due to significant fluctuations in ore grades and hardness in the three active pits. The production plan relies primarily on Lornex ore in 2017, supplemented by the similarly low grade Highmont pit and lower grade sources in the Valley pit, which is now in a heavier stripping phase over the next three to four years. Copper production in 2017 is anticipated to be between 95,000 and 100,000 tonnes, with lower production in the first half of the year, before gradually recovering in 2018 and 2019. Annual copper production from 2018 to 2020 is expected to be between 115,000 and 135,000 tonnes per year. Copper production is anticipated to return to above life of mine average levels of 140,000 tonnes per year after 2020 through to the end of the current mine plan in 2026. Molybdenum production in 2017 is expected to be approximately 9.0 to 9.5 million pounds contained in concentrate, before declining to approximately 7.0 million pounds contained in concentrate annually from 2018 to 2020. Copper production in the fourth quarter of 98,500 tonnes decreased by 14% compared with a year ago primarily as a result of lower ore grades and mill throughput. The mix of mill feed in the quarter was 67% copper-only ore and 33% copper-zinc ore, broadly similar to the same period a year ago. Zinc production of 79,200 tonnes in the fourth quarter increased by 21,200 tonnes, or 37%, compared with a year ago due to higher zinc grades and recoveries. We continued to make very good progress on cost savings and productivity initiatives, with overall site production costs in the quarter lower than a year ago. During 2016, the site achieved a 13% increase in tonnes mined to a record 244 million tonnes. Our 22.5% share of Antamina's 2017 production is expected to be in the range of 88,000 to 92,000 tonnes of copper, 75,000 to 80,000 tonnes of zinc and approximately 2.0 million pounds of molybdenum in concentrate. Our share of copper production is expected to be between 90,000 and 100,000 tonnes from 2018 to 2020. Zinc production is expected to remain strong as the mine enters a phase with higher zinc grades and a higher proportion of copper-zinc ore processed. Our share of zinc production is anticipated to average 80,000 tonnes per year during the same 2018 to 2020 period, although annual production will fluctuate due to feed grades and the amount of copper-zinc ore processed, as anticipated in the mine plan. Annual molybdenum production is expected to be between 2.5 and 3.0 million pounds between 2018 and 2020. Copper production in the fourth quarter was similar to the same period of 2015 with a slight increase in copper in concentrate produced, offset by a reduction in copper cathode. Our continuing cost reduction efforts resulted in lower costs for operating supplies and reduced contractor costs. Operating costs, before a one-time labour settlement charge of US$10 million last year, declined by US$11 million in the fourth quarter compared with a year ago. On an annual basis, operating costs declined by 13% compared with a year ago despite additional tonnes mined and milled. Consistent with the mine plan, copper grades are expected to continue to gradually decline in 2017 and in future years, which we expect to largely offset with planned throughput improvements in the mill. Carmen de Andacollo's production in 2017 is expected to be similar to 2016 and in the range of 68,000 to 72,000 tonnes of copper in concentrate and 3,000 to 4,000 tonnes of copper cathode. Copper in concentrate production is expected to be in the range of 65,000 to 70,000 tonnes for the subsequent three year period, with cathode production rates uncertain past 2017, although there is potential to extend. Copper production in the fourth quarter was 8,900 tonnes, 4% lower than the same period in 2015. Operating costs in the fourth quarter, before inventory adjustments, were US$4 million lower than the same period of 2015 as a result of lower supply costs, reduced material movement and our continued cost reduction efforts. Cost of sales in the current period included the reversal of US$15 million of previously recorded provisions on in-process inventories as a result of the improved copper price environment. This compares to the US$14 million of inventory write-down charges last year. Depreciation and amortization charges increased by $40 million in the fourth quarter compared with the same period of 2015 as a result of uncertainty regarding the mine life of the supergene deposit. On a year-to-date basis, depreciation and amortization expenses are $113 million higher compared to 2015. During the first quarter of 2017, the agglomeration circuit will be halted with all remaining supergene ore mined sent to the dump leach circuit, further reducing operating costs although with a longer leaching cycle. Work is continuing on optimizing the mine plan based on the lower operating cost profile and current copper price. Opportunities to recover additional copper from previously processed material continue to be evaluated. We expect production of approximately 20,000 to 24,000 tonnes of copper cathode in 2017. Future production plans will depend on copper prices and further cost reduction efforts, although we currently anticipate cathode production to continue until mid-2019 at reduced cathode production rates as the supergene deposit is exhausted. Unit cash costs of product sold in the fourth quarter of 2016 as reported in U.S. dollars, before cash margins for by-products, were US$1.72 per pound compared with US$1.46 per pound in the same period a year ago. Total operating costs have been reduced substantially at all sites, however, the favourable effects of our cost reduction efforts were offset by lower production at Highland Valley Copper in the quarter as a result of mining and processing substantially lower grade material. Cash margins for by-products increased to US$0.27 per pound compared with US$0.09 per pound in the same period a year ago. This was primarily due to higher prices as well as significantly higher sales of zinc from Antamina and increased sales volumes of molybdenum at Antamina and Highland Valley Copper. Our cost reduction program and higher by-product credits offset significantly lower copper production in the fourth quarter, resulting in unit cash costs for copper, after cash margin for by-products, which were only 6% higher than the same period a year ago at US$1.45 per pound. At the end of the quarter we completed an updated feasibility study on our Quebrada Blanca concentrator project which incorporates recent project optimization and certain scope changes, including a different tailings facility located closer to the mine. This project has the potential to be a large-scale, long-life copper asset in the stable mining jurisdiction of Chile, with a large resource base with great potential to significantly extend the mine life beyond the feasibility case, and an ore body open in several directions, with further exploration potential. The project is expected to generate strong economic returns with all-in cash costs very well placed on the cost curve. Sustaining capital is expected to be quite low for this project due to the low strip ratio and shorter initial mine life of 25 years, hence a reduced need for replacement mobile equipment. Annual tailings construction costs are included as operating costs, with minimal sustaining capital requirements. Major process equipment as well as infrastructure such as the water supply pipeline from the coast have been designed to last the life of mine without significant capital investment. The project is currently undergoing environmental permitting, with permit approval anticipated in early 2018. We own a 76.5% interest in Quebrada Blanca. The other shareholders are a Chilean private company which owns a 13.5% interest, and Empresa Nacional de Minera (ENAMI), a state-owned Chilean mining company, which has a 10% non-funding interest. The updated study estimates a capital cost for the development of the project on a 100% basis of US$4.7 billion (in constant first quarter of 2016 dollars, not including working capital or interest during construction), of which our funding share would be US$4.0 billion. This compares to the 2012 feasibility study estimate of US$5.6 billion on a 100% basis (in January 2012 dollars). The study is based upon an initial mine life of 25 years, consistent with the capacity of the new tailings facility. The project scope includes the construction of a 140,000 tonne per day concentrator and related facilities connected to a new port facility and desalination plant by 165 kilometre long concentrate and desalinated water pipelines. The project contemplates annual production of 275,000 tonnes of copper and over 7,700 tonnes of molybdenum in concentrate for the first full five years of mine life. On the basis of copper equivalent production of approximately 301,000 tonnes per year over the first full five years of mine life, this equates to a capital intensity of less than US$16,000 per annual tonne. The mineral reserve and mineral resource estimates for the concentrator project on a 100% basis, as at December 31, 2016, are set out in the tables below. Mineral resources are reported separately from, and do not include, that portion of mineral resources classified as mineral reserves. Estimated key project operating parameters are summarized in the following table. Estimated life of mine project economics across a range of copper prices are presented in the following table. Power purchase agreements have been signed which will provide secure and reliable electric power supply for the Quebrada Blanca Phase 2 project. As part of the regulatory process, we submitted the Social and Environmental Impact Assessment (SEIA) to the Region of Tarapacá Environmental Authority in the third quarter of 2016. A decision to proceed with development would be contingent upon regulatory approvals and market conditions, among other considerations. Given the timeline of the regulatory process, such a decision is not expected before mid-2018. Assuming a mid-2018 construction start, the project schedule anticipates first ore processed in the latter half of 2021. The scientific and technical information regarding the hypogene project was approved by Mr. Rodrigo Alves Marinho, P.Geo and Mr. Mike Nelson FAusIMM, who are employees of Teck. Mr. Rodrigo Alves Marinho is a qualified person, as defined under National Instrument (NI) 43-101, and approved the geology, mineral resource, mine plans and mineral reserve estimates. Mr. Nelson is a qualified person, as defined under National Instrument 43-101, and approved the metallurgy and the financial models on which the mineral reserves were based. In October 2016, work began on a pre-feasibility study concurrently with early and ongoing engagement with indigenous and non-indigenous communities to gather feedback and help inform project design. In addition, the first environmental baseline campaign was completed in December 2016. Planned 2017 activities include 16,750 metres of technical drilling on the Relincho and La Fortuna deposits in support of the studies. We expect to complete the pre-feasibility study at the end of the third quarter of 2017. During the third quarter, we completed the pre-feasibility study at the Zafranal copper-gold project located in southern Peru. The project is held by Compañia Minera Zafranal S.A.C. In January 2017, we increased our ownership of Compañia Minera Zafranal S.A.C. to 80% through an acquisition of all of the outstanding shares of AQM Copper Inc., not already owned by us. The remaining 20% is held by Mitsubishi Materials Corporation. Additional drilling and a feasibility study are planned to start in 2017 along with additional community engagement activities, environmental studies and archaeological studies, and permitting work necessary to prepare and submit and Environmental Impact Assessment. We expect 2017 copper production to be in the range of 275,000 to 290,000 tonnes, a decline of approximately 13% from 2016 production levels. The lower production is primarily due to continued lower grades and recoveries at Highland Valley Copper and further planned production declines at our Quebrada Blanca Operation as it nears the end of its life for the supergene deposit. In 2017, we expect our copper unit costs to be in the range of US$1.75 to US$1.85 per pound before margins from by-products and US$1.40 to US$1.50 per pound after by-products based on current production plans, by-product prices and exchange rates. We expect copper production to be in the range of 280,000 to 300,000 tonnes from 2018 to 2020. Gross profit from our zinc business unit in the fourth quarter was $348 million compared with $176 million a year ago. Gross profit before depreciation and amortization from our zinc business unit increased by $181 million compared to the fourth quarter of 2015 (see table below) primarily due to significantly higher zinc prices. Zinc in concentrate production in the fourth quarter was 7% higher than the fourth quarter of 2015. A year-end inventory correction recorded in the quarter resulted in reported production being 8% lower than a year ago. Trail set a new annual refined zinc production record as refined zinc production continued to be strong in the fourth quarter and rose 2% compared to the same quarter in 2015 due to better plant availability and operational improvements. The table below summarizes the gross profit change, before depreciation and amortization, in our zinc business unit for the quarter. Property, plant and equipment expenditures included $27 million for sustaining capital in the fourth quarter. LME zinc prices averaged US$1.14 per pound in the fourth quarter of 2016, an increase of 12% from last quarter and up 56% from the fourth quarter a year ago. LME zinc prices for the full year averaged US$0.95 per pound up 9% over the previous year. In the fourth quarter, zinc prices increased from just above US$1.00 per pound early in the quarter to US$1.31 per pound at the end of November, representing a ten year high. Total reported zinc exchange stocks fell 28,400 tonnes during the quarter to 580,700 tonnes, and year-to-date exchange stocks are down 84,200 tonnes. Total global reported exchange stocks are estimated at 15 days of global consumption, down from the 25 year average of 23 days. Excess zinc metal stocks also continue to be drawn down from non-LME warehouses. Demand for refined zinc globally was seasonally weaker in the fourth quarter with global galvanized steel production down 1.1% from the prior quarter, but up 6.0% over the same period last year. For the full year, CRU estimates that global galvanized sheet production was up 3.0%. Mine production in China is estimated to have contracted by 4% to November 2016 and imports of concentrates are down 43% for the eleven months to November, or 578,000 tonnes. As a consequence of limited availability, stocks of zinc concentrates were drawn down to critical levels last quarter. Western world zinc mine closures combined with seasonally low northern Chinese mine production are expected to keep spot concentrate treatment charges near historically low levels. Tightness in the concentrate market continued to limit refined production and reduce exchange stocks during the quarter. Zinc production in the fourth quarter was 7% higher than a year ago as a result of higher mill throughput, partially offset by lower grades and recoveries. Lead production declined by 4% compared to a year ago primarily due to lower lead grades during the quarter. Our concentrate inventories were adjusted at the conclusion of the shipping season when our mine site concentrate inventories were fully depleted, which resulted in a downward revision to fourth quarter zinc production and an upward revision to fourth quarter lead production. Zinc production, including adjustments, was 9% lower than a year ago while lead production was 21% higher than a year ago. Zinc sales of 213,800 tonnes were similar to the fourth quarter of 2015, but were substantially higher than our most recent guidance of 180,000 tonnes. The higher volumes reflect accelerated consumption rates by smelters due to continued tightness in the concentrate market. This is reflected in spot treatment charges which are now significantly below benchmark terms. Operating costs of US$89 million in the fourth quarter were US$5 million lower than in the same period a year ago primarily due to lower diesel and operating supplies costs. Capitalized stripping costs were US$5 million in the fourth quarter, US$12 million less than the same period a year ago due to mine sequencing during the quarter. Offsite zinc inventory available for sale from January 1, 2017 to the beginning of the 2017 shipping season totals 215,000 tonnes (2016 - 220,000 tonnes) of contained metal. Zinc sales volumes in the first quarter of 2017 are estimated to be approximately 100,000 tonnes of contained metal, however, there is upside potential to first quarter sales as smelters may accelerate the treatment of inventory due to the general tightness in the global concentrate market. All offsite lead inventories were sold as of the end of 2016. Red Dog's production of contained metal in 2017 is expected to be in the range of 545,000 to 565,000 tonnes of zinc and 110,000 to 115,000 tonnes of lead. From 2018 to 2020, Red Dog's production of contained metal is expected to be in the range of 500,000 to 525,000 tonnes of zinc and 85,000 to 115,000 tonnes of lead. Studies to debottleneck the mill and increase throughput to help offset lower zinc grades continue to progress with a feasibility study currently underway. A payment in lieu of taxes (PILT) agreement between Teck Alaska and the North West Arctic Borough (the regional municipality) expired December 31, 2015. Prior to the expiry of the PILT agreement, the Borough enacted a new tax ordinance, imposing a severance tax that would have significantly increased local taxes paid by Teck Alaska. Teck Alaska filed a legal complaint challenging the legality of the severance tax and seeking to compel the Borough to engage in good faith negotiations with respect to a new PILT agreement. Early in 2017, Teck Alaska and the Borough agreed on a term sheet with respect to the terms of a new ten year PILT agreement. Under the terms contemplated by the term sheet, PILT payments to the Borough, based on the assessed property value of the mine, would increase by approximately 30%. In addition, Teck Alaska would make annual payments based on mine profitability to a separate fund aimed at social investment in villages in the region. This agreement is subject to approvals by the Borough and Teck Alaska and will not be effective until a definitive PILT Agreement and related documents are settled. Refined zinc production of 80,200 tonnes in the fourth quarter contributed to a new annual production record, primarily due to higher plant availability. Refined lead production also set a new annual production record, even as quarterly refined lead production of 22,300 tonnes in the fourth quarter was 6% lower than a year ago. Increased lead production in 2016 was a result of improved operating reliability and higher lead inputs in the feed mix compared to last year. Operating costs in the fourth quarter of $110 million were $21 million higher than a year ago. This increase in operating costs was a result of higher energy costs and timing of the annual Kivcet maintenance shutdown, which occurred in October 2016 whereas in 2015 it took place earlier in the year. During the fourth quarter, Trail incurred an impairment charge of $46 million in costs associated with the decision not to proceed with the Number 4 Slag Fuming Furnace Project. Sustaining capital expenditures in the quarter included $5 million for the acid plant, $2 million for the water treatment plant and $9 million for various other projects. In 2017, we expect Trail to produce in the range of 300,000 to 305,000 tonnes of refined zinc, approximately 95,000 tonnes of refined lead and 23 to 25 million ounces of silver. Zinc production during the quarter of 8,900 tonnes was 4% higher than the same period last year primarily due to higher ore grades and improved mill recoveries. The current mine plan sustains the operation through to early 2018, although there is still significant potential to extend the mine life. We identified highly prospective areas in the currently producing East Mine area and initiated a major exploration and drilling program during the quarter, which will continue in 2017. We expect 2017 production to be between 35,000 and 40,000 tonnes of zinc in concentrate. Production rates beyond 2017 are uncertain, although the potential exists to extend the life at similar rates for several more years. In October 2016, we announced an agreement to increase our interest to 100% in the Teena/Reward zinc project by acquiring the 49% interest held by Rox Resources Limited. Closing of the transaction is expected in the first quarter of 2017. Teena is located eight kilometers west of the MacArthur River Mine in the Northern Territory of Australia. We expect zinc in concentrate production in 2017, including co-product zinc production from our copper business unit, to be in the range of 660,000 to 680,000 tonnes. For the 2018 to 2020 period, we expect total zinc in concentrate production to be in the range of 580,000 to 605,000 tonnes excluding Pend Oreille, which has an uncertain production profile beyond 2017. Suncor, as operator of the Fort Hills oil sands project, has provided an update regarding its recently completed review of schedule, project costs and throughput. Suncor advises that the review, at this advanced stage of project development, provides a high degree of confidence on schedule and project costs to completion. In parallel, a review of the plant throughput conducted in parallel has confirmed the steady state production target and expected ramp up. Suncor has announced an 8% increase in the nameplate capacity of the project to 194,000 barrels per day (100% basis). We expect an average production rate of 186,000 barrels per day over the life of the project. Construction as of year end has surpassed 76% of completion, with two of the six major project areas (mining and infrastructure) turned over to operations. All major plant equipment and materials are on site, and all major vessels and process modules have been installed. Shovels, trucks and equipment are mobilizing for operations. As of year end, 58% of operations personnel have been hired. Our share of capital expenditures for 2016 was $987 million. The project remains on track to produce first oil in late 2017. The majority of project scope areas are progressing in line with the original plan and budget, but effects of the 2016 Fort McMurray wild fire as well as productivity challenges have caused an increase in the capital cost estimate for the secondary extraction facility. The revised total project capital forecast is approximately 10% above the project sanction estimate, excluding foreign exchange impacts. Our share of project capital costs through to completion (including foreign exchange) is now expected to be $805 million, of which approximately $640 million will be spent in 2017. We recorded an impairment charge of $222 million in our fourth quarter results, which was triggered by an increase in the expected development costs for the project. Oil production from the first of three secondary extraction units is still expected by the end of 2017. The other two secondary extraction units are scheduled to be completed and commissioned in the first half of 2018, and it is expected that production will reach 90% of nameplate capacity by the end of 2018. Suncor is also exploring the opportunity to reduce the ramp-up period. The regulatory application review of Frontier is continuing with a federal-provincial hearing panel reviewing information filed to date. The regulatory review process is expected to continue through 2017, making 2018 the earliest a federal decision statement is expected for Frontier. Our expenditures on Frontier are limited to supporting this process. We are evaluating the future project schedule and development options as part of our ongoing capital review and prioritization process. On January 26, 2017 we announced that we had entered into an agreement to sell our 49% interest in the Wintering Hills Wind Power Facility to IKEA Canada for $58.6 million. The sale is expected to close in the first quarter of 2017. Other operating expenses, net of other income, were $98 million in the fourth quarter compared with $73 million a year ago. We recorded various non-cash gains and losses due to changes in market prices and rates in respect of pricing adjustments, commodity derivatives, stock based compensation and the discounted value of decommissioning and restoration provisions for closed mines, which totaled $28 million net charge on a pre-tax basis ($27 million after-tax). Pricing adjustments in the fourth quarter totaled $90 million and included positive pricing adjustments on copper and zinc of $48 million and $28 million, respectively. The table below outlines our outstanding receivable positions, provisionally valued at September 30, 2016 and December 31, 2016. Finance expense was $85 million in the fourth quarter, $5 million higher than a year ago. Our debt interest rose slightly, while our fees for letters of credit increased by $17 million. These items were partly offset by an increase of our capitalized interest. Non-operating income in the fourth quarter totaled $25 million compared with a $21 million non-operating expense in the same period last year. We recorded a $15 million pre-tax gain on the revaluation of our call options on our most recently issued debt as our credit spread has declined in the quarter. In addition, we realized a pre-tax gain of $27 million on the repurchase of our debt below face value in the fourth quarter. These items were partly offset by foreign exchange losses of $17 million. Income and resource taxes for the fourth quarter were $395 million, or 36% of pre-tax profits. This rate is higher than the Canadian statutory rate of 26% primarily as a result of resource taxes, higher rates in foreign jurisdictions, inclusive of the newly enacted Peruvian corporate tax increases, and the tax impact of impairments. These were partially reduced by the lower effective tax rate on the gain on debt purchases. Due to available tax pools, we are currently shielded from cash income taxes, but not resource taxes in Canada. We remain subject to cash taxes in foreign jurisdictions. Our financial position and liquidity remains strong. Our debt position, net debt, and credit ratios are summarized in the table below: Since October 2015, we have retired US$1.1 billion of our term notes, including US$300 million in the fourth quarter of 2015, US$759 million in the third and fourth quarter of 2016 and US$34 million in January 2017. As a result, the principal balance of our term notes is now US$6.1 billion. At December 31, 2016, our debt to debt-plus-equity ratio was 32%. Our committed credit facilities are our US$3.0 billion revolving credit facility and US$1.2 billion revolving credit facility. Our US$3.0 billion credit facility matures in July 2020 and US$1.14 billion of our US$1.2 billion revolving credit facility matures in June 2019, with the remaining US$60 million maturing on the facility's original maturity date in June 2017. In June 2016, the maturity on US$1.0 billion of commitments under that credit facility was extended from June 2017 to June 2019, and an additional US$140 million of commitments were also extended in December 2016. As at December 31, 2016, there were no amounts outstanding under the US$3.0 billion facility and there were US$981 million of letters of credit outstanding under the US$1.2 billion facility. Of those letters of credit, an aggregate of US$672 million were issued in respect of long-term power purchase agreements for the Quebrada Blanca Phase 2 project and C$265 million in respect of long-term transport service agreements for our share of the Fort Hills project. The remainder relates to reclamation obligations for our Red Dog mine. We also have various other credit facilities and arrangements that support our reclamation obligations. At December 31, 2016, these include: We may be required to post additional security in respect of reclamation at our sites in future periods as regulatory requirements change and closure plans are updated. Cash flow from operations was $1.5 billion in the fourth quarter compared with $693 million a year ago with the increase primarily due to substantially higher steelmaking coal prices. Changes in working capital items resulted in a use of cash of $276 million in the fourth quarter. During the quarter, trade accounts receivable increased significantly as a result of the effect of the substantial rise in steelmaking coal prices and to a lesser extent, the rise in the zinc and copper prices. This was partly offset by an increase in accounts payable due to timing of royalty accruals and payments. This compares to last year when working capital charges provided a source of cash of $264 million as accounts receivable were reduced during the period. In September and October, we purchased US$334 million and US$425 million aggregate principal amount of our outstanding notes, respectively, through private and open market purchases for a total cost of US$693 million, which was funded from cash on hand. The principal amount of notes purchased were US$80 million of 3.75% notes due 2023, US$91 million of 6.125% notes due 2035, US$159 million of 6.00% notes due 2040, US$205 million of 6.25% notes due 2041, US$101 million of 5.20% notes due 2042 and US$123 million of 5.40% notes due 2043. Following the year-end, we repaid the US$34 million of 3.15% notes that matured in January 2017 from cash on hand. Expenditures on property, plant and equipment were $417 million in the fourth quarter, compared to $532 million a year ago. Included in the spending was $290 million for the Fort Hills oil sands project, $89 million on sustaining capital, $16 million for Quebrada Blanca Phase 2 and $17 million on major enhancement projects. The largest components of sustaining expenditures were $16 million at Trail, $11 million at Teck Coal and $25 million at Antamina primarily related to tailings dam construction. Capitalized stripping expenditures were $108 million in the fourth quarter compared with $176 million a year ago, as mining at some of our key operations was taking place in lower strip ratio areas resulting in lower costs being capitalized. In addition, the effect of our lower unit costs also resulted in less costs being capitalized. We are continuing to strip at all our operations based on their respective mine plans and the majority of this constitutes the advancement of pits for future production at our steelmaking coal mines. The table below summarizes our capital spending for 2016: Prices for our key commodities have recently improved and are contributing additional revenue and cash flows. Tight steelmaking coal supply and increased demand from steel mills during the fourth quarter of 2016 drove prices up rapidly. Steelmaking coal inventories are now being reduced, driving the large price correction which started in December 2016. With increased supply from existing producers and a number of mine restarts, it is unclear how long the price correction will last. In addition, contributing to the volatility in steelmaking coal prices were changes in the Chinese government's working day policy for coal mines, future changes in that policy, or other Chinese government action, may have a significant positive or negative effect on steelmaking coal prices. Commodity markets have historically been volatile and prices can change rapidly, which we have seen recently with the sharp rise and fall in steelmaking coal prices since the third quarter of 2016, and customers can alter shipment plans. This volatility can have a substantial effect on our business. We are also significantly affected by foreign exchange rates. Over the past year, the U.S. dollar average has strengthened by approximately 4% against the Canadian dollar. This has had a positive effect on the profitability of our Canadian operations and translation of profits from our foreign operations. It will, to a lesser extent, put upward pressure on the portion of our operating costs and capital spending that is denominated in U.S. dollars. Our labour agreement at Highland Valley Copper expired at the end of the third quarter, and negotiations are continuing. Our labour agreements at Trail and at Cardinal River expire in May 2017 and June 2017, respectively. In February of this year, we extended the life of two of the three labour agreements at Quebrada Blanca into the first quarter of 2019, leaving only one labour agreement expiring in 2017 at the end of November. Commodity prices are a key driver of our profit and cash flows. On the supply side, the depleting nature of ore reserves, difficulties in finding new ore bodies, the permitting processes, the availability of skilled resources to develop projects, as well as infrastructure constraints, political risk and significant cost inflation may continue to have a moderating effect on the growth in future production for the industry as a whole. We believe that over the longer term the industrialization of emerging market economies will continue to be a major positive factor in the future demand for commodities. Therefore, we believe that the long-term price environment for the products that we produce and sell remains favourable. The sensitivity of our annual profit attributable to shareholders and EBITDA to changes in the Canadian/U.S. dollar exchange rate and commodity prices, before pricing adjustments, based on our current balance sheet, our expected 2017 mid-range production estimates, current commodity prices and a Canadian/U.S. dollar exchange rate of $1.30, is as follows: The increase in our estimated foreign exchange sensitivity from previous estimates is primarily due to the effect of higher commodity prices, which are all denominated in U.S. dollars. Our steelmaking coal production in 2017 is expected to be in the range of 27 to 28 million tonnes compared with 27.6 million tonnes produced in 2016. Our actual production will depend primarily on customer demand for deliveries of steelmaking coal. Depending on market conditions and the sales outlook, we may adjust our production plans. Our copper production for 2017 is expected to decrease and be in the range of 275,000 to 290,000 tonnes compared with 324,200 tonnes produced in 2016. Copper production at Highland Valley Copper is expected to decline as a result of mining lower ore grades. Quebrada Blanca copper cathode production is expected to decline as the agglomeration circuit will be halted with all remaining supergene ore mined sent to the dump leach circuit. Our share of production from Antamina is anticipated to decline by approximately 7,000 tonnes due to a decrease in copper-only ore processed in 2017, while copper-zinc ore increases. Our zinc in concentrate production in 2017 is expected to be in the range of 660,000 to 680,000 tonnes compared with 661,600 tonnes produced in 2016. Red Dog's production is expected to decrease by approximately 28,000 tonnes primarily due to lower ore grades. Our share of Antamina's zinc production is expected to increase by 33,000 tonnes as a result of processing additional copper-zinc ores. Refined zinc production in 2017 from our Trail Operations is expected to be in the range of 300,000 to 305,000 tonnes compared with a record 311,600 tonnes produced in 2016. Our forecast approved capital expenditures for 2017, before capitalized stripping costs, are approximately $1.6 billion and are summarized in the table below. We expect to fund our 2017 capital expenditures from cash on hand and cash flow from operations. New mine development includes $200 million for Quebrada Blanca Phase 2, $640 million for Fort Hills and $26 million for permitting activities on the Frontier oil sands project. The planned sustaining capital expenditures for Fort Hills in 2017 are spread across a number of areas in the project. The costs are associated with activities that will benefit the future development of the operation and technology initiatives, for example: tailings management technology and autonomous hauling. The amount and timing of actual capital expenditures is also dependent upon being able to secure permits, equipment, supplies, materials and labour on a timely basis and at expected costs to enable the projects to be completed as currently anticipated. We may change capital spending plans in 2017, depending on commodity markets, our financial position, results of feasibility studies and other factors. The sales of our products are denominated in U.S. dollars, while a significant portion of our expenses are incurred in local currencies, particularly the Canadian dollar and the Chilean peso. Foreign exchange fluctuations can have a significant effect on our operating margins, unless such fluctuations are offset by related changes to commodity prices. Our U.S. dollar denominated debt is subject to revaluation based on changes in the Canadian/U.S. dollar exchange rate. As at December 31, 2016, $5.4 billion of our U.S. dollar denominated debt is designated as a hedge against our foreign operations that have a U.S. dollar functional currency. As a result, any foreign exchange gains or losses arising on that amount of our U.S. dollar debt are recorded in other comprehensive income, with the remainder being charged to profit. We hold a number of financial instruments and derivatives which are recorded on our balance sheet at fair value with gains and losses in each period included in other comprehensive income and profit for the period as appropriate. The most significant of these instruments are marketable securities, metal-related forward contracts including those embedded in our silver and gold streaming agreements, and settlements receivable and payable, and prepayment rights on certain long-term debt notes. Some of our gains and losses on metal-related financial instruments are affected by smelter price participation and are taken into account in determining royalties and other expenses. All are subject to varying rates of taxation depending on their nature and jurisdiction. As at February 14, 2017 there were 567.7 million Class B subordinate voting shares and 9.4 million Class A common shares outstanding. In addition, there were 22.7 million director and employee stock options outstanding with exercise prices ranging between $4.15 and $58.80 per share. More information on these instruments and the terms of their conversion is set out in Note 21 of our 2016 audited financial statements. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. There have been no significant changes in our internal control over financial reporting during the quarter ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting. Our revenue and gross profit by business unit are summarized in the tables below: Our cost of sales information by business unit is summarized in the table below: Production statistics for each of our operations are presented in the tables below. Operating results are on a 100% basis. USE OF NON-GAAP FINANCIAL MEASURES Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). This document refers to gross profit before depreciation and amortization, gross profit margins before depreciation, EBITDA, adjusted EBITDA, adjusted profit, adjusted earnings per share, cash unit costs, adjusted cash costs of sales, cash margins for by-products, adjusted revenue, net debt, debt to debt-plus-equity ratio, and the net debt to net debt-plus-equity ratio, which are not measures recognized under IFRS in Canada and do not have a standardized meaning prescribed by IFRS or Generally Accepted Accounting Principles (GAAP) in the United States. Gross profit before depreciation and amortization is gross profit with the depreciation and amortization expense added back. EBITDA is profit attributable to shareholders before net finance expense, income and resource taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA before impairment charges. For adjusted profit, we adjust profit attributable to shareholders as reported to remove the effect of certain types of transactions that in our judgment are not indicative of our normal operating activities or do not necessarily occur on a regular basis. This both highlights these items and allows us to analyze the rest of our results more clearly. We believe that disclosing these measures assists readers in understanding the cash generating potential of our business in order to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends. Gross profit margins before depreciation are gross profit before depreciation and amortization, divided by revenue for each respective business unit. Unit costs are calculated by dividing the cost of sales for the principal product by sales volumes. We include this information as it is frequently requested by investors and investment analysts who use it to assess our cost structure and margins and compare it to similar information provided by many companies in our industry. We sell both copper concentrates and refined copper cathodes. The price for concentrates sold to smelters is based on average London Metal Exchange prices over a defined quotational period, from which processing and refining deductions are made. In addition, we are paid for an agreed percentage of the copper contained in concentrates, which constitutes payable pounds. Adjusted revenue excludes the revenue from co-products and by-products, but adds back the processing and refining allowances to arrive at the value of the underlying payable pounds of copper. Readers may compare this on a per unit basis with the price of copper on the London Metal Exchange. Adjusted cash cost of sales for our steelmaking coal operations is defined as the cost of the product as it leaves the mine excluding depreciation and amortization charges. Adjusted cash cost of sales for our copper operations is defined as the cost of the product delivered to the port of shipment, excluding depreciation and amortization charges. It is common practice in the industry to exclude depreciation and amortization as these costs are 'non-cash' and discounted cash flow valuation models used in the industry substitute expectations of future capital spending for these amounts. In order to arrive at adjusted cash costs of sales for copper we also deduct the costs of by-products and co-products. Total cash unit costs include the smelter and refining allowances added back in determining adjusted revenue. This presentation allows a comparison of unit costs, including smelter allowances, to the underlying price of copper in order to assess the margin. Unit costs, after deducting co-product and by-product margins, are also a common industry measure. By deducting the co- and by-product margin per unit of the principal product, the margin for the mine on a per unit basis may be presented in a single metric for comparison to other operations. Readers should be aware that this metric, by excluding certain items and reclassifying cost and revenue items, distorts our actual production costs as determined under GAAP. Net debt is total debt less cash and cash equivalents. The debt to debt-plus-equity ratio takes total debt as reported and divides that by the sum of total debt plus total equity. The net debt to net debt-plus-equity ratio is net debt divided by the sum of net debt plus total equity, expressed as a percentage. These measures are disclosed as we believe they provide readers with information that allows them to assess our credit capacity and the ability to meet our short and long-term financial obligations. The measures described above do not have standardized meanings under IFRS, may differ from those used by other issuers, and may not be comparable to such measures as reported by others. These measures have been derived from our financial statements and applied on a consistent basis as appropriate. We disclose these measures because we believe they assist readers in understanding the results of our operations and financial position and are meant to provide further information about our financial results to investors. These measures should not be considered in isolation or used in substitute for other measures of performance prepared in accordance with IFRS. Reconciliation of Gross Profit Before Depreciation and Amortization This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements, principally under the headings "Outlook," that appear in this release but also elsewhere in this document, include estimates, forecasts, and statements as to management's expectations with respect to, among other things, anticipated cost and production forecasts at our business units and individual operations and expectation that we will meet our production guidance, sales volume and selling prices for our products (including settlement of steelmaking coal contracts with customers), capitalized stripping guidance, capital expenditure guidance, our expectation that we will be able to offset Coal Mountain production with increased production at other coal sites, our expectation that improved prices will provide additional profits and cash resources, our focus on achieving an investment grade rating, plans and expectations for our development projects, the targeted capital cost and mine life of Quebrada Blanca Phase 2, expected production, production capacity of Quebrada Blanca Phase 2, and the estimated key project operating parameters and project economics of that project, the potential to extend the Pend Oreille mine life to 2020, our expectation that we will close the acquisition of the outstanding 49% interest in the Teena/Reward zinc project, the impact of currency exchange rates, the expected timing and amount of production at the Fort Hills oil sands project, total Fort Hills project capital costs, the expected amount and timing of Teck's share of costs, the timing of completion and commissioning of the secondary extraction units, the expected average production rate and timing of achieving 90% of the expected production rate and demand and market outlook for commodities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and steelmaking coal and other primary metals and minerals as well as oil, and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, our steelmaking coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, our ongoing relations with our employees and business partners and joint venturers. Assumptions regarding Quebrada Blanca Phase 2 are based on current project assumptions and the final feasibility study. Assumptions regarding Fort Hills are based on the approved project development plan, as revised including by the updated schedule and project cost projections and the assumption that the project will be developed and operated in accordance with that plan, assumptions regarding the performance of the plant and other facilities at Fort Hills and the operation of the project. Acquisition of the 49% interest in the Teena/Reward zinc project is based on the assumption that all conditions to closing are satisfied and closing not otherwise being delayed. Assumptions regarding the impact of foreign exchange are based on current commodity prices. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially. Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes, political risk, social unrest, failure of customers or counterparties to perform their contractual obligations, changes in our credit ratings, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, and changes or further deterioration in general economic conditions. Closing of the Teena/Rox acquisition may be affected by unanticipated difficulties with respect to satisfaction of closing conditions or other challenges. Our Fort Hills project is not controlled by us and construction and production schedules and costs may be adjusted by our partners. Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies. Statements regarding anticipated steelmaking coal sales volumes and average steelmaking coal prices for the quarter depend on timely arrival of vessels and performance of our steelmaking coal-loading facilities, as well as the level of spot pricing sales. We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2015, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F. Teck will host an Investor Conference Call to discuss its Q4/2016 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Wednesday, February 15, 2017. A live audio webcast of the conference call, together with supporting presentation slides, will be available on our website at www.teck.com. The webcast will be archived at www.teck.com.


News Article | February 21, 2017
Site: www.eurekalert.org

NASA-NOAA's Suomi NPP satellite captured a visible image of the Southern Pacific Ocean's newly formed tropical cyclone in the Gulf of Carpentaria. By the next day Alfred made landfall and weakened to a remnant low pressure area. The Gulf of Carpentaria is a body of water between Australia's Northern Territory and Queensland. The Arafura Sea lies to the north of the Gulf. On Feb. 20 the Visible Infrared Imaging Radiometer Suite (VIIRS) instrument aboard NASA-NOAA's Suomi NPP satellite provided a visible image of Alfred that showed half of the storm was over land, and half in the Gulf of Carpentaria. Tropical Cyclone Alfred developed from a tropical low pressure area previously known as System 91P. As the low pressure area briefly moved off the coast of the Northern Territory and into the warm waters of the Gulf it consolidated and strengthened into a tropical cyclone. When Alfred developed around 0300 UTC on Feb. 20 (10 p.m. EST on Feb. 19) the Joint Typhoon Warning Center noted Alfred's maximum sustained winds were near 46 mph (40 knots/74 kph. At that time, Alfred was centered near 15.3 degrees south latitude and 137.1 degrees east longitude in the southwestern Gulf of Carpentaria. Alfred was moving to the south-southeast 3.4 mph (3 knots/5.5 kph) and was crossing the Gulf of Carpentaria coast, between Borroloola and the Northern Territory/Queensland border. By Feb. 21, Alfred had made landfall near the Queensland and Northern Territory border and weakened to a remnant low pressure area. At 8 p.m. AEST local time in Queensland, The Australian Bureau of Meteorology (ABM) noted that ex-tropical cyclone is expected to remain slow moving over land before shifting westward on Feb. 22. There are currently no tropical cyclone warnings in effect for Alfred. For additional weather advisories, visit the ABM website: http://www. .


News Article | February 24, 2017
Site: www.theguardian.com

The chairman of the Turnbull government’s backbench environment and energy committee has backed Tony Abbott’s call to wind back the renewable energy target, and cut the immigration rate to boost housing affordability. The Liberal MP Craig Kelly told Guardian Australia on Friday the RET needed to be frozen where it is at the moment, and the government needed to explicitly link the issues of immigration and housing affordability. “We have to link the two,” Kelly said. “One of the big factors in housing demand at the moment is how many people migrate to Australia.” Kelly’s comments follow a provocative speech from Abbott on Thursday night, where he laid out a new conservative manifesto for government and warned Malcolm Turnbull was presiding over a Coalition government drifting to defeat. Abbott’s speech has provoked a strong pushback from senior colleagues in Canberra, with the finance minister, Mathias Cormann – a leading government conservative and Abbott’s former numbers man – labelling the intervention “self-indulgent” and “deliberately destructive”. The prime minister said on Friday Abbott’s intervention was “sad” and he contrasted his record of action with that of his predecessor, who spun his wheels unproductively in the Senate. “I do not just talk about cutting taxes. I have cut them,” Turnbull said. “My government hasn’t put up personal income tax, it’s reduced it. Done, tick, gone through the parliament.” On Thursday evening, Abbott used a book launch in North Sydney to unveil a new battle plan for the next election – declaring the Coalition needed to cut immigration, slash the renewable energy target, abolish the Human Rights Commission, and gut the capacity of the Senate to be a roadblock to the government’s agenda. Ignoring the obvious contrast between his record as prime minister and the elements of his new manifesto that contradict his own record, Abbott warned the government wouldn’t win the next election unless it woos the conservative base. He also warned that failing to adopt robust conservative policies could justify voters opting for One Nation over the government. While the speech contained a number of clear pot shots against Turnbull and the government, Abbott denied his intentions were destructive. He claimed on Friday Turnbull had his “full support”. “My duty as a former party leader is to try to ensure the party and the government stays on the right track,” Abbott told the Nine Network. “Obviously we’ve got to have a clear direction and strong purpose for the rest of this term of parliament.” “I’m not in the business of taking pot shots at my colleagues. My colleagues can say what they think is best but I’m in the business of trying to ensure that our country and our party are going forward.” Asked whether Turnbull was the best person to be prime minister, Abbott said “he’s the person that the party chose to lead the government and obviously I support the leader of the government.” “I did everything I humanly could to get the Turnbull government re-elected and I did everything I could to help the prime minister win the election. “We just got there. Having got the government back into office I think my duty now is to try to keep us on the right track and I’ll keep doing that.” On breakfast television the manager of government business, Christopher Pyne, said the government had no plans to freeze immigration. He said the proposal “would be catastrophic in places like Northern Territory, South Australia, Tasmania, [and] most places outside the capital cities”. Rightwing parties in fierce competition with the government for political support, such as One Nation and Cory Bernardi’s new Australian Conservatives movement, are campaigning in favour of lower immigration, which puts pressure on Coalition MPs. Published opinion polling suggests the Coalition is bleeding votes to One Nation, and a lot of the government’s political messaging is focussed on protecting its exposed right flank. Kelly said calls for lower immigration rates needed to be considered seriously because of the housing affordability question Abbott flagged on Thursday night, and also as a factor relating to reliable energy supply. The Sydney backbencher told Guardian Australia, with the Hazelwood power station now heading for closure, and given the problems electricity consumers had seen over the hot summer with blackouts and supply disruptions, high migration rates had to be on the table. “If we didn’t have enough supply this year, how will we go next summer?” Kelly said. He said linking migration to housing affordability and energy supply would put pressure on the states to do more to fix the current problems. Asked whether he supported a return by Abbott to the leadership, given his endorsement of the manifesto laid out on Thursday night, Kelly said Turnbull had delivered “an absolutely stellar performance” during the last parliamentary fortnight. But he said the political times were challenging for whomever held the prime ministership when a government was intent on pursuing necessary policies, such as returning the budget to balance. “It doesn’t matter who the prime minister is,” Kelly said. He said it was much better for the government if colleagues focussed on policy debates rather than personalities. Destructive personality debates, he said, only boosted Labor’s political fortunes. Senior figures inside the government on Friday told Guardian Australia Tony Abbott had no viable path back to the party leadership, and his voluble interventions had only eroded his internal support. While some party figures readily acknowledge ongoing internal problems – such as friction between the prime minister and his treasurer, Scott Morrison, and chest bumps and periodic ill-discipline such as a slip this week from the immigration minister, Peter Dutton, over the US refugee deal which led to him being rebuked by the foreign minister Julie Bishop – several sources say the key conservative players remain steadfastly behind Turnbull. One senior government figure characterised Abbott’s current outlook caustically as: “zero partyroom support. Zero public support. Reduced to hanging out with the Star Wars bar scene freaks of the far right.” Some government MPs remain concerned Abbott’s bombardment may be paving the way for a tilt at the leadership by Dutton, who is the government’s most significant conservative figure – but other senior sources dismiss this as fanciful. The departing Liberal senator Cory Bernardi believes Abbott has his eyes on a return to the leadership. He recently expressed frustration that Abbott was using his departure from the Liberals as an opportunity to engage in proxy warring around the leadership. Pyne on Friday said the government did not intend to revive the unpopular austerity of Abbott’s first budget. “We won’t be slashing spending. Abbott tried that in 2014 and the budget during his leadership but, of course, a whole lot of zombie legislation sat in the Senate unable to be passed.” Pyne said backbenchers such as Abbott were “very welcome” to state their views but vowed the government would not be “distracted by some of these issues”. “The cabinet is very united behind Malcolm Turnbull,” he said, noting that when Abbott was leader he trailed Bill Shorten 30% to 48% as preferred prime minister. “So we are on the right track with Malcolm Turnbull and with the government’s policies.”


News Article | February 22, 2017
Site: www.theguardian.com

A new paper shows that the ancient ancestors of termites found in northern Australia crossed vast distances over oceans, and then followed an evolutionary path similar to humans, migrating from tree-tops to the ground. Mounds sometimes reaching as high as eight metres and housing millions of individual insects are seen in the Northern Territory, Western Australia and far north Queensland, built by cathedral termites. Relative to the animals’ 3mm height and the average human height the termite mounds are the equivalent to four of the world’s tallest structure, the Burj Khalifa skyscraper in Dubai, stacked on top of each other. Little was known about the termites’ origins until this research, said Associate Professor Nathan Lo, the co-lead author of the paper from the University of Sydney. DNA sequencing showed that today’s cathedral termites descend from the first “nasute termites” to arrive in Australia up to 20m years ago from Asia or South America. “It’s a strange result but we’re very confident about it,” said Lo. “The closest relatives of these mound-building termites in Australia are actually tree-nesting termites that live in Asia and South America.” He believed that termites arrived in Australia after crossing long distances of ocean on plant matter following tsunamis or large storm events. The researchers found this colonisation had happened three times in the past 20m years. These first settlers also lived in trees in coastal areas but over time began to build mounds on the ground and feed on litter and grass as they adapted to the arid conditions of northern Australia. Lo said the termites’ relocation was driven by change in climate and environment after Australia shifted from a forest-covered continent 20m years ago to a much drier landscape. As the forests succumbed to Australia’s dry conditions about seven to 10m years ago, the tree-dwelling termites sought more moisture in the earth, he said. “That’s why they started to build mounds.” Humans would later follow a similar evolutionary path, said Lo, with our ancestors living in trees as recently as the last 4m years. “These amazing mounds we see in the north of Australia, we didn’t know if they were 100m years old, 50m years old. Now we know it’s more likely that within the last 10m years that they’ve popped up. “They weren’t here when Australia separated from Gondwana some 100m years ago – they evolved here relatively recently due to ancient climate change.” The study, published on Wednesday in the Royal Society journal Biology Letters, was led by the University of Sydney in collaboration with Purdue University in the United States, the CSIRO National Research Collections Australia, the University of Western Australia and the University of New South Wales.


News Article | February 22, 2017
Site: www.eurekalert.org

They build among the tallest non-human structures (proportionately speaking) in the world and now it's been discovered the termites that live in Australia's remote Top End originated from overseas - rafting vast distances and migrating from tree-tops to the ground, as humans later did. Referred to as "cathedral" termites, the Nasutitermes triodiae build huge mounds up to eight metres high in the Northern Territory, Western Australia and Queensland - representing some of the tallest non-human animal structures in the world. DNA sequencing found the forebearers, called nasute termites, colonised Australia three times in the past 20 million years or so and evolved from wood to grass-feeding as they adapted to significant environmental changes, including increasingly arid conditions and the conversion of woodlands to grassland habitats in subtropical savannahs and central Australia. Now a prominent feature of the arid landscape "Down Under", the mounds house millions of termites; this study is the first comprehensive investigation of the evolution of the nesting and feeding of the extended family of termites, through the Australian refugee descendants. The findings of the international research are published today in the Royal Society journal Biology Letters. Co-lead author of the paper from the University of Sydney, Associate Professor Nathan Lo, said although much was known about the functions of termite mounds - which include protection from predators - little had been known about their evolutionary origins. "We found that the ancestors of Australia's fortress-building termites were coastal tree-dwellers, which arrived in Australia by rafting long distances over the oceans from either Asia or South America," Associate Professor Lo said. "Once in Australia, they continued to build their nests in trees, but later descended and began building mounds on the ground instead, paralleling the evolution of the other great architects of the world - human beings, whose ancestors lived in the tree tops some millions of years ago." Associate Professor Lo, from the University of Sydney's School of Life and Environmental Sciences, said the mounds are an engineering feat when considered in comparison to the tallest structure on Earth - Dubai's skyscraper the Burj Khalifas. "Given that a worker termite stands about 3mm in height, these mounds are in human terms the equivalent of four Burj Khalifas stacked on top of each other," he said. The paper, "Parallel evolution of mound-building and grass-feeding in Australian nasute termites," said ancestral wood feeders would likely have lost the ability to feed on wood as they transitioned to feeding on litter and grass. "This group is one of the most ecologically successful groups of termites in Australia," the paper reads. "We have shown that its capacity to disperse over oceans - and to repeatedly evolve the ability to build mounds and feed on novel substrates in the face of significant environmental change - appears to have been important in promoting this success." The research was led by the University of Sydney in collaboration with Purdue University in the United States, the CSIRO National Research Collections Australia, the University of Western Australia and the University of New South Wales.


News Article | February 22, 2017
Site: phys.org

Referred to as "cathedral" termites, the Nasutitermes triodiae build huge mounds up to eight metres high in the Northern Territory, Western Australia and Queensland - representing some of the tallest non-human animal structures in the world. DNA sequencing found the forebearers, called nasute termites, colonised Australia three times in the past 20 million years or so and evolved from wood to grass-feeding as they adapted to significant environmental changes, including increasingly arid conditions and the conversion of woodlands to grassland habitats in subtropical savannahs and central Australia. Now a prominent feature of the arid landscape "Down Under", the mounds house millions of termites; this study is the first comprehensive investigation of the evolution of the nesting and feeding of the extended family of termites, through the Australian refugee descendants. The findings of the international research are published today in the Royal Society journal Biology Letters. Co-lead author of the paper from the University of Sydney, Associate Professor Nathan Lo, said although much was known about the functions of termite mounds - which include protection from predators - little had been known about their evolutionary origins. "We found that the ancestors of Australia's fortress-building termites were coastal tree-dwellers, which arrived in Australia by rafting long distances over the oceans from either Asia or South America," Associate Professor Lo said. "Once in Australia, they continued to build their nests in trees, but later descended and began building mounds on the ground instead, paralleling the evolution of the other great architects of the world - human beings, whose ancestors lived in the tree tops some millions of years ago." Associate Professor Lo, from the University of Sydney's School of Life and Environmental Sciences, said the mounds are an engineering feat when considered in comparison to the tallest structure on Earth - Dubai's skyscraper the Burj Khalifas. "Given that a worker termite stands about 3mm in height, these mounds are in human terms the equivalent of four Burj Khalifas stacked on top of each other," he said. The paper, "Parallel evolution of mound-building and grass-feeding in Australian nasute termites," said ancestral wood feeders would likely have lost the ability to feed on wood as they transitioned to feeding on litter and grass. "This group is one of the most ecologically successful groups of termites in Australia," the paper reads. "We have shown that its capacity to disperse over oceans - and to repeatedly evolve the ability to build mounds and feed on novel substrates in the face of significant environmental change - appears to have been important in promoting this success." Explore further: Hidden ants reveal gold better than top-dwelling termites More information: Parallel evolution of mound-building and grass-feeding in Australian nasute termites, Biology Letters, rsbl.royalsocietypublishing.org/lookup/doi/10.1098/rsbl.2016.0665


News Article | February 22, 2017
Site: www.businesswire.com

LONDON--(BUSINESS WIRE)--After several years of flat growth or decline for global wool production, the global wool market is finally showing positive signs of gradual recovery for the upcoming fiscal year, thanks to steady growing markets in wool dominating countries such as Australia and China. The latest development of the global wool market, Australia’s wool production and China’s wool consumption are some of this week’s featured stories on BizVibe. BizVibe is the world’s smartest B2B marketplace and allows users to connect with over seven million companies around the globe. After the 1.5% decline in the world’s wool production in 2015/16, things are looking up for the global wool market as the past year brought the highest turnover in the market since 2002, with a total of about USD 2.2 billion. Meanwhile, demand for fine and superfine wools has been rising, as has the price. Manufacturers are also making innovations in Merino wool fabrics. All these factors should help drive the growth of the global wool market. Connect with nearly 7,500 wool companies listed on BizVibe Australia is the world’s largest wool producer, with the value of Australian wool exports in 2015-16 estimated to be around USD 3 billion. By mid-2016, Australia continued its lead with a total wool output of 258 mkg, followed by China and New Zealand. Wool is produced in all Australian states except the Northern Territory. New South Wales produces the greatest volume of wool, followed by Victoria, Western Australia and South Australia. In 2014-15, over 70 million sheep were shorn in Australia. Connect with over 700 textiles companies in Australia Is China’s dominance on the global wool market weakening? China is currently the world’s largest wool importer, wool processor and woollen products manufacturer. However, its wool imports and domestic wool industry has declined in recent years, caused by several fronts including slower economic growth, labour shortages, labour cost increases, and industrial over capacity. Despite the market shrink, China is still expected to continue its leading position in both global wool production and wool consumption for the foreseeable future, thanks to its economic growth and increasing demand driven by the rising middle class. Connect with nearly 1,300 textiles companies in China listed on BizVibe BizVibe is home to 50,000+ apparel and textile companies across 200+ countries, covering all sectors. The BizVibe platform allows you to discover the highest quality leads and make meaningful connections in real time. Claim your company profile for free and let the business come to you. BizVibe is home to over seven million company profiles across 700+ industries. The single minded focus of BizVibe’s platform is to make networking easier. Over the years, we've searched far and wide to figure out how businesses connect and enable trade. That first interaction is usually fraught with the uncertainty of finding a potential partner vs. a potential nightmare. With this in mind, we've designed a robust set of tools to help companies generate leads, shortlist prospects, network with businesses from around the world and trade seamlessly. BizVibe is headquartered in Toronto, and has offices in London, Bangalore and Beijing. For more information on the BizVibe network, please contact us.


News Article | February 27, 2017
Site: www.theguardian.com

The “staggering” increase in energy costs faced by households and businesses will continue thanks to rising gas prices, putting jobs in jeopardy, according to the Australian Industry Group. Warning that last year’s steep price rises are set to become “the new normal”, the Ai Group says in a report on Tuesday that the complexities of the gas market have combined with a decline in coal-fired power generation to produce a perfect storm for consumers. Wholesale electricity prices are roughly doubling, the report said, and once fully passed through, gas and electricity prices will cost households an extra $3.6bn a year and businesses up to $8.7bn. That equates to about $500 a household, depending on gas use, and about $100,000 just in electricity costs for many small- to medium-sized businesses. Several firms had reported that their energy costs had tripled in 2016, said Ai Group, which surveyed 285 companies across Australia for its report entitled Energy Shock: No Gas, No Power, No Future? The Ai Group chief executive, Innes Wilcox, said price rises would lead some manufacturers to question their viability and consider moving operations overseas. “Politics-driven energy policies are making a bad situation worse,” he said. “This includes decisions to put gas development on hold in NSW, Victoria and the Northern Territory, partisan warfare on energy and climate at the federal level, and entirely uncoordinated state renewable energy targets.” The political warfare around energy issues shows no signs of abating with blackouts in South Australia leading to a renewed assault by former prime minister Tony Abbott on the renewable energy target. But the Ai Group report pinpointed the gas market as the main culprit behind the rises. “The high and rising price of gas means that existing gas-powered [electricity] generators will be significantly more expensive,” the report says. “The electricity market’s design means that gas generators often set the price for the whole market. And as they generate more often with more expensive fuel this is translating into higher average prices.” One reason for the increasing importance of gas was the decline in coal-fired generation, which suffered from the rise of renewables and lack of flexibility. The closure of Hazelwood power station in Victoria, for example, would have a “significant impact” on the market. The stations were disappearing for “strong reasons”, including age and the cost of updating plant. They were increasingly handicapped by the “physical and financial difficulties inflexible generators face in a market marked by frequent oversupply and occasional shortage”. The emergence of future renewable capacity under the RET would help push prices down, the report said, adding that greener sources of power would one day replace fossil fuels. “Looking to the longer term, market forces and climate goals are likely to make conventional coal and, eventually, gas power unviable, and bring on lots of renewables.” But it said problems remained with the intermittent nature of renewable power and low-cost ways had to be found to to turn “an abundance of energy” into a dependable resource. It suggested that better energy storage could stabilise the system and that technologically and geographically diverse generation “can reduce the impact of intermittency”. Underpinning the surge in power prices was what the report called the “huge change in Australia’s gas markets” since the development of LNG export terminals across the country. This had been expected to link prices to international markets. But the $200bn projects have created supply shortages in the domestic market because the expected output of the fields has not matched up with the amount exporters committed to their clients, meaning they have scrambled to snap up all remaining capacity, pushing up prices for consumers. This has resulted in the “counterintuitive” outcome whereby international buyers of LNG have been paying “considerably lower prices than have Australian buyers of domestic gas”. The outlook for Australia’s gas market is “grim”, the concludes. To remedy the problems, the report recommends policies to encourage the development of new gas fields and more efficient household case use to ease pressure on supply and demand. It also suggested that despite the huge expenditure on LNG export terminals, one way to reduce Australia’s energy squeeze would be to build an import terminal on the east coast. This would enable suppliers to buy gas on the international market and pass on the lower prices to consumers. But it would cost “several hundred million dollars” and the cost would have to be borne by the consumer.

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