Key Takeaways
- Teck’s QB2 mine in Chile produced a record 105,000 tonnes of copper in Q2 2026, putting it on pace to hit the top end of full-year guidance.
- Analyst price targets for TECK.B have climbed to a consensus of C$87, up from C$74 at the start of 2026.
- QB2 costs of US$1.62/lb are expected to decline further as throughput scales toward full capacity.
- Copper’s structural supply deficit makes QB2’s ramp-up one of the most important new mine developments globally.
Teck Resources (TSX: TECK.B) delivered a significant operational milestone in the second quarter of 2026, reporting record copper output of 105,000 tonnes from its Quebrada Blanca Phase 2 (QB2) operation in northern Chile ahead of internal guidance and analysts’ estimates. The result sent the stock up 4.2% on the day of release and puts Teck firmly on track to meet its full-year copper guidance of 390,000–450,000 tonnes.
QB2: From Problem Child to Portfolio Anchor
QB2 had a difficult commissioning period. Cost overruns pushed the capital budget to approximately US$7.4 billion roughly 40% above the original estimate and a series of operational issues during 2024 ramp-up frustrated investors and led to a period of significant share-price underperformance. Teck’s decision to sell its metallurgical coal business to Glencore and concentrate on becoming a pure-play copper company was widely criticized at the time.
Two years later, the thesis is playing out. QB2 is now operating above its nameplate throughput capacity of 143,000 tonnes per day of ore, and recoveries have improved from roughly 78% during commissioning to above 86% in line with feasibility study assumptions.
Financial Implications
At current copper prices of approximately US$4.87/lb, Teck’s QB2 operation is generating extraordinary margins. With cash costs under US$1.75/lb, the operation is earning over US$3.10/lb in gross margin implying annualized EBITDA from QB2 alone in excess of US$1.3 billion at current production rates and prices.
This cash flow is significant in the context of Teck’s debt position, which still carries approximately US$4.2 billion in net debt following the coal sale and QB2 construction spend. Analysts now expect Teck to be in a net cash position by late 2027 if copper prices remain above US$4.50/lb.
What Analysts Are Saying
The Q2 result has prompted a round of target price upgrades. BMO Capital Markets raised its target to C$85.00 from C$78.00, citing “a clear inflection in QB2 operational delivery.” Scotiabank maintained its Sector Outperform rating and raised its target to C$88.00. RBC Capital Markets, historically the most cautious on Teck among the major bank desks, moved from Sector Perform to Outperform with a C$82.00 target.
| Analyst | Rating | Target (C$) | Change |
|---|---|---|---|
| BMO Capital Markets | Outperform | $85.00 | ↑ from $78.00 |
| Scotiabank | Sector Outperform | $88.00 | ↑ from $82.00 |
| RBC Capital Markets | Outperform | $82.00 | Upgraded |
| TD Securities | Buy | $90.00 | Unchanged |
| National Bank | Outperform | $86.00 | ↑ from $80.00 |
Risks to Watch
The QB2 story is not without risk. Chile’s political environment remains a concern a proposed new royalty regime is still working through the Chilean congress, with a final vote expected in late 2026. The proposed royalty, if passed in its current form, could add approximately US$0.08–0.12/lb to Teck’s effective Chilean cost base.
Water availability is a perennial constraint in the Atacama region. QB2 was designed to use seawater (desalinated and pumped 1,000 metres uphill), but the energy cost of this process adds to operating expenses and creates exposure to Chile’s electricity market.
The Bottom Line
QB2 is delivering. After years of investor frustration, Teck Resources appears to have turned the corner at its flagship copper operation. With costs falling, grades stable, and throughput above nameplate capacity, the operation is generating the kind of cash flow that makes Teck’s pure-copper thesis credible. At current prices, TECK.B offers one of the highest-quality copper exposures available on the TSX.
Boreal Markets and SmallCap Communications Inc. are not registered investment advisers.
Always conduct your own due diligence before making investment decisions.
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