On Relincho, Teck’s last paragraph (dated Feb 2014):

“Given current economic conditions, no significant activities are planned for Relincho in 2014. We will work on optimization studies that will focus on capital and operating cost reductions and explore other ways of enhance the value of the project.”

When I read this it reminds me of our latest JV update:

“Teck Resources Limited ("Teck") as operator of the Schaft Creek Joint Venture has recommended a comprehensive series of studies to review all aspects … of the Schaft Creek project. The objective is to review all data collected … and optimize various parameters of the project…”

It’s a (four sided) dice toss as to what comes next:

• A - The global economy strengthens enough to make us attractive as is (any optimizations an added bonus)

• B - Teck’s optimization studies significantly improve our NPV and make us attractive despite slowed growth

• C – Optimizations and the economy improve together

• D – Neither i.e. long term stalled economic growth + marginal optimizations – that would be chilling.

$0.255 is painful to see. I think the market believes D has already arrived.

Regardless, the ever suspicious undrilled waste, the vast differentials in cost between the PFS and BFS and the wide spread between NPV and other valuation methods make me think there is a lot of “optimization juice” left for Teck to squeeze.

Perhaps AZ will feather our nest a little while we wait?