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Teck profit jumps on higher commodity prices

JOHN LEHMANN/JOHN LEHMANN/GLOBE AND MAIL

Mining giant Teck Resources Ltd. posted a record annual profit of $2.7-billion, up by half from 2010, as the company cashed in on continued strong demand for the copper, zinc and coal it produces.

The Vancouver company said early Thursday it earned $4.52 a share, compared with earnings of $1.8-billion the previous year.

Fourth quarter profit attributable to shareholders nearly doubled to $637-million, or $1.08 per share. just ahead of analyst expectations.

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That compared with $325-million, or 55 cents, in the fourth quarter of 2010.

Quarterly revenue totalled $3-billion in the fourth quarter, compared with $2.7-billion a year ago.

The average analyst estimate had been for a profit of $1.07 per diluted share for the fourth quarter on $2.9-billion in revenue, according to Thomson Reuters.

"Higher average commodity prices combined with strong operating results contributed to new records for each of revenue, gross profit, profit and cash flow from operations," said president and CEO Don Lindsay.

"This allowed us to increase our annualized dividend rate to 80 cents per share. We ended the year with $4.4-billion in cash, which puts us in a strong position to advance our various expansion projects."

In January, Teck signed a deal to buy SilverBirch Energy Corp. for $435-million, snagging full ownership in two oil sands projects and spinning out the rest into a new junior company.

The deal gives Teck the Frontier and Equinox projects, as well as a nearby property called Twin Lakes, while the spin-out firm, to be called SilverWillow Energy Corp., will take a handful of early-stage properties.

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The move also expands Teck's oil sands business and allows it to use the truck-and-shovel open-pit mining expertise it's honed from mining coal, copper and zinc.

Teck is a diversified miner producing steel making coal, zinc, copper and energy. The company's energy business includes the 20 per cent stake in the Fort Hills project and a 50 per cent interest in the Frontier project in the Athabasca region of northern Alberta.

The Frontier project is expected to produce more than 277,000 barrels of bitumen a day and about 2.8 billion barrels are slated to be produced over the anticipated 30-year life of the project.

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