Teck Resources Ltd. reported much better-than-expected first quarter results as it responded to weak commodity prices with deep cost reductions.

Adjusted profit came in at $18 million, or three cents a share, Vancouver-based Teck said on Tuesday. Analysts, on average, were expecting a loss of four cents.

With the exception of the Pend Oreille zinc mine, Teck said all of its operations were cash positive in the first quarter.

“Again our operations performed well by reducing our costs while maintaining production volumes,” chief executive Don Lindsay said in a statement.

“Notwithstanding that the commodity cycle continues to be challenging, we are encouraged by the change in direction in steelmaking coal and zinc prices.”

Even in a horrendous market for coking coal, Teck was able to cut costs enough in Q1 to achieve decent margins. Its unit costs were $56 a tonne, compared to a realized selling price of US$75. By comparison, unit costs were US$68 a tonne in the first quarter of 2015.

Likewise, its copper unit costs dropped 16 per cent year-over-year to US$1.29 a pound.

Teck’s share price has gone on an incredible run this year, more than tripling since mid-January as commodity prices have shown some signs of life after a prolonged bear market. Teck is encouraged by the recent rally but remains cautious, saying on Tuesday that lower prices may persist “for some time.” It has repeated that refrain numerous times over the last few years.

Metal prices have been stuck in a prolonged bear market due to oversupply, concerns about China’s economy and broader global volatility. But there is some hope in the mining sector that the lows of mid-January will prove to be the bottom of the market.

While Teck’s operations continue to perform well in a weak market, investors are concerned about the company’s balance sheet. Teck holds roughly $9 billion of debt and lost its investment-grade credit rating last year.

Those balance sheet concerns have been heightened because of the company’s huge $2.9-billion commitment to the Fort Hills oilsands project, which needs higher oil prices to generate a decent return. Teck has another $1 billion to spend at Fort Hills by the end of 2017.

However, Teck noted on Tuesday that it has more than $5.1 billion of liquidity and hopes to end the year with more than $500 million of cash.

Teck is looking at selling non-core assets, including infrastructure assets, to improve its balance sheet. Debt maturities are spread out over many years, so there is no immediate crisis.