TECK RESOURCES LTD

Variable consideration to IMSA

During the year ended December 31, 2024, we recorded $7 million (2023 – $4 million) of expense (Note 34(b)) related to a derivative financial liability that arose from our 2018 acquisition of an additional 13.5% interest in QBSA through the purchase of Inversiones Mineras S.A. (IMSA), a private Chilean company. This derivative financial liability is carried at fair value, with changes in fair value being recognized in profit for the year. The purchase price at the date of acquisition included additional amounts that may become payable to the extent that average copper prices exceed US$3.15 per pound in each of the first three years following commencement of commercial production, as defined in the acquisition agreement, up to a cumulative maximum of US$100 million if commencement of commercial production occurs prior to January 21, 2024 or up to a lesser maximum in certain circumstances thereafter.

Commencement of commercial production occurred in March of 2024, which reduced our cumulative maximum payment to US$97 million. Based on our estimate that the future average copper prices will exceed the US$3.15 per pound threshold in the next three years, the fair value of the derivative financial liability is $132 million (2023 – $115 million) as at December 31, 2024.

The fair value of the IMSA liability is calculated using a discounted cash flow method based on quoted market prices and is considered a Level 2 fair value measurement with significant observable inputs on the fair value hierarchy (Note 35).

The current portion of the financial liability is $72 million (2023 – $nil) recorded in trade accounts payable and other liabilities (Note 21). The non-current portion is $60 million (2023 – $115 million) recorded in other liabilities (Note 28).