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Teck attains additional interest in QBSA

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Global Mining Review,

Teck Resources Limited announced that it has acquired an additional 13.5% interest in Compañía Minera Teck Quebrada Blanca S.A. (QBSA) through the purchase of Inversiones Mineras S.A.(IMSA), a private Chilean company. The acquisition brings Teck’s interest in QBSA to 90%. ENAMI, a Chilean State agency, holds a 10% preference share interest in QBSA, which does not require ENAMI to fund capital spending.

QBSA’s principal asset is the Quebrada Blanca Phase 2 (QB2) copper development project located in northern Chile. QB2 is in the final stages of permitting, and a project sanction decision is not expected before the second half of 2018.

“This transaction simplifies the ownership and capital structure for QB2, giving Teck additional flexibility with respect to financing options for the project,” said Don Lindsay, President and CEO.

“QB2 is a high quality, long life asset in a low risk jurisdiction that will operate through multiple price cycles at a low cost, substantially increase Teck’s copper production, and generate significant value.”

IMSA holds 8.5% of the ordinary shares of QBSA and a 5% preferred share interest. The purchase price consists of US$52.5 million paid in cash on closing, an additional payment of US$60 million payable on the issuance of the major approval of the social and environmental impact assessment for the QB2 project and the expiry of certain appeal rights, and a further US$50 million payable within 30 days of the commencement of commercial production at QB2. Additional amounts may become payable to the extent that average copper prices exceed US$3.15 per pound in each of the first three years following the commencement of commercial production, up to a cumulative maximum of US$100 million if commencement of commercial production occurs prior to 21 January 2024, or up to a lesser maximum amount in certain circumstances thereafter.

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