Teck Resources Limited

Headnote

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from the requirement in section 8.1 of MI 61-101 to obtain minority approval for arrangement from holders of every class of affected securities, voting separately as a class -- arrangement will introduce a sunset provision to issuer's multiple voting shares that would result in the collapse of dual class share structure in consideration for a fraction of a subordinate voting share per multiple voting share -- arrangement is a business combination under MI 61-101 as each multiple voting share will be acquired and exchanged for a new multiple voting share containing the sunset provision (potentially without the consent of the holder) and related parties of the issuer are entitled to receive, as a consequence of the arrangement, consideration for their multiple voting shares that is greater than the entitlement of subordinate voting shareholders (who are not entitled to any consideration as their interests are not being terminated) -- minority approval under MI 61-101 would be determined by a majority of votes cast by multiple voting shareholders, excluding the related parties -- there is no conflict between the related parties and the other multiple voting shareholders, who will be treated identically and receive consideration per multiple voting share that is identical in amount and form to the entitlement of the related party multiple voting shareholders -- no related party multiple voting shareholder has received, or will receive, any preference, payment, beneficial enhancement, collateral benefit or inducement of any kind in connection with the arrangement -- instead of seeking minority approval from the holders of multiple voting shares, the issuer determined to seek approval for the arrangement from a majority of the votes cast by subordinate voting shareholders, excluding the votes attached to the subordinate voting shares held by the related party multiple voting shareholders, in addition to the applicable corporate law approvals -- relief requested granted, subject to conditions, including that the issuer seek and obtain the modified approvals for the arrangement.

Applicable Legislative Provisions

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, ss. 4.5, 8.1, and 9.1(2).

February 28, 2023

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the "Jurisdiction") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF TECK RESOURCES LIMITED (the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for an exemption pursuant to section 9.1 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") from the requirement in section 8.1 of MI 61-101 to obtain minority approval for the Proposed Dual Class Shares Amendment (as defined below) from the holders of every class of affected securities of the Filer, in each case voting separately as a class (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in Alberta, Manitoba, Saskatchewan, Québec and New Brunswick.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102, and MI 61-101 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation validly existing under the Canada Business Corporations Act (the "CBCA") and is in good standing.

2. The registered and principal offices of the Filer are located at Suite 3300, 550 Burrard Street, Vancouver, British Columbia, V6C 0B3.

3. The Filer is a reporting issuer in each province and territory of Canada and is not in default of any applicable requirements of the securities legislation of such jurisdictions.

4. The Filer is a diversified resource company with major business units focused on copper, zinc and steelmaking coal. The Filer has interests in mining and processing operations in Canada, the United States, Peru and Chile, including four operating steelmaking coal mines, all of which are located in British Columbia.

5. The authorized share capital of the Filer consists of an unlimited number of Class A common shares (the "Class A Shares") and Class B subordinate voting shares (the "Subordinate Voting Shares", and together with the Class A Shares, the "Voting Shares" and the holders of Voting Shares collectively, the "Shareholders"), and an unlimited number of preference shares, issuable in series.

6. The Class A Shares carry the right to 100 votes per share. The Subordinate Voting Shares carry the right to one (1) vote per share. Each Class A Share is convertible, at the option of the holder, into one Subordinate Voting Share. In all other respects, including dividend rights and the distribution of property upon dissolution or winding-up of the Filer, the Class A Shares and the Subordinate Voting Shares rank equally.

7. The Subordinate Voting Shares contain take-over protective (or coattail) provisions, which provide that, in the event that an offer (an "Exclusionary Offer") to purchase Class A Shares, which is required to be made to all or substantially all holders thereof, is not made concurrently with an offer to purchase Subordinate Voting Shares on identical terms, then subject to certain restrictions, each Subordinate Voting Share will be convertible into one Class A Share at the option of the holder during a certain period, provided that any Class A Shares received upon such conversion are deposited to the Exclusionary Offer. The Proposed Dual Class Shares Amendment is not an Exclusionary Offer under the terms of the take-over protective (or coattail) provisions of the Subordinate Voting Shares.

8. The Filer's articles of amalgamation provide that in the event the Class A Shares or the Subordinate Voting Shares, or both, are at any time subdivided or consolidated or reclassified or otherwise changed, appropriate adjustment shall be made (and if not made, shall be deemed to have been made) to the rights, privileges, restrictions and conditions, respectively, attaching to the Class A Shares and to the Subordinate Voting Shares so as to maintain and preserve the relative rights of the holders of each such class of shares.

9. As at December 31, 2022, the Filer had issued and outstanding: (i) 7,765,503 Class A Shares (representing 60.55% of the aggregate voting rights attached to the Voting Shares); (ii) 505,953,600 Subordinate Voting Shares (representing approximately 39.45% of the aggregate voting rights attached to the Voting Shares); and (iii) no preference shares.

10. The Class A Shares are listed on the Toronto Stock Exchange (the "TSX") under the ticker symbol "TECK.A". The Subordinate Voting Shares are listed on the TSX under the ticker symbol "TECK.B" and on the New York Stock Exchange under the symbol "TECK".

11. To the knowledge of the Filer, Temagami Mining Company Limited ("Temagami") owns, controls or directs 4,300,000 Class A Shares (representing approximately 55.37% of the votes attached to the Class A Shares and 33.53% of the Voting Shares) and 525,000 Subordinate Voting Shares (representing approximately 0.10% of the votes attached to the Subordinate Voting Shares and 0.04% of the Voting Shares). Keevil Holding Corporation beneficially owns 51.2% of the outstanding shares of Temagami, with the other 48.8% of the outstanding shares of Temagami beneficially owned by SMM Resources Incorporated ("SMM"). SMM is a wholly-owned subsidiary of Sumitomo Metal Mining Co., Ltd.

12. To the knowledge of the Filer, SMM also owns, controls or directs 1,469,000 Class A Shares (representing approximately 18.92% of the votes attached to the Class A Shares and 11.45% of the Voting Shares) and 397,474 Subordinate Voting Shares (representing approximately 0.08% of the votes attached to the Subordinate Voting Shares and 0.03% of the Voting Shares).

13. To the knowledge of the Filer, Dr. Norman Bell Keevil ("Dr. Keevil", and together with Temagami and SMM, the "Principal Class A Shareholders") owns, controls or directs 418,880 Class A Shares (representing approximately 5.39% of the votes attached to the Class A Shares and 3.27% of the Voting Shares) and 135,338 Subordinate Voting Shares (representing approximately 0.03% of the votes attached to the Subordinate Voting Shares and 0.01% of the Voting Shares).

14. To the knowledge of the Filer, Fullbloom Investment Corporation owns, controls or directs 52,294,674 Subordinate Voting Shares (representing approximately 10.34% of the votes attached to Subordinate Voting Shares and 4.08% of the Voting Shares). Fullbloom Investment Corporation is a wholly-owned subsidiary of China Investment Corporation.

15. To the knowledge of the Filer, no other party owns or exercises control or direction over more than 10% of either class of Voting Shares.

16. The board of directors of the Filer (the "Board") formed an independent special committee (the "Special Committee") in April 2022 to review and consider various potential transactions involving its steelmaking coal assets (collectively, the "Steelmaking Coal Assets"). The Steelmaking Coal Assets consist of interests in the Elkview, Fording River, Greenhills and Line Creek mines in British Columbia, along with certain related assets.

17. On February 21, 2023, the Filer issued and filed a press release announcing that it entered into an arrangement transaction (the "Proposed Spin-Off Transaction") to be carried out by way of a plan of arrangement in accordance with section 192 of the CBCA. Pursuant to the Proposed Spin-Off Transaction: (i) the per share stated capital of the Class A Shares and the Subordinate Voting Shares will be equalized through the shifting of stated capital from the Subordinate Voting Shares to the Class A Shares; (ii) the Steelmaking Coal Assets will be transferred to Elk Valley Resources Ltd. ("Elk Valley"), a newly incorporated, wholly-owned subsidiary of the Filer, in exchange for a royalty, preferred shares and common shares of Elk Valley (the "Elk Valley Common Shares"); and (iii) all of the Elk Valley Common Shares directly received by the Filer will be distributed to the Shareholders as a reduction of the stated capital of the Voting Shares. An 87.5% interest in the royalty and preferred shares of Elk Valley will be retained by the Filer.

18. Pursuant to the Proposed Spin-Off Transaction, Shareholders will be entitled to receive 0.1 of an Elk Valley Common Share and approximately $0.39 in cash, per Voting Share (subject to elections and proration, the "Proposed Per Share Spin-Off Transaction Consideration"). Each Shareholder is entitled to elect to receive, in respect of all the Voting Shares held by it, subject to proration: (i) the maximum amount of cash (the "Maximum Cash Consideration"); or (ii) the maximum number of Elk Valley Common Shares. Shareholders who do not make an election will be deemed to have elected to receive the maximum number of Elk Valley Common Shares.

19. Each Shareholder electing to receive the Maximum Cash Consideration is required to specify the lowest amount in cash per Elk Valley Common Share that it would be willing to accept in lieu of each Elk Valley Common Share it would otherwise be entitled to receive pursuant to the Proposed Spin-Off Transaction, subject to a minimum and maximum price range (the "Elected Price"). The Filer will then determine a single price per Elk Valley Common Share (the "Clearing Price") for the purposes of determining distributions, which will be the price at which Shareholders who have elected to receive the Maximum Cash Consideration would, subject to proration, receive the lowest number of Elk Valley Common Shares pursuant to the distribution (in the aggregate). A shareholder whose Elected Price is less than or equal to the Clearing Price would receive, subject to proration, an amount of cash equal to the Clearing Price in lieu of an Elk Valley Common Share, in addition to the base cash distribution.

20. The Proposed Spin-Off Transaction is a "related party transaction" for the purposes of MI 61-101, but is exempt from the requirements of Part 5 of MI 61-101 pursuant to section 5.1(k) thereof, because the general body of holders in Canada of affected securities of the same class will be treated identically on a per security basis and the Proposed Spin-Off Transaction has no "interested party" for purposes of paragraph (d) of the definition of such term in MI 61-101.

21. Holders of Class A Shares (including the Principal Class A Shareholders) and holders of Subordinate Voting Shares will be treated identically under the Proposed Spin-Off Transaction, on a per share basis. Each of the holders of Voting Shares have an identical opportunity to elect to receive, subject to proration, the Maximum Cash Consideration, or the maximum number of Elk Valley Common Shares and will be subject to the same deeming provisions if they fail to make an election (i.e., they will be deemed to have elected to receive the maximum number of Elk Valley Common Shares).

22. Other than the Proposed Per Share Spin-Off Transaction Consideration, no Principal Class A Shareholder has received, or will receive, directly or indirectly, any preference, payment, beneficial enhancement, collateral benefit, or inducement of any kind in connection with the Proposed Spin-Off Transaction. There are, and will be, no collateral benefits in connection with the Proposed Spin-Off Transaction.

23. Each Principal Class A Shareholder has agreed to elect to receive the maximum number of Elk Valley Common Shares.

24. The Proposed Spin-Off Transaction will be subject to receipt of: (i) two-thirds approval from holders of the Class A Shares, voting separately as a class; and (ii) two-thirds approval from holders of the Subordinate Voting Shares, voting separately as a class.

25. On completion of the Proposed Spin-Off Transaction, Elk Valley will become a reporting issuer in each of the provinces and territories of Canada, and the Elk Valley Common Shares are expected to be listed on the TSX.

26. On February 21, 2023, the Filer also announced a proposal (the "Proposed Dual Class Shares Amendment") to be carried out by way of a plan of arrangement in accordance with section 192 of the CBCA. The effect of the Proposed Dual Class Shares Amendment is to introduce a "sunset provision" to its Class A Shares that would result in the collapse of the Filer's dual class share structure six (6) years from the effective date of the Proposed Dual Class Shares Amendment in consideration for 0.67 of a Subordinate Voting Share per Class A Share.

27. Pursuant to the Proposed Dual Class Shares Amendment:

(a) the Filer's articles will be amended to: (i) redesignate the Class A Shares as "Old Class A common shares" (the "Old Class A Shares"); and (ii) create a new class of shares, designated as "Class A common shares" (the "New Class A Shares") the terms of which will provide that the New Class A Shares will be automatically exchanged on a one-for-one basis for Subordinate Voting Shares on the date which is six (6) years from the effective date of the Proposed Dual Class Shares Amendment and which will otherwise have the same terms as the Old Class A Shares;

(b) each Old Class A Share, other than Old Class A Shares that are held by a dissenting holder in respect of which dissent rights have been validly exercised, will be acquired by the Filer in exchange for one (1) New Class A Share and 0.67 of a Subordinate Voting Share (together, the "Exchange Shares");

(c) all the Old Class A Shares acquired in exchange for Exchange Shares will be cancelled; and

(d) the Filer's articles will be amended to delete the authorized Old Class A Shares (none of which will be outstanding) and the rights, privileges, restrictions, and conditions attaching to such Old Class A Shares.

28. Both the fair market value of the subject matter of, and the fair market value of the consideration for, the Proposed Dual Class Shares Amendment, insofar as it involves the Principal Class A Shareholders, is less than 25% of the Filer's market capitalization (calculated in accordance with MI 61-101 and on the basis of the Filer's market capitalization as of February 17, 2023 (being the last trading day prior to announcement of the Proposed Dual Class Shares Amendment)).

29. Since early 2019, collapsing the Filer's dual class share structure has been a regular agenda item for meetings of the Filer's Corporate Governance & Nominating Committee (the "Governance Committee") and the Governance Committee has also received regular updates from the Filer's counsel regarding developments, regulatory and otherwise, and investor sentiment towards dual class share structure companies since that time. Through the course of its consideration of alternatives related to the Steelmaking Coal Assets, the Special Committee determined that there may be significant benefits to the Filer if it implemented the Proposed Dual Class Shares Amendment substantially concurrently with completion of the Proposed Spin-Off Transaction.

30. The Special Committee and the Board determined that the Proposed Dual Class Shares Amendment is in the best interest of the Filer and fair to Shareholders.

31. Each of the Principal Class A Shareholders have entered into voting support agreements pursuant to which, inter alia, each Principal Class A Shareholder has agreed to: (i) vote any Class A Shares and Subordinate Voting Shares held by them eligible to vote at the meeting of Shareholders called to consider the Proposed Spin-Off Transaction and the Proposed Dual Class Shares Amendment in favour of the resolutions to approve each of them; and (ii) in the case of SMM and Dr. Keevil, certain transfer restrictions with respect to the Elk Valley Common Shares to be received by them pursuant to the Proposed Spin-Off Transaction (including Elk Valley Common Shares received by Temagami pursuant to the Proposed Spin-Off Transaction that may be distributed, directly or indirectly, to each of them as direct or indirect shareholders of Temagami).

32. Completion of the Proposed Dual Class Shares Amendment and completion of the Proposed Spin-Off Transaction are not conditional on one another. In the event that both arrangements are approved, the Proposed Dual Class Shares Amendment will occur prior to the Proposed Spin-Off Transaction, and the Subordinate Voting Shares received by holders of Class A Shares will be entitled to distributions pursuant to the Proposed Spin-Off Transaction.

33. The Proposed Dual Class Shares Amendment is a "business combination" for the purposes of MI 61-101 and subject to the requirements of Part 4 of MI 61-101 as: (i) each Class A Share will be exchanged for a New Class A Share, potentially without the consent of the holder of the Class A Share; and (ii) the Principal Class A Shareholders are "related parties" of the Filer and they are entitled to receive, as a consequence of the Proposed Dual Class Shares Amendment, consideration for their Class A Shares that is greater than the entitlement of the holders of Subordinate Voting Shares (i.e., the Filer's other class of equity securities) in relation to the voting and financial participating interests in the Filer represented by the respective securities. Pursuant to the Proposed Dual Class Shares Amendment, the Principal Class A Shareholders, in their capacity as holders of Class A Shares, will receive 0.67 of a Subordinate Voting Share per Class A Share, whereas the holders of Subordinate Voting Shares will not be entitled to receive consideration as their interests are not being terminated.

34. A formal valuation is not required for the Proposed Dual Class Shares Amendment as no interested party: (i) would, as a consequence of the Proposed Dual Class Shares Amendment, directly or indirectly acquire the Filer or the Filer's business, or combine with the Filer, whether alone or with joint actors; or (ii) is party to any connected transaction to the Proposed Dual Class Shares Amendment that is a related party transaction for which the Filer is required to obtain a formal valuation under section 5.4 of MI 61-101. While the Proposed Spin-Off Transaction is a connected transaction to the Proposed Dual Class Shares Amendment, the Proposed Spin-Off Transaction is exempt from the requirements of Part 5 of MI 61-101, including section 5.4.

35. Section 8.1 of MI 61-101 requires that minority approval for the Proposed Dual Class Shares Amendment be obtained from the holders of every class of affected securities of the Filer, in each case voting separately as a class. An affected security for a business combination is defined to mean an equity security of the issuer in which the interest of a security holder would be terminated as a consequence of the transaction. Under the Proposed Dual Class Shares Amendment, only holders of Class A Shares will have their interests terminated; the interests of the holders of Subordinate Voting Shares will be untouched. Accordingly, under MI 61-101, minority approval for the Proposed Dual Class Shares Amendment would be approval by a majority of the votes cast by holders of the Class A Shares excluding the votes attached to Class A Shares beneficially owned, or over which control or direction is exercised, by any party specified in subsection 8.1(2) of MI 61-101 (the "Interested Shareholders" and all other holders of Class A Shares, the "Disinterested Shareholders") at the shareholder meeting to be held by the Filer in respect of the Proposed Dual Class Shares Amendment. The only Interested Shareholders in respect of the Proposed Dual Class Shares Amendment are the Principal Class A Shareholders.

36. To the knowledge of the Filer, as at December 31, 2022:

(a) the Principal Class A Shareholders beneficially own or have control or direction over an aggregate of 6,187,880 Class A Shares (representing approximately 79.68% of the total votes attached to the Class A Shares), and an aggregate of 1,057,812 Subordinate Voting Shares (representing approximately 0.21% of the total votes attached to the Subordinate Voting Shares);

(b) Disinterested Shareholders beneficially own or have control or direction over an aggregate of 1,577,623 Class A Shares (representing approximately 20.32% of the total votes attached to the Class A Shares); and

(c) after excluding the Subordinate Voting Shares held by the Principal Class A Shareholders, the remaining holders of Subordinate Voting Shares hold an aggregate of 504,895,788 Subordinate Voting Shares (representing approximately 99.79% of the total votes attached to the Subordinate Voting Shares).

37. The Proposed Dual Class Shares Amendment does not require that minority approval be obtained under the provisions of either Ontario Securities Commission Rule 56-501 Restricted Shares or National Instrument 41-101 General Prospectus Requirements.

38. Pursuant to applicable corporate law, the Proposed Dual Class Shares Amendment will be subject to receipt of (i) two-thirds approval from holders of the Class A Shares, voting separately as a class; and (ii) two-thirds approval from holders of the Subordinate Voting Shares, voting separately as a class. The Filer has also determined to have the Proposed Dual Class Shares Amendment be approved by a majority of the votes cast by holders of Subordinate Voting Shares, excluding the votes attached to Subordinate Voting Shares held by the Principal Class A Shareholders (such approvals, collectively the "Dual Class Shares Amendment Approvals").

39. The terms of the Proposed Dual Class Shares Amendment were negotiated on behalf of the Filer by the Special Committee, which is comprised solely of directors of the Filer who are independent of both the Filer and the Principal Class A Shareholders. In connection with its consideration of the Proposed Dual Class Shares Amendment, the Special Committee retained independent legal and financial advisors.

40. The terms of the Proposed Dual Class Shares Amendment were negotiated on behalf of all holders of Class A Shares by the Principal Class A Shareholders, each of whom is a sophisticated party.

41. There is no conflict vis-à-vis the Principal Class A Shareholders and the Disinterested Shareholders. The Disinterested Shareholders will be treated identically and will receive consideration per Class A Share that is identical in amount and form to the entitlement of Principal Class A Shareholders, being the Exchange Shares.

42. Other than the Exchange Shares per Class A Share, none of the Principal Class A Shareholders, has received, or will receive, directly or indirectly, any preference, payment, beneficial enhancement, collateral benefit or inducement of any kind in connection with the Proposed Dual Class Shares Amendment.

43. The Filer will be calling a meeting of Shareholders at which the Dual Class Shares Amendment Approvals will be sought (the "Meeting") and will be sending an information circular to Shareholders (the "Information Circular").

44. The Information Circular will satisfy and comply with the disclosure requirements set out in subsection 4.2(3) of MI 61-101 and the provisions of CSA Multilateral Staff Notice 61-302 Staff Review and Commentary on Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("CSA Staff Notice 61-302").

45. The Special Committee has received fairness opinions in respect of the Proposed Dual Class Shares Amendment from Origin Merchant Partners (the "Origin Fairness Opinion") and BMO Nesbitt Burns Inc. (the "BMO Fairness Opinion" and together with the Origin Fairness Opinion, the "Fairness Opinions"). Origin Merchant Partners is an independent valuator whose fee is fixed regardless of the conclusion reached in its opinion or whether the Proposed Dual Class Shares Amendment is completed. Copies of the Fairness Opinions will be included in the Information Circular and the Origin Fairness Opinion and the associated disclosure will comply with the provisions of CSA Staff Notice 61-302.

46. The Proposed Dual Class Shares Amendment is required to be approved by the Supreme Court of British Columbia, which will consider, among other things, the fairness and reasonableness of the Proposed Dual Class Shares Amendment.

47. Shareholders will have a right of dissent in respect of the Proposed Dual Class Shares Amendment.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) the Filer seeks and obtains the Dual Class Shares Amendment Approvals at the Meeting;

(b) the Disinterested Shareholders are treated identically and receive consideration per Class A Share that is identical in amount and form to the entitlement of the Principal Class A Shareholders under the Proposed Dual Class Shares Amendment;

(c) other than the Exchange Shares per Class A Share, no Principal Class A Shareholder has received, or will receive, directly or indirectly, any preference, payment, beneficial enhancement, collateral benefit or inducement of any kind in connection with the Proposed Dual Class Shares Amendment;

(d) the holders of Class A Shares (including the Principal Class A Shareholders) and the holders of Subordinate Voting Shares are treated identically under the Proposed Spin-Off Transaction, on a per share basis;

(e) other than the Proposed Per Share Spin-Off Transaction Consideration, no Principal Class A Shareholder has received, or will receive, directly or indirectly, any preference, payment, beneficial enhancement, collateral benefit or inducement of any kind in connection with the Proposed Spin-Off Transaction;

(f) there are, and will be, no collateral benefits in connection with the Proposed Spin-Off Transaction or the Proposed Dual Class Shares Amendment;

(g) the Information Circular containing the disclosure required by MI 61-101 and CSA Staff Notice 61-302 is sent to Shareholders and filed on the System for Electronic Document Analysis and Retrieval (SEDAR); and

(h) the Fairness Opinions are included in the Information Circular.