| Finance costs and finance income |
29. Finance costs and finance income | (a) | This caption is made up as follows: |
| | | | | | | | | 2024 | | 2023 | | 2022 | | | US$(000) | | US$(000) | | US$(000) | | | | | | | | Finance revenues: | | | | | | | Interest on time deposits | | 9,998 | | 7,795 | | 3,521 | Interests on third party loans | | 662 | | 800 | | 449 | Interest on tax claims | | 263 | | — | | — | Interest on loans to related parties, note 32(a) | | 21 | | 23 | | 94 | Interest from financial instruments | | — | | 85 | | 74 | Other finance revenues | | 985 | | — | | 565 | | | 11,929 | | 8,703 | | 4,703 | Reversal of the amortized cost of the syndicated loan, note 16(g) | | — | | 85 | | 8,855 | Unrealized change of the fair value related to contingent consideration liability (b) | | — | | — | | 813 | Accrual of other account receivable | | 599 | | 269 | | 72 | Total finance revenues | | 12,528 | | 9,057 | | 14,443 | | | | | | | | | | 2024 | | 2023 | | 2022 | | | US$(000) | | US$(000) | | US$(000) | | | | | | | | Finance costs: | | | | | | | Interest related to the liability resulting from the tax claim of the years 2009-2010 | | — | | 58,454 | | — | Interest related to senior notes | | 30,250 | | 30,250 | | 31,771 | Interest on borrowings and loans | | 7,276 | | 9,044 | | 10,865 | Interest related to payments to the tax administration related to year 2014, note 31(d) | | 3,003 | | — | | — | Bonds non-domiciled interest | | 1,902 | | — | | — | Settlement of hedging financial instruments, note 34(b) | | — | | — | | 818 | Tax on financial transactions | | 186 | | 500 | | 189 | Interest of loans with third parties | | — | | — | | 26 | | | 42,617 | | 98,248 | | 43,669 | Fair value variation of the financial liability of the contingent consideration liability (b) | | 6,657 | | 4,709 | | — | Accretion expense for mine closure and exploration projects, note 15(b) | | 8,081 | | 11,838 | | 5,070 | Amortized cost of financial obligations, note 16(g) | | 700 | | 155 | | 2,820 | Accrual of costs for bond issuance, note 16(g) | | 2,122 | | 2,082 | | 1,963 | Structuring costs related to the credit line of US$200M | | 2,062 | | — | | — | Amortized cost of financial obligations, note 16(g) | | — | | — | | 515 | Update of the accounts receivable from Howden Hodco Perú, notes 1(d) and 7(i) | | — | | 1,956 | | — | Accretion expense for leases related to right-in-use assets, note 16(g) | | 623 | | 266 | | 99 | Other financial cots | | 2,535 | | — | | — | | | 65,397 | | 119,254 | | 54,136 |
| (b) | Contingent consideration - |
On August 18, 2014, Buenaventura acquired from Minera Gold Fields Peru S.A. (hereinafter “Gold Fields”) 51% of the voting shares of Canteras del Hallazgo S.A.C., which represent the whole interest of Gold Fields in the equity of such entity. Through the merger with Canteras del Hallazgo S.A.C, the Group is the owner of the Chucapaca project, which is in the Ichuña district, in the General Sanchez Cerro province, in the Moquegua department, Peru. According to previously performed studies, there is evidence of the existence of gold, silver, copper and antimony in the area, specifically in the Canahuire deposit. The purchase and sale agreement considered a contingent consideration of US$23,026,000, which corresponds to the present value of the future royalty payments equivalent to 1.5% over the future sales of the minerals arising from the mining properties acquired. The fair value of the future royalty payments was determined using the income approach. Significant increase (decrease) in the future sales of mineral would result in higher (lower) fair value of the contingent consideration liability, while significant increase (decrease) in the discount rate would result in lower (higher) fair value of the liability. Changes in the fair value of this contingent consideration have been recognized through profit or loss in the consolidated statement of profit or loss. As of December 31, 2024 and 2023, it is highly probable that the Group reaches the projected future sales. The fair value of the contingent consideration determined as of December 31, 2024 and 2023 reflects this assumption and changes in metal prices. | (c) | A reconciliation of fair value measurement of the contingent consideration liability is provided below: |
| | | | | | | | | 2024 | | 2023 | | 2022 | | | US$(000) | | US$(000) | | US$(000) | | | | | | | | Beginning balance | | 21,614 | | 16,905 | | 17,718 | | | | | | | | Changes in the fair value through profit or loss | | 6,657 | | 4,709 | | (813) | Ending balance | | 28,271 | | 21,614 | | 16,905 |
Significant unobservable valuation inputs are provided below: | | | | | | | 2024 | | 2023 | | | | | | Annual average of future sales of mineral (US$000) | | 275,865 | | 224,288 | Useful life of mining properties | | 14 | | 14 | Pre-tax discount rate (%) | | 12.73 | | 12.04 |
The Group has the preferential right of acquisition of the royalty in case Gold Fields decides to sell it.
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