Turquoise Hill Shares Jump After Agreement Clears Mongolia Mine Expansion
January 25 2022 - 11:03AM
Dow Jones News
By Robb M. Stewart
Turquoise Hill Resources Ltd.'s shares rallied Tuesday after a
deal was struck to allow the delayed expansion of the Oyu Tolgoi
copper mine in Mongolia to push ahead.
In morning trading, the Toronto-listed shares were 16% higher at
C$22.16, and are now up 6.5% in the new year. Rio Tinto's American
depositary receipts were 1% lower at $72.50 on the New York Stock
Exchange.
Majority-owner Rio Tinto said it had reached an agreement with
Turquoise Hill, which owns most of the Oyu Tolgoi operation, and
Mongolia's government that will see the start of underground
operations at the mine in the South Gobi desert.
The agreement resolves a dispute between the partners on how to
split the cost of an underground expansion, which is several years
delayed.
Under the deal, Turquoise Hill will waive in full a $2.4 billion
loan to Mongolia's Erdenes Oyu Tolgoi, and an updated funding plan
has been agreed to address Turquoise Hill's estimated remaining
funding requirement for the underground project. Turquoise Hill has
agreed to an equity or rights offering of up to $1.5 billion, with
an initial offering of at least $650 million no later than the end
of August.
The country's parliament has approved a resolution that resolves
the outstanding issues that have been subject to negotiations with
the government of Mongolia over the last two years, Rio Tinto
said.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
January 25, 2022 10:48 ET (15:48 GMT)
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