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Mogi: says won’t convert the loans to new shares, says even it has no intention of increasing its TRQ stake at the moment, discloses number of shares it owns, it’s still 50.8%, morningstar.com also had corrected its 55.53% to 50.8%
Rio Tinto agrees to provide financing package to Turquoise Hill
8 August 2013 -- Rio Tinto and Turquoise Hill Resources (Turquoise Hill) have signed an agreement under which Rio Tinto will provide Turquoise Hill with a financing package to enable it to fund the continuing development of the Oyu Tolgoi mine in Mongolia and, if necessary, to refinance its existing indebtedness to Rio Tinto by the end of the year.
Rio Tinto has agreed to provide a US$600 million bridge funding facility to Turquoise Hill, maturing 31 December, 2013, subject to certain conditions being satisfied. The facility will be used initially to refinance all amounts outstanding under an existing US$225 million short term funding facility provided by Rio Tinto in June 2013, and thereafter for the continued ramp up of phase one of the Oyu Tolgoi mine development. Rio Tinto has agreed to extend the short term funding facility until 28 August, 2013 and to permit funds repaid by Turquoise Hill from the proceeds of the sale of its 50% interest in Altynalmas Gold Ltd. to be redrawn. Rio Tinto has also agreed to waive its option to convert all or part of any amounts outstanding under the short term funding facility into TRQ common shares.
In addition, in the event Turquoise Hill is required to raise equity to repay this new bridge facility and the existing US$1.8 billion interim funding facility provided by Rio Tinto, which also matures on 31 December, 2013, Rio Tinto has also agreed, subject to certain conditions being satisfied, to provide a firm stand-by commitment for a fully underwritten rights offering by Turquoise Hill.
Rio Tinto remains committed to putting in place a significant project financing package to fund the development of the Oyu Tolgoi underground mine.
Canadian early warning disclosure
Rio Tinto currently beneficially owns 510,983,220 common shares of Turquoise Hill, representing approximately 50.8% of the 1,005,998,892 common shares currently outstanding as of August 6, 2013, as well as 74,247,460 share purchase warrants. Rio Tinto also has anti-dilution rights that permit it to acquire additional securities of Turquoise Hill so as to maintain its proportionate equity interest in Turquoise Hill from time to time.
As the subscription price for the rights offering will not be agreed until the final prospectus, the number of Turquoise Hill common shares Rio Tinto will beneficially own following closing of the rights offering cannot be determined at this time. However, assuming Rio Tinto and the other holders of rights under the rights offering exercise their rights in full and the stand-by commitment is not utilized, Rio Tinto will beneficially own the same percentage of outstanding common shares following closing of the rights offering that it currently beneficially owns.
Except in connection with the rights offering, Rio Tinto has no present intention of acquiring additional securities of Turquoise Hill. Depending upon its evaluation of the business, prospects and financial condition of Turquoise Hill, the market for Turquoise Hill’s securities, general economic and tax conditions and other factors, Rio Tinto may directly or indirectly acquire or sell some or all of the securities of Turquoise Hill.
Announcement made this morning, or after North America close, TRQ closed -0.44%, -0.91% to C$4.55, US$4.36 respectively.
Turquoise Hill Receives Altynalmas Gold Payment and Signs Binding Term Sheet With Rio Tinto for New Funding Package
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 7, 2013) - Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) announced that the company has received a US$235 million advance payment for the Altynalmas Gold transaction and has signed a binding term sheet with majority shareholder Rio Tinto for a new funding agreement that is designed to meet Turquoise Hill's cash needs through the end of 2013.
Following the announcement on August 2, 2013, in respect of Turquoise Hill's sale of its 50% interest in Altynalmas Gold Ltd, the Company has now received US$235 million from Sumeru Gold BV. The payment has been used to repay in full the current US$225 million bridge funding agreement entered into with Rio Tinto on June 28, 2013 (the "Short Term Bridge Funding Agreement").
The company today signed a binding term sheet with Rio Tinto for a new funding package that is designed to meet Turquoise Hill's cash needs through the end of 2013. The Short Term Bridge Funding Agreement, which is now undrawn, will be extended to enable the company to draw down against it in order to fund a cash call obligation for Oyu Tolgoi due on August 13, 2013 and until definitive agreements for the new bridge facility (the "New Bridge Facility") are finalized, which is expected to be on or around August 28, 2013. Rio Tinto has waived its right to exercise its option pursuant to the terms of the Short Term Bridge Funding Agreement to convert all or any of the outstanding loan amounts into Turquoise Hill's common shares, and the New Bridge Facility is not convertible into any securities of Turquoise Hill.
Under the New Bridge Facility, Rio Tinto will provide Turquoise Hill with a secured US$600 million bridge funding facility that matures on December 31, 2013. The New Bridge Facility will have a front-end fee of US$6 million, an interest rate of LIBOR plus 5% per annum on drawn amounts and a commitment fee of 2% per annum on undrawn amounts. The facility will be used initially to refinance any amounts outstanding under the Short Term Bridge Funding Agreement, and thereafter be used for the continued ramp up of phase one of the Oyu Tolgoi mine development.
Under the terms of the New Bridge Facility, in the event that the Oyu Tolgoi project financing funds are not available to repay the US$600 million New Bridge Facility and the US$1.8 billion Interim Funding Facility, which both mature on December 31, 2013, Turquoise Hill would be obligated to launch a rights offering to close by the end of 2013, with a standby commitment from Rio Tinto, to repay both facilities.
Given the signing of the binding term sheet, Turquoise Hill is no longer exploring a private placement of common shares that was referenced in the company's press release on July 19, 2013.
Discussions with the Government of Mongolia about project financing, delayed funding and development of the Oyu Tolgoi underground and other outstanding matters continue. The Company remains committed to project financing and is engaging with the Government with a goal of completing the transaction and beginning to draw from the facility by the end of 2013.
As discussions with the Government take place, the Oyu Tolgoi concentrator continues to ramp up production from the mine's open pit. The concentrator is now consistently producing at over 80% of design capacity and all commercial production tests are complete. Full production is expected to be achieved in the second half of 2013. Following the commencement of concentrate shipments on July 9, 2013, shipments will continue to grow for the remainder of 2013 and are expected to match production by the end of this year.
This news release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, Canada or in any other jurisdiction; nor shall there be any sale of securities mentioned in this news release in any state of the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Mogi Munkhdul Badral Bontoi
Founder & CEO
Mobile: +976 9999 6779
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