At the press release of Turquoise Hill on November 14, the company has provided update on Oyu Tolgoi, announced filing of preliminary prospectus for rights offering and an extension of interim funding and new bridge facilities and released financial results and review of operations for the third quarter of 2013.
The highlights of the press release are as follows
- Discussions with the Government of Mongolia continue in order to reach agreement on outstanding issues; there is positive engagement between the parties and progress is being made.
- Given uncertainties surrounding the timing of resolution of issues with the Government of Mongolia, including obtaining all required approvals and completion of the Oyu Tolgoi expansion feasibility study, Turquoise Hill is unable to complete project financing in 2013.
- Turquoise Hill remains committed to obtaining project finance to fund the development of the Oyu Tolgoi Project and is engaging with the Government of Mongolia to achieve this; work continues on the optimization of the underground mine design and construction plan and finalization of the feasibility study.
- In light of uncertainty of project financing timing and in accordance with the 2013 Memorandum of Agreement, Turquoise Hill has filed today a preliminary prospectus for a rights offering.
- Turquoise Hill and Rio Tinto have agreed to extend the maturity date of the Interim Funding Facility and the New Bridge Facility to no later than January 15, 2014 in order to allow for completion of the rights offering.
We believe this will increase uncertainty to the investment climate in Mongolia.
And, by issuing the additional shares, the share price of TRQ will be pressured significantly because of the dilution of the share.
However, as Rio is still committed on Oyu Tolgoi, we remain positive on TRQ
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