By Adriano Marchese

 

Turquoise Hill Resources Ltd. shares soared on Monday after it said that it has made an offer to the Government of Mongolia in conjunction with Rio Tinto PLC which would see the erasure of loans owing by a Mongolian-owned shareholder in a bid reset its relationship with the country's government.

At 11:25 a.m. ET, shares gained 14% to C$21.25.

The Canadian mining company focused on the operation and development of the Oyu Tolgoi copper-gold mine in southern Mongolia said that the offer includes a proposal to forgive and write-off the entirety of US$2.3 billion carry account loan owing by the Mongolian-owned shareholder Erdenes Mongol LLC.

The company said that it would also cancel the underground mine development and financing plan on a go-forward basis.

The deal goes back to 2009 when Rio Tinto and Turquoise signed a long-term, comprehensive investment agreement with the Mongolian government.

The agreement created a partnership between the Mongolian government which acquired a 34% interest in the project, and Turquoise Hill Resources, which retained a controlling 66% interest in Oyu Tolgoi.

Turquoise Hill said that it remains committed to securing approval to begin the undercut as quickly as possible following the entering into of a definitive agreement among the parties.

"The offer follows on months of discussions between Turquoise Hill, Rio Tinto and the Government of Mongolia to understand the Government's issues and priorities, deliver greater economic value to Mongolia and build a stronger partnership for a prosperous future for all," the company said.

 

Write to Adriano Marchese at adriano.marchese@wsj.com

 

(END) Dow Jones Newswires

December 13, 2021 11:44 ET (16:44 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Mar 2024 to Mar 2024 Click Here for more Rio Tinto Charts.
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Rio Tinto Charts.