TORONTO, Sept. 10, 2020 /CNW/ - Rio Tinto and
Turquoise Hill Resources (TRQ) have entered into a memorandum of
understanding (MOU), which provides a clear pathway to progress the
financing for completion of the Oyu Tolgoi Underground Project in
Mongolia and address TRQ's funding
position.
The MOU reflects the parties' agreement that, subject to timing,
availability and terms and conditions being acceptable to both
parties, they will:
- pursue re-profiling of principal debt repayments with lenders
under the existing project finance arrangements to better align
with the revised mine plan, project timing and cash flows;
- seek to raise up to $500 million
in additional lending under the existing project financing
arrangements from selected international financial institutions;
and
- while TRQ continues to explore other options for additional
debt funding, which Rio Tinto will consider, Rio Tinto has advised
TRQ that it does not currently support or expect to consent to any
additional debt or other sources of funding. Rio Tinto and TRQ
acknowledge that any balance of the funding required for Oyu Tolgoi
to achieve completion of the underground mine will need to be met
by way of a TRQ equity offering.
Rio Tinto chief executive of Copper & Diamonds, Arnaud
Soirat, said "The MOU agreed today with TRQ provides a clear
funding pathway for the completion of the Oyu Tolgoi Underground
Project. We will continue working with TRQ and the Government of
Mongolia to progress the
underground project, which has the potential to unlock the most
valuable part of the mine for the benefit of all stakeholders."
Canadian early warning disclosure
Rio Tinto currently beneficially owns 1,021,966,440 common
shares of TRQ, representing approximately 50.8% of the issued and
outstanding common shares of TRQ. Rio Tinto also has anti-dilution
rights that permit it to acquire additional securities of TRQ so as
to maintain its proportionate equity interest in TRQ from time to
time.
As the subscription price for and the amount of any equity
offering is not determinable at this time, the number of TRQ common
shares Rio Tinto will beneficially own following closing of any
such equity offering cannot be determined at this time.
Except in connection with any such equity offering, Rio Tinto
has no present intention of acquiring additional securities of TRQ.
Depending upon its evaluation of the business, prospects and
financial condition of TRQ, the market for TRQ'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 TRQ.
This announcement is authorised for release to the market by Rio
Tinto's Group Company Secretary.
SOURCE RIO TINTO PLC