Oyu Tholgay

Anglo-Australian mining giant Rio Tinto has announced that its majority stake in Turquoise Hill Resources remained unchanged at 50.8% following the successful completion of the $2.4bn rights offering.

Rio Tinto is Turquoise Hill’s largest shareholder and the Oyu Tolgoi’s project operator. The company stated that it has acquired 510.98 million common shares of Turquoise Hill for C$1.29bn ($1.18bn) or C$2.53 ($2.3m) per share.

However, Rio Tinto may utilise the Series D Warrants and Anti-Dilution Series D Warrants to further increase its stake to 54.2%.

Turquoise Hill will be using a portion of the funds it receives under the rights offering to repay amounts outstanding on the $1.8bn interim funding facility and the $600m secured bridge funding facility, which were both provided by Rio Tinto.

Rio Tinto stated that the acquisition of additional common shares under Turquoise Hill’s rights offering was made in accordance with the contractual obligations of an agreement between Rio Tinto and Turquoise Hill dated 23 August 2013.

The company added that it has no intention of acquiring additional securities of Turquoise Hill, at present.

Following its evaluation of Turquoise Hill’s business, prospects, financial condition, the market for securities, general economic and tax conditions and other factors, Rio Tinto may decided to directly or indirectly acquire or sell some or all of the securities of Turquoise Hill.

Turquoise Hill is the operator of Oyu Tolgoi in Mongolia, which is expected to produce between 150,000t and 175,000t of copper concentrate and 700,000oz to 750,000oz of gold.

The mine exported its first copper in July 2013. The second stage will start operation after successful negotiations between the companies and the Mongolian Government.

Image: The Oyu Tolgoi mine is jointly owned by multinational resources company Ivanhoe Mines and Rio Tinto. Photo: courtesy of Rio Tinto.