Stocks in Turquoise Hill Resources (TSX: TRQ) were dropping during morning trading hours following the announcement the Mongolian government was investigating the Vancouver mining company for unpaid taxes associated with its Oyu Tolgoi project.
Stocks were down 3.18% to $3.96 at about 10 a.m. June 23 in the wake of the announcement the company had received an audit report from the Mongolian Tax Authority.
In addition to unpaid taxes, the Mongolian government has claimed Turquoise Hill has unpaid penalties and disallowed entitlements associated with the development of the Oyu Tolgoi mine.
The mining company said it is of the “firm belief” it has paid everything due to the host country under its agreement with the Mongolian government.
"We strongly disagree with the claims in the audit report and are currently reviewing all options to resolve this matter,” Turquoise Hill president Kay Wilson said in a release.
“It is important that we protect our right of tax stabilization provided by the investment agreement (with the Mongolian government)."
The company said the underground feasibility study of its mining project will likely be delayed of the dispute is not reached by June 30.