Rio Tinto share price: Mining giant maintains stake in Turquoise Hill
iNVEZZ.com, Tuesday, January 14: Rio Tinto (LON:RIO) has kept its majority stake in Turquoise Hill Resources unchanged at 50.8 percent following the successful completion of a $2.4 billion (£1.46 billion) rights issue related to the highly prospective 66 percent owned Oyu Tolgoi copper and gold mine in Mongolia.
In a statement to the London Stock Exchange, Rio Tinto said it bought $C1.29 billion (£723 million) worth of shares in Turquoise Hill as part of the rights offering which closed yesterday. Rio, which is Turquoise Hill's largest shareholder and Oyu Tolgoi's project operator, didn't acquire any additional shares as part of a standby agreement because the rights issue was fully subscribed.
Rio Tinto’s share price was 0.79 percent down to 3,152p as of 10:05 UTC today, valuing the mining giant at £58.26 billion.
Canada-based Turquoise Hill is required to repay, out of the proceeds of the rights issue, all amounts outstanding under a $1.8 billion interim funding facility and a $600 million secured bridge funding facility, each provided to Turquoise Hill by Rio Tinto and maturing on January 15, 2014, and certain other amounts.
Rio Tinto said it also received anti-dilution warrants in connection with the rights offering which, if exercised alongside other warrants, would increase its stake in Turquoise Hill to 54.2 percent. JPMorgan analysts had originally estimated that Rio's stake in Turquoise Hill could increase to 75 percent if other shareholders had been reluctant to participate.
Rio Tinto has anti-dilution rights that permit it to acquire additional securities of Turquoise Hill so as to maintain its proportional equity interest but the mining giant added that presently it doesn’t intend to acquire additional securities of Turquoise Hill. Depending upon its evaluation of the business, prospects and financial condition of Turquoise Hill, the market for Turquoise Hill'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 Turquoise Hill, the miner added.
Turquoise Hill had initially planned to pay off the loans by securing project financing in 2013 for the underground expansion of the Oyu Tolgoi mine where about 70 percent of the project's mineral value lies but Rio froze the expansion last summer after the Mongolian government unexpectedly said that the project's financing would have to be approved first by parliament. Rio has been at odds with the Mongolian government, which owns a 34 percent stake in Oyu Tolgoi, over the project's financing with the government concerned about rising costs at the mine, which is expected to produce copper and gold in Mongolia for the next 100 years and ranks as one of the company’s most important growth assets.
The smaller first stage of the mine began production in July, but the larger second phase, which is expected to cost $4 billion (2.44 billion) is still the subject of fragile negotiations between Rio Tinto and the Mongolian government. (Rio Tinto Share Price: Mongolia Unlocks Exports from Oyu Tolgoi Mine).
In October last year, Rio said copper production at Oyu Tolgoi was running at design capacity. Oyu Tolgoi is set to produce 150,000 to 175,000 tonnes of copper concentrates and 700,000 to 750,000 ounces of gold concentrates this year. After the second phase goes on stream, the mine situated in the Gobi desert close to the border with China could produce over 500,000 tonnes of copper, 650,000 ounces of gold and three million ounces of silver each year.
As of 10:02 UTC buy Rio Tinto shares at 3,150.00p
As of 10:02 UTC sell Rio Tinto shares at 3.149.00p.
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
In a statement to the London Stock Exchange, Rio Tinto said it bought $C1.29 billion (£723 million) worth of shares in Turquoise Hill as part of the rights offering which closed yesterday. Rio, which is Turquoise Hill's largest shareholder and Oyu Tolgoi's project operator, didn't acquire any additional shares as part of a standby agreement because the rights issue was fully subscribed.
Rio Tinto’s share price was 0.79 percent down to 3,152p as of 10:05 UTC today, valuing the mining giant at £58.26 billion.
Canada-based Turquoise Hill is required to repay, out of the proceeds of the rights issue, all amounts outstanding under a $1.8 billion interim funding facility and a $600 million secured bridge funding facility, each provided to Turquoise Hill by Rio Tinto and maturing on January 15, 2014, and certain other amounts.
Rio Tinto said it also received anti-dilution warrants in connection with the rights offering which, if exercised alongside other warrants, would increase its stake in Turquoise Hill to 54.2 percent. JPMorgan analysts had originally estimated that Rio's stake in Turquoise Hill could increase to 75 percent if other shareholders had been reluctant to participate.
Rio Tinto has anti-dilution rights that permit it to acquire additional securities of Turquoise Hill so as to maintain its proportional equity interest but the mining giant added that presently it doesn’t intend to acquire additional securities of Turquoise Hill. Depending upon its evaluation of the business, prospects and financial condition of Turquoise Hill, the market for Turquoise Hill'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 Turquoise Hill, the miner added.
Turquoise Hill had initially planned to pay off the loans by securing project financing in 2013 for the underground expansion of the Oyu Tolgoi mine where about 70 percent of the project's mineral value lies but Rio froze the expansion last summer after the Mongolian government unexpectedly said that the project's financing would have to be approved first by parliament. Rio has been at odds with the Mongolian government, which owns a 34 percent stake in Oyu Tolgoi, over the project's financing with the government concerned about rising costs at the mine, which is expected to produce copper and gold in Mongolia for the next 100 years and ranks as one of the company’s most important growth assets.
The smaller first stage of the mine began production in July, but the larger second phase, which is expected to cost $4 billion (2.44 billion) is still the subject of fragile negotiations between Rio Tinto and the Mongolian government. (Rio Tinto Share Price: Mongolia Unlocks Exports from Oyu Tolgoi Mine).
In October last year, Rio said copper production at Oyu Tolgoi was running at design capacity. Oyu Tolgoi is set to produce 150,000 to 175,000 tonnes of copper concentrates and 700,000 to 750,000 ounces of gold concentrates this year. After the second phase goes on stream, the mine situated in the Gobi desert close to the border with China could produce over 500,000 tonnes of copper, 650,000 ounces of gold and three million ounces of silver each year.
As of 10:02 UTC buy Rio Tinto shares at 3,150.00p
As of 10:02 UTC sell Rio Tinto shares at 3.149.00p.
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
Comments
Post a Comment