TRQ - What is up with them?
They put out this oddly phrased NR is response to the Notice of Arbitration from ETG.
"Turquoise Hill Resources Ltd. (TSX: TRQ) (NYSE: TRQ) (“Turquoise Hill” or the “Company”) today announced that it has received a notice of arbitration from Entre Resources Ltd. (“Entre”) in connection with the Earn-in Agreement (the “Earn-in Agreement”) with Entre.
The Company disputes the characterizations made by Entre in its news release dated May 26, 2022 announcing the initiation of arbitration proceedings. Turquoise Hill has been in discussions with Entre in order to resolve certain commercial disagreements in connection with the Earn-in Agreement. The Company reserves all of its rights and will vigorously defend itself. The Company will update the market as appropriate."
If we go back to the NR, all ETG said was they had been negotiating without success to add some amendments and finalize a JVA "to better align stakeholder interests".
ETG's NR:
"The commencement of arbitration proceedings follows ongoing discussions with Rio Tinto International Holdings Ltd. ("Rio Tinto") and Turquoise Hill regarding the potential for finalization and execution of an amended JVA. As previously disclosed, the Company's primary objective has been to advance amendments that it believes align the interests of all stakeholders as they are now understood, and upon finalization and execution, confirm the transfer of the Shivee Tolgoi and Javhlant mining licences to OTLLC as manager of the Entre/Oyu Tolgoi joint venture. While the Company remains committed to continuing discussions with Rio Tinto and Turquoise Hill, the Company's Board of Directors has concluded that absent near-term prospects for a finalized agreement, the Earn-in Agreement and JVA must be enforced without further delay."
What terrible public disclosure over all these years. We are in negotiations to resolve a 14 year impasse that includes failure to be included in a tax stability agreement (or IA similar to TRQ/OTLLC), but we won't tell the market what the specific disagreements or disputes are that prevent amendment, fullfillment or execution of a JVA. Now TRQ disputes "characterizations" which are invisible or so ambiguous as to be meaningless to public market participants, because they won't tell us what they have been discussing or disagreeing about for all that time. It's outrageous on both sides from a disclosure point of view. The entire value of ETG is tied up in the terms of the JVA and what IA treatment it receives and upon what terms.
As for TRQ, what major public company can't respond to a cash buy-out offer for two and a half months with an opinion concerning the fairness of the offer and their own assessment of value? RIo has scrambled the corporate governance of this project with its odd position claiming total management control yet only owning less than 1/3 of the total cashflow equity at present. TRQ ... hopeless minions?
Then Rio's actions concerning the mine design and build-out, for which they are wholly responsible, are attacked as including negligence, poor execution, misrepresentations to the public markets, and they quickly gift over $2 billion to Mongolia to quieten the waters and advance the undercut commencement. And low-ball the TRQ minority, and continue to shove ETG's status without an IA or signed JVA down the road. As if it hasn't been rather obvious to most that the instant resolution of ETG would be to acquire it and consolidate all of the Shivee West and Jahvlahnt licences into OTLLC.
The longer and harder they fight and squirm over ownership, the more you know the assets in play are worth to them. OT has been grievously undervalued for a long time, all part of a sustained campaign by Mongolia and Rio Tinto to consolidate their ownership at the lowest possible cost. So much for the good faith owed a junior JV partner who threw in 80% of a hugely valuable land position that includes HNE, Heruga, a likely doubling or tripling of HNE reserves (high grade with high gold content), and multiple ripe camp play exploration targets with potential further economic deposits and mines - a single shallow high grade gold deposit could turn the economics of all of OT on its head.
Have they never heard of win win negotiation strategies?
cg