Turquoise Hill Resources Ltd. T.TRQ

Well, will the beaten dog sell off on this news?

[Countrygent]

"Ulaanbaatar /MONTSAME/. At the plenary meeting of the State Great Khural (Parliament) today, December 30, the resolution on Measures to be taken to ensure the benefits to Mongolia from Oyu Tolgoi gold-copper mine has been approved.

 
Following measures reflected in the resolution:
- To write off Mongolia's USD 2.3 billion-debt for its share (34 percent) in the Oyu Tolgoi copper-gold project. 
- To terminate the Oyu Tolgoi Underground Mine Development and Financing Plan, known as ‘Dubai Agreement’ and conduct an independent audit into the financing of the project's underground expansion;
- The costs required until the first half of 2023, when the underground mine is commissioned, shall be covered by the investors, not incurring additional debts to Erdenes Oyu Tolgoi LLC;
- To supply electricity for Oyu Tolgoi project from the energy grid of Mongolia
- To ensure the implementation of tax acts
 
The majority of MPs who attended the plenary session have supported two proposals: to not incur additional debts to Erdenes Oyu Tolgoi LLC, and not receive additional loan from shareholders of Oyu Tolgoi LLC and third parties. The Temporary committee in charge of taking control on the implementation of the parliamentary resolution No.92 dated November 21, 2019, on ‘Ensuring the interests of Mongolia in the exploitation of the Oyu Tolgoi gold-copper mine’, has submitted the two proposals."

Anything is possible, but eventually you might think people will get out their calculators and start figuring out the cashflow that will be coming from Lift 1 underground.  It's big.  Copper and gold stay firm ... copper and gold rise, it's all extra gravy.  Massive option to the metals.

cg





The draft resolution has been approved with the support of 74.1 percent of  the attended MPs.

[Countrygent]

  Whether the resolution seeks to go back to the well with Rio when they said they had made a final offer, or not, the usual translation problems and lack of editorial coherence out of Mongolia ...  I guess we'll hear soon enough. cg

[ScotUK]

Thanks for the update CG - I'm kind of surprised that the TRQ and ET SP are relatively unaffected by the news - a positive announcement was presumably anticipated. I guess the big question now is how RIO will deal with the debt w/off - will they risk the wrath of the minorties or offer a fairer proposal? 

[Countrygent]

  I firmly believe at the end of the day there is no minority ownership at OT, it's a 2/3 Rio and 1/3 Mongolia venture It's only a question of what price and a little delicate issue about how to fold in ETG.   What has been interesting in the past few months is Rio being more conciliatory at no small expense.  There are a lot of mysteries around OT ... one of which is

[Malpeque2]

CG, Reminds me of Katanga in Canada.  Minority company owned 10% of the Glencore Copper/Cobalt asset in Congo.    They oppressed the minority with the debt financing  arrangements and then diluted again in the end on a stock offering and then untimately bought out the minority on the very very cheap,  right before it was all working well and cash flowing.  Looks

[Countrygent]

  I believe the Mongolians gave Rio enough rope to hang themselves.  Whether Rio has appetite to try and run the table on the minority, or would rather just buy everybody out at a fair price that keeps them out of jail ... we'll see.  I don't know what to believe about the overruns, nothing is proven yet, maybe never will be.   What does seem clear is they are