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Turquoise Hill Resources Ltd. TRQ


Primary Symbol: T.TRQ

Turquoise Hill Resources Ltd is a global mining company that primarily mines copper, gold, and coal in the Asia-Pacific region. The company holds a 66% interest in Oyu Tolgoi, one of the world's largest copper-gold-silver mines, which ships concentrate to customers in China. Oyu Tolgoi is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border. The company also holds interests in companies that mine...


TSX:TRQ - Post by User

Comment by Countrygenton Jul 16, 2015 7:27pm
140 Views
Post# 23932237

RE:RE:RE:2nd q results

RE:RE:RE:2nd q results If you read through the material agreements section of TRQ's last AIF, there is reference to the consolidation of confidentiality agreements between TRQ and RioT - TRQ has never disclosed, that I can find, the identity or balance sheet of the subsidiary debt funding vehicle for OT, but it is safe to assume the balance sheet of the subsidiary is nominal in that it has borrowed all sums lent to OT - maybe digging through RioT's financial statements one can find to what extent they have assumed any portion of the debt funding, or whether it was all laid off to third party lenders.  What is probably safe to assume is some security was given by RioT for which they have taken a premium or financial charge, management or stand-by fee - similar to how they structured the earlier interim bridge facilities to TRQ that were repaid from the rights offering.

Main point is this:  the cost of OT construction has not been repaid by a long shot, but it is an obligation that bypasses TRQ's balance sheet, the key information being TRQ's rights to receive dividends are subordinated to repayment of OTLLC's debts.

In the bigger picture, the reason so much money I'd being invested is all about grade, cost of production, and the huge reserves and upside for expansion of higher grade reserves.  If TRQ ever survives through to receive OT dividends they will be big.  There was good reason to pay out RF $25 share more or less .... And eventually as earnings at OT rise and the dapex is retired the cash flows will propel the share price.

Welcome to the opaque world of multinational conglomerate accounting!

cg
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