RE:RE:Country Gent partial drill result announcement from 2022Sorry a PS about negotiated exit for ETG.
i am fully aware the Mongolians have never contributed a red cent to OT and never will. In fact, they have bled lump sum inducement payments, ongoing taxes and value added, and then in 2022 a massive $2.6 billion loan forgiveness. It all adds up to large numbers to their treasury over the past 22 years and even so they have had bitter tax disputes that it should be more.
Note that at the time of the significant loan forgiveness and undercut commencement agreement in 2022 a number of Mongolian politicians underlined their position that OTLLC and in particular Mongolia would not in any circumstances moving forward assume debt that impaired the free cash flow of dividends from OTLLC - anticipated to rise sharply and throw off significant cash later this year when the Hugo North extraction ramp is commissioned and Hugo North/HNE block caving panels begin to achieve full targetted production.
So, Rio Tinto is the only plausible contributor/financier of an ETG buyout within the OTLLC structure - and a negotiation of terms of their financing OTLLC to fund acquisition of ETG could be a major sticking point. Other possibilities include bringing in an additional partner to share the single project/single country risks, particularly if the playbook of a post-ETG buyout was acceleration of building Lift 2 and/or Heruga and/or ??? Other prime targets in conjunction with a significant mill and infrastructure expansion. One uncertainty the capacity of the existing aquifer water source to be expanded (my understanding is it could be expanded with literally hundreds of years of future capacity and in no way affects any other water uses). But it has been a bit of a political stalking horse for those who appear to have ulterior motives relate to other political goals or are anti-mining (which is weird since copper is such a critical green transition input for clean energy and carbon emission reduction).
Some clever Rio Tinto finance plan could establish a shrinking fund repayment or recapitalization of OTLLC that skirts a direct interest repayment deduction against the Mongolian dividends from their common share equity. The amongolians should be happy to see an ETG acquisition as it will lock up all of OT, eventually, on their intended 2/3 - 1/3 ownership scheme.
cg,