Entree Resources Ltd ERLFF

Mongolians dependence on OT

[thasis]

I have heard it stated from a trusted source that Mongolia would go bankrupt if not for Oyu Tolgio. Unfortuately for the Mongolian people this years terrible Dzud just put more dependence upon RIO and the OT resource. Now with regards to the arbitration. It is binding arbitration. However, it would not surprise me that if, RIO did not find the ruling to their satisfaction to look for a back door to appeal the decision. It has dragged on this long, how much further can they kick the can down the road. One would think logically with copper showing signs of longer term upward trend that it would be prudent to strike a deal before the price appreciates much more. But I have given up long ago trying to predict what RIO will do or what they may have up their sleeve.. Mean while we hurry up and wait. Not sure how many years I left so preferably sooner than later. :+)
Just my 2 cents...

[aldarion8484]

Yup, or if they can't appeal, just drag their feet and force Entree into some type of enforcement action, which would take place in Canada, I believe.  Hope it doesn't come to that.  Will be interesting to see what the arbitrators say. 

[Countrygent]

  ETG is going to appreciate due to revenue beginning from the JV, and many of us expect, rising metals prices.  But Rio has other pressures as well - the need to determine the true extent of Lift 2, pethaps the desire to expand production capacity to accelerate and expand JV production.  They also benefit from more thorough exploration of the JV, and conclusion of the Licence

[Countrygent]

  And maybe to clarify because my prior post may be ambiguous about TD and Rio - I have no knowledge they did anything wrong or conspired in any unlawful way,  I'm just curious about how the TRQ buyout and fairness opinion transpired. My opinions characterizing what happened as unfair or exploitive are based on what has transpired since TRQ was bought out - the many contrary

[aldarion8484]

To your point (related a bit to my recent posts about RIO), its true we don't know for sure if RIO did anything underhanded EXCEPT with regard to the Sailingstone side-deal debacle.  But the removal of the prior TRQ CEO who was putting up a fight , the original takeover from RF, etc., the non-disclosure of what actually happened technically during the long delay,etc.  Doesn't

[aldarion8484]

meant Pentwater side deal -- I'm getting confused with the twists and turns of the saga.

[Helmsman1]

Regarding "at some point you have to wonder why the Mongolians and Rio haven't decided to wind us up." I wonder if Rio is waiting for the arbitration award from the Pentwater/Sailingstone dissent fair value dispute before wrapping up ETG? 

[Countrygent]

I wondered about waiting for the TRQ buyout to be truly over and put to bed as well, certainly the optics of ... Lift 2 expanding, or accelerated schedule for Lift 2, Heruga ... or expanding the mill capacity ... or paying a substantial premium to ETG may not look good when valuing TRQ shares, but I believe the valuation strictly speaking is fixed in time as of the time of the purchase.  So

[ubbill]

What is the status of the Pentwater lawsuit?  Haven't seen much news about it.  How long is this likely to take? thanks -- IV still not working for me.  Unable to login. ubbill

[Helmsman1]

Pentwater and Sailingstone are in a joint fair value arbitration with Rio. There is no news because it is confidential.  It has not yet been awarded.  

[mrpancake]

Confidential becuase both Pentwater and Sailingstone are private companies. HCU being public would have to disclose any side deal if it comes to that with ETG  

[Countrygent]

Pentwater must make some disclosure of its portfolio holdings, but not cash positions.  In terms of materiality they have somewhere between $9 and $20 billion in market capitalization - so, the swing amount on the TRQ disposition is not particularly significant to them. Who knows, maybe Rio just settled on a number with them already. As for ETG, there is no saying when Rio might decide

[Skip57]

Recall that approximately 35 million TRQ shares were dissented, Pentwater holding the bulk of these.  Dissenters were paid out 80% of the $43 buyout price.  The remaining 20% is accumulating interest at 4.4% pa which amount to $1 million a month, roughly $17 million to date. For every $30 increase in the final arbitration above $34.40, RIO is on the hook for $1 billion which imo is

[Countrygent]

The way you work those numbers is significant, no question. However it will depend upon the case law for the appraisal remedy and the onus of proof and timing of permitted evidence.  I suspect the only evidence supporting an appraisal permitted is as it stood at the time of valuation - ie, the delay in adjudication doesn't open a window for later information.  So, for example, if

[Skip57]

Shortly before the closing, Pentwater published a massive review of the proposed transaction.  There were 2 givens at the time. First the economic adjustment of TD's use of 0.7. The review showed that acquisitions of this scale in the industry averaged 1.1. TD's use of 0.7 was arbitrary. In their "fairness opinion" TD gave 2 examples, one using 0.7 and the other 1.1. TD'

[ubbill]

Skip57, many thanks.  Is that review still available?  I am quite interested and appreciate your help. ubbill

[Skip57]

ubbill:  I have the report which was obtained by my legal representation. Have sent them a note to verify if I can disseminate. Will let you know.

[mrpancake]

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