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Turquoise Hill Resources to sell remaining SouthGobi stake to Chinese firm

24th February 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Rio Tinto subsidiary Turquoise Hill Resources has reached a deal with Chinese holding firm Novel Sunrise Investments to buy its remaining stake in Mongolia-focused coal miner SouthGobi Resources.

Turquoise Hill, which has a 66% interest in the massive Oyu Tolgoi copper/gold mine, in the same country, had agreed to sell 48.7-million SouthGobi shares at C$0.35 apiece for $17-million in cash, which was to be paid in two installments.

SouthGobi also announced on Tuesday that it had entered into a private placement with Novel Sunrise to raise about $7.5-million, with an initial tranche of $3.5-million.

Novel Sunrise would subscribe for an initial tranche of 10.13-million mandatory convertible units that would be convertible on a one-for-one basis for common shares in the company. Upon closing of the Turquoise Hill transaction, Novel Sunrise would qualify to subscribe to 11.61-million additional common shares for further gross proceeds of about $4-million.

Turquoise Hill last year sold a 29.95% stake in SouthGobi to Hong Kong-based National United Resources (NUR) Holdings, which bought 56.1-million shares at C$0.455 a share, leaving Turquoise Hill with a 26% interest in SouthGobi after the deal had closed.

After the Novel Sunrise and NUR transactions had closed, Turquoise Hill would no longer own or control any common shares of SouthGobi.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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