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.