JOHANNESBURG (miningweekly.com) – NYSE- and TSX-listed Turquoise Hill Resources on Monday said it had secured a $225-million nonrevolving bridge facility from majority shareholder Rio Tinto.
The facility, which would mature on August 12 and which replaced a previous, now expired, facility, would be used to fund the operations and current underground development of Turquoise’s 66% owned Oyu Tolgoi copper/gold/silver mine, in southern Mongolia.
The copper, gold and coal mining group, formerly called Ivanhoe Mines, expected to make an initial drawdown to fund a cash-call obligation due on Tuesday.
Turquoise Hill pointed out that, should it default under the terms of the bridge facility, Rio Tinto would be entitled to convert any outstanding amounts into common shares at a price per share equal to 85% of the then prevailing five-day volume-weighted average trading price of the shares on the NYSE.
“The company continues to explore various financing alternatives which would allow it to repay the bridge facility in full prior to maturity and fund the operations at Oyu Tolgoi, pending receipt of $300-million in proceeds from the sale of its 50% interest in Altynalmas Gold and the completion of project financing,” the company said in a statement.
Turquoise Hill and Rio Tinto continued to engage lenders to finalise the mine’s project financing plan to raise about $4-billion.
Meanwhile, the mining company said all the necessary permits had been received and the mine was ready to start concentrate shipments – subject to the Mongolian government’s support.
The commissioning of the Oyu Tolgoi concentrator continued to progress and had achieved daily run rates in excess of 80% of nameplate capacity.
More than 40 000 t of concentrate had been produced to date.