Seeking Alpha

Turquoise Hill warns of further Oyu Tolgoi delays but eyes potential restart

  • Turquoise Hill Resources (TRQ -7.6%) says FY 2013 gross revenue for its Oyu Tolgoi gold and copper project in Mongolia totaled $55M, falling short of initial projections, with some sales expected to be deferred into Q2 and Q3 2014.
  • TRQ says an option to restart underground development of Oyu Tolgoi has been proposed even as negotiations with the Mongolian government continue to resolve outstanding issues that led to the project's suspension last July.
  • Further delays in the project may occur if outstanding shareholder issues are not resolved before the expiration of lender commitments on existing project finance arrangements.
  • Production rates recently were hurt by various post-commissioning issues which will result in the shutdown of one line for up to eight weeks, but TRQ continues to project 2014 output of 150K-175K metric tons of copper in concentrates and 700K-750K oz. of gold in concentrates.
  • Rio Tinto (RIO) holds a 50.8% controlling interest in TRQ.
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Comments (7)
  • cashewking
    , contributor
    Comments (648) | Send Message
     
    TRQ has just become become a totally terrible investment. It isn't fair to shareholders that the government and TRQ takes this long to have discussions and there is no end in sight. We may go down to the share offering price before this gets resolved.
    13 Feb 2014, 03:34 PM Reply Like
  • jayinbaker
    , contributor
    Comments (9) | Send Message
     
    It's not only the Mongolian Government's actions that's causing TRQ from being a good investment. Rio is literally squeezing the shareholders of TRQ for their own benefit. They could have easily extended the financing to TRQ for 6 months to one year and eliminated the last rights offering. I think they are eventually going to try to take over Oyu Tolgoi and buy out the smaller TRQ shareholders for a very cheap price.
    13 Feb 2014, 04:19 PM Reply Like
  • Jeff CA
    , contributor
    Comments (63) | Send Message
     
    Rio Tinto does not care how long it takes. Holding the ore is like a, "Shadow Warehouse".
    13 Feb 2014, 04:28 PM Reply Like
  • Pepper22
    , contributor
    Comments (31) | Send Message
     
    This is a very low cost mine. Weakness in Gold and lack of cooperation with the Mongolian government makes this a tricky investment. Though if all bad RIO wouldn't be invested.
    13 Feb 2014, 05:55 PM Reply Like
  • Pepper22
    , contributor
    Comments (31) | Send Message
     
    Remember the largest MF owner is RS. They own it because TRQ is a low cost producer.
    13 Feb 2014, 05:55 PM Reply Like
  • gast77
    , contributor
    Comments (6) | Send Message
     
    If the perspectives would look so bad as some comments here suggested Friedmann wouldn't have singed the rights offering
    14 Feb 2014, 09:17 AM Reply Like
  • jayinbaker
    , contributor
    Comments (9) | Send Message
     
    Why is it we still don't have a message board on Yahoo after the name and symbol chance from IVN? Tried numerous times to contact Yahoo with no success.
    14 Feb 2014, 11:34 AM Reply Like
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