Vancouver's Turquoise Hill Resources (TSX:TRQ), majority owners of the massive Oyu Tolgoi copper-gold mine in Mongolia, announced the completion of its rights offering on January 8.
Early estimates peg the rights offering as raising $2.4 billion for the company.
According to a Turquoise Hill press release, the company plans to use the money to repay $2.4 billion in loans – a $1.8 billion long-term loan and a short-term $600 million loan from Rio Tinto (NYSE:RIO). Rio Tinto is the majority shareholder of Turquoise Hill.
Any leftover money will be used to fund Oyu Tolgoi as well various administrative expenses.
In the offer, Turquoise Hill shareholders were able to purchase an additional share at a discounted rate of $2.53 for shares on the Toronto Stock Exchange and US$2.40 for shares on the New York Stock Exchange.
Turquoise Hill has been mired in a battle with the Mongolian government – which owns 34% of Oyu Tolgoi – over a stalled expansion of the mine and the lack of Mongolians working in management positions, to name but two reasons.
The trouble with the government has led to stalls in production and the shipping of concentrate at Oyu Tolgoi.
The mine is one of the largest copper-gold developments in the world. Oyu Tolgoi is expected to produce up to 175,000 tonnes of copper and up to 750,000 ounces of gold in 2014.
– With files from Mining.com
