Turquoise Hill Resources (TSX:TRQ), formerly Ivanhoe Mines, announced Monday the termination of its lock-up agreement with Aluminum Corporation of China Ltd. (Chalco) whereby Turquoise Hill was to sell up to 60% of its shares in SouthGobi Resources Ltd. (TSX:SGQ), a deal valued at around $889 million.
In a press release, Turquoise Hill said that, after careful consideration, both Turquoise Hill and Chalco concluded that the proposed transaction had minimal prospect of obtaining the necessary regulatory approvals within an acceptable timeframe.
On April 17, the Mongolian government moved to suspend South Gobi’s mining activity in the country in connection with the proposed proportional takeover bid.
According to the terms of the initial lock-up agreement, Chalco was to make its offer to all shareholders by July 5. Turquoise Hill and Chalco twice agreed to extend the time for the offer to be made, with the current offer period set to expire today.
Following termination of the lock-up agreement, Turquoise Hill said it will work with SouthGobi to improve performance of the company’s business and more fully recognize SouthGobi’s operating potential.
