(Kitco News) - U.K. listed mining firm Rio Tinto (RIO:LSE) has confirmed it will acquire the remaining Turquoise Hill shares for $3.3bn. Turquoise Hill owns 66% of Oyu Tolgoi, one of the world’s largest copper and gold deposits, located in Mongolia.
According to a statement, the FTSE 100 miner will pay C$43 per share for the remaining 49% of Turquoise Hill shares that it does not currently own.
This represents a 67% premium to the share price on 11 March 2022, the day before Rio Tinto’s initial offer was made, and a 125% premium to 24 January 2022, the day before an agreement was reached between the two parties and the government of Mongolia to commence the underground mine at Oyu Tolgoi.
Rio Tinto’s chief executive Jakob Stausholm “This agreement represents another significant step following the recent commencement of the underground operations, and will simplify governance, improve efficiency and create greater certainty of funding for the long-term success of the Oyu Tolgoi project,”
Elsewhere, the companies agreed in principle amendments to the financing agreement to support Turquoise Hill with near-term liquidity. This includes increasing the early advance facility, agreed in May, to $650mln from $400mln, with the possibility to increase further by an additional US$100mln if necessary.
Rio Tinto shares are down 3% today trading at 4629.5. The share price tried to break the 5000 mark but the resistance zone stood firm and now the next support level at 4446 could be under threat.
Base metals markets have been struggling of late as a COVID-inspired slowdown in China and weak global sentiment have pushed the sector into decline. Manufacturing PMI readings have been poor but later in the U.S. session markets will get the latest readings from the world's largest economy.
