At a time when it appears there is nothing to stop the disintegration of the commodity bear market, my outlook for Turquoise Hill (NYSE:TRQ) remains strong.
My reasoning is I believe commodities are closing in on their lows in general, and are likely to begin a rebound in the not-too-distant future. But even if there is more downside to come for an extended period of time (meaning about a year or so), I don't see it having a negative impact on those holding a position in Turquoise Hill for the long term. That's because of the timing of the completion of the second phase construction at its flagship property Oyu Tolgoi.
Another reason is gold is going to get a hefty rebound once it bottoms out, and that is the second-most important metal at Oyu Tolgoi, behind Copper. Rounding out the top three is silver.
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Showing posts with label Oyu Tolgoi. Show all posts
Showing posts with label Oyu Tolgoi. Show all posts
Friday, July 24, 2015
Friday, May 22, 2015
Why I Like Turquoise Hill Now
It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO)
concerning their stake in the massive Oyu Tolgoi, as they have finally
come to an agreement with the Mongolian government to move ahead with
its development of the next phase of the mine, which is to expand the
major underground portion of the resource, which at this time, is
estimated to account for approximately 80 percent of the mineral value
of the mine.
Major sticking points which led to the differences have been resolved, including cost overruns and taxes.
With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.
read more...
Major sticking points which led to the differences have been resolved, including cost overruns and taxes.
With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.
read more...
Friday, April 10, 2015
Time to Take a Position in Turquoise Hill?
Financial news outlets were blaring out headlines and lead stories about an alleged agreement between the government of Mongolia and Rio Tinto (RIO) and Turquoise Hill (TRQ) concerning Oyu Tolgoi, the rich mineral resource in the country.
While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.
Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.
If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.
This is especially true after Walsh said just a little over a week ago thatnegotiations had reached the critical stage, with the major issues left to be faced. It's puzzling to believe it took that long to fix a number of smaller issues, and in a short week the major issues have quickly been resolved. It's possible, but highly unlikely.
More on Oyu Tolgoi, Turquoise Hill and Rio Tinto
While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.
Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.
If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.
This is especially true after Walsh said just a little over a week ago thatnegotiations had reached the critical stage, with the major issues left to be faced. It's puzzling to believe it took that long to fix a number of smaller issues, and in a short week the major issues have quickly been resolved. It's possible, but highly unlikely.
More on Oyu Tolgoi, Turquoise Hill and Rio Tinto
Saturday, June 1, 2013
Rio Tinto Gets Lean as Oyo Tolgoi Shipments Approach
As anticipation of the first shipments from Oyu Tolgoi, the giant copper and gold project in Mongolia, builds, Rio Tinto's (RIO) CEO Sam Walsh offered his input on the strategy of the company overall, and where things stand with Oyu Tolgoi specifically, at the Bank of America Merrill Lynch conference in Barcelona recently.
Walsh said all the right things, and it's worthwhile taking a look at them as the strategy of the company is one that should be considered a bellwether for the mining industry in general. If you're looking at miners, the actions and ideas presented by Walsh should be taken into account in the analysis of other mining companies. If they aren't taking similar actions, they could be in real trouble in the current economic environment.
continue reading ...
Walsh said all the right things, and it's worthwhile taking a look at them as the strategy of the company is one that should be considered a bellwether for the mining industry in general. If you're looking at miners, the actions and ideas presented by Walsh should be taken into account in the analysis of other mining companies. If they aren't taking similar actions, they could be in real trouble in the current economic environment.
continue reading ...
Tuesday, May 28, 2013
Rio Tinto and Turquoise as Oyu Tolgoi Shipments About to Begin
The rough and tumble conditions associated with the gigantic Oyu Tolgoi mine in Mongolia are about to pay off for Turquoise Hill Resources (TRQ) and Rio Tinto (RIO) as approval to ship copper from the mine may be as close as two weeks away.
Rio Tinto CEO Sam Walsh said this:
We are still looking for some approvals in relation to exactly how we transport and ship the material ... that we expect to receive in the next couple of weeks.I think we have moved well down the path in terms of resolving issues the government had tabled with us, enabling us really to move forward with the project.
Commercial production was previously expected to launch near the latter part of June, but Walsh says that copper may be able to be shipped by that time.
Monday, March 4, 2013
Oyu Tolgoi Gets $4 Billion Financing Commitment
One of the largest mines in the world - Oyu Tolgoi - has received confirmation and commitment from several sources for a $4 billion financing package.
Interestingly, part of that financing is coming from the European Bank for Reconstruction and Development. It confirms the quality and quantity of the resources at Oyu Tolgoi, as Europe has significantly cut back on mining financing over the last couple of years; one of the major reasons the junior miners have been struggling to secure capital.
Rio Tinto (RIO) said, “This is a further important step in securing long-term project financing for the development of Oyu Tolgoi.”
The other major entity committing to financing the project is the International Finance Corp., which will commit about $400 million in a regular loan, and as high as $1 billion in a syndicated loan.
The European Bank for Reconstruction and Development (EBRD) is contemplating about $400 million for the project. Financing for the deal has yet to be officially signed off on.
Production at the mine is expected to begin in about June 2013, although Mongolia has demanded a higher percentage of the mine than the agreement they originally agreed to.
Interestingly, part of that financing is coming from the European Bank for Reconstruction and Development. It confirms the quality and quantity of the resources at Oyu Tolgoi, as Europe has significantly cut back on mining financing over the last couple of years; one of the major reasons the junior miners have been struggling to secure capital.
Rio Tinto (RIO) said, “This is a further important step in securing long-term project financing for the development of Oyu Tolgoi.”
The other major entity committing to financing the project is the International Finance Corp., which will commit about $400 million in a regular loan, and as high as $1 billion in a syndicated loan.
The European Bank for Reconstruction and Development (EBRD) is contemplating about $400 million for the project. Financing for the deal has yet to be officially signed off on.
Production at the mine is expected to begin in about June 2013, although Mongolia has demanded a higher percentage of the mine than the agreement they originally agreed to.
Tuesday, November 6, 2012
Rio (RIO), Turquoise (TRQ) Gets Power at Oyu Tolgoi
Rio Tinto (NYSE: RIO) and partner Turquoise Hill Resources (NYSE: TRQ) had good news to announce Monday as the challenge of obtaining the required power to run the mine was successfully navigated. The partners are now set to begin production on the mine in the early part of 2013.
The agreement put in place is a $6 billion deal with Inner Mongolia Power Corp. The deal was held up by differences between Mongolia and China, where much of the power will be provided from.
In as early as six weeks the first ore from Oyu Tolgoi will be processed by Turquoise Hill Resources. The company confirmed its projections of commercial production beginning sometime in early part of next year.
Goals for Turquoise Hill are to have the Oyu Tolgoi mine in full production by 2018. Estimates are it'll cost from $3 billion to $4 billion for the company to accomplish the task.
Underground mining is expected to start in 2016, after a feasibility study is released by Turquoise Hill in 2013.
Annual production estimates for the mine are for 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver.
Turquoise Hill Resources, which owns the mine with the Mongolian government and Rio Tinto, hold a 66 percent stake in Oyu Tolgoi. Rio is running the operations.
Rio and Turqoise still face some uncertainties as the government has asked for Turquoise Hill to renegotiate the contract in place, something the company at this time has refused to do. Until that is solved, a cloud will of uncertainty will hang over the deal.
Once the uncertainty is removed and commercial production begins, Turquoise Hill Resources, especially, should take off in a major way on its share price. It could be one of the biggest mining success stories for many years, bringing shareholders some major success.
Wednesday, September 5, 2012
Rio Tinto (RIO) Challenged by Oyu Tolgoi's Lack of Power
Rio Tinto (NYSE: RIO) isn't in an enviable place concerning its Oyu Tolgoi mine in Mongolia, as it's sitting on an amazing property only to be challenged and frustrated over not having the electric power resources on hand to run the operations there.
Oyu Tolgoi has enormous amounts of copper and gold in it, along with a number of smaller amounts of metals.
At this time Rio Tinto is struggling to find enough electricity to operate the mine, as it closes in on completing project, with only 6 percent of the project remaining.
According to Turquoise Hill Resources (formerly Ivanhoe Mines), the mine should be operating commercially by as early as 2013.
At this time China is the major provider of electricity, and it's not a guarantee that once the increased demand for power comes about from an operating mine that China will be willing to sell it to Rio Tinto, as there have been poor relations between China and Mongolia for some time.
To make it work, Rio Tinto will probably have to enter into negotiations with China itself to ensure it has enough power for the giant mining project.
So at this time Oyu Tolgoi must be considered a property with extraordinary potential, but always seeming to be one step away from significantly adding to the bottom line of Rio Tinto.
In the second quarter alone Rio had a net loss of $285.9 million at the mine, and to recoup and go into the black, they must secure electricity in a timely manner in order to be sure this amazing resource doesn't become a huge weight around the fiscal neck of the company.
And even if electricity is secured, for Rio Tinto investors, it must be taken with a long-term view as to how it will have an impact on the bottom line of the company.
Once it's going full throttle, which could take several years, it will be a huge feather in the cap of Rio Tinto, but it will take patience on the part of shareholders to wait until that time arrives.
Oyu Tolgoi has enormous amounts of copper and gold in it, along with a number of smaller amounts of metals.
At this time Rio Tinto is struggling to find enough electricity to operate the mine, as it closes in on completing project, with only 6 percent of the project remaining.
According to Turquoise Hill Resources (formerly Ivanhoe Mines), the mine should be operating commercially by as early as 2013.
At this time China is the major provider of electricity, and it's not a guarantee that once the increased demand for power comes about from an operating mine that China will be willing to sell it to Rio Tinto, as there have been poor relations between China and Mongolia for some time.
To make it work, Rio Tinto will probably have to enter into negotiations with China itself to ensure it has enough power for the giant mining project.
So at this time Oyu Tolgoi must be considered a property with extraordinary potential, but always seeming to be one step away from significantly adding to the bottom line of Rio Tinto.
In the second quarter alone Rio had a net loss of $285.9 million at the mine, and to recoup and go into the black, they must secure electricity in a timely manner in order to be sure this amazing resource doesn't become a huge weight around the fiscal neck of the company.
And even if electricity is secured, for Rio Tinto investors, it must be taken with a long-term view as to how it will have an impact on the bottom line of the company.
Once it's going full throttle, which could take several years, it will be a huge feather in the cap of Rio Tinto, but it will take patience on the part of shareholders to wait until that time arrives.
Monday, July 30, 2012
Rio (RIO) Keeps 51 Percent Ivanhoe (IVN) Stake
Rio Tinto (RIO) said it retained its 51 percent stake in Ivanhoe Mines (IVN) by paying 935 million to maintain the position.
The acquisition of the shares came about from a shareholder rights offering by Ivanhoe.
Rio acquired 133.6 million additional shares of Ivanhoe as a result of the offering, paying $7 a share. The company now owns over 510 million shares of Ivanhoe.
Ivanhoe is developing the gigantic Mongolian mine Oyu Tolgoi, which holds huge deposits of gold and copper.
The offering was part of the strategy on the part Of Ivanhoe to finance the development of the mine.
Construction on the mine continues, with production scheduled to begin in the latter part of 2012, and commercial production to launch in 2013.
Ivanhoe closed Monday at $8.56, down $0.14, or 1.61 percent. Rio Tinto closed at $46.29, gaining $0.12, or 0.26 percent.
The acquisition of the shares came about from a shareholder rights offering by Ivanhoe.
Rio acquired 133.6 million additional shares of Ivanhoe as a result of the offering, paying $7 a share. The company now owns over 510 million shares of Ivanhoe.
Ivanhoe is developing the gigantic Mongolian mine Oyu Tolgoi, which holds huge deposits of gold and copper.
The offering was part of the strategy on the part Of Ivanhoe to finance the development of the mine.
Construction on the mine continues, with production scheduled to begin in the latter part of 2012, and commercial production to launch in 2013.
Ivanhoe closed Monday at $8.56, down $0.14, or 1.61 percent. Rio Tinto closed at $46.29, gaining $0.12, or 0.26 percent.
Tuesday, May 11, 2010
Citigroup (NYSE:C) Advising Ivanhoe Mines (NYSE:IVN) on Oyu Tolgoi
Releasing estimates for its gigantic Oyu Tolgoi mining project in Mongolia, Ivanhoe Mines (NYSE:IVN) reiterated they still have Citigroup (NYSE:C) adivising them on a variety of strategic options they have available to them, which could include equity and debt offerings, as well as sales of assets.
The giant mine, which will be among the largest in the world when it becomes operational, has an estimated 46.4 million ounces of gold, and an extraordinary 81.3 billion pounds of copper. The mine could have a life span of 59 years for the copper, while the gold should bring about 650 ounces annually for a decade, although after that figures weren't thrown out.
Rio Tinto (NYSE:RTP), who has a 22.4 percent stake in Ivanhoe, will be working on developing the asset with them.
Once operational, this will push Ivanhoe into the one of the elite of mining companies, putting them up there with Freeport-McMoRan Copper & Gold (NYSE:FCX) and the BHP Billiton (NYSE:BHP).
The giant mine, which will be among the largest in the world when it becomes operational, has an estimated 46.4 million ounces of gold, and an extraordinary 81.3 billion pounds of copper. The mine could have a life span of 59 years for the copper, while the gold should bring about 650 ounces annually for a decade, although after that figures weren't thrown out.
Rio Tinto (NYSE:RTP), who has a 22.4 percent stake in Ivanhoe, will be working on developing the asset with them.
Once operational, this will push Ivanhoe into the one of the elite of mining companies, putting them up there with Freeport-McMoRan Copper & Gold (NYSE:FCX) and the BHP Billiton (NYSE:BHP).
Thursday, March 4, 2010
Rio Tinto (LON:RIO) Investing Ivanhoe Mines (NYSE:IVN)
Rio Tinto Investing in Ivanhoe Mines
Now that Ivanhoe Mines (NYSE:IVN) has landed the big deal in Mongolia, Rio Tinto (LON:RIO) has decided to invest in the company to the tune of 15 million shares, making the overall stake in Ivanhoe by Rio Tinto at 22.4 percent.
Per the deal, Rio can now acquire up to 44 percent of Ivanhoe Mines, along with other securities in the future to maintain its equity interest if needed.
This is the result of the Oyu Tolgoi project in Mongolia, considered the largest known gold and copper mine in the world yet to be worked.
Rio Tinto Investing in Ivanhoe Mines
Now that Ivanhoe Mines (NYSE:IVN) has landed the big deal in Mongolia, Rio Tinto (LON:RIO) has decided to invest in the company to the tune of 15 million shares, making the overall stake in Ivanhoe by Rio Tinto at 22.4 percent.
Per the deal, Rio can now acquire up to 44 percent of Ivanhoe Mines, along with other securities in the future to maintain its equity interest if needed.
This is the result of the Oyu Tolgoi project in Mongolia, considered the largest known gold and copper mine in the world yet to be worked.
Rio Tinto Investing in Ivanhoe Mines
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