Turquoise Hill Will Be A Long-Term Winner

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.

read more on Turquoise Hill

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...