LONDON (Yosefardi) – Rio Tinto Plc and Turquoise Hill Resources have signed an agreement under which Rio Tinto will provide Turquoise Hill with a financing package to enable it to fund the continuing development of the Oyu Tolgoi mine in Mongolia and, if necessary, to refinance its existing indebtedness to Rio Tinto by the end of the year.
“Rio Tinto has agreed to provide a US$600 million bridge funding facility to Turquoise Hill, maturing 31 December, 2013. The facility will be used initially to refinance all amounts outstanding under an existing US$225 million short term funding facility provided by Rio Tinto in June 2013, and thereafter for the continued ramp up of phase one of the Oyu Tolgoi mine development,” Rio Tinto said in a statement made available to YosefArdi News Thursday, August 8th.
Rio Tinto has agreed to extend the short term funding facility until 28 August, 2013 and to permit funds repaid by Turquoise Hill from the proceeds of the sale of its 50% interest in Altynalmas Gold Ltd to be redrawn.
“Rio Tinto has also agreed to waive its option to convert all or part of any amounts outstanding under the short term funding facility into TRQ common shares,” the company added.
In addition, in the event Turquoise Hill is required to raise equity to repay this new bridge facility and the existing US$1.8 billion interim funding facility provided by Rio Tinto, which also matures on 31 December, 2013, Rio Tinto has also agreed to provide a firm stand-by commitment for a fully underwritten rights offering by Turquoise Hill.