Turquoise Hill Presents Update Regarding Beginning of Underground Construction

Turquoise Hill Resources today provided an update on progress toward the start of underground construction, including project finance drawdown and the signing of an engineering, procurement and construction management (EPCM) contract.

Project finance drawdown

Oyu Tolgoi has drawn down approximately $4.0 billion of the project finance facility that was signed in December 2015 and provided by a syndicate of international financial institutions, export credit agencies representing the governments of Canada, the United States, and Australia as well as 15 commercial banks. Steps are being taken to finalize the drawdown of the additional $0.4 billion and are expected to be largely complete in the coming weeks. As part of the project finance facility, a debt cap of $6.0 billion for Oyu Tolgoi was agreed, which provides the possibility for an additional $1.6 billion of supplemental debt in the future.

In accordance with the Amended and Restated Shareholders' Agreement (ARSHA) dated June 8, 2011, Turquoise Hill has funded Oyu Tolgoi's cash requirements beyond internally generated cash flows by a combination of equity investment and shareholder debt. For amounts funded by debt, Oyu Tolgoi must repay such amounts, including accrued interest, before it can pay common share dividends.

Net funding received to date has been used by Oyu Tolgoi to pay down shareholder loans payable to Turquoise Hill. Net funding will be available for drawdown by Oyu Tolgoi as required for the development of the underground mine. The shareholder loans bear interest at an effective annual rate of LIBOR plus 6.5%.

EPCM contract signing

Oyu Tolgoi LLC has signed a contract with Jacobs Engineering Group (Jacobs) to provide EPCM services for underground development, which paves the way for construction to begin. Jacobs will be responsible for the materials handling systems for the underground mine and associated surface and underground infrastructure. The project is expected to be delivered over a five to seven-year period.

Source: http://www.turquoisehill.com/

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Submit