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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Rio Tinto Group    RIO   AU000000RIO1


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Gold stream probably 'most attractive' funding option for Turquoise Hill: Wheaton CEO

11/10/2020 | 04:01pm EST

(Reuters) - A gold stream is "probably the most attractive" option for Canadian miner Turquoise Hill Resources as it seeks funding for a copper and gold project in Mongolia, the head of mine financing company Wheaton Precious Metals said on Tuesday.

Turquoise Hill last week began arbitration proceedings against its biggest shareholder Rio Tinto to seek "clarity" on financing for Oyu Tolgoi, one of Rio's biggest growth projects.

Streaming is a type of alternative finance that generally involves an upfront payment by the streamer to a miner, which repays the loan by supplying metal at a later date.

A "gold streaming transaction" is among options under study by Turquoise Hill to plug a funding gap for the project estimated at $1.7 billion as of the end of the second quarter, the company said.

The aim would be to reduce the size and delay the timing of any equity rights offering.

"Definitely from a Turquoise Hill shareholder perspective I would say it is probably the most attractive way of financing that project," Randy Smallwood, president and chief executive of Wheaton Precious Metals, told Reuters.

He declined comment when asked if Wheaton was in active talks. Any such deal would require approval from Rio.

"That's one of the challenges that I think Turquoise Hill has," he said.

Turquoise Hill and Rio declined comment.

Additional debt or a streaming agreement are not in Rio's best interests as both options would leave the miner carrying all the risk but with a higher cost of capital than a direct equity funding option, Bank of Montreal analyst Edward Sterck said last week in note.

The Oyu Tolgoi deposit in south Mongolia is jointly owned by the Mongolian state and ranks as one of the world's largest known copper and gold deposits.

(Reporting by Jeff Lewis; Editing by Chris Reese, Emelia Sithole-Matarise and David Gregorio)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF MONTREAL 1.14% 100.63 Delayed Quote.3.98%
GOLD -1.04% 1827.635 Delayed Quote.-2.69%
RIO TINTO GROUP 0.72% 120.52 End-of-day quote.5.88%
TURQUOISE HILL RESOURCES LTD. -2.43% 15.25 Delayed Quote.-3.66%
WHEATON PRECIOUS METALS CORP. -2.35% 50.75 Delayed Quote.-4.53%
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Financials (USD)
Sales 2020 43 744 M - -
Net income 2020 10 281 M - -
Net Debt 2020 2 318 M - -
P/E ratio 2020 11,9x
Yield 2020 5,84%
Capitalization 135 B 135 B -
EV / Sales 2020 3,14x
EV / Sales 2021 2,89x
Nbr of Employees 46 000
Free-Float 65,2%
Duration : Period :
Rio Tinto Group Technical Analysis Chart | MarketScreener
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Technical analysis trends RIO TINTO GROUP
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 25
Average target price 78,01 $
Last Close Price 80,78 $
Spread / Highest target 56,9%
Spread / Average Target -3,44%
Spread / Lowest Target -44,2%
EPS Revisions
Managers and Directors
Jakob Stausholm Chief Executive Officer & Executive Director
Simon Robert Thompson Chairman
Peter Lloyd Cunningham Chief Financial Officer
Michael Gerard L'Estrange Independent Non-Executive Director
Megan Clark Independent Non-Executive Director
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