DeBeurs.nl

ubu 16 mei 2019 13:02

0

www.miningweekly.com/article/oyu-tolg...

Oyu Tolgoi going strong despite shaft delays

The Oyu Tolgoi mine, in Mongolia, has had a strong start to 2019, with copper and gold production in the openpit mine rising strongly, standing Vancouver-based Turquoise Hill in good stead to meet its production guidance for the year.

During the first three months of the year, Oyu Tolgoi produced 45 800 t of copper and 120 000 oz of gold, compared with 38 800 t of copper and 42 000 oz of gold a year earlier.

Turquoise Hill generated revenue of $352.7-million in the first quarter, up 44% on the first quarter of 2018, reflecting the significant increase in gold production as higher gold content ore were processed.

The mine’s cost of sales was $1.99/lb of copper sold, C1 cash costs were $0.77/lb of copper produced and all-in sustaining costs were $1.45/lb of copper produced.

For the March quarter, Turquoise Hill recorded income of $105.2-million and net income attributable to owners of the company of $111.2-million.

"Oyu Tolgoi has made a strong start to 2019," said Turquoise Hill CEO Ulf Quellmann.

Commenting on the delays to underground mining, he said that Oyu Tolgoi remained engaged with mine manager Rio Tinto to incorporate new geotechnical data into the mine design.

“We expect to provide an update along with our mid-year results.”

The company previously advised that Rio Tinto would complete a review of the Shaft 2 schedule and that outcomes were expected by the end of October.

Turquoise Hill owns the mine in a 66:34 partnership with the Mongolian government, but while it is seen as one of the most lucrative copper/gold properties under development, Oyu Tolgoi has been dogged by political challenges, corruption investigations and construction delays.

Oyu Tolgoi mine was initially developed as an openpit operation. The copper concentrator plant, with related facilities and necessary infrastructure, was originally designed to process about 100 000 t/d of ore from the Oyut openpit. Since 2014, the concentrator has improved operating practices and gained experience, which has helped achieve a consistent throughput of more than 105 000 t/d. Concentrator throughput for 2019 is targeted at 110 000 t/d.

In August 2013, development of the underground mine was suspended pending resolution of matters with the government of Mongolia. Following signing of the Oyu Tolgoi underground plan in May 2015 and the signing of a $4.4-billion project finance facility in December 2015, Oyu Tolgoi received formal notice to proceed approval by the boards of Turquoise Hill, Rio Tinto and Oyu Tolgoi in May 2016, which was the final requirement for the restart of underground development.

Underground construction restarted in May 2016. Since then, a total of $2.6-billion had been spent on underground construction. Another $1.3-billion to $1.4-bilion is earmarked for underground development this year.

Oyu Tolgoi is expected to produce 125 000 t to 155 000 t of copper and 180 000 oz to 220 000 oz of gold in concentrates for 2019.

haas 22 mei 2019 09:33

2

Naast de wereldwijde transitie naar zonne- en windenergie, is vooral elektrisch rijden een zeer grote veroorzaker van een enorme stijging van de vraag naar koper.

Een gewone auto bevat 55 pond koper. Een elektrische auto 165 pond. Voor een elektrische auto is dus drie keer zoveel koper nodig.

ubu 27 mei 2019 14:50

0

Kritisch!

Turquoise Hill Is Closer To Being An Investment, But Is Still A Bet On Copper And Gold

seekingalpha.com/article/4266222-turq...

May 23, 2019 6:40 PM ET|32 comments | About: Turquoise Hill Resources Ltd. (TRQ)

Summary
TRQ's stock is down more than 70% from its 5-year high but my net present value estimation is still below the current market capitalization.

However, given the quality of the Oyu Tolgoi mine, future expected low cost production and gold hedge, TRQ should deserve a premium.

There are 4 issues plaguing the stock; taxes, a mine plan change, the power plant to be built and possible government joint agreement changes.

My valuation models based on free cash flows to shareholders including debt servicing and repayments show that TRQ is getting closer to become a good long-term investment.

The last time I wrote about Turquoise Hill (TRQ) was more than 3 years ago. As I am a value investor my conclusion was straightforward;

TRQ is a play on copper
Many things can go wrong
The investment isn't justified at low copper prices

Unfortunately for TRQ investors, the risks materialized and higher copper prices didn't suffice to protect the stock price.

However, the market capitalization is slowly but surely getting closer to what could be a fair investment valuation for TRQ where the higher copper price option, gold hedge and 100-year future potential development could be bought for free. My estimation of the present value for shareholders of TRQ's future cash flow is at $1.8 billion. If there is more trade war turmoil, markets start to fear a hard landing for China, all copper related investments will inevitably decline. This could make TRQ and excellent long term investment for those who are brave enough to buy when others are fearful.

Even if the asset looks great, copper might be the metal of the century given the electrification towards the world is going, there is still the reality that is plaguing TRQ in the form of:

A new mine plan in the making
The unknown costs of the power plant to be built
The Mongolian government changing their agreement
The uncertainty related to past and future tax contributions
If you wish to know more about my reasoning, please enjoy the video.

Content and time stamps:

0:00 Current situation
3:17 Company Overview
5:44 Oyu Tolgoi Technical report
4 Issues plaguing TRQ:
8:18 build own power plant
9:13 Tax issue - $150 million added
9:33 Ore body stability
9:50 New agreement with government
11:13 Financials
11:50 Valuation model
14:27 Long term copper/gold play
15:38 Investing in copper

www.youtube.com/watch?v=sh_c_YWD-YY

ubu 27 mei 2019 15:05

0

Transcript:

www.valuewalk.com/2019/05/turquoise-h...

There fell investors over the last few days. There were a lot of comments on my two year old video on Turquoise Hill. So the stock is down 70 percent. It's a copper gold miner with expected production for the next century. So we have copper a great metal for the electrification and where our world is going with renewables electric vehicles and everything. If you build all that infrastructure you need a lot of copper. There is a lot of gold to be mined so it is a hedge against the inflationary pressures that we have here. So it is a very very interesting investment. A very interesting proposition. However the stock is down more than 70 percent since from its five year highs. And we have to see what's going on. And I really want to answer the comments that have been wondering what's going on and what is the current valuation.

So the topics for today are of course Turkey is down 70 percent the bargain will give you a quick Company Overview The current issues the four big unknowns that pushed the stock price down. We'll just discuss the financial situation quickly and then I'll show you my earnings models to make a valuation on turquoise here and I'll conclude with the copper conclusion how many copper miners are in the same situation. And you have to be careful how and what to buy to expose your portfolio to the metal. The last time I made the proper analysis of Turquoise Hill was in 2016 and my conclusion wasn't positive. I said that at 2016 copper prices earnings per share do not justify the project. Therefore turquoise was a pure bet on copper and then also it should be defined as highly risky as a lot of things can happen in seven years. That was the plan from 2016 to build and expand the mine and expect production in 2020 free more than three years have passed now since then and actually a lot of bad things happened in the meantime. If we look at the stock price the five year high was four point four dollars. So we are now 70 percent below that. And the risks never materialized. So the stock is more than what more than 50 percent below the price that was there when I wrote that article. And plus copper prices have increased 40 percent. So the stock price should have exploded as it was a bet on copper. But when you have an asset like turquoise you also have Mongolia you have the government there and then it's a huge ore body. So a lot of things can happen when you plan something and then things might not turn out that way. It's always the same with such long term huge projects.

You can always expect delays and there is one little hint that might help you estimate whether those will come or not. And I'll show you that in a moment just the Company Overview by 2025 or your Tolgoi should be the third largest copper mine in the world with extremely low cash flows of around 50 cents per pound which means that if you sell the copper at three dollars per pound the profits the gross profit margin should be two point five dollars per pound. That would lead to EBITDA of 3 billion and that's not bad when you compare to the current market cap of 2.5 billion. Even if it take only 66 percent of the EBITDA it's still a great number one gets to two billion on a market cap of two point five billion. And that's because all you tall guys is jointly owned by the government of Mongolia 44 percent and Turquoise Hill that owns 66 percent and Rio Tinto owns 51 percent of Turquoise Hill and is the manager of the project for those that don't know the story Oyu Tolgoi is mine already producing mine in Mongolia but with huge growth expectations over the next years as they expand the mine they will invest more than 5 billion in the mine and expect huge cash flows over the long term. As I said we are into the renewable electric vehicle driven revolution urbanization electrification etc. There is less and less copper the mines have to go deeper. The costs are higher. So supply will be challenged let's say to meet demand and the expectations are that copper prices might go up up and up and that's a very big positive for Turquoise Hill especially

haas 30 mei 2019 06:38

0

TRQ: 1.22

ubu 16 juli 2019 11:17

0

www.miningweekly.com/article/rio-warn...

PERTH (miningweekly.com) – Mining giant Rio Tinto has warned of costs blow-outs and delays to its Oyu Tolgoi underground project, in Mongolia.

The miner on Tuesday said that capital spend to bring the copper project into production was expected to range between $6.5-billion and $7.2-billion, an increase of between $1.2-billion and $1.9-billion compared with the previous cost estimate of $5.3-billion.

In addition to the cost blow-out, Rio has also warned that first sustainable production from Oyu Tolgoi would only be achieved between May 2022 and June 2023, which was between 16 and 30 months later than the original feasibility study guidance in 2016.

Rio is considering a number of mine design options for the Oyu Tolgoi project, after enhanced geotechnical information and data modelling suggested that there could be stability risks with the previously approved mine design.

These options are being evaluated to determine the final design of the first panel of mining, ‘Panel 0’, and this work is anticipated to continue until early 2020.

The miner noted that given the further technical work which was needed, the definitive estimate, which would include the final estimate of cost and schedule for the remaining underground project, was now expected to be delivered in the second half of 2020, reflecting the preferred mine design approach.

“We have made significant progress on a number of key elements in the construction of the underground project during 2019. However, the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options,” said Rio’s group executive for growth and innovation, Stephen McIntosh.

“Delays are not unusual for such a large and complex project, but we are very focused as a team on finding the right pathway to deliver this high-value project.”

McIntosh said that the company would continue to focus on minimising the impact to project schedule and cost as it worked through the detailed analysis and testing of each mine design option.

Although further work is necessary to reach definitive conclusions, Rio is reviewing the carrying value of its investment in the project and will announce if any changes are required, in the half-year results on August 1.

Meanwhile, the miner on Tuesday reported a tough second quarter, as operational and weather conditions impacted the bottom-line.

“We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution. Whilst we experienced operational and weather issues at our iron-ore operations in Australia, pricing and market demand have remained robust,” CEO Jean-Sebastian Jacques said.

Iron-ore production for the quarter was down 7% on the previous corresponding period, to 79.7-million tonnes, with iron-ore shipments also down by 3% over the same period, to 85.4-million tonnes.

In the first half of 2019, iron-ore production was down 8% on the previous corresponding period, to 155.7-million tonnes.

The iron-ore operations were impacted by recovery works in April this year, following Tropical Cyclone Veronica.

BHP in June revised its full-year production guidance to between 320-million and 330-million tonnes, down from the previous estimate of between 333-million and 343-million tonnes, while the cost guidance for the iron-ore division has also been increased to between A$14/t and A$15/t, up from the previous estimate of between A$13/t and A$14/t.

Meanwhile, copper production for the second quarter was down 13% on the 2018 figures, reaching 137 100 t, while half-year production was down by 5% on the previous corresponding period, to 281 000 t.

Both the Kennecott and Escondida operations delivered lower copper output during the quarter under review, reflecting lower grades.

Meanwhile, bauxite production for the quarter was up 1% on the previous corresponding period, to 13.4-million tonnes, and up 1% in the half-year, to 26.1-million tonnes.

Aluminium production remained stagnant at 803 000 t in the second quarter ended June, and 1.5-million tonnes in the half-year.

“We remain focused on safely improving and optimising the performance and productivity of our assets in order to drive future cash flow. This, combined with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term,” Jacques said.

ubu 16 juli 2019 17:54

0

quote:
haas schreef op 30 mei 2019 06:38:
TRQ: 1.22

TRQ: 0.65 USD

Ik had gelukkig nog maar een klein plukje. Heb nu weer iets uitgebreid.

ubu 16 juli 2019 18:27

0

www.fool.com/investing/2019/07/16/her...

Here's Why Turquoise Hill Resources Tumbled Today
The copper and gold miner reported solid second-quarter 2019 production results, but announced mounting challenges at an important growth asset.

What happened
Shares of Turquoise Hill Resources (NYSE:TRQ) fell over 45% today after the company reported production results from the second quarter of this year. While first-half 2019 copper, gold, and silver output were solid compared to the year-ago period, the production update included troubling news for the Oyu Tolgoi copper mine in Mongolia.

As previously discussed on the first-quarter 2019 earnings conference call, the company's most important asset is facing unexpected development challenges, primarily related to the underground expansion of the mine. Turquoise Hill Resources now expects steady-state production could be delayed 16 to 30 months from the original estimate, while capital investment could increase $1.2 billion to $1.9 billion over the most recent $5.3 billion estimate.

As of 11:30 a.m. EDT, the stock had settled to a 41.1% loss.

So what
An aboveground portion of the Oyu Tolgoi copper mine is currently in production, but the majority of the asset's vast resources remain locked deep underground. While Turquoise Hill Resources has long planned to develop a world-class underground mine at the site, the relatively small company lacks the capital required to complete that ambitious task by itself. The latest cost estimates put that goal even further out of reach.

It helps that Rio Tinto (NYSE:RIO) owns a 50.8% stake in Turquoise Hill Resources, but even the $102 billion mining behemoth expects a challenging road ahead. According to Financial Times, Rio Tinto executives said a final mining plan with cost estimates and production timelines won't be ready until the second half of 2020.

Investors are worried about the newfound uncertainty. Will Rio Tinto scale back its plans for Oyu Tolgoi, or is the project too big to fail? The situation is complicated by the fact that the copper mine is expected to become the third-largest on the planet and to be an important source of revenue for the Mongolian government, which owns a 34% stake in the asset. Turquoise Hill Resources owns the remaining 66% equity of the mine.

Now what
Investors are clearly growing pessimistic over the chances Turquoise Hill Resources can pull off a miracle in Mongolia. The company has seen its market cap crater from over $6 billion to just $1.3 billion in the last three years. The stock now trades well below the $1 per share mark. Considering the high level of uncertainty, individual investors will need to keep a close eye on the business update from Rio Tinto next month, which will provide more details about the path forward.

ubu 16 juli 2019 18:48

0

www.mining.com/rio-tinto-faces-1-9bn-...

Rio Tinto faces $1.9bn cost blowout, further delays at Oyu Tolgoi copper-gold mine

Situated in the southern Gobi desert of Mongolia, about 550 km. south of the capital, Oyu Tolgoi is one of the largest high-grade copper deposits in the world. (Image courtesy of Oyu Tolgoi LLC..)
World’s No.2 miner Rio Tinto (ASX, LON, NYSE:RIO) is once again in deep trouble in Mongolia, but this time is not related to the government questioning the legitimacy of the ongoing underground expansion of its giant Oyu Tolgoi copper-gold-silver mine, but the costs and schedule of the project.

The company revealed on Tuesday that difficult ground conditions could blow out the estimated cost of the expansion (currently pegged at $5.3 billion) by as much as an additional $1.9 billion.

It also warned of further delays of up to two and a half years.

First sustainable production is now expected between May 2022 and June 2023, though Rio said a final estimate cost and schedule would be announced in the second half of 2020.

GROUND CONDITIONS ARE MORE CHALLENGING THAN EXPECTED AND WE ARE HAVING TO REVIEW OUR MINE PLAN.

Stephen McIntosh, Rio Tinto.
The mining giant noted the update would reflect the “preferred mine design approach” since changes to planned underground infrastructure such as the ore handling system and access ramps have to be considered.

Ground conditions are more challenging than expected and we are having to review our mine plan.

“Delays are not unusual for such a large and complex project, but we are very focused as a team on finding the right pathway to deliver this high value project,” Rio Tinto group executive, growth and innovation, Stephen McIntosh, said in the statement.

The company also said it was reviewing the carrying value of the project and could announce an impairment charge when it announces half-year results next month. Rio has also agreed to build a power plant to supply the mine, which will make the final cost of the project even higher.

New mine design
Turquoise Hill (TSE, NSYE: TRQ), the Rio-controlled company that owns 66% of Oyu Tolgoi, said they have already identified a number of mine designs to address the stability risks associated with the original expansion design.

Issues with the underground project first emerged in October, when a nine-month delay to sustainable production was announced due to technical problems.

The companies have been using block-caving mining at the asset. Although technically challenging, it’s deemed as one of the most cost-effective mining methods for extracting ore buried deep below the surface.

For block-caving to effectively work, weak and fractured rock needs to collapse under pressure from gravity. Rio Tinto chief executive Jean-Sébastien Jacques had previously mentioned that rock collapses too easily at Oyu Tolgoi.

“Starting a block cave correctly is critical to its long-term safety and viability. Analysis suggests that the current mine design carries stability risks leading to a number of alternative mine designs being considered with work currently at the conceptual study phase,” Edward Sterck, analyst at BMO Capital Markets, said in a note to investors. “The alternative plans may require relocation of critical underground infrastructure and a change in mining sequence.”

Copper hunger
Rio has been stepped up efforts to find new copper deposits worth of being developed into mines, since demand for the industrial metal is expected to grow further as the world shifts to cleaner forms of energy.

The company’s board of directors approved the underground expansion of the massive Mongolian mine in the Gobi desert three years ago, but progress has been slow due to a series of disagreements between Rio and the country’s government, including differences over taxes owed and a power contract.

“Current information indicates that Oyu Tolgoi mineral reserves will not be materially impacted by the Hugo North mine design options being considered; however, ongoing reviews will be considered as the work progresses,” the Canadian miner said in a separate statement.

Oyu Tolgoi was discovered in 2001 and Rio gained control of it in 2012. Once finished, the expansion is expected to lift the mine’s production from 125–150kt this year to 560k tonnes of copper concentrate at full tilt from 2025, making it the world’s third-largest copper mine.

Osho 16 juli 2019 20:21

0

quote:
maurice73 schreef op 16 juli 2019 17:54:
[...]

TRQ: 0.65 USD

Ik had gelukkig nog maar een klein plukje. Heb nu weer iets uitgebreid.

Interessante prijs. Jammer van het uitstel. Koopwaardig?

ubu 16 juli 2019 21:02

0

quote:
Osho schreef op 16 juli 2019 20:21:
[...]

Interessante prijs. Jammer van het uitstel. Koopwaardig?

Ik beleg ca. 1 1/2 jaar en ga geen adviezen geven. Ik kocht en koop dit omdat ik verwacht dat de vraag naar koper door elektrificatie gaat stijgen en ik liever aandelen in een grote mijn koop.

Ik baseer mij daarbij op deze gegevens, maar die kun jij ook vinden ;-):
www.bloomberg.com/quote/TRQ:CN

En dit (feb 2019) helpt dan ook nog iets:

www.bnnbloomberg.ca/investing/video/r...

Osho 16 juli 2019 21:18

0

quote:
maurice73 schreef op 16 juli 2019 21:02:
[...]

Ik beleg ca. 1 1/2 jaar en ga geen adviezen geven. Ik kocht en koop dit omdat ik verwacht dat de vraag naar koper door elektrificatie gaat stijgen en ik liever aandelen in een grote mijn koop.

Ik baseer mij daarbij op deze gegevens, maar die kun jij ook vinden ;-):
www.bloomberg.com/quote/TRQ:CN

En dit (feb 2019) helpt dan ook nog iets:

www.bnnbloomberg.ca/investing/video/r...

Thanks voor de reactie. Snap je perspectief. Ik ga me verder inlezen. Heb hier aandeel sinds dit draadje op the watchlist. Ik blijf ze in de gaten houden.. (y)

haas 18 juli 2019 18:27

0

deze week bleek de productie fors lager te zijn dan verwacht. De ontwikkeling van de mijn is problematisch gebleken. De vraag is nu of TRQ wel kan overleven.

De Mongoolse overheid bezit ondertussen 34% van de mijn en is alleen maar geld aan het eisen. Het benodigde geld dat geïnvesteerd moet worden zal dus van TRQ moeten komen en daar is de kas onderhand leeg. Tegenvallende productie helpt dan pertinent niet.

ubu 23 juli 2019 17:34

0

Voorzichtigheid blijft geboden :-):

www.mining.com/web/rio-tintos-mongoli...

Rio Tinto’s Mongolia copper problems highlight frontier country risks

Reuters | July 22, 2019 | 9:25 am Intelligence Top Companies Asia Copper

Looking for a long-term bullish signal for copper? Then look no further than Rio Tinto’s struggles with the Oyu Tolgoi mine and expansion project in Mongolia.

The latest news about the giant copper-gold project is that the production from the underground expansion will be delayed by more than a year to between May 2022 and June 2023, and that costs have ballooned by another $1.9 billion.

The capital cost of the project is now estimated at $6.5 billion to $7.2 billion, up from an original estimate of $5.3 billion.

Rio Tinto, through its Turquoise Hill Resources subsidiary, owns 66% of the Oyu Tolgoi mine, which could become the world’s third-largest copper mine by production in 2025 under the current development plan.

MONGOLIA’S PARLIAMENT IS SET TO APPROVE MEASURES THAT WOULD TERMINATE THE 2015 AGREEMENT ON THE OYU TOLGOI UNDERGROUND EXPANSION

What’s becoming more of an issue for the mine is that the Mongolian government owns the other 34%, and it appears that there is mounting disquiet in Ulaanbaatar that the landlocked country between Russia and China is getting a dud deal.

Mongolia’s parliament is set to approve measures that would terminate the 2015 agreement on the Oyu Tolgoi underground expansion, seeking to bring forward the time when it will receive dividend payments from the project, demand more transparency on copper prices and push for Rio Tinto to build a power plant.

Currently, Mongolia will only start to receive dividends around 2041, when its share of the debt for the project is repaid.

“For now, the Oyu Tolgoi agreement is not benefiting Mongolian citizens,” Battumur Baagaa, a member of the parliamentary working group scrutinising the project, told Reuters. “It is good to attract foreign investment but that doesn’t mean foreign investment should only benefit the foreign side.”

The sentiment expressed in the above quote goes to the heart of Rio Tinto’s Mongolia problem, and indeed to any mining company considering a major investment in a developing, or frontier market.

Balancing risks
The Oyu Tolgoi project is a country-changer for Mongolia, with its capital budget making it the biggest ever undertaken in the country, but it’s also more than half of the annual gross domestic product (GDP) of $13 billion.

By comparison, the $200 billion of spending on eight liquefied natural gas (LNG) projects in Australia over the past decade, the biggest investment in a single industry in the country’s history, represented about 17% of annual GDP.

A country such as Mongolia cannot afford the upfront cost for its stake in a project the size of Oyu Tolgoi, so it pays for its share by deferring dividends.

While this sounds like a good solution in theory, it also means that the government, and the populace, see the mine being built and start operations, but they don’t necessarily see the benefits flowing to them.

Rio Tinto makes the point on its website that from 2010 to the third quarter of 2018 it has spent “$8.3 billion in-country in the form of salaries, payments to Mongolian suppliers, taxes, and other payments to the government.”

The question is whether this is enough, and the answer the Mongolian authorities appear to be giving is no.

The obvious risk for Rio Tinto is that it spends billions of dollars on an investment that takes a longer period to deliver returns, or even in the worst case the asset is seized by the state.

This situation is increasingly being confronted by resource companies around the globe.

Mozambique and Tanzania are both keen to see international oil and gas companies spend billions of dollars developing an LNG industry in the east African neighbours.

But will the authorities remain satisfied with the terms that were initially struck when it becomes clear that the benefits to the government coffers will take some time to flow?

Increasingly, valuable deposits of commodities are in jurisdictions with higher country risk, but it doesn’t appear that project developers factor in the likelihood of having to renegotiate terms once vast amounts have already been spent.

It’s always going to be a fine balance between a company assessing how much of the value of the project it can afford to surrender to the host country, and the government of that country working out how hard they can squeeze before the company walks away and your investment reputation is severely damaged.

For the market, the risk is that much of the new supply of several key resources is likely to come from countries such as Mongolia, and the question is how likely is it that this resource is actually developed and delivers to plan.

haas 28 juli 2019 09:02

0

anders maar even met trien gaan kijken bij TRQ ?
www.youtube.com/watch?v=g8pAnnSmr8A

ubu 1 augustus 2019 11:01

0

www.mining.com/web/turquoise-hill-swi...

Turquoise Hill swings to loss on Mongolia mine woes

Reuters | July 31, 2019

Rio Tinto-controlled Turquoise Hill Resources said an impairment charge at the cash-generating unit of its Oyu Tolgoi copper mine in Mongolia led to the company missing estimates for second-quarter profit on Wednesday.

Turquoise Hill, which owns 66% of the mine, reported a loss of $736.7 million, or 22 cents a share, in the three months ended June 30, compared with a profit of $204 million, or 9 cents, a year earlier. That compared with analyst expectations for earnings of 3 cents a share.

OYU TOLGOI’S UNDERGROUND EXPANSION HAS BEEN BESET BY DELAYS, COST OVERRUNS AND POLITICAL SQUABBLES

Oyu Tolgoi, operated by Rio Tinto PLC and expected to become one of the mining company’s most lucrative properties, produced 39,156 tonnes of copper and 71,825 ounces of gold during the quarter.

That came at an all-in sustaining cost of $1.54 per pound of copper produced, compared with $2.42 a year earlier.

Oyu Tolgoi’s underground expansion has been beset by delays, cost overruns and political squabbles, prompting the government of Mongolia, which owns 34% of the mine, to set a vote for August to cancel parts of an investment agreement with Rio Tinto. This would reduce the company’s future profits while benefiting Mongolia.

Turquoise Hill shares have slumped 46% since it said this month it could spend as much as $1.9 billion more than the $5.3 billion previously announced on the underground expansion of Oyu Tolgoi, and that first production would be delayed by up to 30 months.

The impairment causing its quarterly loss was related to that increase in expected spending and delays, the company said on Wednesday.

Turquoise Hill, which is also listed on the New York Stock Exchange, said its share price decline to below $1 meant it is no longer in compliance with the exchange’s listing rules, and that it intends to “pursue measures to cure the share price non-compliance.”

Turquoise Hill spent $292 million on the expansion during the quarter, bringing total expenditure on the underground project since January 1, 2016, to $2.9 billion.

Turquoise Hill posted revenue of $382.7 million, down from $341.7 million a year ago and compared with analysts’ expectations of $307.5 million.

(By Nichola Saminather; Editing by Grant McCool and Jonathan Oatis)

ubu 1 augustus 2019 11:51

0

Kritisch:

seekingalpha.com/article/4278744-turq...

Jul. 29, 2019 4:02 PM ET

Turquoise Hill Revisited

Summary
TRQ is likely to have a rough H2 2019 due to multiple operational challenges.

Expected mine CAPEX has increased significantly and RIO may enter into a JV agreement to meet increased funding requirements.

RIO’s lack of interest in buying additional equity stake in TRQ has distressed the stock price.

TRQ has promisingmining potential in the long term but the positive outlook is dwarfed by the risks.

Thesis
Turquoise Hill Resources (TRQ) has witnessed a significant drop in share price since the publication of Q2 2019 production report. This report highlights that the completion of TRQ's Oyu Tolgoi project will be significantly delayed. In this article, I have analyzed the implications of such a delay on the share prices.

Moreover, TRQ's parent Rio Tinto (RIO) has not yet announced any plans to increase its investment in its flagship copper asset. In my view, this factor is also landing heavily on the stock price. Given TRQ's valuation, one might consider it to be a bargain at current prices, but I don't expect TRQ's prices to witness any significant improvement in the short-to-medium term.

Bijlage:

ubu 1 augustus 2019 15:24

0

Kwartaalverslag:
www.turquoisehill.com/site/assets/fil...

ubu 1 augustus 2019 15:39

0

Hoogte schuld:

For amounts funded by debt, Oyu Tolgoi must repay such amounts, including accrued interest, before it can pay common share dividends. As of June 30, 2019, the aggregate outstanding balance of shareholder loans extended by subsidiaries of the Company to Oyu Tolgoi was $5.5 billion, including accrued interest of $1.0 billion. These loans bear interest at an effective annual rate of LIBOR plus 6.5%.

ubu 4 september 2020 15:51

0

Dit gaat crescendo de laatste paar dagen.

AEX 865,36 +0,01 +0,00% 18 apr


Germany40^	17.751,90	-0,48%
BEL 20	3.826,58	+0,84%
Europe50^	4.919,39	-0,35%
US30^	38.013,46	0,00%
Nasd100^	17.548,80	0,00%
US500^	5.049,25	0,00%
Japan225^	38.001,71	0,00%
Gold spot	2.390,48	+0,47%
EUR/USD	1,0627	-0,16%
WTI	82,08	0,00%

VIVORYON THER...	+11,51%
JUST EAT TAKE...	+5,71%
Air France-KLM	+4,18%
FASTNED	+3,00%
RANDSTAD NV	+2,65%

Pharming	-9,63%
ASMI	-6,10%
Avantium	-6,01%
PostNL	-5,84%
TomTom	-3,31%

Grondstoffen « Terug naar discussie overzicht

Turquoise Hill Resources - Oyu Tolgoi

Meedoen aan de discussie?

Direct naar Forum

Markt vandaag

Aandelenadviezen van IEX.nl

Stijgers

Dalers