Canada's Turquoise Hill considers gold streaming, debt funding for Mongolian mine www.reuters.com
(Reuters) - Canadian miner Turquoise Hill Resources Ltd said on Tuesday it intended to pursue “gold streaming” and medium-term debt offering transactions for its Oyu Tolgoi copper and gold project in Mongolia.
The streaming transaction would involve “a significant up-front payment” to Oyu Tolgoi, as well as deferred payments based on gold “spot” prices, Turquoise Hill said.
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.
The potential transaction will be in exchange for deliveries to one or more streamers of an agreed portion of gold produced from the Oyut deposit, the company added.
It was also considering one or more offering of global medium-term debt by Oyu Tolgoi with a tenor of at least 10 years. It would require Oyu Tolgoi to make a “bullet” repayment of the principal at maturity.
“We will now focus on finalising terms for a streaming transaction as soon as possible, and on completing preparations necessary for a potential inaugural offering of (global medium term notes/bonds) later in 2021,” Chief Financial Officer Luke Colton said.
The Oyu Tolgoi deposit in south Mongolia is jointly owned by Rio Tinto-controlled Turquoise Hill and the Mongolian state.
Reporting by Shubham Kalia in Bengaluru; Editing by Rashmi Aich
Published Date:2020-12-23