MONTREAL, Oct. 1, 2020 /PRNewswire/ - Turquoise Hill
Resources Ltd. (Turquoise Hill or the Company)
announced today that it is proceeding with the planned
consolidation (or reverse stock-split) of the Company's issued and
outstanding common shares at a ratio of one post-consolidation
share for every ten pre-consolidation shares (the
Consolidation). The Consolidation will be effective as of
October 23, 2020. Notice has been
provided to the New York Stock Exchange (NYSE) and
conditional approval to proceed with the Consolidation has been
received from the Toronto Stock Exchange (TSX). Subject to
the receipt of all required and final approvals, the Company's
common shares are expected to begin trading on the NYSE and the
TSX, on a consolidated basis, on or about October 26, 2020.
The Company's shareholders approved a special resolution at the
Company's annual and special meeting of shareholders held on
July 24, 2020, granting the board of
directors authority, in its sole discretion, to implement the
Consolidation and to select the exact consolidation ratio, provided
that (i) the ratio be no smaller than one post-consolidation share
for every five pre-consolidation shares and no larger than one
post-consolidation share for every thirty pre-consolidation shares,
and (ii) the number of pre-consolidation shares in the ratio be a
whole number of common shares. The principal reason for
implementing the Consolidation is to ensure that the Company's
common shares remain eligible for continued listing on the NYSE.
The NYSE's listing rules require that a listed security must have
an average closing price of at least US$1.00 over a 30- day trading period in order to
remain eligible for continued listing on the exchange.
The Consolidation will reduce the number of issued and
outstanding common shares of the Company from
2,012,314,469 shares to approximately
201,231,446 shares. Turquoise Hill's common shares will
continue to trade on the NYSE and the TSX under the existing ticker
symbols. Following the Consolidation, the new CUSIP number for the
Company's common shares will be 900435207 and the new ISIN
will be CA9004352071.
Proportionate adjustments will be made to the Company's
outstanding performance share units, restricted share units and
deferred share units. No fractional Common Shares will be issued
pursuant to the Consolidation. Any and all such fractional shares
will be aggregated and sold by the Company's transfer agent and
registrar, AST Trust Company (Canada) (AST), on the market and in the
event that the proceeds therefrom, net of brokerage commissions,
expenses and withholding taxes, exceed US$5.00, such proceeds shall be paid to the
relevant shareholders in proportion to their fractional
entitlements. The Company is only responsible for dealing with
fractions arising on registered holdings. For shareholders who hold
their common shares through an intermediary (such as a securities
broker, dealer, bank or other financial institution), the effect of
the Consolidation on their individual holdings will be administered
by the intermediary.
Further details on the Consolidation are contained in the
amended management information circular of the Company dated
June 17, 2020, which has been filed
and is available under the Company's profile on SEDAR at
www.sedar.com.
AST will act as the exchange agent for the
Consolidation. While a letter of transmittal was previously
mailed to the Company's registered shareholders along with its
proxy materials in March of 2020, a new letter of transmittal will
be mailed to the Company's registered shareholders in respect of
the Consolidation.
Registered shareholders will be required to send their
certificate(s) representing pre-Consolidation common shares of the
Company, along with a properly executed letter of transmittal, to
AST in accordance with the instructions provided in the letter of
transmittal. Shareholders who previously returned their
certificates to AST with a properly executed letter of transmittal
will not be required to take any further action with respect to the
Consolidation. Shareholders who hold their common shares through a
securities broker, dealer, bank or other financial institution will
not be required to take any action with respect to the
Consolidation and should contact that intermediary for their
post-Consolidation positions. A copy of the new letter of
transmittal will be available on the Company's profile on SEDAR at
www.sedar.com, and will also be posted on the Company's website at
www.turquoisehill.com.
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Forward-looking statements and forward-looking
information
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of the
Company's beliefs, intentions and expectations about developments,
results and events which will or may occur in the future,
constitute "forward looking information" within the meaning of
applicable Canadian securities legislation and "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements and information relate to future events
or future performance, reflect current expectations or beliefs
regarding future events and are typically identified by words such
as "anticipate", "could", "should", "expect", "seek", "may",
"intend", "likely", "plan", "estimate", "will", "believe" and
similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to,
statements and information regarding: the completion and potential
benefits of the Consolidation; the expected number of common shares
issued and outstanding following the Consolidation; the timing and
anticipated effective date of the Consolidation; the date on which
the common shares are expected to start trading on the NYSE and the
TSX on a consolidated basis; the expectations set out in the 2020
Oyu Tolgoi Technical Report ("OTTR20"); the timing and amount of
future production and potential production delays; statements in
respect of the impacts of any delays on the Company's cash flows;
expected copper and gold grades; liquidity, funding sources,
funding requirements and planning and the status and nature of the
Company's ongoing discussions with Rio Tinto plc and its
subsidiaries with respect to future funding plans and requirements
(including as contemplated by the Memorandum of understanding dated
September 9, 2020 (the "MoU")); the
amount of any funding gap to complete the Oyu Tolgoi underground
project; the amount and potential sources of additional funding;
the Company's ability to re-profile its existing project debt in
line with current cash flow projections; the amount by which a
successful re-profiling of the Company's existing debt would reduce
the Company's currently projected funding requirements; the
Company's and Rio Tinto's understanding regarding the raising of
supplemental senior debt and the Company's ability to raise
supplemental senior debt; the Company's and Rio Tinto's
understanding regarding the process for identifying and considering
other funding options; the Company's and Rio Tinto's understanding
regarding the scope and timing for an equity offering by the
Company to address any remaining funding gap; the Company's
intention to prioritize funding by way of debt and/or hybrid
financing over equity funding; the Company's expectation of the
anticipated funding gap in the various scenarios described in this
press release; the timing of studies, announcements and analyses;
status of underground development; the mine design for Panel 0 of
Hugo North Lift 1 and the related cost and production schedule
implications; the re-design studies for Panels 1 and 2 of Hugo
North Lift 1 and the possible outcomes, content and timing thereof;
expectations regarding the possible recovery of ore in the two
structural pillars to the north and south of Panel 0; the possible
progression of a state-owned power plant ("SOPP") and related
amendments to the Power Source Framework Agreement ("PSFA") as well
as power purchase agreements; the timing of construction and
commissioning of the potential SOPP; sources of interim power; the
potential impact of COVID-19 on the Company's business, operations
and financial condition; capital and operating cost estimates,
timing of completion of the Definitive Estimate review and the
scope thereof; mill and concentrator throughput; the outcome of
formal international arbitration proceedings; anticipated business
activities, planned expenditures, corporate strategies, and other
statements that are not historical facts.
Forward-looking statements and information are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performance or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such statements or
information. There can be no assurance that such statements or
information will prove to be accurate. Such statements and
information are based on numerous assumptions regarding present and
future business strategies, local and global economic conditions,
and the environment in which the Company will operate in the
future, including the price of copper, gold and silver; projected
gold, copper and silver grades; anticipated capital and operating
costs, anticipated future production and cash flows; the
anticipated location of certain infrastructure in Hugo North Lift
1; sequence of mining within and across panel boundaries; the
availability and timing of required governmental and other
approvals for the construction of the SOPP; the ability of the
Government of Mongolia to finance
and procure the SOPP within the timeframes anticipated in the PSFA,
as amended; the willingness of third parties to extend existing
power arrangements; the status of the Company's relationship and
interaction with the Government of Mongolia on the continued operation and
development of the Oyu Tolgoi mine and Oyu Tolgoi LLC internal
governance; the status and nature of the Company's ongoing
discussions with Rio Tinto plc and its subsidiaries with respect to
future funding plans and requirements (including as contemplated by
the MoU) as well as the completion and potential benefits of the
Consolidation, the timing and anticipated effective date of the
Consolidation and the date on which the common shares are expected
to start trading on the NYSE and the TSX on a consolidated basis.
Certain important factors that could cause actual results,
performance or achievements to differ materially from those in the
forward-looking statements and information include, among others:
copper, gold and silver price volatility; discrepancies between
actual and estimated production; mineral reserves and resources and
metallurgical recoveries; development plans for processing
resources; the outcome of the Definitive Estimate review; public
health crises such as COVID-19; matters relating to proposed
exploration or expansion; mining operational and development risks,
including geotechnical risks and ground conditions; litigation
risks; regulatory restrictions (including environmental regulatory
restrictions and liability); Oyu Tolgoi LLC or the Government of
Mongolia's ability to deliver a
domestic power source for the Oyu Tolgoi project within the
required contractual time frame; communications with local
stakeholders and community relations; activities, actions or
assessments, including tax assessments, by governmental
authorities; events or circumstances (including strikes, blockades
or similar events outside of the Company's control) that may affect
the Company's ability to deliver its products in a timely manner;
currency fluctuations; the speculative nature of mineral
exploration; the global economic climate; dilution; share price
volatility; competition; loss of key employees; cyber security
incidents; additional funding requirements, including in respect of
the development or construction of a long-term domestic power
supply for the Oyu Tolgoi project; capital and operating costs,
including with respect to the development of additional deposits
and processing facilities; and defective title to mineral claims or
property. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements and information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. All such forward-looking statements and information are
based on certain assumptions and analyses made by the Company's
management in light of their experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors management believes are
reasonable and appropriate in the circumstances. These statements,
however, are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements
or information.
With respect to forward-looking information concerning the
continued operation and development of Oyu Tolgoi, the Company has
based its assumptions and analyses on certain factors which are
inherently uncertain. Uncertainties and assumptions include, among
others: the timing and cost of the construction and expansion of
mining and processing facilities; the timing and availability of a
long-term domestic power source (or the availability of financing
for the Company or the Government of Mongolia to construct such a source) for Oyu
Tolgoi; the ability to secure and draw down on the
supplemental debt under the Oyu Tolgoi project financing facility
and the availability of additional financing on terms reasonably
acceptable to Oyu Tolgoi LLC, Rio Tinto and the Company to further
develop Oyu Tolgoi as well as the status and nature of the
Company's ongoing discussions with Rio Tinto plc and its
subsidiaries with respect to future funding plans and requirements
(including as contemplated by the MoU); the potential impact of
COVID-19; the impact of changes in, changes in interpretation to or
changes in enforcement of, laws, regulations and government
practices in Mongolia; the
availability and cost of skilled labour and transportation; the
obtaining of (and the terms and timing of obtaining) necessary
environmental and other government approvals, consents and permits;
delays, and the costs which would result from delays, in the
development of the underground mine (which could significantly
exceed the costs projected in OTTR20); projected copper, gold and
silver prices and their market demand; and production estimates and
the anticipated yearly production of copper, gold and silver at Oyu
Tolgoi.
The cost, timing and complexities of mine construction and
development are increased by the remote location of a property such
as Oyu Tolgoi. It is common in mining operations and in the
development or expansion of existing facilities to experience
unexpected problems and delays during development, construction and
mine start-up. Additionally, although Oyu Tolgoi has achieved
commercial production, there is no assurance that future
development activities will result in profitable mining
operations.
Readers are cautioned not to place undue reliance on
forward-looking information or statements. By their nature,
forward-looking statements involve numerous assumptions, inherent
risks and uncertainties, both general and specific, which
contribute to the possibility that the predicted outcomes will not
occur. Events or circumstances could cause the Company's actual
results to differ materially from those estimated or projected and
expressed in, or implied by, these forward-looking statements.
Important factors that could cause actual results to differ from
these forward-looking statements are included in the "Risk Factors"
section in Company's annual information form for the year ended
December 31, 2019 ("AIF"), as
supplemented by the "Risks and Uncertainties" section of the
Company's second quarter 2020 management's discussion and analysis
("MD&A") dated July 28, 2020.
Readers are further cautioned that the list of factors
enumerated in the "Risk Factors" section of the AIF and in the
"Risks and Uncertainties" section of the Company's second quarter
2020 MD&A that may affect future results is not exhaustive.
When relying on the Company's forward-looking statements and
information to make decisions with respect to the Company,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. Furthermore,
the forward-looking statements and information contained herein are
made as of the date of this document and the Company does not
undertake any obligation to update or to revise any of the included
forward-looking statements or information, whether as a result of
new information, future events or otherwise, except as required by
applicable law. The forward-looking statements and information
contained herein are expressly qualified by this cautionary
statement.
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SOURCE TURQUOISE HILL RESOURCES LTD