UPDATE 3-Turquoise Hill to raise up to $2.4 bln for Oyu Tolgoi

Thu Nov 14, 2013 2:53pm EST
 
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(Adds rights offer amount, updates share price)

Nov 14 (Reuters) - Turquoise Hill Resources Ltd said Thursday it was planning a rights offering of up to $2.4 billion, citing delays at Rio Tinto's Oyu Tolgoi copper and gold mine in Mongolia that have stopped it from financing the mine's next phase.

Shares of Vancouver-based Turquoise Hill, which owns 66 percent of Oyu Tolgoi, fell more than 6 percent to C$4.35 in afternoon trading on the Toronto Stock Exchange.

Diversified miner Rio Tinto owns 50.8 percent of Turquoise Hill and operates Oyu Tolgoi.

Turquoise Hill filed a preliminary prospectus for the rights offering. Rights offerings raise funds from existing shareholders.

Rio Tinto put Oyu Tolgoi's more than $5 billion underground expansion on hold in July, saying the Mongolian government wanted parliament to approve the project's financing.

Uncertainty over Oyu Tolgoi and shifting foreign investment rules have weighed on foreign direct investment in Mongolia over the last year.

Turquoise Hill said progress was being made with the government, but it was not clear when the project would be approved or when a feasibility study would be final. The company said it did not expect to complete project financing this year.

Under an agreement with Turquoise Hill, Rio Tinto will be required to buy shares that are not taken up under the rights offering, subject to some conditions.   Continued...