Turquoise Hill surges after Mongolia taps new leader
Shares in Turquoise Hill Resources (TSE:TRQ) gained sharply for a second day in a row after reports that Mongolian politicians were moving quickly to end a political crisis following the ouster of Prime Minister Altankhuyag Norov last week.
Vancouver-based Turquoise Hill gained 5.6% in massive volumes on Wednesday moving back into positive territory for the year following news that Mongolia's Democratic Party caucus had tapped Amarjargal Renchinnyam to become the new Prime Minister.
Amarjagal is a former PM who served in 1999-2000, a respected economist and is seen as something of a pragmatist within Mongolia's sometimes shambolic political environment.
Turquoise Hill's massive Oyu Tolgoi mine is a political hot potato in the country of less than three million souls and the-long delayed expansion of the copper-gold mine in the south of the country was again put in doubt amid the political turmoil.
Turquoise Hill, worth $6.9bn on the New York Stock Exchange, is controlled by world number two miner Rio Tinto and owns 66% of the massive project in the Gobi Desert and the Mongolian government the rest.
The two camps have been at loggerheads over funding for the more than $5 billion underground expansion – where 80% of the resource is located – for over a year.
The delays also saw $4.5bn funding commitments led by the World Bank expire at the end of September and a $100m-plus tax dispute raised and settled during the talks.
Rio flagged the possibility of a $2.5 billion writedown as a result of the impasse during its half-year results delivered in August.
Turquoise Hill said last week chairman David Klingner and CEO Kay Priestly, would step down from January and December respectively.
Image of traditional Naadam festivities at Oyu Tolgoi in 2012 courtesy of the company.