Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Shareholder advisory firm Glass Lewis & Co. is urging Turquoise Hill Resources Ltd. investors to support a proposed takeover by Rio Tinto Group — dismissing criticisms of a top shareholder critical of the mining giant’s efforts to gain control of one of the world’s largest copper mines.
Glass Lewis recommended Turquoise Hill shareholders vote for Rio Tinto’s cash offer to acquire 49% of the shares it doesn’t own for C$43 a share, the proxy adviser said Wednesday in a statement. The deal values the stake in the Montreal-based miner at about C$4.24 billion ($3.1 billion).
The recommendation adds a twist in Rio’s efforts to gain greater control of Mongolia’s Oyu Tolgoi mine, which is expected to become the world’s fourth-largest copper mine, despite resistance from some of Turquoise Hill’s largest investors. Pentwater Capital Management and SailingStone Capital Partners, which combined hold about 14% of the Canadian miner, have said Rio’s offer undervalues the company.
Read more: Turquoise Hill’s fifth largest investor to reject Rio Tinto’s takeover bid
Glass Lewis said Turquoise Hill investors should vote for Rio’s offer because of the “relatively elevated risk profile” that would exist as a standalone company as well as its “significant near-term financing risks”.
“We are inclined to believe that Rio Tinto’s current offer represents a reasonable exit price and a compelling market premium for minority shareholders, on balance,” the firm said.
Rio already owns 51% of Turquoise Hill, but more than half of the remaining shareholders must back the acquisition for the deal to proceed. The Oyu Tolgoi mine is a joint venture between Turquoise Hill and the government of Mongolia.
Shares of Turquoise Hill rose 1.9% to C$40.12 at 10:37 a.m. in Toronto, giving Rio’s offer a 7.2% premium.
(By Yvonne Yue Li)
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