$2.7 Billion in Cash! Rio Tinto To Acquire 49% Stake in TRQ At High Premium.

The mining industry has learned that, on 14 March, Rio Tinto made a non-binding proposal to the board of Turquoise Mountain Resources Corporation (TRQ Corporation) to acquire approximately 49% of the outstanding shares of TRQ Corporation (the "Transaction Proposal").

Under the terms of the proposed deal, TRQ minority shareholders would receive C $34 in cash per share, a 32 per cent premium to the company's last closing price on the Toronto Stock Exchange. The proposal values TRQ's minority stake at $2.7 billion, based on the March 11 exchange rate of one Canadian dollar to $0.7874.

Rio tinto is understood to have proposed the deal in order to gain direct control of Mongolia's Oyu Tolgoi copper and gold mine. TRQ owns 66 percent of Oyu Tolgoi, 550 kilometers (342 miles) south of the Mongolian capital Ulan Bator, while the Mongolian government holds a 34 percent stake in the project. Rio tinto currently owns 51 percent of TRQ. Rio would hold a 66 per cent stake in Oyu Tolgoi if the proposed deal goes ahead.

Rio tinto said it had previously reached a comprehensive agreement with TRQ and the Mongolian government to proceed with the Oyu Tolgoi project and to approve underground operations. The proposed deal would simplify the ownership structure of Oyu Tolgoi, strengthen Rio's portfolio of copper assets and reinforce its long-term commitment to Mongolia. In addition, the proposed transaction enables TRQ's minority shareholders to realize strong, immediate and certain value in the face of ongoing uncertainty over the development process and financing of the underground mine.

"Rio Tinto firmly believes in achieving long-term returns for all stakeholders. We believe the proposed terms are attractive to TQR shareholders." Jakob Stausholm, Rio Tinto group chief executive, said: "The proposed transaction will enable Rio Tinto to work directly with the Mongolian government to advance the Oyu Tolgoi project with a simpler and more efficient ownership and governance structure. This transaction demonstrates our clear and unambiguous long-term commitment to Mongolia as our partnership reopens and our underground operations begin."