August 27, 2016 3:15 PM ET

Metals and Mining

Company Overview of Oyu Tolgoi LLC

Company Overview

Oyu Tolgoi LLC operates as a copper and gold mining company in Mongolia. It develops a mine with undeveloped copper-gold resources in the Gobi desert in southern Mongolia. Oyu Tolgoi LLC was formerly known as Ivanhoe Mines Mongolia Inc. and changed its name to Oyu Tolgoi LLC in October 2009. The company was incorporated in 2000 and is based in Ulaanbaatar, Mongolia. Oyu Tolgoi LLC operates as a subsidiary of Oyu Tolgoi Netherlands BV.

Monnis Tower

Chinggis Avenue 15

Sukhbaatar District

Ulaanbaatar,  14240

Mongolia

Founded in 2000

Phone:

97 6113 31880

Fax:

97 6113 31890

Key Executives for Oyu Tolgoi LLC

Chief Executive Officer and President
Age: 52
Managing Director
Age: 58
Principal Advisor of Biodiversity Research-Environmental Department
Compensation as of Fiscal Year 2016.

Oyu Tolgoi LLC Key Developments

Oyu Tolgoi Reports Earnings and Operating Results for the Fourth Quarter and Full Year End December 31, 2015; Provides Earnings and Operating Guidance for the Year 2016

Oyu Tolgoi reported earnings results for the fourth quarter and full year end December 31, 2015. For the quarter, the company reported revenues of $670.6 million against $355.6 million a year ago. Capital expenditure on cash basis was $18.5 million against $27.5 million a year ago. For the year, the company reported revenues of $1,634.8 million against $1,735.6 million a year ago. Capital expenditure on cash basis was $116.2 million against $242.2 million a year ago. For the quarter, the company reported open pit material mined of 18,944,000 tonnes against 23,708,000 tonnes a year ago. Ore treated was 7,505,000 tonnes against 9,369,000 tonnes a year ago. Concentrates produced was $186.7 million against $231.8 million a year ago. Copper production was 50,300 tonnes against 57,300 tonnes a year ago. Gold production was 2,78,000 ounces against 2,07,000 ounces a year ago. Silver production was 2,86,000 ounces against 3,55,000 ounces a year ago. For the year, the company reported full year of production, the mine operated at record levels. Productivity improvements in the concentrator implemented throughout the year led to throughput exceeding nameplate capacity by year end. Copper production for 2015 of 202,200 tonnes exceeded the Company's guidance of 175,000 to 195,000 tonnes and annual gold production of 653,000 ounces met 2015 guidance of 600,000 to 700,000 ounces. Compared to 2014 results, 2015 mined production increased 19.3%, concentrator throughput increased 23.9%, concentrate production increased 39.9%, copper production increased 36.3% and gold production increased 10.9%. Open pit material mined was 91,771,000 tonnes against 76,919,000 tonnes a year ago. Ore treated was 34,537,000 tonnes against 27,872,000 tonnes a year ago. Silver production was 12,23,000 ounces against 8,93,000 ounces a year ago. For the year 2016, the company expects to produce 175,000 to 195,000 tonnes of copper and 210,000 to 260,000 ounces of gold in concentrates for 2016. Open-pit operations are expected to mine in phases 2, 3 and 6 during the year as well as begin stripping for phase 4. In addition, stockpiled ore is anticipated to be processed during the year. The reduction in gold compared to 2015 is expected to result from mining in lower-grade gold areas and processing lower-grade stockpiled ore. The majority of 2016 gold production is expected in the first half of the year. For the year 2016, the company expects capital expenditures for 2016 on a cash-basis, excluding underground development, are expected to be approximately $300 million, of which approximately $280 million relates to sustaining capital.

Oyu Tolgoi LLC Enters Agreement on Senior Loan Facilities

Oyu Tolgoi LLC entered into a common terms agreement dated on or about December 15, 2015 among OT LLC, the Senior Lenders, the US Ex-Im Agent, the MIGA Agent, the Intercreditor Agent, the Security Agents and the Account Banks and other finance documents thereby securing an aggregate of $6,000,000,000 in senior loan facilities for purposes of, among other things, financing the Project. As a condition precedent for the Senior Lenders making the Initial Senior Loans available to OT LLC, TRQ, as sponsor, will enter into a sponsor debt service undertaking, to be dated concurrent with the RT CSU, among TRQ, Rio Tinto, the Senior Lenders, the Offshore Security Agent and the Intercreditor Agent pursuant to which, prior to the Project Completion Date, TRQ has guaranteed to the Senior Lenders the full and punctual payment of its Pro Rata Share (as defined in the Sponsor Debt Service Undertaking) of all Guaranteed Senior Debt Obligations (as defined in the Sponsor Debt Service Undertaking). Pursuant to a memorandum of agreement dated April 17, 2012, between Rio Tinto International Holdings Limited (“RTIH”), Rio Tinto South East Asia Limited (the “Rio Tinto Funding Company”) and TRQ, the principal components of a comprehensive financing plan (the “Comprehensive Financing Plan”) intended to address the funding needs of TRQ (with the primary focus on the financing of the OT Project) was agreed, including the provision by a member of the Rio Tinto Group of a completion support undertaking for the project financing for the OT Project upon certain terms and conditions. As agreed in the MoA and as a condition precedent for the Senior Lenders making the Initial Senior Loans available to OT LLC, Rio Tinto will enter into a completion support undertaking (the “RT CSU”), to be dated on or about the Funding Date, among Rio Tinto, the Senior Lenders, the Offshore Security Agent and the Intercreditor Agent pursuant to which Rio Tinto has guaranteed to the Senior Lenders the full and punctual payment of its Pro Rata Share (as defined in the RT CSU) of all Covered Obligations (as defined in the RT CSU). TRQ and OT LLC will derive substantial benefit from the RT CSU. TRQ has agreed to provide management services to OT LLC pursuant to the amended and restated shareholders agreement dated June 8, 2011, between Erdenes MGL LLC, Ivanhoe Oyu Tolgoi (BVI) Ltd., Oyu Tolgoi Netherlands B.V. and OT LLC (the “ARSHA”), including in connection with obtaining the Initial Senior Loans, and TRQ is compensated for the services it provides to OT LLC by virtue of a management services fee paid in accordance with the terms of the ARSHA. In consideration for Rio Tinto’s provision of the RT CSU, TRQ has agreed with Rio Tinto that under certain prescribed circumstances and subject to the terms and conditions set out herein, Rio Tinto may require TRQ to take certain actions to ensure that OT LLC has sufficient resources to fund and meet its Senior Debt Obligations and TRQ has sufficient resources to fund and meet its Debt Service Obligations.

Oyu Tolgoi LLC Signs $4.4 Billion Finance Facility

Oyu Tolgoi LLC signed a $4.4 billion finance facility for underground mine development at the Oyu Tolgoi project. The facility is being provided by a syndicate of international financial institutions and export credit agencies representing the governments of Canada, the United States and Australia, along with 15 commercial banks.

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Recent Private Companies Transactions

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