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Rio Tinto Provides Convertible Bridge Facility To Turquoise Hill

LONDON, United Kingdom, June 28, 2013 /CNW/ - Rio Tinto has entered into a bridge funding agreement dated June 28, 2013 with Turquoise Hill Resources Ltd. under which it has agreed to make available to Turquoise Hill a short term convertible credit facility of up to US$225 million. The aggregate of all amounts outstanding under the facility, including principal, interest (at one month LIBOR plus 5%) and fees, will be repayable at maturity on August 12, 2013.

At any time after the maturity date or upon the occurrence of an event of default, Rio Tinto may convert all or part of the outstanding amount under the facility into common shares of Turquoise Hill at a conversion price equal to 85% of the VWAP of the common shares on the NYSE for the five consecutive trading days before Rio Tinto gave notice to Turquoise Hill of such conversion.

Rio Tinto currently beneficially owns 510,983,220 Turquoise Hill common shares, representing approximately 50.8% of the outstanding common shares. Rio Tinto also has 74,247,460 Series D Warrants as well as anti-dilution rights that permit it to acquire additional securities of Turquoise Hill so as to maintain its proportionate equity interest in Turquoise Hill.

If Turquoise Hill were to have drawn down the entire $225 million maximum principal amount on the date of the bridge funding agreement, and Rio Tinto were to have been immediately entitled to convert such amount on such date, Rio Tinto would have been entitled to acquire 47,545,691 common shares upon such conversion, representing approximately 4.5% of the then outstanding common shares. If Rio Tinto were to have also exercised all of its Series D Warrants at such time, Rio Tinto would own 632,776,371 common shares, representing approximately 56.1% of the then outstanding common shares. The foregoing is by way of example only, and the actual number and percentage of common shares issuable on conversion will depend upon the outstanding amount under the facility and the conversion price as calculated. The bridge funding agreement provides that the aggregate number of common shares issuable on the exercise of Rio Tinto's conversion rights may not exceed 100,587,901, being approximately 10% of the currently outstanding common shares.

The purpose of Rio Tinto entering into the bridge funding agreement was to provide additional funding to Turquoise Hill to enable it to meet its short term funding obligations with respect to its Oyu Tolgoi copper-gold mine in Mongolia.

Rio Tinto has no present intention of acquiring additional securities of Turquoise Hill. Depending upon its evaluation of the business, prospects and financial condition of Turquoise Hill, the market for Turquoise Hill's securities, general economic and tax conditions and other factors, Rio Tinto may acquire or sell some or all of the securities of Turquoise Hill.

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