Commentary

Nova Scotia’s growth vs preservation dilemma

Commentary, Environment, Exploration, News, Politics, Regulatory Issues April 29, 2025

A move by Nova Scotia to lift its ban on uranium exploration and mining has reignited a critical debate. For over four decades, the province has prohibited uranium development due…

Commentary, Politics November 8, 2024

How oil and gas will fare in the Trump era

Trump is back, and the threat of tariffs looms large over China’s economy. On Wednesday, base and precious metal prices took a dive. Resource markets are deeply concerned about Trump’s…

$Pentwater Capital Management LP, the second-largest investor in Turquoise Hill Resources (TSX: TQR) has increased its stake in the Canadian company while rejecting again Rio Tinto’s C$43-a-share offer for the 49% of the miner it doesn’t already own. The activist investor disclosed it had bought around 1.24% of common stock at C$41.01 per share in Turquoise Hill, for a total of C$102.5 million on September 15. It means it currently owns 13.77% of Turquoise Hill’s shares Rio Tinto agreed on earlier this month to take over Turquoise Hill after sweetening an initial offer by around 20% to “a best and final” $3.3 billion. Penwater, which joined minority shareholder SailingStone Capital Partners in publicly opposing Rio Tinto’s offer as too low, restated its discontent. “The proposed price implies an equity value of C$8.65 billion, which is a fraction of the free cash flow that Pentwater expects Turquoise Hill to generate over the next decade,” it said in the statement. Pentwater noted it expects Turquoise Hill to generate over C$10.5 billion of free cash flow through 2030 assuming a $3.50 per pound copper price and almost C$14.2 billion of free cash flow assuming copper prices of $4 per pound. It also said it was weighing options to thwart the deal, including but not limited to the possible exercise of dissent rights or other legal action. Rio’s offer equires two thirds of shareholders, including Rio Tinto’s, to vote in favour. More than 50% of minority shareholders must approve it. Rio’s final bid represents a 67% premium from Turquoise Hill’s closing price of C$25.68 a share on March 11, the trading day prior to the initial proposal. Pentwater has said the proposed premium is unacceptable for a mine that it expects to be “the third largest copper and gold mine in the world with a mine life in excess of 90 years.” Some analysts believe that Rio Tinto will need to increase its offer to win over some minority shareholders and so hold a direct majority stake in massive Oyu Tolgoi copper-gold mine in Mongolia. The global miner, which has mined copper from Oyu Tolgoi’s open pit for a decade, will have the task to conclude building the underground section of the mine. Once finished, it will lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes per year at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.$

Column, Commentary, Commodities Markets, Exploration October 25, 2024

Clues to when the next commodity boom will start abound – if you know where to look

It’s important to understand that the boom phase of a commodity cycle doesn’t kick off overnight. While there have been some green shoots — record gold prices, and copper (briefly) spiking…

Junior miners need an ESG strategy to secure funding

Commentary, Environment, ESG, Financing, News, Stock Markets/Investing October 14, 2024

How junior miners can meet the new ESG funding hurdles

The conversation around environmental, social, and governance ESG considerations in mining has grown increasingly sophisticated over the last decade, giving rise to an evolving set of requirements that companies must…