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So what: Rio Tinto agreed to provide Turquoise Hill with a much-needed $600 million bridge-funding facility, putting the company one step closer to production at its key Oyu Tolgoi copper and gold mine in Mongolia. Specifically, the loan is designed to help Turquoise Hill refinance an existing $225 million loan from Rio Tinto made in June, and assists in meeting its cash costs through the end of 2013, preventing the need for a dilutive placement of common shares.
Now what: The stock tanked last week on news that the Mongolian government will need to approve financing for the project, so there's still plenty of uncertainty over the stock. Turquoise Hill "remains committed to project financing and is engaging with the Government with a goal of completing the transaction and beginning to draw from the facility by the end of 2013," wrote the company in a statement. Given the political and production risks that remain, however, I'd be cautious about buying too heavily into that optimism.
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