Turquoise Hill Resources Ltd. (TRQ.TO)

[thompsg4416]

Anyone investing in this one? I have a 3rd of my TFSA tied up in it.

Seems as though everything is riding on one mine which hasn't even opened yet.

[PMREdmonton]

They have a very lucrative gold deposit in Mongolia if I'm thinking of the right company (previously Ivanhoe?) that they are trying to get developed. I think it may be a joint venture with Rio Tinto (Rio owns 51% of this project).

This one is very promising but also high risk in a number of ways:

1. Have to deal with Mongolian government which doesn't have a reputation for being favorable to international companies.

2. Have to deal with Mongolian workers who are not skilled in mining

3. Have to find a power supply to do the mining. I believe the Mongolians are in discussions with the Chinese government to run a line out there.

4. Then there are all the usual mining risks.

So I think this would have to be considered the speculative part of your portfolio but I do understand that it is a potentially huge gold deposit that could yield several million ounces by the time all is said and done.

You could play it through Rio but that would be much less leveraged to the results of this mine.

I do know this one has been pumped a lot in the newsletter universe which would be a strike against it IMO. I would suggest it belongs in the speculative portion of your portfolio - money that you are okay with losing.

[thompsg4416]

Thanks PMRE I apprecaite your comments... I agree it is somewhat speculative and the company will make or break on thier mine in Mongolia. That said we'll find out soon enough as the mine is scheduled to start production in 2013. I think now is the time to get in, once they start making money it will be too late nAs a side note I also have a 3rd of my TFSA in RIO already. They have a solid Dividend and I think there stock price is set to rise as well.

[PMREdmonton]

Rio is a pretty solid company but they have been beaten up because the base metals have been pretty soft in demand and pricing.

There is a great deal of infrastructure yet to be built in China, India, Brazil and the next wave of emerging markets so I think the commodity boom cycle probably isn't going away entirely. The Chinese kicker of 70% of GDP being in construction may be over unless they decide to kick the can down the road over there but there will still be pretty big demand for the products Rio produces. Their price has been pretty badly beaten up and they are quite financially solid so it should work out over time but the next couple of years could be scary (ditto for natural gas, natural gas liquids, uranium and coal). Gold and Silver will be strong so long as all the major nations try to devalue their currencies either to manage debt or pump exports.

[thompsg4416]

Big sell off lately. Looks like people are getting cold feet and are worried the gov might try and reneg the deal. I just avg'd down to 8.40/share...

Last I had read the issue of power from china was pretty much sorted out.

[thompsg4416]

I've posted on here about his stock before but the search doesn't quite find it for whatever reason.


I'm wondering if anyone else in here is following this one? I have a pretty good chunk of money in this and after close to a year I think I'm about to realize some returns. They are sitting on one of the bigggest gold/copper deposits in the world which is about to start commercial production in June. There has been some issues with the Gov of Mongolia which has scared off some investors but these issues are almost ironed out(I hope).

Thoughts?

[ban]

Here's your old thread:
http://canadianmoneyforum.com/showth...hlight=ivanhoe
btw I'm one of those who got scared

[thompsg4416]

Thanks!, funny how it didn't show up for my search...

I stayed in and I'm glad..... When it got down to just above 5 dollars I was close to pulling the plug but I've had a of these scenarios before. 1st with the BP spill. I bought after the spill but panicked before I made big money. 2nd with SAN.. Started in at 8 avg'd down to 5 and held on to make some good money.

Now trq. Still down 7% on this one with an avg price of 8 but I think the worst is behind us. Ban now is the time to get back in. Commercial production is less then a month away although copper and gold prices are weak. Good luck to you.

[Toronto.gal]

BP spill. I bought after the spill but panicked before I made big money.

Just curious, how much did you pay? I was cautious at first as well, but before I bought, not after, and that's why I purchased first in the mid $30's instead of mid $20's [the 2010 low], because after watching the disaster on tv., day after day, I thought the stock could hit a single digit price, so I opted to buy when the stock began to make a recovery instead. Anyway, I sold for about 30% profit in early 2012 after holding for 2 years [so 15%/yr.], and bought again for $40 in late 2012, and now I'm holding; still a low price comparing the high before the spill was in the $60's.

Don't follow TRQ, but for that price, I would rather look at other more punished stocks, like IMG [don't own that one yet]. Anyway, good luck!

[humble_pie]

perhaps there will always be "government" issues with Oyu Tolgoi, which is its original name, so i kind of stick to it.

the story has always interested me because many mining companies play so dirty in 3rd world countries, whereas this one has a lot of appeal as a decent development model. Oyu Tolgoi is the best partnership deal between big western miners & a 3rd world country that i know of.

hammered out over a decade, the OT agreement gives the govt of mongolia more than 50% ownership of the contiguous zones by the time that proven & probable reserves for the existing planned mine will be exhausted.

the deal isn't a freebie; the gom has to pay for its share out of profits it will earn from mine operations from day one.

i thought the deal was fair enough. I also respected the extraordinary silence & patience that rio tinto displayed. The negotiations have dragged on for 12 years or more already. Some of the claims & statements from some members of the mongolian government have been wild beyond belief. However, Rio has never uttered as much as a syllable or even a sigh of reproach. Oyu Tolgoi has remained peaceful. It is not a "red mine" in the sense of being a mine in which a miner or a citizen has died by violence.

but - politics being politics - the leninist wing of the mongolian communist party - which has seats in government - has never given up its stated hope of owning 100% of Oyu Tolgoi. Somehow in nearly 15 years it has never occurred to these followers of lenin & stalin that, if they were to somehow gain ownership of 100% of the mine, there would then be no incentive for western engineers, western capital & western know-how to commit billions of their own $$ to develop Oyu Tolgoi as a kind of gift for the mongolian people. The marxist-leninists of ulan bator can't seem to understand that a mining business is not a charity.