The   2  fundamental  questions   prospective  and  current   TRQ   shareholders  MUST   find  answer  to   are:


1.What  are  RIO's  intentions  towards  TRQ   given the   worsening   M  climate


2. How  will  OT future  look like - how  debacle  with M  donks  will end  up


Pre-condition  to  answering  2  above  Qs  is  Q3  
3  What / how  much  $$ is   really  at  stake  for  RIO.
 How   much the  donk  -adventure  cost  RIO to  date  
Therefore,   what  are  the  likely  RIO moves / options on both  fronts  (1&2)


Here   we need  some   numbers by  some  serious  posters
  3.1 .  how  much    EXACTLY   cost  RIO  to  get  51%  stake  in TRQ


3.2  how  much  RIO  spend   directly  on  OT of  it's own money (  not  TRQ's)


3.3 . how  much RIO  lent  to  GOM for  them   to  cover   their  stake in capex  
(  250 OR   500M -  AND  NOW IS  ABOUT  TO CALL THAT LOAN )
or  paid  for  GOM  capex  portion -  to  be  repaid from  future  GOM portion of  profits.
( BOTH  SHALL TOTAL  TO  $1.8 b )


3.4  how    RIO outlays  are   structured  -looks  mostly  in form of  loans  to  TRQ or  directly  to  operating mongolian  co
RIO  may  have  most of  it's investments in form of   loans  to  TRQ/ GOM  insulating it  somewhat from fate  of  OT
( OT  can be  failure  but  loans   have  to  be  paid  back )
( side  Q : who  holds  TRQ  $1.9 b  debt ?)
But   RIO controls  TRQ  / SGQ/IVN  AU  etc  cash =  at  a click of  a mouse
  can  transfer    about  $  2 b   to  itself  and  get  PART OF  it's  money  back

4. what is  the  total  RIO  exposure/  cost and in  what  form
 ( breakdown betwen   cost of  equity in TRQ, loans  , direct cash  spent )
I  suspect , the  $6 B capex  tossed  arround  is  misleading  as  applied  to RIO's  real  cost.
Can  be  much  higher  (  cost of   51%  stake ) or  lower   if  selling  TRQ  subs  and  grabing TRQ  cash.
OR  SELLING  TRQ  ITSELF and  getting  out of  donks-land  un/ little  scrached .

5. what are  the odds  that  the  fighting parties will use    third party potential  suckers to pay  for their  claims  - the debt and  equity bagholderes=  the  market ?
"Market"  paid  already  substantial portion of  OT  capex  ( HOW  MUCH ?.. $3-4  b  )
in form of    giving  in the past hard  cash   to  IVN  for  IVN  shares .
EQUTY INVESTORS  ARE  ALWAYS  THE  DEFAULT  SUCKERS / VICTIMS  WHEN  THINGS  GO  WRONG.


--------------------
ROUGH  CALATION  oF  RIO  COST
WE  NEED  BETTER  OINE  

==========
Jan 4  2012
Rio Tinto purchased an additional 15.1 million common shares of Ivanhoe, representing 2 per cent of Ivanhoe's outstanding common shares, from two sellers in a privately negotiated share purchase transaction. The shares were purchased for an aggregate of C$302 million at a price per share of C$20.00.
 After the completion of the share purchase, Rio Tinto will own 377,397,658 common shares of Ivanhoe representing 51 per cent of Ivanhoe's outstanding common shares.
URL: http://www.riotinto.com/media/5157_21498.asp


IF  377.4 M  SH ON JAN  4  2012   =  51%   
,  IVN    TOTAL  SHARES  COUNT   AT  THAT  TIME  MUST HAVE  BEEN  747.2 M


THERE  WERE   SH POSTs  AT  THAT  TIME  TRYING  TO  CALCULATE  THE  $  AMOUNT  RIO SPENT ON 51%  IVN
   QUOTE  FROM  SOME POST  AT  THAT  TIME  
The CS-analysis of Jan 16, page 8 states:
Rio’s weighted average purchased price since it started to build its shareholding in Ivanhoe has been C$11.45 per share (highest price paid C$25.34 per share).  bull   se  sgq  fil  
We can the update CS's numbers and calculate RT's average purchase price of IVN-shares to date:
( (377 397 658 - 15 100 000) x 11.45 + 15 100 000 x 20 ) / 377 397 658  =  C$11.79 per share.
377,4 M  SH   X $11.8 =  $  4., 44 b


THEN  CAME  THE DILUTION  BY   RIGHTS OFFERING  SAGA  =  SCREWING  ORIGINAL  SHAREHOLDERS  SECOND  TIME  
NOW  YAHOO  SHOWS  1.01  B  SH   OUT  AND    307 M  SH  FLOAT


Means  , RIO's  51%  represents  now  511m  sh  =  134 m  sh   (  like  28% more  SINCE  TAKE OVER )   x  $ 8  ??   rights  buy  =   $  1.25 B  more  


total  cost   of  51  %  TRQ  equity =  $  5.7 b =  around  $ 10.5 /  sh  after  the  rights manouver

TRQ  cap now  at  $  7.5 /sh  =  $ 7.7 b
RIO  51%   at  market  is  worth  now  = $3.9  B
Investment loss on  equity  = $1.8 b =  30%


TOTAL RiO;s' COST
$  5.7 b  =  51%  equty in  TRQ=  that's  it ?

  what  is  RIO's  own  cash  portion in  the $  1.8b financing  of  M  donks    portion of  capex
Add  RIO ( not  TRQ)  loans / capex   (if   any) directly  to  M  OT  operating  co
  and  RIO ( not  TRQ) welfare/ community  spending
Should  be   zero or  not  much  because  RIO   is  not  spending it's own  money
 -  is  using  TRQ  money .

  So , about  $  5.7  b   bought  RIO 51% in  66%  TRQ  stake   in  OT
=  33%  in OT

+  stakes in  TRQ   subs 

.
By  selling the   subs  (  Kazak    gold  mine  for  300m  and SGQ  +  iVN  Australia    they  can  reduce   the  pure    33% OT  cost  to  say    $  5  B 

 
Whole  OT  capex = book value  is  say  $6b
33% of  it  =   $2  b

So , Rio  bought  for  $  5  b  ,  $  2 b  of  OT book =  paid  2.5   times  OT book
LOOKS  OVERPAID
ON P/B  BASIS


 But  because of  controlling   stake in  TRQ,,,,  laid  it;s  hands  on    $ 4 B book =  whole  TRQ  portion of  book


If  Rio will ever  recover  from GOM   donks  that  $ 1.8.  b    than the  deal  can be  reduced to   say  1.5  OT book
and   $  3 b   final  outlays.

Right ?.. I  am  confused  myself   by looking  at  things  from  this  angle

==============

Can    RIO  afford  to   put  OT on ice   if  donks will force  them  to ?
    Walk  away     write  down   $   3b   and  engage  for next  10  Y  in litigation with  GOM ?
Sure  they  can  
RIO    has  written  down  $  14  b  of  bad  investments   and  still made  $   13 billions in   NEW investments in   projects  all over  the  world   besides  OT.
2012  earnings  due  today   will likely  miss    as  all others in the  space
Most of  majors  put many projects on ice    all the  time   because of  many reasons
 -  explosion of  capex /opex  , rise in  taxes / royalties ,oversupply  /price  drop   of  given commodity
 being  major  causes.
IE: in Poland they  discovered  more   $$ in shale  gas  than M  has  in  coal or  Cu
Enough to put  Russia  out of  gas  business in  EU.
Majors  staked most  of  licences , spent  lotsa   on  drilling
 but  those  post  commie countries  have  same   thing in  common
 -  red  tape , corruption and  too big  tax  / free  stake   grabs
So,  majors  are  returning the  licences , writing  down  costs   and leaving  the  country
Pump  / dig yourself  ....commie  ... if  you  can  afford  the  $$ billions  in  investments, have  the  technical  expertise  , efficiency  and  access  to markets
Stable  US  is  cheaper    better  to  do NG   business in .\


IE   :  under  GOM is   sea of  oil.
Cuba  sits  in the middle of  it  and  90 miles  from biggest  oil market  in  world .
Have  you  heard  of    commie  Cuba  being   a big oil  exporter   despite  having huge  oil  resource in it;s  territorial  waters

 Maybe  this  is  RIO  response  to  M  donks
Feb 7 (Reuters) - Rio Tinto is looking into restarting its Panguna mine in Papua New Guinea
one of the world's largest sources of copper and gold
until the company abandoned it a quarter century ago

 after local villagers chased off workers in a secessionist uprising.


Well  ,the  villages  after   happy 25 years of  hunting- gathering in the  jungle  
apparently  are  now  more   eager / receptive  to    'exploitation by  multinationals '
LOL
Note  also  that  no other  miner  went  there   for  25 Y  ,after  RIO left  the  region / country
  Did  the  world  missed  or  suffered   undersupply  after    putting on ice  
" one of the world's largest sources of
copper and gold "
Not  really.


As  will not  miss OT   if  RIO  WILL PUT ON ICE   M  donks .

.