Rio Tinto Group (NYSE: RIO) disclosed Friday that it has entered into an agreement with Turquoise Hill Resources (TRQ). Both the firm have inked binding Heads of Agreement (HoA) and have updated the financing plan for the execution of the Oyu Tolgoi (OT) underground initiative in Mongolia.

This agreement with TRQ is the greatest accomplishment in the Oyu Tolgoi. The firm is anticipating that Oyu Tolgoi will become one of the world's biggest copper mines and a substantial backer to the Mongolian nation for years to come. The important steps to maintain motion on the appropriate distribution of the Oyu Tolgoi Underground Project is to start the re-profiling and at the same time resolving the issues of the Government of Mongolia.

Important Points of HoA

As per the HoA, TRQ and RIO will follow the re-profiling of principal debt refunds up to $1.4 billion with creditors under the current project finance agreements. RIO and TRQ will also intend to boost up to $500 million in senior supplemental debt (SSD) under the current project financing agreements.

Furthermore, Rio Tinto is also planning to tackle any possible deficits from the re-profiling and extra SSD of up to $750 million by offering a senior co-lending facility on the same terms as OT’s project financing. Moreover, TRQ has pledged to execute a right offering or arrangement of common shares for up to $500 million to fulfill any outstanding financing deficit within six months of the Co-Lending Facility becoming accessible.

Presently, Rio Tinto constructively holds 102,196,643 common shares of TRQ. It signifies nearly 50.8% of the issued and ordinary shares outstanding of TRQ. Furthermore, RIO has no plan to buy the extra securities of TRQ. Rio Tinto and TRQ have asserted to get an order rejecting the present settlement on a without partiality basis, plus an order removing the provisional measures order.