Shares of the Turquoise Hill Resources Ltd. (TRQ) stock continued to climb in the premarket trading session today on November 22, 2021. TRQ stock price saw a push of 5.50% to reach $14.78 a share at the time of this writing. The stock performed well in the previous trade and went up by 7.27% at closing. Let’s dig in to understand the reason behind this bull.

What’s Happening?

Recently on November 18, 2021, Pentwater Capital Management LP did write a letter to Mr. Ben Wyatt, director of Rio Tinto plc, and the rest of the board members. You might be thinking what really Pentwater Capital Management LP is, it is the largest minority shareholder of TRQ stock. Rio Tinto is continuously inflicting corporate governance breaches upon TRQ stock minority shareholders without explaining any solid reason.

Pentwater discussed the mismanagement of Rio that came under the watch of Mr. Ben Wyatt that resulted in the coverup at the Oyu Tolgoi mine in Mongolia. This is unacceptable as it will damage the people of Mongolia as well as minority shareholders of TRQ stock.

TRQ stock has a 66% share in the entity that owns the Oyu Tolgoi mine. The reset of the entity belongs to the Government of Mongolia. Rio Tinto is taking interest in this mine through Turquoise. The major concern is the controlled election of Turquoise board members by Rio Tinto through which it selected the management team of the former. Now Rio Tinto is exerting control over the actions of the TRQ stock. The minority shareholders of Turquoise stock made many attempts to have representation on the board but all in vain due to Rio Tinto.

Financial View of TRQ stock:

On November 03, 2021, Turquoise stock announced the third quarter 2021 financial results according to which

• Revenues represented an increase of 135.6% to reach $622.8 million in Q3,2021 from $264.4 million in Q3,2020.
• Income in the recently reported quarter was $22.9 million as compared to $161.7 million in the same period of the previous year. This reflects the impact of $299.9 million deferred tax asset de-recognition in the third quarter of 2021.
• TRQ stock recorded $350.6 million in cash generated from operating activities, higher than $77.6 million in the same quarter of last year.
• By the end of the third quarter Turquoise stock had $0.8 billion in available liquidity.

Wrap Up:

The sentiment is positive for TRQ stock as far as the stock market is concerned. It would be interesting to see how long it will persist. The company has estimated $80 million to $100 million in capital expenditure for 2021 on a cash basis.