02/24/2015 10:24 EST | Updated 04/26/2015 05:59 EDT

Turquoise Hill signs deal to sell remaining stake in SouthGobi Resources

VANCOUVER - Turquoise Hill Resources (TSX:TRQ) has reached a deal to sell its remaining stake in SouthGobi Resources Ltd. (TSX:SGQ), a coal mining business in Mongolia.

It says a private Chinese company, Novel Sunrise Investments, has agreed to buy 48.7 million shares in SouthGobi for 35 cents per share in cash.

The company formerly known as Ivanhoe Mines will receive C$17 million for the shares, paid in two instalments of C$8.5 million.

SouthGobi also said Tuesday it has signed a deal to raise US7.5 million in a financing deal with Novel Sunrise. The company will issue 21.75 million units in two tranches that will convert into shares on a one-for-one basis.

Turquoise Hill signed an agreement last year to sell its other 56.1 million shares in SouthGobi to National United Resources Holdings Ltd. in a deal that still has not closed.

Under the Turquoise Hill deal with Novel, it can require the Chinese company to buy more shares if the National United Resources deal does not close by April 30.

Assuming the Novel Sunrise and NUR transactions are completed, Turquoise Hill would no longer have a stake in SouthGobi.

Turquoise Hill holds a 66 per cent interest in the Oyu Tolgoi mine in southern Mongolia.