Turquoise Hill Resources Ltd building a Mongolian copper mine with Rio Tinto
Group, paid $19.4 million to cancel cost-sharing deals with companies linked to
former Chief Executive Officer Robert Friedland.

“These arrangements were on a cost-recovery basis and included aircraft
rental and administration and other office services” in London and Singapore,
Turquoise, formerly Ivanhoe Mines Ltd. and 51 percent owned by London-based
Rio, said in a statement dated yesterday. The deals were with companies 100
percent owned by Friedland, it said.

Turquoise also paid $17.8 million in severance payments to the former
management team and booked a non-cash charge of $24 million related to the
acceleration of vesting stock options held by former management, it said.

Friedland, who founded Ivanhoe, controls about 10 percent of Vancouver-based
Turquoise, according to data compiled by Bloomberg. He resigned as CEO in
April, three months after Rio raised its stake in Ivanhoe to 51 percent,
allowing it to replace managers.

Turquoise and Rio expect production from Mongolia’s $6.2 billion Oyu Tolgoi
mine in the first half of next year. They plan to complete talks on a $3
billion to $4 billion finance package for the project by the end of the year,
according to the statement.

Seven directors –Marc Faber, Edward Flood, Friedland, David Korbin, Livia
Mahler, Tracy Stevenson and Dan Westbrook — resigned from the Turquoise board
in April. Three others –Michael Gordon, David Huberman and Bob Holland —
resigned a month later. A spokesman for Rio Tinto declined to comment.