Exhibit(a)(2)(i)

These materials are important and require your immediate attention. They require shareholders of Turquoise Hill Resources Ltd. to make important decisions. If you are in doubt about how to make such decisions, please contact your financial, legal, tax or other professional advisors. If you are a shareholder of Turquoise Hill Resources Ltd. and have any questions regarding the information contained in this management proxy circular or require assistance in completing your form of proxy, please contact our proxy solicitation agent, Kingsdale Advisors, at 1-888-370-3955 (toll-free within North America) or by calling collect at 416-867-2272 (outside of North America) or by email at contactus@kingsdaleadvisors.com. Questions on how to complete the letter of transmittal should be directed to Turquoise Hill Resources Ltd.’s transfer agent, TSX Trust Company, at 1-800-387-0825 (toll-free within North America) or at 416-682-3860 (outside of North America) or by email at shareholderinquiries@tmx.com.

Shareholders in the United States should read the section “Notice to Shareholders in the United States” on page (ii) of the accompanying management proxy circular.

 

ARRANGEMENT

INVOLVING

TURQUOISE HILL RESOURCES LTD.

AND

RIO TINTO INTERNATIONAL HOLDINGS LIMITED AND RIO TINTO PLC

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

to be held on November 1, 2022 at 10:30 a.m. (Montréal time),

in person at Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Chapleau Room,

Montréal, Québec, Canada, H3B 1R1

and virtually via live audio webcast at https://web.lumiagm.com/449028588.

AND

MANAGEMENT PROXY CIRCULAR

 

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES REGULATORY AUTHORITY IN ANY STATE IN THE UNITED STATES HAS APPROVED OR DISAPPROVED OF THE ARRANGEMENT OR PASSED UPON THE FAIRNESS OR MERITS OF THE ARRANGEMENT, NOR HAS THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORY AUTHORITIES OF ANY STATE IN THE UNITED STATES PASSED ON THE ADEQUACY OR ACCURACY OF THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. IN ADDITION, NEITHER THE TORONTO STOCK EXCHANGE NOR ANY CANADIAN SECURITIES REGULATORY AUTHORITY HAS IN ANY WAY PASSED UPON THE MERITS OF THE TRANSACTION DESCRIBED IN THIS CIRCULAR, AND ANY REPRESENTATION OTHERWISE IS AN OFFENCE.

September 27, 2022

LETTER TO SHAREHOLDERS

September 27, 2022

Dear Shareholders:

You are invited to attend a special meeting of holders of common shares (the “Shareholders”) of Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Corporation”) to be held in person and virtually on Tuesday, November 1, 2022 at 10:30 a.m. (Montréal time) (the “Meeting”). The purpose of the Meeting is to allow Shareholders to consider an offer by Rio Tinto International Holdings Limited (the “Purchaser”) to acquire all of the common shares of Turquoise Hill (each, a “Share”) not currently owned by the Purchaser or its affiliates (each, a “Minority Share”) at an all-cash price of C$43.00 per Share (the “Consideration”) by way of Court-approved statutory plan of arrangement (the “Arrangement”) involving the Corporation, the Purchaser and Rio Tinto plc pursuant to the provisions of the Business Corporations Act (Yukon).

A special committee of the Board of Directors of the Corporation (the “Board of Directors” or the “Board”) consisting entirely of independent directors (the “Special Committee”) conducted, with the assistance of its financial and legal advisors, a review of the Corporation’s operations and financing needs and alternatives available to the Corporation and obtained an independent valuation of the Shares. Following this process, and after careful consideration, the Special Committee unanimously determined that the Arrangement is in the best interests of the Corporation and fair to the holders of Minority Shares (the “Minority Shareholders”) and recommended that the Board of Directors approve the Arrangement and recommend that the Minority Shareholders vote in favour of the Arrangement.

On the unanimous recommendation of the Special Committee, the Board, with Alfred P. Grigg and Stephen Jones (being the two directors on the Board employed by Rio Tinto plc) having recused themselves, unanimously determined that the Arrangement is in the best interests of the Corporation and fair to the Minority Shareholders and recommends that the Minority Shareholders vote in favour of the Arrangement.

In reaching its conclusion, the Special Committee took into consideration, among other things, the following:

 

•

the Consideration represents:

 

•

a 67% premium to the closing price of C$25.68 of the Shares on the Toronto Stock Exchange (“TSX”) on March 11, 2022, being the last trading date prior to the Purchaser’s initial public proposal to acquire the Minority Shares;

 

•

a 26% increase in the consideration as compared to the Purchaser’s initial proposal made on March 13, 2022 of C$34.00 per Share;

 

•

an 8% increase in the consideration as compared to the Purchaser’s revised proposal made on August 24, 2022 of C$40.00 per Share; and

 

•

a 19% premium to the closing price of C$36.12 of the Shares on the TSX on August 31, 2022, being the last trading day prior to the September 1, 2022 announcement of the agreement in principle and term sheet entered into by the parties with respect to the Arrangement;

 

•

the valuation carried out by TD Securities Inc., the independent valuator retained by the Special Committee, which determined that as of August 31, 2022 and based upon and subject to the assumptions, limitations and qualifications set out therein, the fair market value of the Shares is in the range of C$42.00 to C$58.00 per Share;

 

•

fairness opinions received from BMO Capital Markets to the effect that, as of August 31, 2022 and September 5, 2022, respectively, and based upon and subject to the assumptions, limitations and qualifications set out therein, the Consideration to be received by the Shareholders (other than the Purchaser and its affiliates) pursuant to the Arrangement is fair from a financial point of view to the Shareholders (other than the Purchaser and its affiliates);

 

•

a fairness opinion received from TD Securities Inc., the independent valuator retained by the Special Committee, to the effect that, as of August 31, 2022, and based upon and subject to the assumptions, limitations and qualifications set out therein and such other matters that TD Securities Inc. considered relevant,

the Consideration to be received by the Shareholders, other than Rio Tinto plc and its affiliates, pursuant to the Arrangement is fair, from a financial point of view, to such Shareholders;

 

•

the Consideration is all cash, which provides Minority Shareholders with certainty of value and immediate liquidity;

 

•

the Arrangement is the result of a process that included robust negotiations and procedural safeguards;

 

•

there are limited alternatives for a sale to third parties, including due to the fact that Rio Tinto plc has publicly announced that it is not interested in pursuing any alternative transaction and Rio Tinto plc’s controlling interest in the Corporation; and

 

•

there are a limited number of closing conditions to the completion of the Arrangement, including the lack of a financing condition.

Procedural Safeguards for the Shareholders

The negotiations leading to the execution and announcement of the Arrangement Agreement were undertaken by the Special Committee, which was comprised solely of independent directors and advised by experienced and qualified financial and legal advisors. The Arrangement is subject to the following approvals from Shareholders and the Supreme Court of Yukon (the “Court”), which provides additional protection to the Minority Shareholders:

 

(a)

a special resolution (the “Arrangement Resolution”), the full text of which is outlined in Appendix A of the accompanying management proxy circular (the “Circular”), which must be approved by at least two-thirds (662⁄3%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, voting as a single class;

 

(b)

as the Arrangement constitutes a “business combination” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (implemented in Québec as Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions) (“MI 61-101”), the Arrangement Resolution must also be approved by a simple majority (more than 50%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, excluding, for this purpose, the votes attached to the Shares held by Rio Tinto plc and its affiliates and any other Shareholders required to be excluded under MI 61-101; and

 

(c)

the Arrangement must be approved by the Court, which will consider, among other things, the procedural and substantive fairness of the Arrangement to the Minority Shareholders.

The 102,196,643 Shares beneficially owned by Rio Tinto plc and its affiliates, representing approximately 50.8% of the Shares, will be excluded for the purposes of the “minority approval” required under MI 61-101.

In connection with the proposed Arrangement, all independent directors and executive officers of the Corporation entered into voting and support agreements pursuant to which they have agreed, subject to the terms thereof, to vote all of their Shares IN FAVOUR of the Arrangement Resolution.

The Arrangement is currently scheduled to be completed on or about November 9, 2022 based on the assumption that all required Shareholder and Court approvals are obtained and all other conditions to the Arrangement are satisfied or waived prior to such date.

The Meeting will be a hybrid meeting, held in person at Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Chapleau Room, Montréal, Québec, Canada, H3B 1R1 and in virtual format via live audio webcast. Shareholders will be able to participate and vote at the Meeting online regardless of their geographic location at https://web.lumiagm.com/449028588.

Please arrange for your proxy to be received by the Corporation’s transfer agent, TSX Trust Company (“TSX Trust”), at 1200-1 Toronto Street, Toronto, Ontario, Canada, M5C 2V6, Attention: Proxy Department, or at 1600-2001 Robert-Bourassa Blvd., Montréal, Québec, Canada, H3A 2A6, Attention: Proxy Department, by no later than 10:30 a.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, 48 hours, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting). Late proxies may be accepted or rejected by the Chair of the Meeting at his or her discretion, subject to the terms of the Arrangement Agreement, and the Chair of the Meeting is under no obligation to accept or reject any particular late proxy.

Shareholders should review the accompanying notice of special meeting of Shareholders and the Circular, which describes, among other things, the background to the Arrangement as well as the reasons for the determinations and recommendations of the Special Committee and the Board. The Circular contains a detailed description of the Arrangement and includes additional information to assist you in considering how to vote at the Meeting. You are urged

to read this information carefully and, if you require assistance, you are urged to consult your financial, legal, tax or other professional advisors.

Your vote is important regardless of the number of Shares you own. If you are unable to attend the Meeting online or in person, we encourage you to take the time now to complete, sign, date and return the enclosed form of proxy or voting instruction form, as applicable, so that your Shares can be voted at the Meeting in accordance with your instructions. If you are a registered Shareholder, we also encourage you to complete, sign, date and return the enclosed letter of transmittal, which will help the Corporation arrange for the prompt payment for your Shares if the Arrangement is completed.

If you have any questions about the information contained in this Circular or require assistance in completing your form of proxy please contact our proxy solicitation agent, Kingsdale Advisors, at 1-888-370-3955 (toll-free in North America), or by calling collect at 416-867-2272 (outside of North America) or by email at contactus@kingsdaleadvisors.com. Questions on how to complete the letter of transmittal should be directed to the Corporation’s transfer agent, TSX Trust, at 1-800-387-0825 (toll-free within North America) or at 416-682-3860 (outside of North America) or by email at shareholderinquiries@tmx.com.

On behalf of the Board, we would like to take this opportunity to thank you for the support you have shown as Shareholders of the Corporation.

Yours very truly,

 

(signed) R. Peter Gillin

R. Peter Gillin Independent Chairman of the Board of Directors

TURQUOISE HILL RESOURCES LTD.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Montréal, Québec, Canada, September 27, 2022

NOTICE IS HEREBY GIVEN that, in accordance with an interim order of the Supreme Court of Yukon dated September 27, 2022 (the “Interim Order”), a special meeting (the “Meeting”) of the holders (the “Shareholders”) of common shares (the “Shares”) of Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Corporation”) will be held on Tuesday, November 1, 2022 at 10:30 a.m. (Montréal time) in person and in virtual format for the following purposes:

 

1.

to consider, and, if deemed advisable, to pass, with or without variation, a special resolution (the “Arrangement Resolution”), the full text of which is outlined in Appendix A of the accompanying management proxy circular (the “Circular”), to approve an arrangement (the “Arrangement”) pursuant to section 195 of the Business Corporations Act (Yukon) (the “YBCA”) involving the Corporation, Rio Tinto International Holdings Limited (the “Purchaser”) and Rio Tinto plc, the whole as described in the Circular; and

 

2.

to transact such other business as may properly come before the Meeting or any adjournment or postponement(s) thereof.

The Circular provides additional information relating to the matters to be addressed at the Meeting, including the Arrangement.

Meeting

The Meeting will be held in person at Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Chapleau Room, Montréal, Québec, Canada, H3B 1R1 and in virtual format via live audio webcast. Shareholders will be able to participate and vote at the Meeting online regardless of their geographic location at https://web.lumiagm.com/449028588.

To access the Meeting, follow the instructions below:

If you are a registered Shareholder:

Step 1:

Log in online at: https://web.lumiagm.com/449028588

Step 2:

Select the “Control # / No de contrôle” icon and enter your 13-digit control number as indicated on the form of proxy, followed by the following password: TRQ2022 (case sensitive).

Please note that if you use your control number to log in to the Meeting, any vote you cast will thereby revoke any proxy you previously submitted. If you do not wish to revoke a proxy that you previously submitted, you should refrain from voting during the Meeting.

If you are a duly appointed proxyholder:

Step 1:

Log in online at: https://web.lumiagm.com/449028588

Step 2:

Select the “Control # / No de contrôle” icon and enter your 13-digit control number you will have received by email from TSX Trust Company (“TSX Trust”), followed by the following password: TRQ2022 (case sensitive).

Please note that proxyholders who have been duly appointed and registered with TSX Trust in accordance with the instructions provided herein below will receive their own 13-digit control number via email from TSX Trust after the proxy voting deadline has passed.

If you are a guest:

Step 1:

Log in online at: https://web.lumiagm.com/449028588

Step 2:

Select the “Guest / Invité” icon and complete the online form.

Shareholders who are participating in the Meeting virtually must be connected to the internet throughout the entire Meeting in order to be able to vote. Participants must ensure that they have a good connection throughout the Meeting and set aside enough time to connect to the Meeting and follow the procedure described in this section.

You will require the most recent version of the browsers Chrome, Safari, Edge or Firefox. Make sure your browser is compatible by connecting in advance. PLEASE DO NOT USE INTERNET EXPLORER. Internal networks, firewalls, as well as VPNs (virtual private networks) may block the webcast or access to the virtual platform for the Meeting. If you experience issues, make sure your VPN is deactivated or that you are not using a computer connected to an enterprise network.

Appointment of Proxyholders

Shareholders who wish to appoint a person other than the Management nominees identified in the form of proxy or voting instruction form, including non-registered (beneficial) Shareholders who wish to appoint themselves as proxyholder, must carefully follow the instructions in the accompanying Circular and on their form of proxy or voting instruction form.

Additionally, such Shareholder or its duly appointed proxyholder MUST complete the online form at the address https://www.tsxtrust.com/control-number-request or contact TSX Trust at 1-866-751-6315 (toll-free in Canada and the United States) or 212-235-5754 (other countries) by 10:30 a.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, 48 hours, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting) and provide the TSX Trust representative with the required information so that TSX Trust may provide the proxyholder with his, her or its own 13-digit control number by email. Without their own 13-digit control number, proxyholders will not be able to vote nor ask questions at the Meeting but will be able to attend as guests.

The Board of Directors of the Corporation (the “Board of Directors” or the “Board”) has set the close of business on September 19, 2022 as the record date (the “Record Date”) for determining the Shareholders who are entitled to receive notice of, and to vote their Shares at the Meeting. Only persons who are shown on the register of Shareholders at the close of business on the Record Date, or their duly appointed proxyholders, will be entitled to attend the Meeting and vote on the Arrangement Resolution.

As of the Record Date, there were 201,231,446 Shares issued and outstanding. Each Share entitles its holder to one (1) vote with respect to the matters to be voted on at the Meeting.

In order to become effective, the Arrangement must be approved by (i) at least two-thirds (66²⁄₃%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, voting as a single class, and (ii) as the proposed transaction constitutes a “business combination” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (implemented in Québec as Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions) (“MI 61-101”), a simple majority (more than 50%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, excluding, for the purposes of (ii), the votes attached to the Shares held by Rio Tinto plc and its affiliates and any other Shareholders required to be excluded under MI 61-101. The 102,196,643 Shares beneficially owned by Rio Tinto plc and its affiliates (collectively, the “Excluded Shares”), representing approximately 50.8% of the Shares, will be excluded for purposes of such “minority approval” required under MI 61-101.

Accompanying this notice of meeting is the Circular, a proxy form and a letter of transmittal (for registered Shareholders) (the “Letter of Transmittal”). The accompanying Circular provides information relating to the matters to be addressed at the Meeting and is incorporated into this notice of meeting. Any adjourned or postponed meeting resulting from an adjournment or postponement of the Meeting will be held at a time and place to be specified either by the Corporation before the Meeting or at the Chair’s discretion at the Meeting.

For a registered Shareholder (other than any dissenting Shareholders and the holders of the Excluded Shares) to receive the consideration of C$43.00 in cash per Share (the “Consideration”) to which it, he or she, as the case may

be, is entitled upon the completion of the Arrangement, she, he or it, as the case may be, must complete, sign and return the Letter of Transmittal together with her, his or its, as the case may be, Share certificate(s) and/or Direct Registration System advice(s), as applicable, and any other required documents and instruments to the depositary named in the Letter of Transmittal, in accordance with the procedures set out therein.

Whether or not you are able to attend the Meeting, the Board and management of the Corporation urge you to participate in the Meeting and vote your Shares. If you cannot attend the Meeting in person or online to vote your Shares, please vote in one of the following ways:

 

i.

by following the instructions for internet voting in the accompanying proxy form at least 48 hours, excluding Saturdays, Sundays and holidays, prior to the Meeting or related adjournment(s) or postponement(s); OR

 

ii.

by completing and signing the accompanying proxy form and returning it in the enclosed envelope, postage prepaid at least 48 hours, excluding Saturdays, Sundays and statutory holidays, prior to the Meeting or related adjournment(s) or postponement(s); OR

 

iii.

by duly appointing someone as a proxy to participate in the Meeting and vote your Shares for you.

The Chair reserves the right to accept late proxies and to extend or waive the proxy cut off at their discretion, with or without notice, subject to the terms of the Arrangement Agreement.

If you are a beneficial (non-registered) Shareholder, please refer to the section in the Circular entitled “Information Concerning the Meeting and Voting – Non-Registered Shareholders” for information on how to vote your Shares. Beneficial (non-registered) Shareholders who hold their Shares through a broker, investment dealer, bank, trust company, custodian, nominee or another intermediary (an “Intermediary”), should carefully follow the instructions of their Intermediary to ensure that their Shares are voted at the Meeting in accordance with such Shareholders’ instructions and, as applicable, to arrange for their Intermediary to complete the necessary transmittal documents and to ensure that they receive payment of the Consideration for their Shares if the Arrangement is completed.

Dissent Rights

Pursuant to the Interim Order, registered Shareholders have the right to dissent with respect to the Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of their Shares by the Purchaser in accordance with the provisions of Section 193 of the YBCA (the “Dissent Rights”), as modified by the Interim Order and/or the plan of arrangement pertaining to the Arrangement (the “Plan of Arrangement”). A registered Shareholder wishing to exercise Dissent Rights with respect to the Arrangement Resolution must send to the Corporation a Dissent Notice (as defined below), which the Corporation must receive, c/o Dustin Isaacs, Chief Legal Officer and Corporate Secretary, at 1 Place Ville Marie, Suite 3680, Montréal, Québec, Canada, H3B 3P2, Canada, with copies to each of:

 

i.

Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Montréal, Québec, Canada, H3B 1R1, Attention: Steve Malas, email: steve.malas@nortonrosefulbright.com and Orestes Pasparakis, email: orestes.pasparakis@nortonrosefulbright.com;

 

ii.

McCarthy Tétrault LLP, Toronto-Dominion Bank Tower, 66 Wellington Street West, Suite 5300, P.O. Box 48, Toronto, Ontario, Canada, M5K 1E6, Attention: Eva Bellissimo, email: ebellissimo@mccarthy.ca; and Shea Small, email: ssmall@mccarthy.ca; and

 

iii.

TSX Trust Company, 1200-1 Toronto Street, Toronto, Ontario, Canada, M5C 2V6, Attention: Proxy Department, or at 1600-2001 Robert-Bourassa Blvd., Montréal, Québec, Canada, H3A 2A6, Attention: Proxy Department;

by no later than 4:00 p.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, by no later than 4:00 p.m. on the second (2^nd) business day, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting) (the “Dissent Notice”), and must otherwise strictly comply with the dissent procedures described in the accompanying Circular. A Shareholder’s Dissent Notice sent with respect to the Arrangement shall be deemed to be and shall be automatically revoked if such Shareholder has voted (some or all of their Shares) in favour of the Arrangement Resolution, whether in person, virtually or by proxy.

Anyone who is a beneficial owner of Shares registered in the name of an Intermediary and who wishes to exercise Dissent Rights should be aware that only registered Shareholders are entitled to exercise Dissent Rights. A non-registered Shareholder who wishes to exercise Dissent Rights must make arrangements for the registered Shareholder of such Shares to exercise Dissent Rights on behalf of such Shareholder. A registered Shareholder who intends to exercise Dissent Rights must do so with respect to all of the Shares registered in the Dissenting Shareholder’s

name that either: (i) they hold on their own behalf; or (ii) they hold on behalf of any one beneficial Shareholder and only if a Dissent Notice is received from such Shareholder by the Corporation in the manner and within the time described above. There is no right to a partial Dissent Right.

It is recommended that you seek independent legal advice if you wish to exercise Dissent Rights. The Shareholders’ Dissent Rights are more particularly described in the accompanying Circular, and copies of the Plan of Arrangement, the Interim Order and the text of Section 193 of the YBCA are set forth in Appendix B, Appendix E and Appendix G, respectively, of the Circular. Failure to strictly comply with the requirements set forth in Section 193 of the YBCA, as modified by the Interim Order and/or the Plan of Arrangement, will result in the loss of any right of dissent.

 

TURQUOISE HILL RESOURCES LTD.

MANAGEMENT PROXY CIRCULAR

This management proxy circular (this “Circular”) is provided in relation to the solicitation of proxies by the management of Turquoise Hill Resources Ltd. (“we”, “us”, “Turquoise Hill” and the “Corporation”) for use at the special meeting of Shareholders (the “Meeting”) of the Corporation to be held on November 1, 2022 at 10:30 a.m. (Montréal time) in person at Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Chapleau Room, Montréal, Québec, Canada, H3B 1R1 and virtually via live audio webcast at https://web.lumiagm.com/449028588 and at any adjournment or postponement thereof. Unless otherwise indicated, the information provided in this Circular is provided as of the Record Date of September 19, 2022.

All capitalized terms used in this Circular but not otherwise defined herein have the meanings set forth in the “Glossary of Terms”. In this Circular, unless there is something in the subject matter or context inconsistent therewith, words importing the singular number only (including defined terms) include the plural.

CURRENCY AND EXCHANGE RATES

Unless otherwise indicated, references to “$” or “C$” refer to the lawful currency of Canada and references to “US$” refer to the lawful currency of the United States of America. On September 27, 2022, the daily average exchange rate as reported by the Bank of Canada was: C$1.00 = US$0.7285 and US$1.00 = C$1.3726.

CAUTIONARY STATEMENTS

We have not authorized any person to give any information or make any representation regarding the Arrangement or any other matters to be considered at the Meeting other than those contained in this Circular. If any such information or representation is given or made to you, you should not rely on it as being authorized or accurate.

This Circular does not constitute an offer to buy, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation. The delivery of this Circular will not, under any circumstances, create any implication or be treated as a representation that there has been no change in the information set out herein since the date of this Circular.

Management is soliciting your proxy. The Corporation has retained Kingsdale as its proxy solicitation agent for assistance in connection with the solicitation of proxies for the Meeting, and will pay Kingsdale fees of approximately C$85,000 for such services in addition to certain out-of-pocket expenses. Management requests that you sign and return the proxy form or voting instruction form so that your votes are exercised at the Meeting. The solicitation of proxies will be conducted primarily by mail but may also be made by telephone, facsimile transmission or other electronic means of communication or in-person by the directors, officers and employees of Turquoise Hill. The Corporation will bear the cost of such solicitation and will reimburse Intermediaries for their reasonable charges and expenses incurred in forwarding proxy materials to non-registered Shareholders. The Purchaser and Rio Tinto may also participate in the solicitation of proxies.

Shareholders should not construe the contents of this Circular as legal, tax or financial advice and are urged to consult with their own legal, tax, financial or other professional advisors.

The information contained in this Circular concerning the Purchaser and Rio Tinto, including such information under the heading “Special Factors – Background to the Arrangement”, has been provided by the Purchaser and Rio Tinto for inclusion in this Circular. Although the Corporation has no knowledge that any statement contained herein taken from, or based on, such information and records or information provided by the Purchaser or Rio Tinto are untrue or incomplete, the Corporation assumes no responsibility for the accuracy of the information contained in such documents, records or information or for any failure by the Purchaser or Rio Tinto to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to the Corporation.

All summaries of and references to the Arrangement Agreement, the Plan of Arrangement, Third A&R HoA and Early Advance Agreement in this Circular are qualified in their entirety by the complete text of such documents and Shareholders should refer to the full text for complete details of such documents. The Plan of Arrangement is attached as Appendix B to this Circular, and a copy of the Arrangement Agreement, Third A&R HoA and Early Advance Agreement are available under Turquoise Hill’s profiles on SEDAR at www.sedar.com and EDGAR at www.sec.gov. You are urged to read the full text of the Arrangement Agreement and the Plan of Arrangement carefully.

 

i

NO CANADIAN SECURITIES REGULATORY AUTHORITY NOR THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE.

FORWARD-LOOKING INFORMATION

This Circular contains “forward-looking information” within the meaning of applicable Canadian Securities Laws, and Turquoise Hill intends that such forward-looking statements be subject to the safe harbours created thereby. Forward-looking statements are statements other than historical information or statements of current condition. Words such as may, expect, believe, plan, anticipate, intend, could, estimate, continue, or similar expressions or the negative of such expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events and circumstances are considered forward-looking statements. They are not guarantees of future performance and these statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. More particularly and without restriction, this Circular contains forward-looking statements and information regarding: statements and implications about the anticipated benefits of the Arrangement for the Corporation, the Purchaser and their respective shareholders, Shareholder and Court approvals and the anticipated timing of the completion of the Arrangement.

Forward-looking information is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the failure of the parties to obtain the necessary Shareholder and Court approvals or to otherwise satisfy the conditions to the completion of the Arrangement; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner or at all; significant transaction costs or unknown liabilities; failure to realize the expected benefits of the Arrangement; general economic conditions; and other risks and uncertainties identified under “Risk Factors” and “Information Concerning Turquoise Hill”. Failure to obtain the necessary Shareholder and Court approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the Arrangement or to complete the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, and the Corporation continues as a publicly traded entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources of the Corporation to the completion of the Arrangement could have an impact on its business and strategic relationships (including with future and prospective employees, customers, suppliers and partners), operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Furthermore, pursuant to the terms of the Arrangement Agreement, the Corporation may, in certain circumstances, be required to pay the Expense Reimbursement Amount to the Purchaser, the result of which could have an adverse effect on its financial position.

Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable Securities Laws.

This list is not exhaustive of the factors that may affect any of the forward-looking statements of Turquoise Hill. The risks and uncertainties that could affect forward-looking statements are described further under the heading “Risk Factors”. Additional risks are further discussed in Turquoise Hill’s Annual Information Form (Exhibit 99.1 to the Corporation’s Annual Report on Form 40-F) for the year ended December 31, 2021, the management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021, as well as the management’s discussion and analysis of financial condition and results of operations for the second quarter period ended June 30, 2022, which have been filed under Turquoise Hill’s profiles on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

The transactions contemplated herein constitute a “going private” transaction under Rule 13E-3 promulgated under the United States Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”). In connection with these transactions, the Corporation, the Purchaser and certain related parties have filed with the U.S. Securities and Exchange Commission (the “SEC”) a transaction statement (the “Schedule 13E-3”) pursuant to Section 13(e) of the U.S. Exchange Act and Rule 13E-3 thereunder, which incorporates, by reference therein, this Circular. Copies of the Schedule 13E-3 are, and any other documents filed by the Corporation in connection with the Arrangement will be, available under Turquoise Hill’s profile on EDGAR at www.sec.gov.

 

ii

Shareholders are advised to read this Circular and the Schedule 13E-3 in their entirety, including the exhibits or appendices hereto or thereto, as applicable, because they contain important information.

Turquoise Hill is a corporation existing under the laws of Yukon and is a “foreign private issuer” within the meaning of the rules promulgated under the U.S. Exchange Act. Section 14(a) of the U.S. Exchange Act and related proxy rules are not applicable to the Corporation nor to this solicitation and, therefore, this solicitation is not being effected in accordance with such laws. The solicitation of proxies and the transactions contemplated herein involve securities of a Canadian issuer and are being effected in accordance with (1) Canadian corporate laws and Canadian Securities Laws, which differ from disclosure requirements in the United States, and (2) the requirements of Rule 13E-3 promulgated under the U.S. Exchange Act.

The unaudited interim financial statements and audited annual financial statements of Turquoise Hill and other financial information included or incorporated by reference in this Circular have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and thus may differ from the U.S. generally accepted accounting principles. Shareholders that are United States taxpayers are advised to consult their independent tax advisors regarding the United States federal, state, local and foreign tax consequences to them by participating in the Arrangement.

The enforcement by investors of civil liabilities under United States federal and state securities laws may be affected adversely by the fact that Turquoise Hill is organized under the laws of a jurisdiction other than the United States, that some (or all) of its respective officers and directors are residents of countries other than the United States, that some or all of the experts named in this Circular may be residents of countries other than the United States, or that all or a substantial portion of the assets of Turquoise Hill and such directors, officers and experts may be located outside the United States. As a result, it may be difficult or impossible for Shareholders resident in the United States to effect service of process within the United States upon Turquoise Hill and its respective officers and directors or the experts named herein, or to realize against them on judgments of courts of the United States. In addition, Shareholders resident in the United States should not assume that the courts of Canada: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under the U.S. Securities Laws or any state within the United States, including “blue sky laws” of any state within the United States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the U.S. Securities Laws, including “blue sky laws” of any state within the United States.

 

iii

QUESTIONS AND ANSWERS ABOUT THE MEETING AND THE ARRANGEMENT

Your vote is important. The following are key questions that you as a Shareholder may have regarding the Arrangement to be considered at the Meeting. You are urged to carefully read the remainder of this Circular as the information in this section does not provide all of the information that might be important to you with respect to the Arrangement. All capitalized terms used herein have the meanings ascribed to them in the “Glossary of Terms” on page 119 of this Circular.

Questions Relating to the Arrangement

 

Q.	What is the proposed Arrangement?

 

A.	Pursuant to the Arrangement, Rio Tinto would acquire the Minority Shares, representing the approximately 49.2% of the Shares of Turquoise Hill not currently owned by Rio Tinto, for C$43.00 in cash per Share by way of a Court-approved plan of arrangement pursuant to the provisions of the YBCA.

 

Q.	What is the background and reasons for the proposed Arrangement?

 

A.	The Arrangement Agreement is the result of arm’s length negotiations between the Special Committee, Rio Tinto and their respective advisors.

See “Special Factors – Background to the Arrangement” for a summary of certain relevant background information that informed the Special Committee’s deliberations as well as the principal events leading to the execution of the Arrangement Agreement and the public announcement of the Arrangement.

In determining that the Arrangement is in the best interests of the Corporation and fair to the Minority Shareholders, the Special Committee, with the assistance of financial and legal advisors, carefully reviewed the Arrangement and the terms and conditions of the Arrangement Agreement and related agreements and documents and considered and relied upon a number of substantive factors, including those set out under “Special Factors – Position of Turquoise Hill as to Fairness of the Arrangement – Reasons for the Recommendation”.

 

Q.	Does the Special Committee support the Arrangement?

 

A.

Yes. The Special Committee, following careful consideration of, among other things, the Formal Valuation and the Fairness Opinions, the terms and conditions set forth in the Arrangement Agreement, the matters discussed below under the heading “Special Factors – Position of Turquoise Hill as to Fairness of the Arrangement – Reasons for the Recommendation” and advice from its financial advisor, unanimously determined that the Arrangement is in the best interests of the Corporation and fair to the Minority Shareholders and unanimously recommended that the Board determine that the Arrangement is in the best interests of the Corporation and fair to the Minority Shareholders and recommend that the Minority Shareholders vote IN FAVOUR of the Arrangement Resolution. See “Special Factors – Position of Turquoise Hill as to Fairness of the Arrangement – Recommendation of the Special Committee”.

 

Q.	Does the Board support the Arrangement?

 

A.

Yes. The Unconflicted Board of Directors, after receiving the unanimous recommendation of the Special Committee and following careful consideration of, among other things, the Formal Valuation and the Fairness Opinions, the terms and conditions set forth in the Arrangement Agreement, the matters discussed under the heading “Special Factors – Position of Turquoise Hill as to Fairness of the Arrangement – Reasons for the Recommendation” and advice from financial advisors, unanimously determined that the Arrangement is in the best interests of the Corporation and fair to the Minority Shareholders and unanimously recommends that the Minority Shareholders vote IN FAVOUR of the Arrangement Resolution. See “Special Factors – Recommendation of the Board”.

 

Q.	Who has agreed to support the Arrangement?

 

A.	All independent directors and executive officers of the Corporation have entered into Voting Agreements pursuant to which they have agreed, subject to the terms thereof, to vote all of their Shares IN FAVOUR of the Arrangement Resolution. See “The Arrangement – Voting Agreements”.

 

1

Q:	What approvals are required by Shareholders at the Meeting?

 

A:

To be effective, the Arrangement Resolution must be approved by (i) at least two-thirds (662⁄3%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, voting as a single class; and (ii) a simple majority (more than 50%) of the votes cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, excluding for the purposes of (ii) the votes attached to the Excluded Shares and the Shares held by any other Shareholders required to be excluded under MI 61-101. See “The Arrangement – Shareholder Approval of the Arrangement”.

 

Q:	What other approvals are required for the Arrangement?

 

A:

The Arrangement requires approval by the Court under Section 195 of the YBCA. Prior to the mailing of this Circular, the Corporation obtained an Interim Order providing for the calling and holding of the Meeting and other procedural matters. The Corporation will apply to the Court for a Final Order if the Shareholders approve the Arrangement at the Meeting. The Court will consider, among other things, the procedural and substantive fairness of the Arrangement. See “Certain Legal Matters – Court Approvals and Completion of the Arrangement”.

 

Q.	How will I know when all required approvals have been obtained?

 

A.	If all the necessary approvals have been received and conditions to the completion of the Arrangement have been satisfied or waived, other than conditions that, by their terms, cannot be satisfied until the Effective Date, then Turquoise Hill will issue a press release disclosing such fact.

 

Q:	When will the Arrangement become effective?

 

A:

The Arrangement is currently scheduled to be completed on or about November 9, 2022 based on the assumption that all required Shareholder Approvals and Court approvals are obtained and all other conditions to the Arrangement are satisfied or waived prior to such date. It is not possible, however, to state with certainty when the Effective Date will occur. The Arrangement will become effective on the date shown on the Certificate of Arrangement to be endorsed by the Director on the Articles of Arrangement giving effect to the Arrangement in accordance with the YBCA. See “Certain Legal Matters – Implementation of the Arrangement and Timing”.

 

Q.	If the Arrangement is approved by Shareholders at the Meeting, when will the Shares cease to be traded on stock exchanges?

 

A.

The Corporation and Rio Tinto have agreed to use their commercially reasonable efforts to cause the Shares to be delisted from the TSX and the NYSE promptly, with effect as soon as practicable following the acquisition by the Purchaser of the Minority Shares pursuant to the Arrangement. Following the Effective Date, it is expected that the Purchaser will cause the Corporation to apply to cease to be a reporting issuer under the securities legislation of each of the provinces and territories in Canada under which it is currently a reporting issuer (or equivalent) or take or cause to be taken such other measures as may be appropriate to ensure that the Corporation is not required to prepare and file continuous disclosure documents. Following the consummation of the Arrangement, the registration of the Shares under the U.S. Exchange Act will be terminated. See “Securities Law Matters – Stock Exchange Delisting and Reporting Issuer Status”.

 

Q:	What will I receive for my Shares under the Arrangement?

 

A:

If the Arrangement becomes effective, Minority Shareholders will be entitled to receive Consideration of C$43.00 in cash per Share, representing a 67% premium to the closing price of C$25.68 of the Shares on the TSX on March 11, 2022, being the last trading day prior to the Purchaser’s Initial Proposal.

 

Q:	If I am a registered Shareholder, how do I receive my Consideration under the Arrangement?

 

A:

Accompanying this Circular is a form of proxy and Letter of Transmittal (for registered Shareholders). For a registered Minority Shareholder (other than any Dissenting Shareholder) to receive the Consideration of C$43.00 in cash per Share to which she, he or it, as the case may be, is entitled upon the completion of the Arrangement, she, he or it, as the case may be, must complete, sign and return the Letter of Transmittal together with her, his or its, as the case may be, Share certificate(s) and/or DRS Advice, as applicable, and any other required documents and instruments to the Depositary named in the Letter of Transmittal in accordance with the procedures set out therein.

 

2

Q:	What happens if I do not surrender the certificates representing my Shares in order to receive the Consideration under the Arrangement?

 

A:

Until surrendered, each certificate that immediately prior to the Effective Time represented Shares shall be deemed after the Effective Time to represent only the right to receive upon such surrender a cash payment in lieu of such certificate as contemplated in the Plan of Arrangement, less any amounts withheld pursuant to the Plan of Arrangement. Any such certificate formerly representing Shares not duly surrendered on or before the sixth (6th) anniversary of the Effective Date shall cease to represent a claim by or interest of any former Shareholder of any kind or nature against or in the Corporation or the Purchaser. On such date, all cash to which such former holder was entitled shall be deemed to have been surrendered to the Purchaser or the Corporation, as applicable, and shall be paid over by the Depositary to the Purchaser as directed by the Purchaser. See “The Arrangement – Payment of Consideration”.

 

Q:	What will happen to the Corporation if the Arrangement is completed?

 

A:

If the Arrangement becomes effective, former Minority Shareholders will be entitled to receive the Consideration in exchange for their Shares and the only Shareholders of the Corporation will be wholly owned Subsidiaries of Rio Tinto plc, including the Purchaser, and the Corporation will become a privately held corporation and an indirect wholly owned Subsidiary of Rio Tinto and there will be no public market for its Shares.

 

Q.	What will happen if the Arrangement Resolution is not passed or the Arrangement is not completed for any reason?

 

A:

If the Arrangement Resolution is not passed or the Arrangement is not completed for any reason, the Arrangement Agreement may be terminated. If this occurs, the Corporation will continue as a publicly traded entity and continue to pursue its business plan on a stand-alone basis. Note that failure to complete the Arrangement could have an adverse effect on the Share price or on the Corporation’s operations, financial condition or prospects. See “Risk Factors”. Furthermore, pursuant to the terms of the Arrangement Agreement, the Corporation may, in certain circumstances, be required to pay the Expense Reimbursement Amount to the Purchaser, the result of which could have an adverse effect on the Corporation’s financial position.

 

Q.	Are there risks associated with the Arrangement?

 

A:

In evaluating the Arrangement, Shareholders should consider the risk factors relating to the Arrangement. Some of these risks include, but are not limited to: (i) the Arrangement Resolution must be approved by a simple majority of the votes (more than 50%) cast by Shareholders present in person, virtually present or represented by proxy at the Meeting, excluding, for the purpose of this Minority Approval, the votes attached to the Excluded Shares and the Shares held by any other Shareholders required to be excluded under MI 61-101; (ii) the Arrangement Agreement may be terminated in certain circumstances, including in the event of a change having a Material Adverse Effect or if holders of more than 12.5% of the outstanding Shares exercise Dissent Rights; and (iii) there can be no certainty that all other conditions precedent to the Arrangement will be satisfied or waived.

Any failure to complete the Arrangement could materially and negatively impact the trading price of the Shares. You should carefully consider the risk factors described in the section “Risk Factors” in evaluating the approval of the Arrangement Resolution. Readers are cautioned that such risk factors are not exhaustive.

 

Q.	Is there a termination fee if the Arrangement Resolution is not approved by Turquoise Hill’s Shareholders?

 

A:

There is no termination fee payable by either party if the Arrangement Resolution is not approved by Shareholders. However, if the Shareholder Approvals for the Arrangement are not obtained and certain other conditions are satisfied, the Purchaser has agreed in the Arrangement Agreement to pay the Expense Reimbursement Amount of US$15,000,000 to the Corporation which would defray a portion of the Corporation’s out-of-pocket fees, costs and expenses incurred in connection with the Arrangement. The Arrangement Agreement also provides that the Corporation will be required to pay the Expense Reimbursement Amount of US$15,000,000 to the Purchaser if the Arrangement Agreement is terminated and certain other conditions are satisfied.

 

3

Q.

The Pentwater Funds have reported that they have beneficial ownership of in excess of 13.7% of the outstanding Shares and have publicly stated that they do not support the Arrangement and are considering legal actions including exercising Dissent Rights under the Arrangement. If the Pentwater Funds do exercise Dissent Rights, can the Arrangement proceed?

 

A.

Under the Arrangement Agreement, the Purchaser’s obligation to complete the Arrangement is subject to a number conditions in its favour, including that the number of Shares held by Shareholders who validly exercise Dissent Rights does not exceed 12.5% of the Shares issued and outstanding on the date of the Arrangement Agreement. If Dissent Rights are validly exercised by Shareholders holding in excess of 12.5% of the issued and outstanding Shares, and the Purchaser and Rio Tinto plc, in their sole discretion, do not waive this condition on or before the Outside Date, the Purchaser and Rio Tinto plc will not be obligated to complete the Arrangement and any of the Corporation, the Purchaser or Rio Tinto plc may then terminate the Arrangement Agreement, in which case the Purchaser will be required to pay to the Corporation the Expense Reimbursement Amount.

Questions Relating to the Turquoise Hill Special Meeting of Shareholders

 

Q.	Why did I receive this Circular?

 

A.	You received this Circular because you are a Shareholder and Shareholders are being asked at the Meeting to approve the Arrangement involving Turquoise Hill and the Purchaser, pursuant to Section 195 of the YBCA.

 

Q.	Where and when will the Meeting be held?

 

A.

The Meeting will be held on November 1, 2022, at 10:30 a.m. (Montréal time). The Meeting will be held in person at Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Chapleau Room, Montréal, Québec, Canada, H3B 1R1 and in virtual format via live audio webcast. Shareholders will be able to participate and vote at the Meeting online regardless of their geographic location at https://web.lumiagm.com/449028588. See “Information Concerning the Meeting and Voting – Date, Time and Place of Meeting”.

In the event necessary to address material comments from any securities regulatory authority, including from the SEC, on this Circular or the Schedule 13E-3, the Parties have agreed pursuant to the Arrangement Agreement that the Corporation may adjourn the Meeting.

 

Q.	Am I entitled to vote?

 

A.	You are entitled to vote if you were a Shareholder as of the close of business on the Record Date, September 19, 2022. Each Share entitles its holder to one (1) vote with respect to the matters to be voted on at the Meeting.

 

Q.	What are Shareholders being asked to vote on at the Meeting?

 

A.

At the Meeting, pursuant to the Interim Order, the Shareholders will be asked to consider and, if thought advisable, pass the Arrangement Resolution to approve the Arrangement. The Arrangement provides for, among other things, the acquisition by the Purchaser of all of the issued and outstanding Minority Shares by way of a court-approved statutory plan of arrangement under section 195 of the YBCA. Pursuant to the Arrangement Agreement and the Plan of Arrangement, if the Arrangement becomes effective each Minority Shareholder (except for any Dissenting Shareholders) will be entitled to receive C$43.00 in cash per Share.

 

Q.	What constitutes quorum for the Meeting?

 

A.

The Corporation’s by-laws provide that the quorum for the transaction of business at the Meeting is at least one (1) individual present, either in person or electronically, at the commencement of the Meeting holding, or representing by proxy the holder or holders of Shares carrying, in the aggregate, not less than one-third (331⁄3%) of the votes eligible to be cast at the Meeting.

 

Q.	How many Shares are entitled to be voted?

 

A.	As at the Record Date of September 19, 2022, there were 201,231,446 Shares issued and outstanding, and no issued and outstanding preferred shares. Each Share entitles its holder to one (1) vote with respect to the matters to be voted on at the Meeting.

 

4

Q.	What if I acquire ownership of Shares after the Record Date?

 

A.	You will not be entitled to vote Shares acquired after the Record Date on the Arrangement Resolution. Only persons owning Shares as of the Record Date of September 19, 2022 are entitled to vote their Shares on the Arrangement Resolution.

 

Q.	What do I need to do now in order to vote on the Arrangement Resolution?

 

A:

Registered Shareholders can vote by internet, by mail, or in person or virtually at the Meeting. It is recommended that you vote by internet to ensure that your vote is received before the Meeting. To cast your vote by internet, please have your form of proxy or VIF on hand and carefully follow the instructions contained therein. Your internet vote authorizes the named proxies to vote your Shares in the same manner as if you mark, sign and return your form of proxy. You may also vote by mail by completing, dating and signing the enclosed form of proxy or VIF and return it in the envelope provided for that purpose. To be valid, proxies must be received by TSX Trust Company, at 1200-1 Toronto Street, Toronto, Ontario, Canada, M5C 2V6, Attention: Proxy Department, or at 1600-2001 Robert-Bourassa Blvd., Montréal, Québec, Canada, H3A 2A6, Attention: Proxy Department, by no later than 10:30 a.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, 48 hours, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting). Late proxies may be accepted or rejected by the Chair of the Meeting at his or her discretion, subject to the terms of the Arrangement Agreement, and the Chair of the Meeting is under no obligation to accept or reject any particular late proxy.

 

Q:	If my Shares are held by my broker, investment dealer or other Intermediary, will they vote my Shares for me?

 

A:	No. Non-registered (beneficial) Shareholders who receive these materials through their broker or other Intermediary should complete and send the form of proxy or VIF in accordance with the instructions provided by their broker or Intermediary.

Additionally, the Corporation may utilize the Broadridge QuickVote^TM system, which involves NOBOs being contacted by Kingsdale, which is soliciting proxies on behalf of Management, to obtain voting instructions over the telephone and relaying them to Broadridge (on behalf of the NOBO’s Intermediary). While representatives of Kingsdale are soliciting proxies on behalf of Management, Shareholders are not required to vote in the manner recommended by the Board of Directors. The QuickVote^TM system is intended to assist Shareholders in placing their votes, however, there is no obligation for any Shareholders to vote using the QuickVote^TM system, and Shareholders may vote (or change or revoke their votes) at any other time and in any other applicable manner described in this Circular. Any voting instructions provided by a Shareholder will be recorded and such Shareholder will receive a letter from Broadridge (on behalf of the Shareholder’s Intermediary) as confirmation that their voting instructions have been accepted.

 

Q.	Who is soliciting my proxy?

 

A.

Management is soliciting your proxy. The Corporation has retained Kingsdale as its proxy solicitation agent for assistance in connection with the solicitation of proxies for the Meeting, and will pay Kingsdale fees of approximately C$85,000 for such services in addition to certain out-of-pocket expenses. Management requests that you sign and return the form of proxy or VIF so that your votes are exercised at the Meeting. The solicitation of proxies will be conducted primarily by mail but may also be made by telephone, facsimile transmission or other electronic means of communication or in-person by the directors, officers and employees of Turquoise Hill. The Corporation will bear the cost of such solicitation and will reimburse Intermediaries for their reasonable charges and expenses incurred in forwarding proxy materials to non-registered Shareholders. The Purchaser and Rio Tinto may also participate in the solicitation of proxies.

 

Q.	Can I appoint someone other than those named in the enclosed proxy forms to vote my Shares?

 

A.	Yes. You have the right to appoint a person other than the Management nominees identified in the form of proxy or VIF. Non-registered (beneficial) Shareholders who wish to appoint themselves as proxyholder must carefully follow the instructions in the Circular and on their form of proxy or VIF.

Additionally, a Shareholder or its duly appointed proxyholder who is entitled to attend the Meeting MUST complete the online form at the address https://www.tsxtrust.com/control-number-request or contact TSX Trust at 1-866-751-6315 (toll-free in Canada and the United States) or 212-235-5754 (other countries) by 10:30 a.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, 48 hours,

 

5

excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting) and provide the TSX Trust representative with the required information so that TSX Trust may provide the proxyholder with his, her or its own 13-digit control number by email. Without their own 13-digit control number, proxyholders will not be able to vote nor ask questions at the Meeting but will be able to attend as guests. See “Information Concerning the Meeting and Voting – Appointment of Proxyholders”.

 

Q.	What if my Shares are registered in more than one name or in the name of a company?

 

A.

If your Shares are registered in more than one name, all registered persons must sign the form of proxy. If your Shares are registered in a company’s name or any name other than your own, you may be required to provide documents proving your authorization to sign the form of proxy for that company or name. For any questions about the proper supporting documents, contact TSX Trust before submitting your form of proxy.

 

Q:	When will I receive the Consideration payable to me under the Arrangement for my Shares?

 

A:

If the Arrangement becomes effective and your Letter of Transmittal and Share certificate(s), if applicable, and all other required documents are properly completed and received by the Depositary, you will receive the Consideration due to you under the Arrangement as soon as practicable after the Arrangement becomes effective. The Arrangement is currently scheduled to be completed on or about November 9, 2022 based on the assumption that all required Shareholder Approvals and Court approvals are obtained and all other conditions to the Arrangement are satisfied or waived prior to such date.

 

Q:	What happens if I send in my Share certificate(s) and the Arrangement Resolution is not approved or the Arrangement is not completed?

 

A:	If the Arrangement Resolution is not approved or if the Arrangement is not otherwise completed, your Share certificate(s) will be returned promptly to you by the Depositary.

 

Q:	Can I revoke my vote after I have voted by proxy?

 

A:

Yes. If you want to revoke your proxy after you have delivered it, you can do so by (i) delivering a written notice of revocation that is received by TSX Trust Company, at 1200-1 Toronto Street, Toronto, Ontario, Canada, M5C 2V6, Attention: Proxy Department, or at 1600-2001 Robert-Bourassa Blvd., Montréal, Québec, Canada, H3A 2A6, Attention: Proxy Department, no later than 5:00 p.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, 48 hours, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting), or delivered to the person presiding at the Meeting before it commences, (ii) signing a proxy bearing a later date and depositing it in the manner and within the time described above; (iii) attending the Meeting and voting virtually if you were a registered Shareholder at the Record Date; or (iv) in any other manner permitted by Law. See “Information Concerning the Meeting and Voting – Changing Your Mind (Revoking Your Proxy)”.

 

Q.	Are the shareholders of the Purchaser required to approve the Arrangement?

 

A.

No.

 

Q.	Who is responsible for counting and tabulating the votes by proxy?

 

A.	Votes by proxy are counted and tabulated by TSX Trust, Turquoise Hill’s transfer agent.

 

Q:	What are the Canadian federal income tax consequences of the Arrangement?

 

A:

Subject to the discussion in “Certain Canadian Federal Income Tax Considerations”, a Shareholder who is, or is deemed to be, resident in Canada, holds the Shares as “capital property”, and who sells such Shares to the Purchaser pursuant to the Arrangement will realize a capital gain (or a capital loss) to the extent that such Shareholder’s proceeds of disposition, net of any reasonable cost of disposition, exceed (or are less than) the aggregate adjusted cost base to such Shareholder of his, her or its Shares.

The foregoing description of Canadian federal income tax consequences of the Arrangement is qualified in its entirety by the longer discussion under “Certain Canadian Federal Income Tax Considerations” below which contains a summary of certain Canadian federal income tax considerations of the Arrangement generally applicable to a Resident Holder (including a Dissenting Resident Holder) or a Non-Resident Holder (including a Dissenting Non-Resident Holder). Neither this description nor the longer discussion is intended to be legal

 

6

advice to any particular Shareholder. Accordingly, Shareholders should consult their tax advisor with respect to their particular circumstances.

The foregoing is only a brief summary of certain material Canadian federal income tax considerations. Shareholders should read carefully the information in the Circular under the heading “Certain Canadian Federal Income Tax Considerations”, which qualifies the summary set forth above. Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of the Arrangement.

 

Q:	What are the United States income tax consequences of the Arrangement?

 

A:

Subject to the discussion in “Certain United States Federal Income Tax Considerations” a U.S. Shareholder who holds Shares as capital assets and who sells such Shares pursuant to the Arrangement and receives the Consideration generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the amount received and the U.S. Shareholder’s adjusted tax basis in the Shares.

The foregoing description of U.S. federal income tax consequences of the Arrangement is qualified in its entirety by the longer discussion under “Certain United States Federal Income Tax Considerations” below, and neither this description nor the longer discussion is intended to be legal advice to any particular Shareholder residing in the United States. Accordingly, U.S. Shareholders should consult their tax advisor with respect to their particular circumstances.

 

Q:	Are Shareholders entitled to Dissent Rights?

 

A:

Pursuant to the Interim Order, registered Shareholders have the right to exercise Dissent Rights with respect to the Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of their Shares by the Purchaser in accordance with the provisions of Section 193 of the YBCA, as modified by the Interim Order and/or the Plan of Arrangement. A registered Shareholder wishing to exercise Dissent Rights with respect to the Arrangement Resolution must send to the Corporation a Dissent Notice, which the Corporation must receive, c/o Dustin Isaacs, Chief Legal Officer and Corporate Secretary, at 1 Place Ville Marie, Suite 3680, Montréal, Québec, Canada, H3B 3P2, Canada, with copies to each of:

 

i.

Norton Rose Fulbright Canada LLP, 1 Place Ville Marie, Suite 2500, Montréal, Québec, Canada, H3B 1R1, Attention: Steve Malas, email: steve.malas@nortonrosefulbright.com and Orestes Pasparakis, email: orestes.pasparakis@nortonrosefulbright.com;

 

ii.

McCarthy Tétrault LLP, Toronto-Dominion Bank Tower, 66 Wellington Street West, Suite 5300, P.O. Box 48, Toronto, Ontario, Canada, M5K 1E6, Attention: Eva Bellissimo, email: ebellissimo@mccarthy.ca; and Shea Small, email: ssmall@mccarthy.ca; and

 

iii.

TSX Trust Company, 1200-1 Toronto Street, Toronto, Ontario, Canada, M5C 2V6, Attention: Proxy Department, or at 1600-2001 Robert-Bourassa Blvd., Montréal, Québec, Canada, H3A 2A6, Attention: Proxy Department;

by no later than 4:00 p.m. (Montréal time) on October 28, 2022 (or, if the Meeting is adjourned or postponed, by no later than 4:00 p.m. on the second (2^nd) Business Day, excluding Saturdays, Sundays and statutory holidays, prior to the commencement of the reconvened Meeting), and must otherwise strictly comply with the dissent procedures described in this Circular, the Interim Order, the Plan of Arrangement and Section 193 of the YBCA, as modified by the Interim Order and/or the Plan of Arrangement. A Shareholder’s Dissent Notice sent with respect to the Arrangement will be deemed to be and will be automatically revoked if such Shareholder has voted (some or all of their Shares) in favour of the Arrangement Resolution, whether in person, virtually or by proxy.

A Shareholder’s failure to follow exactly the procedures set forth in the Plan of Arrangement and the Interim Order will result in the loss of such Shareholder’s Dissent Rights. If you are a Shareholder and wish to dissent, you should obtain your own legal advice and carefully read the Plan of Arrangement, the Interim Order and the text of Section 193 of the YBCA, all of which are set forth in Appendix B, Appendix E and Appendix G, respectively, of this Circular. See “Dissenting Shareholders’ Rights”.

 

Q:	Who can help answer my questions?

 

A:

If you have any questions about the information contained in this Circular or require assistance in completing your form of proxy, please contact our proxy solicitor, Kingsdale, at 1-888 370 3955 (toll-free in North America), or by calling collect at 416-867-2272 (outside of North America) or by email at

 

7

contactus@kingsdaleadvisors.com. Questions on how to complete the Letter of Transmittal should be directed to the Corporation’s depositary, TSX Trust, at 1-800-387-0825 (toll-free within North America) or at 416-682-3860 (outside of North America) or by email at shareholderinquiries@tmx.com.

 

8

 

9

 

10

 

11

 

12

 

13

 

14