Ivanhoe Mines announced that the joint Ivanhoe Mines-Rio Tinto Oyu Tolgoi Technical Committee has approved a conditional US$758 m budget for 2010 to begin full-scale construction of the Oyu Tolgoi copper-gold mining complex in Mongolia. The budget provides for an early start on a site-wide development program.
Ivanhoe Mines has been formally notified that Rio Tinto immediately intends to complete its Tranche 2 private placement financing – consisting of 46,304,473 Ivanhoe shares at US$8.38 per share – for net proceeds to Ivanhoe of US$388 million. Upon completion of the financing, expected within 10 business days, Rio Tinto’s equity ownership in Ivanhoe Mines will increase from its current level of 9.9% to 19.7%. The terms of the private placement were negotiated as part of the original Rio Tinto-Ivanhoe Mines strategic partnership announced in October 2006 to develop the Oyu Tolgoi copper and gold mining complex in southern Mongolia, approximately 80 kilometres north of the Mongolia-China border. Receipt of the funds will increase Ivanhoe’s consolidated cash position to approximately US$725 million. The Tranche 2 proceeds of US$388 million from Rio Tinto will be used to help build and commission the open-pit mine at Oyu Tolgoi and to advance development of the underground block-cave mine.
Entrée Gold, Ivanhoe Mines, Rio Tinto and the Mongolian government announced to have signed an Investment Agreement. The successful conclusion to the negotiations paves the way for the development of Entrée’s Hugo North Extension and Heruga deposits as part of the overall construction and operation of the massive Oyu Tolgoi mining complex.
