Rio Tinto upping stake in Ivanhoe; ensures funding for Mongolian copper project
LONDON, England - Rio Tinto (NYSE:RTP) said Tuesday that it is increasing its stake in Ivanhoe Mines Ltd. (TSX:IVN) by 7.3 per cent to almost 30 per cent as Ivanhoe continues to develop its Oyu Tolgoi copper-gold project in Mongolia.
The British-based company said in a news release that it will up its stake by exercising all of its series A warrants, which entitle it to acquire just over 46 million Ivanhoe shares at US$8.54 per share, for total consideration of approximately US$393 million.
"Exercising the warrants early ensures Ivanhoe has sufficient funds to meet the current Oyu Tolgoi development schedule," said Andrew Harding, Rio Tinto's chief executive, copper.
"Our further investment in Ivanhoe Mines underlines our confidence in the quality of the world class Oyu Tolgoi deposit and its priority in our project portfolio."
Rio Tinto and Ivanhoe are development partners for the Oyu Tolgoi project. Production is expected to commence in 2013, with a five-year ramp up to full production.
After the completion of the exercise of the series A warrants, Rio Tinto will own 144.66 million Ivanhoe shares. If Rio Tinto were to exercise all of its remaining share purchase warrants and convert its US$350-million loan into shares, it would own approximately 267.8 million shares of Ivanhoe representing some 44 per cent of the company.
Rio Tinto is a leading international mining group headquartered in the United Kingdom, combining Rio Tinto plc, a London- and NYSE- listed company, and Rio Tinto Ltd., which is listed on the Australian Securities Exchange.
Vancouver-based Ivanhoe is an international mineral exploration and development company with projects in Australia and elsewhere as well as Mongolia. Its shares were down $1.40 or more than nine per cent at $13.99 Tuesday on the Toronto Stock Exchange amid a general sell-off in the mining sector.
The British-based company said in a news release that it will up its stake by exercising all of its series A warrants, which entitle it to acquire just over 46 million Ivanhoe shares at US$8.54 per share, for total consideration of approximately US$393 million.
"Exercising the warrants early ensures Ivanhoe has sufficient funds to meet the current Oyu Tolgoi development schedule," said Andrew Harding, Rio Tinto's chief executive, copper.
"Our further investment in Ivanhoe Mines underlines our confidence in the quality of the world class Oyu Tolgoi deposit and its priority in our project portfolio."
Rio Tinto and Ivanhoe are development partners for the Oyu Tolgoi project. Production is expected to commence in 2013, with a five-year ramp up to full production.
After the completion of the exercise of the series A warrants, Rio Tinto will own 144.66 million Ivanhoe shares. If Rio Tinto were to exercise all of its remaining share purchase warrants and convert its US$350-million loan into shares, it would own approximately 267.8 million shares of Ivanhoe representing some 44 per cent of the company.
Rio Tinto is a leading international mining group headquartered in the United Kingdom, combining Rio Tinto plc, a London- and NYSE- listed company, and Rio Tinto Ltd., which is listed on the Australian Securities Exchange.
Vancouver-based Ivanhoe is an international mineral exploration and development company with projects in Australia and elsewhere as well as Mongolia. Its shares were down $1.40 or more than nine per cent at $13.99 Tuesday on the Toronto Stock Exchange amid a general sell-off in the mining sector.
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