Ivanhoe breaks contract with Rio Tinto, shares jump
SAN FRANCISCO (MarketWatch) -- Shares of Ivanhoe Mines Ltd. surged 14% in Toronto Tuesday after the company announced plans to terminate a contract with London-based mining group Rio Tinto PLC, its largest shareholder. The current agreement limits Ivanhoe's /quotes/comstock/11t!e:ivn (CA:IVN 17.07, +2.14, +14.33%) ability to bring new investors into its Oyu Tolgoi mining project in southern Mongolia, Ivanhoe said in a statement. Termination will allow Ivanhoe to issue more than 5% of its common shares to strategic investors, including major mining companies. For Rio Tinto, the termination will prevent it from owning a stake larger than 46.7% -- essentially barring the larger miner from taking up its right to purchase.
Ivanhoe's decision to dissolve its contract with Rio Tinto is the latest tussle between the Vancouver miner and its heavyweight partner, the third-largest mining company in the world. Rio Tinto /quotes/comstock/13*!rtp/quotes/nls/rtp (RTP 47.55, +0.66, +1.41%) /quotes/comstock/23s!a:rio (UK:RIO 3,128, +25.50, +0.82%) has held a strategic stake in Ivanhoe since 2006 and now owns a 30% stake of the company.
On Friday Rio said it plans to take Ivanhoe to arbitration over the previous passage of a shareholder rights amendment. Ivanhoe announced the plan in early April, stating it would protect shareholders during a potential takeover bid or a transaction that would involve a change in control.
Production on the Oyu Tolgoi copper-gold project, which Ivanhoe calls the world's largest undeveloped copper-gold project, is not expected to begin until 2013.
Source:www.marketwatch.com
Ivanhoe's decision to dissolve its contract with Rio Tinto is the latest tussle between the Vancouver miner and its heavyweight partner, the third-largest mining company in the world. Rio Tinto /quotes/comstock/13*!rtp/quotes/nls/rtp (RTP 47.55, +0.66, +1.41%) /quotes/comstock/23s!a:rio (UK:RIO 3,128, +25.50, +0.82%) has held a strategic stake in Ivanhoe since 2006 and now owns a 30% stake of the company.
On Friday Rio said it plans to take Ivanhoe to arbitration over the previous passage of a shareholder rights amendment. Ivanhoe announced the plan in early April, stating it would protect shareholders during a potential takeover bid or a transaction that would involve a change in control.
Production on the Oyu Tolgoi copper-gold project, which Ivanhoe calls the world's largest undeveloped copper-gold project, is not expected to begin until 2013.
Source:www.marketwatch.com
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