DJ Ivanhoe Sticks To Shareholders' Plan As Arbitration Continues
LONDON, Aug 17, 2010 (Dow Jones Commodities News Select via Comtex) --
Ivanhoe Mines Ltd. (IVN.T) Tuesday said its battle with Rio Tinto PLC ( RTP | PowerRating) for control of Mongolia's Oyu Tolgoi mine is continuing, and it is sticking to a shareholders' rights plan that has led its project partner to go to arbitration, Ivanhoe said Tuesday.
The plan, adopted by Ivanhoe's board in April, could make it difficult for Rio to ever take a majority stake in Ivanhoe, which is developing Oyu Tolgoi, a huge deposit of copper and gold slated to start production in 2013.
Rio Tinto, which currently owns 29.6% in Ivanhoe, claimed in an arbitration filing on July 9 that the plan breached its rights under a previous private placement agreement between the two companies dated October 2006.
"It is Ivanhoe Mines' view that nothing in the private placement agreement prohibits Ivanhoe Mines from implementing a shareholders' rights plan and that nothing in the shareholders' rights plan breaches any of Rio Tinto's existing contractual rights under the private placement agreement, as amended," the company said.
"Ivanhoe Mines will continue to support its shareholders' rights plan in the arbitration proceeding initiated by Rio Tinto," it added.
Relations between the two miners have cooled since Ivanhoe adopted the shareholders' rights plan and terminated a covenant that governs Rio Tinto's investment in Ivanhoe. This will allow the Canadian miner to issue more than 5% of its shares to strategic investors, which could include major mining companies. It isn't known who the strategic investors might be.
If any party wants to sell a stake in the mine, then Rio Tinto, Ivanhoe and the Mongolian government have right of first refusal. If Rio Tinto exercises that right and ups its Ivanhoe stake beyond 46.65%, then a standstill agreement with Ivanhoe that limits how much Rio can buy in Ivanhoe would become void.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com
(END) Dow Jones Newswires
08-17-10 0301ET
For full details on (IVHMF) IVHMF. (IVHMF) has Short Term PowerRatings at TradingMarkets. Details on (IVHMF) Short Term PowerRatings is available at This Link.
For full details on Rio Tinto Plc Adr (RTP) RTP. Rio Tinto Plc Adr (RTP) has Short Term PowerRatings at TradingMarkets. Details on Rio Tinto Plc Adr (RTP) Short Term PowerRatings is available at This Link.
Ivanhoe Mines Ltd. (IVN.T) Tuesday said its battle with Rio Tinto PLC ( RTP | PowerRating) for control of Mongolia's Oyu Tolgoi mine is continuing, and it is sticking to a shareholders' rights plan that has led its project partner to go to arbitration, Ivanhoe said Tuesday.
The plan, adopted by Ivanhoe's board in April, could make it difficult for Rio to ever take a majority stake in Ivanhoe, which is developing Oyu Tolgoi, a huge deposit of copper and gold slated to start production in 2013.
Rio Tinto, which currently owns 29.6% in Ivanhoe, claimed in an arbitration filing on July 9 that the plan breached its rights under a previous private placement agreement between the two companies dated October 2006.
"It is Ivanhoe Mines' view that nothing in the private placement agreement prohibits Ivanhoe Mines from implementing a shareholders' rights plan and that nothing in the shareholders' rights plan breaches any of Rio Tinto's existing contractual rights under the private placement agreement, as amended," the company said.
"Ivanhoe Mines will continue to support its shareholders' rights plan in the arbitration proceeding initiated by Rio Tinto," it added.
Relations between the two miners have cooled since Ivanhoe adopted the shareholders' rights plan and terminated a covenant that governs Rio Tinto's investment in Ivanhoe. This will allow the Canadian miner to issue more than 5% of its shares to strategic investors, which could include major mining companies. It isn't known who the strategic investors might be.
If any party wants to sell a stake in the mine, then Rio Tinto, Ivanhoe and the Mongolian government have right of first refusal. If Rio Tinto exercises that right and ups its Ivanhoe stake beyond 46.65%, then a standstill agreement with Ivanhoe that limits how much Rio can buy in Ivanhoe would become void.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com
(END) Dow Jones Newswires
08-17-10 0301ET
For full details on (IVHMF) IVHMF. (IVHMF) has Short Term PowerRatings at TradingMarkets. Details on (IVHMF) Short Term PowerRatings is available at This Link.
For full details on Rio Tinto Plc Adr (RTP) RTP. Rio Tinto Plc Adr (RTP) has Short Term PowerRatings at TradingMarkets. Details on Rio Tinto Plc Adr (RTP) Short Term PowerRatings is available at This Link.
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