ADDITIONS AND AMENDMENTS TO OT SHA HAVE BEEN SIGNED, IVN- "LOWERED INTEREST RATE REFLECTS ECONOMIC RECOVERY, IT IS CRITICAL NOW THAT THE AGREEMENTS ARE REGARDED AS UNCHANGEABLE"

Government of Mongolia(GOM) stated today, 03/09/2011 that addition and amendments to Oyu Tolgoi Shareholders agreement have been signed by Erdenes MGL and OT companies representatives.


• “Funding and loan interest amount
As a result of negotiations, interest amount on total loan and funding for the project for OT has been changed from 9,9% plus USA inflation to LIBOR plus 6,5%. The agreement is to take effect from 01/31/2011

• Right for Mongolian side to make funding
It has been agreed that Mongolian side will have a right to make funding for its share of project capital at anytime.

• Funding hedging options
If case of LIBOR having high cost to the company and shareholders due to world economy and financial condition the company will take necessary measure to hedge from financial risk. Funding and loan interest is to be researched and discussed again every 7 years with the investors.

• Project funding from third parties
The company will utilize in priority basis funding from appropriate third parties on beneficial for the project terms from international banking market.

• Mongolian stake of 34% will not be reduced
Regardless of decision of Mongolian side to supply to company required capital, it has been re-validated again that Mongolian stake of 34% will not be reduced without its permission.

• Preferential rights shares
It has been agreed with investors to deduct any issues pertaining to preferred rights shares on account of its complete change.

Also it has been agreed that Rio Internatinal holdings will agree beforehand with Government of Mongolia and get written permission in case of selling or transferring any shares in Oyutolgoi LLC to state-owned entities or directly on non-directly related to Oyutolgoi LLC entities. A separate agreement has been concluded, signed and validated on the issue of restriction of sale and transfer shares by investors by GOM and Rio Tinto.”

OT LLC stated on June 8,2011

• The original terms of the Shareholders Agreement were negotiated in the midst of an unprecedented global economic crisis. Bank finance was unobtainable and the interest rate struck at that time was a reflection of the cost of raising capital.

• The lowered interest rate in the amended Shareholders Agreement reflects the economic recovery since the first Agreement was signed.

• “By demonstrating a rock solid commitment to the integrity of the Shareholders Agreement and the Investment Agreement, the Government of Mongolia is demonstrating to the international community that Mongolia is an attractive place to invest. It is critical now that the agreements are regarded as unchangeable. This will provide a stable investment environment and many more opportunities for the Mongolian economy to grow.”

Ivanhoe Mines stated on June 9,2010

• “The interest-rate adjustment was made at the government’s request, taking into consideration the higher costs of capital that prevailed in 2009 following the global economic crisis.”