Rio Tinto: Oyu Tolgoi Project Development Conditions Satisfied
March 31 2010 - 5:16AM
Dow Jones News
Rio Tinto PLC (RIO.LN), international mining group, said
Wednesday conditions precedent to the investment agreement with the
Government of Mongolia for the development of the Oyu Tolgoi
copper-gold complex in Mongolia's South Gobi region have been
satisfied.
MAIN FACTS:
-The investment agreement has now taken full and binding
effect.
-Government of Mongolia will own 34% of OT LLC the license
holder of the Oyu Tolgoi project.
-Key terms include a stable operational and tax environment,
provisions dealing with the Government's equity participation and
financing arrangements.
-Rio Tinto and Ivanhoe Mines Ltd (IVN.T), the development
partners for the project, will now move forward with the Government
of Mongolia to start the development phase of the project.
-Production is expected to start 2013, with a five year ramp up
to full expected production of 450,000 tones of copper per year
with significant gold by-products.
-Ivanhoe estimates total investment over the next four years to
build and commission the initial mining complex will be U.S.$4
billion (100% basis).
-Building a coal-powered electricity generating plant for Oyu
Tolgoi would require an additional capital commitment.
-Rio Tinto currently owns 98.6 million shares of Ivanhoe Mines,
22.4%.
-Rio Tinto has the right at any time to exercise its share
purchase warrants and/or convert its convertible loan into shares
of Ivanhoe Mines.
-Rio Tinto shares in London at 0840 GMT up 7 pence, or 0.2%, at
3904 pence valuing the company at GBP3.9 billion.
-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296;
ian.walker@dowjones.com
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