Ivanhoe Still Discussing Additional Financing For Oyu Tolgoi

Ivanhoe Mines Ltd. (IVN.T) is still discussing additional financing options for the balance of its capital requirements for the development of its Oyu Tolgoi mine, the company said Tuesday.

The discussions, which are with "leading international financial institutions," are continuing, after the Canadian company said its consolidated cash position as of Monday is around $1.4 billion. Ivanhoe didn't name the third parties it is talking with.

The initial capital cost needed to achieve first production from the open pit mine on the southern Oyu deposits is estimated at $4.6 billion, including $1.6 billion to be spent advancing underground development at the Hugo North deposit.

A core group of five financial institutions--Paris-based BNP Paribas SA (BNP.FR), London-based Standard Chartered PLC (STAN.LN), Export Development Canada, the European Bank for Reconstruction and Development and the International Finance Corp.--are expected to arrange a financing package for the project valued at more than $2 billion by the first quarter of 2011.

Ivanhoe and Rio Tinto PLC (RTP) are jointly developing the Oyu Tolgoi copper and gold deposit in Mongolia, which is due to start production in 2013 and be ramped up over five years to output of 450,000 metric tons a year.

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com

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