Rio Tinto's Ownership of Ivanhoe Mines Rises to 34.9% Upon Conversion of US$350 Million Credit Facility Into Ivanhoe Mines' Comm
September 13 2010 - 11:41AM
Marketwired
Robert Friedland, Executive Chairman of Ivanhoe Mines (TSX:
IVN)(NYSE: IVN)(NASDAQ: IVN), and John Macken, President and Chief
Executive Officer, announced today that Ivanhoe Mines has converted
Rio Tinto's maturing US$350 million convertible credit facility,
plus accrued interest of $50.8 million, into approximately 40.1
million common shares of Ivanhoe Mines, increasing Rio Tinto's
ownership in Ivanhoe Mines from 29.6% to 34.9%.
The convertible credit facility was put in place in September
2007 to help maintain mine development activities at Oyu Tolgoi
while Ivanhoe and Rio Tinto continued negotiations with the
Mongolian Government that resulted in a long-term Investment
Agreement for the Oyu Tolgoi Project in 2009.
The interest rate on the convertible credit facility was LIBOR
plus 3.3% and the conversion price into Ivanhoe Mines shares was
set at US$10.00 per share.
As part of the credit facility transaction, Rio Tinto also
received share-purchase warrants exercisable to purchase up to 35
million common shares of Ivanhoe Mines at a price of US$10.00 per
share for a period of five years. These warrants expire in October
2012.
Rio Tinto now has invested approximately US$1.73 billion in
Ivanhoe Mines. Rio Tinto holds additional rights to subscribe for
common shares from Ivanhoe Mines (see details in accompanying
table).
Mr. Macken said that Rio Tinto's past and potential future
investments in Ivanhoe total approximately US$2.5 billion,
comprised of the 2006 private-placement agreement and other
financing transactions negotiated in 2007, 2008 and 2010.
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Exercise Price Shares Proceeds
(US$ unless noted) (US$ millions)
--------------------------------------------------------------------------
Tranche 1 -
completed Oct 2006 $8.18 37,089,883 $303.4
--------------------------------------------------------------------------
Tranche 2 -
completed Oct 2009 $8.38 46,304,473 $388.0
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Anti-dilution shares C$3.15 243,772 $0.6
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Equipment repurchased
from Rio - completed
March 2010 C$16.31 15,000,000 $241.1
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Warrants (A) -
completed June 2010 $8.54 46,026,522 $393.1
--------------------------------------------------------------------------
Convertible Debt -
converted Sept 2010 n/a 40,083,206 $400.8
--------------------------------------------------------------------------
184,747,856(1) $1,727.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Warrants (B) -
expire Oct 2011 $8.54 - $9.02 46,026,522 $393.1 to $415.2
--------------------------------------------------------------------------
Warrants © -
expire Oct 2012 $10.00 35,000,000 $350.0
--------------------------------------------------------------------------
Anti Dilution Warrants C$3.15 1,440,406 $4.3
--------------------------------------------------------------------------
Projected Rio
Tinto investment 267,214,784 $2,474.4 to $2,496.5
--------------------------------------------------------------------------
1. Represents approximately 34.9% of Ivanhoe's issued and outstanding
shares as of September 13, 2010.
About Ivanhoe Mines (www.ivanhoemines.com)
Ivanhoe Mines (TSX: IVN)(NYSE: IVN)(NASDAQ: IVN) is an
international mining company with operations focused in the Asia
Pacific region. Assets include the company's 66% interest in the
world-scale, Oyu Tolgoi copper-gold mine development project in
southern Mongolia; its 57% interest in Mongolian coal miner
SouthGobi Resources (TSX: SGQ)(HK: 1878); a 63% interest in Ivanhoe
Australia (ASX: IVA), a copper-gold-uranium-molybdenum-rhenium
exploration and development company; and a 50% interest in
Altynalmas Gold Ltd., a private company developing the Kyzyl Gold
Project in Kazakhstan.
Forward-looking statements
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of our
beliefs, intentions and expectations about developments, results
and events which will or may occur in the future, constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements are typically identified
by words such as "anticipate", "could", "should", "expect", "seek",
"may", "intend", "likely", "plan", "estimate", "will", "believe"
and similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to the
possible additional future investments in Ivanhoe by Rio Tinto and
other statements that are not historical facts.
All such forward-looking information and statements are based on
certain assumptions and analyses made by Ivanhoe Mines' management
in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors management believes are appropriate in the
circumstances. These statements, however, are subject to a variety
of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected
in the forward-looking information or statements. Important factors
that could cause actual results to differ from these
forward-looking statements include those described under the
heading "Risks and Uncertainties" elsewhere in the Company's
MD&A filed on Sedar. The reader is cautioned not to place undue
reliance on forward-looking information or statements.
Contacts: Ivanhoe Mines Ltd. Bill Trenaman Investors
+1.604.688.5755 Ivanhoe Mines Ltd. Bob Williamson Media
+1.604.331.9830 www.ivanhoemines.com
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