Rio Tinto To Take Direct Management Of Oyu Tolgoi Project In Mongolia
December 08 2010 - 9:36AM
Dow Jones News
Rio Tinto PLC (RIO.LN), the mining giant, and Ivanhoe Mines have
signed a new agreement under which Rio Tinto will assume direct
management of the Oyu Tolgoi copper-gold project in Mongolia and
provide a comprehensive financial package to Ivanhoe Mines that is
expected to help secure the development of the project
approximately six months ahead of schedule in late 2012.
MAIN FACTS:
-Rio Tinto will:
*assume management of the Oyu Tolgoi project, with the approval
of the board of Oyu Tolgoi LLC.
*provide the Oyu Tolgoi project with a comprehensive financing
package, including a $1.8 billion interim loan facility whilst Rio
Tinto and Ivanhoe work together to complete project financing;
exercising Rio Tinto's remaining warrants for common shares in
Ivanhoe; participating fully in Ivanhoe's $1.2 billion rights
offering.
*secure the right to increase its ownership in Ivanhoe Mines to
49% through: acquiring a total of 20 million shares at current
market prices, evenly from Citibank and Ivanhoe Mines executive
chairman and chief executive officer, Robert Friedland; exercising
Rio Tinto's remaining warrants for common shares in Ivanhoe; the
purchase of Ivanhoe shares in the market o receiving a subscription
right that allows Rio Tinto to subscribe for Ivanhoe common shares
from treasury at market prices until January 2012.
-Rio Tinto has also agreed to suspend its arbitration in
relation to the Shareholders Rights Plan by six months to June 2011
and to extend the standstill arrangement by three months to January
2012.
-Depending upon its assessment of Ivanhoe's business, prospects
and financial condition, the market for Ivanhoe's securities,
general economic and tax conditions, and other factors, Rio Tinto
will consider availing itself of its rights to acquire additional
securities of Ivanhoe.
-Shares at 1400 GMT down 0.95% at 4462 pence valuing the company
at GBP68.09 billion.
-By Jana Weigand, Dow Jones Newswires; 44-20-7842-9314;
jana.weigand@dowjones.com
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