- Report of Foreign Issuer (6-K)
June 09 2011 - 2:41PM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
From: June 9, 2011
IVANHOE MINES LTD.
(Translation of Registrants Name into English)
Suite 654 999 CANADA PLACE, VANCOUVER, BRITISH COLUMBIA V6C 3E1
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.)
Form 20-F-
o
Form 40-F-
þ
(Indicate by check mark whether the registrant by furnishing the information contained in this form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes:
o
No:
þ
(If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b):
82-
.)
Enclosed:
News Release
June 9, 2011
Update by Ivanhoe Mines reports construction of the Oyu Tolgoi
copper-gold-silver mining complex has reached 23% completion
and remains ahead of schedule
Protection of shareholders rights the paramount concern
in Ivanhoe Mines resumption of arbitration with Rio Tinto
Final US$100 million advance payment
to Mongolian government made ahead of schedule
LONDON, ENGLAND Robert Friedland, Chief Executive Officer of Ivanhoe Mines Ltd., issued an
operations update today that reports on progress being achieved on the development of principal
projects in the portfolios of the parent company and its subsidiaries and associated interests.
Key developments include:
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Full-scale construction at Ivanhoe Mines flagship Oyu Tolgoi copper-gold-silver mining
complex is continuing toward a projected peak level of activity that is expected to be reached
during the third quarter of this year. Overall construction reached a 23.3% level of
completion at the end of May. Construction of the concentrator, the centerpiece component of
Oyu Tolgois phase one development, reached 32% completion at the end of May and commissioning
of the concentrators first production line is expected to begin in the second quarter of
2012.
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The total number of workers engaged at the Oyu Tolgoi construction site has more than
doubled since March 1, 2011, as part of the build up to the peak of construction and currently
stands at 12,497. Counting construction and head office jobs, plus more than 3,000 vocational
trainee positions being funded by Oyu Tolgoi in the largest training program ever undertaken
in Mongolia, the projects total designated Mongolian workforce now is approximately 10,000.
The project is committed to ensuring that 90% of all jobs created during the mines operation
will be held by Mongolians.
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Targeted completion of construction of the first phase of Oyu Tolgoi remains ahead of
schedule. Pre-stripping excavation of the open-pit mine is due to begin during the third
quarter of this year. The project has set an objective of delivering the first ore from the
mine to a mill circuit test in the concentrator within 12 months, in June 2012. The goal of
achieving commercial production remains on schedule to begin in the first half of 2013. (An
extensive photo gallery recording construction progress at Oyu Tolgoi is maintained on the
companys website at www.ivanhoemines.com.)
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The arbitration proceeding between Ivanhoe Mines and Rio Tinto regarding Ivanhoes
Shareholders Rights Plan is expected to resume later this month following the expiry of a
six-month suspension that was agreed upon by the companies as part of the Heads of Agreement
signed in December 2010.
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Mr. Friedland said that the arbitration will not adversely affect construction progress at Oyu
Tolgoi. Ivanhoe Mines is highly confident that the rights plan, overwhelmingly supported by 95%
of the votes cast by our minority shareholders a year ago, is not in breach of any of Rio
Tintos existing
contractual rights. We are committed to vigorously protecting the rights of all of our
shareholders and have received very strong support from institutional shareholders for our
insistence that all shareholders be treated fairly during any takeover bid.
Ivanhoe Mines submitted a statement of defence in October 2010 that rejected Rio Tintos claim
and also filed a counter-claim contending that Rio Tinto had breached certain covenants in its
October 2006 private placement agreement with Ivanhoe. Rio Tinto has filed a statement of
defence to the Ivanhoe Mines counterclaim.
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Mr. Friedland said that the Office of the Chairman is continuing to lead Ivanhoe Mines
assessment of potential strategic initiatives and is negotiating with a number of parties as
part of the companys commitment to create and enhance value for shareholders.
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Earlier this week, on June 7, Ivanhoe Mines and Oyu Tolgoi LLC made the third and final
prepayment to the Government of Mongolia in a ceremony held in Ulaanbaatar and attended by
senior project representatives and government cabinet ministers. Oyu Tolgoi LLC, the licence
holder and owner-operator of the Oyu Tolgoi Project, is 66% owned by Ivanhoe Mines and 34%
owned by Erdenes MGL LLC, a Mongolian government state-owned company. The US$100 million third
prepayment, which was due by June 30 this year, completed a total prepayment package of US$250
million that was an attendant arrangement to the long-term Oyu Tolgoi Investment Agreement
signed in October 2009. Together with the second prepayment of US$50 million made after the
Investment Agreement took effect March 31, 2010, the third prepayment will accrue interest at
the rate of 1.59% after tax and will be credited against the projects future taxes and
royalties beginning January 2012. The first payment of US$100 million was made by Oyu Tolgoi
LLC at the time the Investment Agreement was signed, in October 2009, through the purchase of
a Treasury Bill from the government that had a face value of US$115 million payable within
five years after issuance.
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In another development this week, Ivanhoe Mines and Rio Tinto agreed with the Mongolian
government to execute the Amended and Restated Shareholders Agreement, which provided limited
amendments to the Oyu Tolgoi Shareholders Agreement that was signed in conjunction with the
Investment Agreement in October 2009. Ivanhoe Mines is funding the Mongolian governments 34%
share of the projects initial capital costs. The interest rate to be applied to the repayment
of the governments share of the costs for amounts incurred after January 31, 2011, has been
reduced to LIBOR plus 6.5%, down from the previous rate of 9.9%, adjusted for the US CPI. The
interest-rate adjustment was made at the governments request, taking into consideration the
higher costs of capital that prevailed in 2009 following the global economic crisis.
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Following receipt of approvals by national and local authorities in Mongolia, the Oyu
Tolgoi Project has begun work on the construction of a 95-kilometre high-voltage power line
from the Oyu Tolgoi site to the Mongolia-China border, where it is planned to connect to a
proposed supply line in China. The Mongolia section of the line is expected to be completed by
the end of this year. Discussions to secure electricity imports from China during Oyu Tolgois
initial four years of commercial production are continuing between Chinese and Mongolian
representatives. Mongolias Prime Minister is planning to visit China later this month.
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Ivanhoe Mines and Rio Tinto are investing an average of US$7 million each day, much of it
in Mongolia, on purchases of goods and services to advance the project. The Oyu Tolgoi capital
budget for 2011 is US$2.3 billion.
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The Oyu Tolgoi Project has not been materially impacted by reported short-term reductions
of Russian exports of diesel fuel, which supply most of Mongolias requirements. Oyu Tolgoi
currently
has sufficient assured supply of diesel fuel to maintain work on essential elements of the
projects construction schedule.
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SouthGobi Resources, 57% owned by Ivanhoe Mines, recently received final registration of
mineral reserves for the companys Soumber coking coal deposit from the Mineral Resource
Authority of Mongolia. Registration is a prerequisite for submission of a mining licence
application. SouthGobi intends to apply for the Soumber mining licence in the coming weeks.
Based on a NI 43-101-compliant resource statement from January 2011, the Soumber Project
currently contains 61.4 million tonnes in the Measured and Indicated categories and an
additional 65.8 million tonnes of Inferred Resources.
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Ivanhoe Australia, 62% owned by Ivanhoe Mines, is continuing its push toward producer
status, with commencement of copper-gold production from the companys Osborne milling
complex in northwestern Queensland expected in the first half 2012. To achieve this target,
Ivanhoe Australia recently awarded the underground development contract for the Kulthor
deposit and the extension of the Osborne underground mine. The company also completed
construction of 1000 metres of the planned 2400-metre underground decline that will provide
access to the high-grade Merlin and Little Wizard molybdenum-rhenium deposits. The decline is
scheduled to be adjacent to the Little Wizard Deposit by the end of this month; direct access
into this high-grade mineralization is planned for late August to enable further drilling
directed at extending the mineralization and the collection of bulk samples for metallurgical
test work.
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Ivanhoe Australia, which holds a 22.8% interest in Exco Resources, expects to receive a
dividend of approximately US$32 million following the completion of the announced sale of
Excos Cloncurry Copper Project to Xstrata Copper. Ivanhoe Australia intends to use its share
of the Exco sale proceeds to continue to fund the ongoing development and exploration work on
projects on the companys own Cloncurry tenements.
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Ivanhoe Mines owns 50% of Altynalmas Gold, the company that holds 100% ownership of the
Kyzyl Gold Project in northeastern Kazakhstan. The Kyzyl Gold Project contains the Bakyrchik
and Bolshevik gold deposits, as well as a number of satellite deposits. The NI 43-101 Mineral
Resources for the Bakyrchik Deposit, based on drill results available up to December 1, 2010,
contain 22.16 million tonnes of Indicated Mineral Resources grading 8.72 grams/tonne (g/t)
gold, containing 6.2 million ounces, and an additional 9.68 million tonnes of Inferred
Mineral Resources grading 7.43 g/t gold, containing 2.3 million ounces.
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The ongoing drilling program is designed to continue the delineation of resources and
reserves at the Kyzyl Gold Project that are compliant with NI 43-101 standards. A total of
25,000 metres are planned to be completed during 2011 on the Bakyrchik Mining Lease and a
further 50,000 metres are planned to begin the delineation of the numerous satellite deposits
on the surrounding exploration licence.
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A definitive feasibility study for the Kyzyl Project is expected to be completed in Q2
2011 by Fluor Canada Ltd., Crescent Technology Inc., Technip USA Inc., Environmental
Resources Management, Scott Wilson Roscoe Postle Associates Inc. and Sustainability East Asia
LLC. Early construction works are expected to begin in Q3 2011, with commissioning of a 1.5
million tonnes per annum operation planned for late Q4 2013.
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About Ivanhoe Mines
Ivanhoe Mines (IVN: NYSE, NASDAQ & TSX) is an international mining company with operations focused
in the Asia Pacific region. Assets include the companys 66% interest in the Oyu Tolgoi copper-gold
mine development project in southern Mongolia; its 57% interest in Mongolian coal miner SouthGobi
Resources (SGQ: TSX; 1878: HK); a 62% interest in Ivanhoe Australia (IVA: ASX & TSX), a
copper-gold-uranium-molybdenum-rhenium exploration and development company; and a 50% interest in
Altynalmas Gold, a private company developing the Kyzyl Gold Project in Kazakhstan.
Information contacts
Investors: Bill Trenaman +1.604.688.5755 / Media: Bob Williamson +1.604.331.9830
Website: www.ivanhoemines.com
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: statements with respect to the arbitration process
is expected to resume later this month; the expectation that the arbitration will not negatively
impact construction progress at Oyu Tolgoi; statements respecting negotiations with a number of
parties as part of the companys commitment to create and enhance value for shareholders; the
schedule for carrying out and completing construction of the Oyu Tolgoi Project; the estimated
commencement of pre-stripping of the Southern Oyu open pit deposits; the estimated delivery of the
first ores from the Southern Oyu open pit to the concentrator; the estimated schedule to bring the
Oyu Tolgoi Project into commercial production; the timing and outcome of discussions between the
Mongolian and Chinese governments regarding importing electrical power from China; the expectation
that Ivanhoe Australia will receive approximately US$32 million from Exco Resources following
completion of the announced sale of Excos Cloncurry Copper Project to Xstrata Copper; 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 companys periodic regulatory filings in Canada and the US. The
reader is cautioned not to place undue reliance on forward-looking information or statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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IVANHOE MINES LTD.
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Date:
June 9, 2011
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By:
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/s/ Beverly A. Bartlett
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BEVERLY A. BARTLETT
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Vice President &
Corporate Secretary
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