Joint Response From Ivanhoe Mines and Rio Tinto Delivered to Mongolian Government and Members of the National Security Council
October 03 2011 - 9:46AM
Marketwired
Ivanhoe Mines Ltd. (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) -
STATEMENT
Late last week Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) and
Rio Tinto received a letter from a representative of the Mongolian
Cabinet inviting the companies to discuss potential changes to the
Oyu Tolgoi Investment Agreement. The changes related to the
conditions under which the Mongolian Government may negotiate with
Ivanhoe Mines to acquire, on mutually agreed terms, an additional
16% interest in the project and the application of a sliding-scale
royalty to the project.
In response to this letter, Ivanhoe Mines and Rio Tinto have
formally advised the Mongolian government that the companies are
not prepared to renegotiate the investment agreement.
In addition, the companies also have written to the individual
members of Mongolia's peak political authority, the National
Security Council, requesting its assistance to ensure the
government's full and immediate support for the investment
agreement. The National Security Council of Mongolia consists of
the President, the Speaker of the Parliament and the Prime
Minister.
Ivanhoe Mines expects that the parties will continue to honour
and implement the terms of the agreement as previously negotiated
and has asked the government to affirm its full support for the
agreement.
The comprehensive, long-term investment agreement, which took
full legal effect 18 months ago, was signed by senior
representatives of the Mongolian government, Ivanhoe Mines and Rio
Tinto in October 2009 and may be amended only by mutual, written
consent of all three parties.
Ivanhoe Mines, which used private capital to discover the chain
of deposits at Oyu Tolgoi, presently holds the majority 66%
interest in the project. Rio Tinto, which owns 49% of Ivanhoe
Mines, is managing construction of the Oyu Tolgoi mining
complex.
The investment agreement complies with all relevant Mongolian
laws and regulations and all parliamentary resolutions, including
Resolution 57, which authorized the government to conclude the
agreement with Ivanhoe Mines and Rio Tinto. Under Mongolian law,
the government's right to acquire an ownership interest in the
project is limited to 34%.
The investment agreement has formed the basis for the
construction of the Oyu Tolgoi copper, gold and silver mine that
passed the 50% completion mark earlier this month and is on track
to begin initial production during the third quarter of next
year.
The letters delivered to the government and the National
Security Council noted that the Investment agreement had been
presented to parliament on a number of occasions for review and
comment, was signed by the government in full compliance with all
applicable Mongolian laws, regulations and parliamentary
resolutions and will deliver a fair distribution of value from the
project to all stakeholders.
The letters also cautioned that the government's actions could
seriously undermine the confidence that international investors
have in Mongolia's future as a safe and stable country in which to
invest.
Ivanhoe Mines also took note of, and is encouraged by, remarks
made yesterday by Mongolia's President Elbegdorj, who said that the
Mongolians should keep their word and the current government should
not back off its contractual commitments.
About Ivanhoe Mines
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
Oyu Tolgoi copper-gold-silver mine development project in southern
Mongolia; its 57% interest in Mongolian coal miner SouthGobi
Resources (TSX:SGQ)(HK:1878); a 54% interest in Ivanhoe Australia
(TSX:IVA)(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.
Contacts: Ivanhoe Mines Ltd. Bill Trenaman Investors
+1.604.688.5755 Ivanhoe Mines Ltd. Bob Williamson Media
+1.604.331.9830www.ivanhoemines.com
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