Ivanhoe Mines Receives Ruling In Rio Tinto Arbitration

Ivanhoe Mines Ltd. (IVN.T) said Tuesday it can keep a shareholders' rights plan in place until it expires in April 2013, following a ruling by an arbitrator in a dispute with key shareholder Rio Tinto PLC (RIO).

The arbitrator also ruled that Rio hadn't breached any of its obligations under a private-placement agreement between the companies, Canada's Ivanhoe said in a statement.

Anglo-Australian Rio has claimed a shareholders' rights plan could potentially breach its rights as part of an agreement signed with Ivanhoe in 2006. Ivanhoe said the arbitrator determined that if Rio were to trigger the rights plan and become an "acquiring person," antidilution rights granted to Rio would continue to apply.

Ivanhoe had filed a counterclaim alleging Rio breached certain of its obligations.

The antidilution rights apply in situations where Ivanhoe plans to issue shares to anyone other than Rio, and entitle the mining giant to acquire a sufficient number of Ivanhoe shares to maintain the relative size of its stake.

Ivanhoe's board in April 2010 adopted a shareholders' rights plan it said was intended to give it additional time to consider any bid and explore alternatives.

Rio has steadily increased its hold on Ivanhoe from 19.7% at the start of 2010 to 49% in September, the maximum allowed under an agreement between the companies due to expire in January.

Ivanhoe is 66% owner of Mongolia's massive Oyu Tolgoi copper and gold project, which is due to start commercial production in the middle of 2013. The Mongolian government owns the remaining 34% stake, while Rio is the project operator.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

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