Aluminum Corporation of China Announces its Intention to Make a Proportional Takeover Bid for up to 60% of the Common Shares ...
April 01 2012 - 9:59PM
Marketwired
Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) Chairman David
Huberman said today that the company has received notice that
Aluminum Corporation of China Ltd. (CHALCO) intends to make a
proportional takeover bid for up to 60%, but not less than 56%, of
the common shares of Mongolian coal miner SouthGobi Resources Ltd.
(TSX:SGQ)(HKSE:1878) at C$8.48 per share.
Ivanhoe currently owns 104,807,155 shares of SouthGobi,
representing approximately 57.6% of SouthGobi's issued and
outstanding shares. Ivanhoe has entered into a lock-up agreement
with CHALCO and has agreed to tender all of its SouthGobi shares,
on a pro-rata basis, to CHALCO.
Depending upon the uptake of the offer by other SouthGobi
shareholders, Ivanhoe could receive up to approximately C$889
million (US$898 million) from the sale of all of its shares in
SouthGobi. A sale of 60% of its current holding would realise
proceeds of approximately C$533 million (US$538 million).
"Ivanhoe's board, in conjunction with our financial and legal
advisors, has determined that the value offered by this transaction
is an excellent opportunity for our shareholders to realize
significant value through our creation of what has become one of
the fastest growing coal producers on China's doorstep," said Mr.
Huberman.
The offer price for SouthGobi's shares represents a 28% premium
over the most recent closing price on the Toronto Stock Exchange of
C$6.62, and a 32% premium over the volume-weighted average price of
C$6.41 during the past 10 trading days on the Toronto Stock
Exchange.
The shares of CHALCO, a listed subsidiary of Chinalco Aluminum
Corporation of China, trade on the Hong Kong, Shanghai and New York
stock exchanges.
The proportional offer from CHALCO will be made by way of a
takeover-bid circular under British Columbia law and will be made
to all SouthGobi shareholders. If individual shareholders elect to
tender more than 60% of their common shares of SouthGobi to the
takeover bid - and if CHALCO receives less than 60% of outstanding
common shares of SouthGobi as a result of the offer - a
proportional amount of shares will be taken up, on a pro rata
basis, from each shareholder who has elected to tender those
additional shares.
Ivanhoe Mines has been advised that SouthGobi has not received
any formal documentation relating to the proportional offer.
SouthGobi's board of directors has established a special committee
comprised of independent directors to consider the proportional
offer, when received.
The proportional offer by CHALCO is subject to all statutory and
regulatory approvals, including Investment Canada Act and
Competition Act approvals, as well as Chinese regulatory approvals
and CHALCO shareholder approval. CHALCO has advised SouthGobi that
it expects to mail the takeover-bid circular in connection with the
Proportional Offer in early July 2012, by which time it expects to
have secured all necessary regulatory approvals that are
conditional to the closing of the offer. CHALCO's bid also is
subject to China Investment Corporation, SouthGobi's second largest
shareholder, confirming that it does not intend to exercise its
right of first offer over Ivanhoe's SouthGobi shares.
Ivanhoe plans to use the proceeds from the sale of its shares in
SouthGobi primarily to fund the continued development of its
flagship Oyu Tolgoi copper, gold and silver mine in southern
Mongolia, which is on track to meet the mine's targeted start of
initial production in Q3'12. Commercial production at the mine is
projected to begin in the first half of 2013.
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 mine development project in southern
Mongolia; its 57.8% interest in SouthGobi Resources
(TSX:SGQ)(HKSE:1878); a 59% 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, a private company developing the Kyzyl Gold
Project in Kazakhstan.
Ivanhoe Mines' shares are listed on the New York, NASDAQ and
Toronto stock exchanges under the symbol IVN.
About SouthGobi Resources
SouthGobi Resources is focused on exploration and development of
its Permian-age metallurgical and thermal coal deposits in
Mongolia's South Gobi Region. SouthGobi's flagship coal mine, Ovoot
Tolgoi, is producing and selling coal to customers in China.
SouthGobi plans to supply a wide range of coal products to markets
in Asia.
About CHALCO
CHALCO is a joint stock limited company established in China;
its shares are listed on the Hong Kong Stock Exchange and the
Shanghai Stock Exchange. CHALCO's American depositary receipt is
listed on the New York Stock Exchange. CHALCO is principally
engaged in the mining of bauxite; the production and sales of
alumina, primary aluminum and aluminum fabrication products; and
trading of other non-ferrous metal products. CHALCO is the largest
producer of alumina, primary aluminum and aluminum fabrication
products in China; it also is the world's second-largest producer
of alumina and the third-largest producer of primary aluminum.
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 made with respect to the proportional offer from Chalco
and statements made with respect to the expected dates for the
start of initial and commercial production at the Oyu Tolgoi
Mine.
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. Readers are cautioned not to place undue reliance on
forward-looking information or statements.
Contacts: Ivanhoe Mines Ltd. - Investors Bill Trenaman
+1.604.688.5755 Ivanhoe Mines Ltd. - Media Bob Williamson
+1.604.331.9830 www.ivanhoemines.com
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