LONDON, U.K. – RIO TINTO has agreed to provide IVANHOE MINES with a convertible credit facility of US$350 million, to be used for interim financing of the Oyu Tolgoi copper-gold project in the South Gobi region of Mongolia. Rio says the offer is “directed at maintaining the momentum of mine development” until Ivanhoe can finalize an investment agreement with the Mongolian government.
Rio Tinto invested approximately US$303 million in October 2006 to take an initial stake of 9.95% in Ivanhoe Mines. A second 9.95% interest, valued at approximately US$388 million, will be taken up at the conclusion of a satisfactory long-term investment agreement between Ivanhoe and the Mongolian government.
The US$350-million deal includes options and warrants for Rio Tinto to acquire over 90 million Ivanhoe shares during the next five years. If Rio Tinto exercised all possible conversions and warrants, it would wind up with a 44.2% interest in Ivanhoe.
Particulars regarding the Oyu Tolgoi project are available at www.Ivanhoe-Mines.com.