MONGOLIA — Rio Tinto has completed the second tranche of its investment in Ivanhoe Mines of Vancouver. The deal brings Rio's holding to 19.7% from 9.9%. The deal consisted of 46.3 million Ivanhoe shares priced at US$8.38 per share for a net US$388 million to Ivanhoe.
Ivanhoe's most important asset is its Oyu Tolgoi copper-gold project in Mongolia's South Gobi region. Ivanhoe signed an agreement with the government of Mongolia earlier this month that allows development to proceed. Both an open pit and an underground mine using block caving methods are planned. Production is expected in 2013.
Under the current financing agreement with Ivanhoe, Rio Tinto has rights to subscribe for common shares from Ivanhoe's treasury representing up to 43.1% of Ivanhoe and, during the next two years, Rio Tinto may increase this stake to 46.6% through purchases on the open market.
For an in-depth look at the Oyu Tolgoi project, visit www.Ivanhoe-Mines.com.