Rio Tinto (LSE, ASX: RIO) has opted to complete its private placement financing consisting of 46,304,473 Ivanhoe Mines (TSX: IVN) shares at US$8.38 per share for a total financing of US$388 million to double its stake in the company to 19.7%. The terms of the private placement were negotiated as part of the strategic partnership between the two companies announced in late 2006 to develop the Oyu Tolgoi mining complex in Mongolia. Ivanhoe will now have a cash position of US$725 million, which will enable it to build and commission the open-pit mine at Oyu Tolgoi and advance development of the underground block-cave mine. Rio Tinto, Ivanhoe and the Mongolian government signed an investment agreement last week, setting up a partnership between the government, which will acquire a 34% interest in Ivanhoe Mongolia Inc LLC, which holds the Oyu Tolgoi license, and Ivanhoe, which will retain a controlling 66% interest in the project. Ivanhoe will also invest US$100 million in Mongolian government treasury bills. QUOTE Rio Tinto has rights to subscribe to common shares representing 43.1% of Ivanhoe Mines and buy further stock on the open market to increase its total stake to 46.6%. http://www.proactiveinvestors.com.au/compa...o-197-2855.html
IVA Price at posting:
$3.57 Sentiment: Hold Disclosure: Held
