Ivanhoe Australia says up to 8 bidders eyeing mine stakesPRINT...

Ivanhoe Australia says up to 8 bidders eyeing mine stakes
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By: Reuters
15th May 2012
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MELBOURNE/SYDNEY - Gold and copper miner Ivanhoe Australia Ltd has received interest from up to eight bidders for stakes in its projects and may in the process end up with a new controlling stakeholder, said CEO Peter Reeve.

Ivanhoe Australia, with a market value of A$553-million ($551.92-million), appointed UBS AG in January to advise it stake sales in four projects, aiming to complete a deal by mid-year. The proceeds are key for Ivanhoe Australia to develop its Osborne copper-gold mine, the Merlin molybdenum-rhenium project, the Mount Dore cathode copper project and the Mount Elliott copper-gold project.

Two sources with direct knowledge of the deal said second-round bids were due later this month, with preliminary interest seen from Anglo American Plc, OZ Minerals Ltd , Vedanta Group and Indian conglomerate Aditya Birla Group for the copper and gold deposits.

The sources declined to be identified as the talks are confidential.

Anglo American officials declined comment and officials at Oz Minerals, Aditya Birla Group and Vedanta could not immediately be reached for comment.

"There's continuing interest in the copper assets out of Asia. People are just very cautious about where they can get good, large copper deposits from in the future," Reeve told Reuters.

The sale process has been complicated as global miner Rio Tinto Ltd recently took over management control of Ivanhoe Australia's parent Ivanhoe Mines Ltd.

Rio Tinto is looking to pare Ivanhoe Mine's holdings to focus on the Canadian miner's stake in the Oyu Tolgoi copper mine in Mongolia, as its other holdings do not fit Rio's strategy of owning large, low-cost, long-life assets.

Reeve said he still expected to seal a deal by mid-2012 and that could include the sale of Ivanhoe Mines' 59 percent stake in Ivanhoe Australia.

"It could move that way, if required," he said, referring to Ivanhoe Mines' equity stake sale, but declined to comment on the likelihood.

"We're focusing on getting the business funded," he said.

Reeve did not elaborate on the bidders beyond saying they were largely Asian.

In a research note earlier this month, Macquarie said Ivanhoe Australia needed more than A$250 million for the Merlin project and with the company's cash balance now under A$100 million, lining up funding was key.

Concern over the stake sale and funding have weighed on Ivanhoe Australia's shares, which are down 50 percent since it launched the search for a strategic partner.

"I'm actually very confident we will achieve something out of this strategic process," Reeve said.

http://www.miningweekly.com/article/ivanhoe-australia-says-up-to-8-bidders-eying-mine-stakes-2012-05-15