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LONDON, United Kingdom
April 18, 2012
/PRNewswire/ - Rio Tinto and Ivanhoe Mines Ltd. (Ivanhoe) have signed an agreement under which Rio Tinto has agreed to support and provide certain elements of a comprehensive funding package for Ivanhoe that will underpin the development of the Oyu Tolgoi copper-gold mine in
. The parties have also agreed that Rio Tinto, which currently owns 51 per cent of Ivanhoe, will replace a number of the directors on the Ivanhoe Board with Rio Tinto-nominated directors and also nominate a new management team.
The comprehensive financing package, together with the proceeds from any potential future asset sales by Ivanhoe, are intended to cover Ivanhoe's total funding needs to complete the development of Oyu Tolgoi. Rio Tinto will provide a standby commitment for the full amount of a
rights offering by Ivanhoe. Rio Tinto will also provide
of bridge financing to Ivanhoe, in addition to the
interim funding facility that was agreed in
Rio Tinto remains committed to continue working with Ivanhoe to secure project financing for the Oyu Tolgoi project and has agreed to provide a guarantee of certain obligations of Ivanhoe under the project financing. Once project financing is in place, both the
of bridge financing and the
interim funding facility will be repaid to Rio Tinto in full.
Board and management changes
Under the agreement, a new thirteen-member Board will be formed, the majority of which will be independent directors comprising:
- Eleven Rio Tinto-nominated directors, six of which will be independent; and
- Two directors nominated by Mr Robert Friedland, one of which will be independent.
There will be an interim Board in place until the new Board is formed. Seven Ivanhoe Board directors will step down immediately. Mr
will step down from his role as chairman but continue to serve as a Board member. Mr
has been appointed as interim chairman pending the formation of the new Board.
Mr Friedland has stepped down from the Board and from his role as CEO of Ivanhoe. In addition, the CFO and certain other senior executives of Ivanhoe have stepped down.