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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 Mongolia. 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 US$1.8 billion rights offering by Ivanhoe. Rio Tinto will also provide US$1.5 billion of bridge financing to Ivanhoe, in addition to the US$1.8 billion interim funding facility that was agreed in December 2010.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 US$1.5 billion of bridge financing and the US$1.8 billion 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.