Ivanhoe Mines (IVN.TO) is down 15 cents at $19.14 as it records
something of a roller coaster day. It dropped to a day low $18.48
inside the first 30 minutes of trading, but then rose to a day high
$19.41 in about as much time again. From there it fell back down to
the $18.80 mark. It got back up to $19.30, dipped and rose again.
The stock is showing signs of stabilizing now.
Chair David Huberman said today that a progress report from its
Special Finance Committee on the status of a comprehensive
financing plan to cover the completion of the first phase of the
Oyu Tolgoi mining complex in southern Mongolia through to the
projected start of commercial production of copper, gold and silver
in 2013, has been received.
The Board of Directors has accepted a recommendation from the
Special Finance Committee and approved a proposed US$1.8 billion
facility to be provided by a major international bank as an
interim, bridge financing measure. The facility, a precautionary
response to volatility in the project finance and corporate debt
markets stemming from recent events in Europe, could be used if
there is a delay in completing and gaining approvals for the
long-term project-finance package. The proposed bridging facility
approved by the Ivanhoe Mines board remains subject to approvals by
Rio Tinto and the bank credit committee, and completion of final
The bridge loan is expected to be in addition, and on similar
terms, to the US$1.8 billion interim funding facility already being
provided by Rio Tinto and now being accessed by Ivanhoe Mines to
continue advancing construction of the Oyu Tolgoi Project. Both
bridge facilities are expected to be repaid from the first drawdown
from the planned project-finance facility.
Ivanhoe Mines, Rio Tinto, a core lending group and their
respective advisers are working together to complete a
project-finance facility of up to approximately US$4 billion for
Oyu Tolgoi, with the objective of signing loan documentation during
the second quarter of 2012.
Construction of the first phase of Oyu Tolgoi has surpassed the
70% completion milestone this month, Ivanhoe reported.
Huberman also said today that the Board has decided that the
interests of shareholders and the company's strategic objectives
would be best served by the termination of the company's
shareholders' rights plan. Rio Tinto, which has been restricted to
a 49% ownership stake in Ivanhoe Mines until after the scheduled
expiry later today of a 2006 standstill agreement, has advised the
Ivanhoe Mines board in recent weeks that it intends to purchase
additional shares in Ivanhoe Mines, regardless of the status of the
shareholders' rights plan, to enable Rio Tinto to increase its
ownership level to more than 50%.