MONGOLIA - Ivanhoe launches bid to raise US$1.8 billion

Ivanhoe Mines has launched a rights offering to its shareholders which will allow them to purchase additional common shares in a bid to raise US$1.8 billion for the company. The offering is part of a major financing plan to continue development of the Oyu Tolgoi project.

Overall construction of the copper-gold mining complex in southern Mongolia is 82% complete and on track to begin commercial production in 2013. The company has spent $4.6 billion on the first phase of construction to date, from a $6.2 billion budget allocated for this stage of development.

The offering is also part of a memorandum of agreement with its majority shareholder Rio Tinto (51%) which will be amended to more closely align the terms of the offering with current market conditions.

One amendment to the agreement includes Rio Tinto providing a standby commitment for the full amount of the US$1.8 billion offering which will ensure it is required to acquire any Ivanhoe common shares not sold in the offering. This standby commitment is to be paid in cash.

The new shares available for purchase will be offered at a discount to the company’s current market price, which is international practice. Ivanhoe shareholders will be given the choice to participate in the offering and maintain their current level of ownership.

Ivanhoe has applied to the Toronto Stock Exchange to approve the rights offering, and similar applications have been made to the New York Stock Exchange and Nasdaq Stock Market to admit the rights for trading. Shareholders who don’t wish to buy new common shares under the offering plan will have the option of selling the rights that they receive from the company through these three markets.

www.ivanhoemines.com