Ivanhoe Mines has completed a US$1.8 billion rights offering aimed at raising funds for the construction and development of its Oyu Tolgoi project. The rights offering will see a total of 260 million new common shares issued, the maximum available. Rio Tinto, Ivanhoe’s majority shareholder, has exercised all of its respective rights issued to it in the offering.
Ivanhoe’s chairman Dr David Klingner says, “The Ivanhoe Mines Board of Directors extends its sincere appreciation to all shareholders who participated in, and contributed to, the success of the rights offering.”
The company’s 66%-owned $7 billion Oyu Tolgoi copper-gold-silver project is 82% complete and on track to begin commercial production in 2013.
Ivanhoe 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 second phase of development is estimated to cost more than $5 billion.
The project is in a remote southern area of Mongolia with little existing infrastructure including electricity supply. Rio Tinto is negotiating commercial agreements with Chinese and Inner Mongolia power generators, but is also awaiting approval for construction of its own on-site power plant.