The European Bank for Reconstruction and Development (EBRD) has agreed to provide equity financing of up to US$10 million to Altan Rio Minerals to help further the company’s Mongolian operations.  1

The EBRD has 61 shareholders (59 governments and 2 international institutions) and invests in 29 countries from central Europe to central Asia. It is the largest institutional investor in Mongolia.

Mongolia became an EBRD country of operations in October 2006 and since the beginning of its operations in Mongolia, the EBRD has committed through debt and equity investments more than US$684 million to the Mongolian private sector through 52 projects in sectors ranging from banking to manufacturing and from mining to agribusiness.

Altan Rio’s president and CEO Evan Jones says, “We are delighted to have attracted a partner of the calibre of EBRD. As shareholders will be aware, the ability for junior explorers such as Altan Rio to raise capital to fund ongoing activities is somewhat limited in the current market environment. As such, by entering into this agreement, Altan Rio has substantially reduced financing uncertainty.”

EBRD has agreed to purchase, on a private placement basis, 16.666 million shares of the company at a price of $0.06 per share as a first tranche subscription pursuant to a larger potential investment.

The first tranche subscription is made by EBRD pursuant to a Subscription Agreement and Framework Agreement entered into between EBRD and Altan Rio. Under the agreements, EBRD has committed to invest a minimum of $5 million (subject to certain limitations) and a maximum of $10 million to purchase common shares of Altan Rio and a series of subsequent private placements in minimum tranches of $1 million. Each subsequent tranche subscription will be triggered by a notice from the company requesting funds and providing certain other required information.

The financing agreements also provide for Altan Rio to adhere to an agreed business plan with respect to its ongoing exploration activities in Mongolia, to report quarterly and annually to EBRD with respect to ongoing operations, and to obtain EBRD’s consent to certain material changes in the company’s business, material corporate reorganizations and certain other material events including outside equity financings.

The proceeds from the first tranche subscription in the sum of about $1 million will be employed to advance the company’s exploration activities in Mongolia and to provide working capital.

Using innovative exploration targeting techniques and leveraging long-term in-country experience, Vancouver-based Altan Rio explores large-scale gold and copper projects in Mongolia. The company’s licence holdings in Mongolia, which total more than 103,341 hectares, contain significant zones of newly identified primary gold and copper mineralization across a very large area of unexplored ground.
www.altanrio.com

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