Zijin Mining Group has agreed to make a major investment in acquiring a significant minority stake in Ivanhoe Mines which has a number of projects in Africa. A private placement to Zijin will raise about Can$105 million, giving a wholly-owned subsidiary of Zijin about 9.9% of Ivanhoe.
Under terms of the agreement signed in Hong Kong by Ivanhoe’s executive chairman Robert Friedland and Zijin’s chairman Chen Jinghe, Ivanhoe will issue more than 76.817 million common shares to Zijin through a private placement at a price of Can$1.36 per share.
Ivanhoe will use the proceeds for working capital and general corporate purposes, including the advancement of the company's projects in southern Africa.
Robert Friedland said Zijin’s decision represented the first major commitment by an international mining company to provide support for all of Ivanhoe’s development-stage projects in South Africa and in the Democratic Republic of Congo.
“We are delighted to welcome Zijin Mining both as an old friend of Ivanhoe Mines and a strategic investor that shares our long-term vision. We also have agreed to continue to explore additional opportunities to collaborate on the advancement of all three of our world-class projects,” he said.
“In particular, Ivanhoe and Zijin are in detailed, friendly discussions about the strategic co-development of our Kamoa copper discovery in the Democratic Republic of Congo.
“Kamoa’s significance was further affirmed in early March when Ivanhoe’s Kamoa Discovery Team received the prestigious 2015 Thayer Lindsley Award from the Prospectors & Developers Association of Canada, recognizing Kamoa’s distinction as the year’s top global mineral discovery.”
Chen Jingher said Zijin Mining “is honoured to have the opportunity to invest in Ivanhoe Mines, which controls the world-class, high-grade Kamoa Copper Project, Platreef Platinum-Group-Metals Project and Kipushi Zinc-Copper Project, all three of which have great untapped potential. We believe these are among the most attractive undeveloped mineral deposits in the world. Robert Friedland and I have been friends for more than 10 years. As a geologist myself, I sincerely admire the achievements of his team in its significant discoveries in Africa.
“Zijin will establish a close and strategic partnership with Ivanhoe through which we plan to closely cooperate in the development of Ivanhoe’s mines. I am convinced that our partnership will turn our respective strengths into synergies, not only for the mutual benefit of both parties, but also to create significant value for both Zijin and Ivanhoe shareholders, as well as the societies in which we operate,” he added.