Global miner Rio Tinto has given the Ivanhoe Mines’ Oyu Tolgoi copper-gold project in Mongolia a ringing endorsement by spending almost $C245 million ($A259 million), to boost its share by 2.7 per cent.
Under the deal, Rio will acquire 15 million shares in Ivanhoe at $16.31 a share to lift its interest to 22.4 per cent.
Andrew Harding, Rio Tinto’s chief executive copper, said the project was on track to start in 2013 and ramp up to 450,000 tonnes of copper and 330,000 ounces of gold per year within five years of the project.
“Our further investment in Ivanhoe Mines underlines our confidence in the quality of the world-class Oyu Tolgoi deposit and its priority in our project portfolio,’’ he said. ‘‘We are working with Ivanhoe Mines on finalising the conditions precedent for completion of the investment agreement with the government of Mongolia and are looking forward to moving into the development phase of the project.”
Rio will have the right to increase its stake in the Canadian miner by up to 44 per cent.
‘‘Rio Tinto also has, among other things, the right to acquire additional securities so as to maintain its proportional equity interest in Ivanhoe Mines, and the right to acquire additional Ivanhoe Mines securities in certain other circumstances and subject to certain limits,’’ the company said in a statement.
Oyu Tolgoi, in the Gobi desert, is thought to be one of the world’s largest untapped copper and gold deposits.
Ivanhoe shares soared more than 6 per cent in early trade while improved slight more than 1 per cent.
mmurphy@theage.com.au
The Age
