Universal Coal

Robert Friedland, Executive Chairman of TSX-listed Ivanhoe Mines, and Lars-Eric Johansson, CEO, have announced that CITIC Metal has completed its due diligence and has received internal approvals to complete the long-term, strategic cooperation and investment agreement with Ivanhoe Mines.

The attainment of the milestones immediately followed a high-level site visit by senior CITIC and Ivanhoe Mines representatives to inspect Ivanhoe’s three world-scale mine-development projects in Southern Africa: Kamoa-Kakula, Platreef and Kipushi.

Under terms of the agreement signed in Beijing on June 11, 2018, Ivanhoe Mines will issue 196,602,037 common shares to CITIC Metal through a private placement at a price of C$3.68 per share, yielding gross proceeds to Ivanhoe of approximately C$723 million (US$560 million).

Upon completion, itl will own approximately 19.5% of Ivanhoe Mines’ issued and outstanding common shares.

Under the terms of the agreement, it has the right to nominate two directors to Ivanhoe’s expanded 11-member board.

Ivanhoe Mines has accepted CITIC Metal’s nomination of Yufeng “Miles” Sun, President of CITIC Metal Group, who will join the board at closing.

Sun will become Co-Chairman of Ivanhoe Mines at that time – a position he will share with Friedland.

The second CITIC Metal nominee, who also will join the board at that time, will be announced prior to closing.

“We look forward to welcoming Miles as Co-Chairman of our board of directors,” says Friedland.

“Miles and colleagues at CITIC have been close friends of the Ivanhoe group of companies for more than 20 years.

"Working together, we will build innovative, environmentally- and socially-responsible mines that will contribute to economic transformations in Southern Africa and China.”

Friedland also announced that Ivanhoe’s joint-venture partner at the Kamoa-Kakula Project, Zijin Mining Group, now has exercised its existing anti-dilution rights.

This will result in additional proceeds of C$78 million (US$60 million) that Ivanhoe will receive concurrently with the completion of CITIC Metal’s investment.

Ivanhoe Mines intends to use the combined proceeds of more than C$800 million to be received from CITIC Metal and Zijin to rapidly advance its Kamoa-Kakula, Platreef and Kipushi projects.

Friedland noted that the Toronto Stock Exchange has issued its conditional approval to the
private placement and the issuance of the anti-dilution common shares to Zijin.

The Ivanhoe-CITIC Metal transaction now remains subject only to customary closing conditions, and recordals and registration with certain Chinese government regulatory agencies.