Ivanhoe
Money

Robert Friedland, executive chairman of dual-listed Ivanhoe Mines, and CEO Lars-Eric Johansson say CITIC Metal Group has provided Ivanhoe Mines with an interim loan of US$100 million.

This is in accordance with a term loan facility that is an integral part of the long-term strategic cooperation and investment agreement between Ivanhoe and CITIC Metal announced on June 11, 2018.

The interim funds have an annual interest rate of 6% and will be repaid from the proceeds of the US$557 million strategic investment by CITIC Metal.

Friedland has provided, on behalf of the company, a secured limited-recourse guarantee and share pledge securing the company’s obligation under the interim loan facility.

Having drawn the $100 million facility, the company has a working capital of approximately $165 million.

Friedland said that the interim loan provides assurance that the company will continue to advance its exploration and development activities uninterrupted and on current accelerated timetables.

“Ivanhoe’s projects are three of the world’s best undeveloped mining assets. CITIC Metal Group committed to this interim funding in order that our projects continue to advance on schedule, and CITIC Metal Group has delivered.

“While we do not anticipate having to use the funds from the interim loan before the CITIC Metal investment closes, the funds are in our bank account.”

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

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

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

The company's joint-venture partner at the Kamoa-Kakula Project, Zijin Mining Group has exercised its existing anti-dilution rights.

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

The company 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.