Ivanhoe Mines Files Preliminary Prospectus for Rights Offering and Amends Certain Terms of Memorandum of Agreement With Rio T...
23 Mai 2012 - 3:05PM
Marketwired
Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) announced today that
the company intends to launch a rights offering in which all
existing shareholders, subject to applicable law, may participate
on an equal and proportional basis in purchasing additional common
shares. The offering is expected to raise up to approximately
US$1.8 billion in gross proceeds.
The rights offering is part of the comprehensive financing plan
to continue the development of the Oyu Tolgoi Project, and was the
subject of a memorandum of agreement reached with majority
shareholder Rio Tinto on April 18, 2012. Ivanhoe Mines and Rio
Tinto have agreed to amend certain terms of the memorandum of
agreement. The amended terms address conditions of regulatory
approval and more closely align the terms of the proposed rights
offering with current market conditions.
Amendments to the agreement include:
-- Rio Tinto confirming it will take up its full basic subscription
privilege under the US$1.8 billion rights offering with respect to its
51% shareholding in Ivanhoe, subject to certain conditions;
-- Rio Tinto agreeing to eliminate the material adverse change condition
for its standby commitment in relation to a decline in Ivanhoe's share
price;
-- Rio Tinto continuing to provide a standby commitment for the full amount
of the US$1.8 billion rights offering, subject to certain conditions
including the price for Ivanhoe's common shares on the NYSE not falling
below the subscription price at any time on or after the fifth business
day before the expiry of the rights. Under the standby commitment, Rio
Tinto is required to acquire any Ivanhoe common shares not taken up
under the rights offering;
-- Removing the previously announced US$8.34 subscription price for the
rights offering. Ivanhoe and Rio Tinto have agreed to price the rights
offering in the final prospectus;
-- In consideration of eliminating the material adverse change condition
for a decline in Ivanhoe's share price, re-pricing the exercise price of
the Series D Warrants to US$10.84 per share, subject to adjustment upon
completion of the rights offering; and
-- Confirming the standby commitment fee will be paid in cash. Rio Tinto
has agreed to waive its previously announced entitlement to reinvest its
standby commitment fee in Ivanhoe common shares.
Subject to applicable law, a rights certificate and a prospectus
will be mailed to each shareholder after a record date has been set
for issuance of the rights in conjunction with the filing of the
final prospectus. The rights offering will be open for exercise for
at least 21 days from the date of mailing to shareholders.
In keeping with international practice in rights offerings, each
new common share of Ivanhoe Mines available for purchase by rights
holders will be offered at a discount to the company's current
market price. Subject to applicable law, all Ivanhoe Mines
shareholders will have the choice of participating and, by doing
so, maintain their existing levels of ownership. It means, for
example, that an individual shareholder with a one per cent stake
in Ivanhoe will be issued rights to buy a maximum number of new
shares that would maintain that shareholder's stake at one per cent
following completion of the offering.
An application has been submitted to the Toronto Stock Exchange
to approve the listing of the rights and the common shares issuable
upon the exercise of the rights. Similar applications have also
been made to the New York Stock Exchange and the Nasdaq Stock
Market to admit the rights for trading and list the common shares
issuable upon the exercise of the rights, subject to Ivanhoe Mines
fulfilling listing requirements.
Shareholders who do not wish to exercise their rights to buy new
common shares under the offering plan will have the option of
selling the rights that they receive from the company through the
Toronto Stock Exchange, the New York Stock Exchange or the Nasdaq
Stock Market. Shareholders who do not exercise all of their rights
consequently will have their present ownership interests in Ivanhoe
Mines, as a percentage of the total outstanding common shares,
reduced as a result of the rights offering.
About Ivanhoe Mines
Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) is an
international mining company with operations focused in the Asia
Pacific region. Assets include the company's 66% interest in the
Oyu Tolgoi copper-gold-silver mine development project in southern
Mongolia; a 58% interest in Mongolian coal miner SouthGobi
Resources (TSX:SGQ)(HK:1878); a 59% interest in copper-gold miner
Ivanhoe Australia (TSX:IVA)(ASX:IVA), which also is developing a
molybdenum-rhenium discovery; and a 50% interest in Altynalmas
Gold, a private company developing the Kyzyl Gold Project in
Kazakhstan.
Ivanhoe Mines' shares are listed on the New York, NASDAQ and
Toronto stock exchanges under the symbol IVN.
Forward-looking statements
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of our
beliefs, intentions and expectations about developments, results
and events which will or may occur in the future, constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbour" provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements are typically identified
by words such as "anticipate," "could," "should," "expect," "seek,"
"may," "intend," "likely," "plan," "estimate," "will," "believe"
and similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to whether
or not the above contemplated rights offering or debt-financing
package will be successfully completed in the future, statements
made with respect to the memorandum of agreement that establishes
Rio Tinto's support for Ivanhoe Mines equity financing, statements
regarding Rio Tinto's standby commitment, and other statements that
are not historical facts.
All such forward-looking information and statements are based on
certain assumptions and analyses made by Ivanhoe Mines' management
in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors management believes are appropriate in the
circumstances. These statements, however, are subject to a variety
of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected
in the forward-looking information or statements. Important factors
that could cause actual results to differ from these
forward-looking statements include those described under the
heading "Risks and Uncertainties" included in the preliminary
prospectus or in the company's Annual Information Form, both filed
on Sedar and EDGAR. The reader is cautioned not to place undue
reliance on forward-looking information or statements.
The issuer has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before investing, individuals should read
the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information
about the issuer and this offering. The documents are available
free of charge by visiting EDGAR on the SEC website at www.sec.gov.
Alternatively, the issuer will arrange to send you the prospectus
if you request it by calling toll-free 1-877-858-5407.
Contacts: Ivanhoe Mines Ltd. Jason Combes Investors +1
604.648.3920jasonco@ivancorp.net Ivanhoe Mines Ltd. Tony Shaffer
Media +1 604.648.3934tonysh@ivancorp.net
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