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September 7, 2018

Chinese regulators clear CITIC’s investment in Ivanhoe Mines

Chinese regulators have granted all requisite approvals for the private placement transaction between Ivanhoe Mines and CITIC Metal valued at C$723m ($549m).

Chinese regulators have granted all requisite approvals for the private placement transaction between Ivanhoe Mines and CITIC Metal valued at C$723m ($549m).

In June this year, CITIC Metal agreed to acquire 196,602,037 common shares in Ivanhoe through a private placement at a price of C$3.68 a share.

“The transaction will see CITIC Metal become the largest shareholder in Ivanhoe, with around 19.5% of the company’s shares.”

Set to be completed in the third week of this month, the transaction will see CITIC Metal become the largest shareholder in Ivanhoe, with around 19.5% of the company’s issued and outstanding common shares.

Ivanhoe Mines executive chairman Robert Friedland will retain a stake in the company equal to roughly 17%.

As part of the deal, CITIC Metal has already provided a $100m interim loan facility to Ivanhoe.

The company will now repay the loan using a portion of the proceeds from the strategic investment made by CITIC Metal.

Meanwhile, Chinese firm and Ivanhoe’s joint-venture partner at the Kamoa-Kakula copper discovery project in the Democratic Republic of Congo (DRC), Zijin Mining Group, has exercised its existing anti-dilution rights through a concurrent private placement.

As a result, Zijin will now hold a 9.7% ownership interest in Ivanhoe Mines.

Ivanhoe noted that it will use proceeds totalling C$800m ($608m) from CITIC Metal ($549m) and Zijin ($59m) to advance its Kamoa-Kakula, Platreef and Kipushi projects in Africa.

In July this year, Ivanhoe reported a 16% increase in zinc-rich measured and indicated resources and a 40$ increase in copper-rich measured and indicated resources at the Kipushi zinc-copper-silver-germanium mine in the DRC.

CITIC Metal also owns a 15% stake in the Las Bambas copper project in Peru.

In addition, the company heads a Chinese consortium that holds a 15% ownership in the Brazil-based niobium producer CBMM.

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