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.
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.
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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.