China’s Zijin Mining Group’s wholly owned subsidiary has agreed to acquire 9.9% stake in Ivanhoe Mines in a transaction worth C$105m ($82m).
Ivanhoe will use the proceeds for working capital and general corporate purposes such as advancing its projects located in southern Africa.
Ivanhoe Mines executive chairman Robert Friedland said: “We are delighted to welcome Zijin Mining both as an old friend of Ivanhoe Mines and a strategic investor that shares our long-term vision.”
The parties are holding detailed discussions relating to the strategic co-development of the Kamoa copper discovery in the Democratic Republic of Congo.
Zijin Mining Group chairman Chen Jinghe said: “Zijin will establish a close and strategic partnership with Ivanhoe through which we plan to closely cooperate in the development of Ivanhoe’s mines.
“I am convinced that our partnership will turn our respective strengths into synergies, not only for the mutual benefit of both parties, but also to create significant value for both Zijin and Ivanhoe shareholders, as well as the societies in which we operate.”
As per the deal, Zijin will purchase about 76.8 million shares at C$1.36 each in a private placement.
Scheduled to close on or around 20 April, the Zijin private placement is subject to receipt of the approval of the Toronto Stock Exchange, and receipt by Zijin of approvals from the Chinese Government.
Image: Zijin Mining Group chairman Chen Jinghe and Ivanhoe Mines executive chairman Robert Friedland. Photo: courtesy of Ivanhoe Mines.