CITIC Metal’s C$612 million (US$465 million) second equity
July 30, 2019
CITIC Metal’s C$612 million (US$465 million) second equity
investment in Ivanhoe Mines to close August 16, 2019
Additional C$67 million (US$51 million) to be received
concurrently from Zijin Mining
Upon closing, Ivanhoe will have cash of approximately C$1.1
billion (US$860 million)
BEIJING, CHINA – Robert Friedland and Yufeng “Miles” Sun, Co-Chairmen of Ivanhoe
Mines, announced today that the private placement transaction with CITIC Metal Africa
Investments Limited (CITIC Metal Africa), a direct subsidiary of CITIC Metal Co., Ltd.
(CITIC Metal), announced on April 25, 2019, now has received all necessary recordals
and registration with Chinese government regulatory agencies and the transaction is
scheduled to close on August 16, 2019.
Upon closing, Ivanhoe will receive gross proceeds of C$612 million (approximately
US$465 million) from CITIC Metal Africa and will issue 153,821,507 common shares to
CITIC Metal Africa through a private placement at a price of C$3.98 per share. CITIC
Metal Africa will then own approximately 29.4% of Ivanhoe Mines’ issued and
outstanding common shares. Mr. Friedland will remain the second largest Ivanhoe
Mines shareholder, with an ownership stake of approximately 14.3%.
This will be the second major investment by CITIC Metal Africa in Ivanhoe Mines,
bringing its total investment in Ivanhoe to approximately US$1 billion, and positions
Ivanhoe to become a leading copper and zinc producer in the DRC and a leading
producer of platinum-group metals, nickel and copper in South Africa.
Ivanhoe’s joint-venture partner at the Kamoa-Kakula Copper Project in the Democratic
Republic of Congo, Zijin Mining Group Co., Ltd., exercised its existing anti-dilution
rights on May 15, 2019, which will yield additional proceeds to Ivanhoe of C$67 million
(approximately US$51 million). These funds will be received concurrently with the CITIC
Metal Africa private placement. The exercise by Zijin of its anti-dilution rights also was
at a price of C$3.98 per share and will result in Zijin maintaining its 9.8% ownership
stake in Ivanhoe Mines.
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Upon receipt of the combined proceeds of more than C$679 million (approximately
US$515 million) from CITIC Metal and Zijin, Ivanhoe will have cash and cash equivalents
of approximately C$1.1 billion (US$860 million) and no significant debt.
This cash balance positions Ivanhoe to fully finance its share (approximately US$540
million) of the capital costs required to bring the Kakula Copper Mine into commercial
production. Initial copper concentrate production from the Kakula Mine currently is
scheduled for the third quarter of 2021.
About CITIC Metal and CITIC Limited
CITIC Metal Co., Ltd. is a wholly-owned subsidiary of CITIC Limited. As CITIC Limited’s
arm in the business of resources and energy, CITIC Metal specializes in the importation
and distribution of copper, zinc, platinum-group metals, niobium products, iron ore,
coal, and non-ferrous metals, export of silver, trading of steel products, and
investments in metals and mining projects. CITIC Metal’s major mining investments
include a 15% ownership in the Las Bambas copper project in Peru and leading a
Chinese consortium in acquiring a 15% ownership in the Brazil-based niobium producer
CBMM.
CITIC Limited (SEHK:267) is China’s largest conglomerate, with total assets of more
than US$900 billion. Among its diverse global businesses, CITIC Limited focuses
primarily on financial services, resources and energy, manufacturing, engineering
contracting and real estate.
CITIC Limited is listed on the Stock Exchange of Hong Kong, where it is a constituent of
the Hang Seng Index. CITIC Group Corporation, a Chinese state-owned enterprise, owns
58% of CITIC Limited.
About Ivanhoe Mines
Ivanhoe Mines is a Canadian mining company focused on advancing its three principal
projects in Southern Africa: the development of new mines at the Kamoa-Kakula copper
discovery in the Democratic Republic of Congo (DRC) and the Platreef palladium-
platinum-nickel-copper-gold discovery in South Africa; and the extensive
redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-lead
mine, also in the DRC. Ivanhoe also is exploring for new copper discoveries on its
wholly-owned Western Foreland exploration licences in the DRC, near the Kamoa-
Kakula Project.
Information contacts
Investors: Bill Trenaman +1.604.331.9834
Media: Kimberly Lim +1.778.996.8510
Cautionary statement on forward-looking information
Certain statements in this news release constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws. Such statements and information involve
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known and unknown risks, uncertainties and other factors that may cause the actual results,
performance or achievements of the company, its projects, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking
statements or information. Such statements can be identified by the use of words such as “may”,
“would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”,
“forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved.
Such statements include without limitation: (i) all statements regarding the timing and scheduled
completion on August 16, 2019, of the planned private placement of 153,821,507 common shares to
CITIC Metal Africa at a price of C$3.98 per share for gross proceeds to Ivanhoe of approximately
C$612 million; (ii) statements regarding the timing and completion on August 16, 2019, of the issuance
of anti-dilution shares to Zijin Mining for proceeds of C$67 million; (iii) statements regarding Ivanhoe’s
cash balance is expected to be sufficient to fully finance its share (approximately US$540 million) of the
capital costs required to bring the Kakula Copper Mine into commercial production and(iv) statements
regarding the second major investment from Citic Metal Africa in Ivanhoe Mines positioning Ivanhoe to
become a leading copper and zinc producer in the DRC and a leading producer of platinum-group
metals, nickel and copper in South Africa.
Forward-looking statements and information involve significant risks and uncertainties, should not be
read as guarantees of future performance or results and will not necessarily be accurate indicators of
whether or not such results will be achieved. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements or information, including, but not
limited to, the factors discussed under “Risk Factors” and elsewhere in the company’s MD&A, as well
as the inability to obtain regulatory approvals in a timely manner; the potential for unknown or
unexpected events to cause contractual conditions to not be satisfied; unexpected changes in laws,
rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts
with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the
failure of exploration programs or studies to deliver anticipated results or results that would justify and
support continued exploration, studies, development or operations.
Although the forward-looking statements contained in this news release are based upon what
management of the company believes are reasonable assumptions, the company cannot assure
investors that actual results will be consistent with these forward-looking statements. These forward-
looking statements are made as of the date of this news release and are expressly qualified in their
entirety by this cautionary statement. Subject to applicable securities laws, the company does not
assume any obligation to update or revise the forward-looking statements contained herein to reflect
events or circumstances occurring after the date of this news release.
The company’s actual results could differ materially from those anticipated in these forward-looking
statements as a result of the factors set forth in the “Risk Factors” section and elsewhere in the
company’s MD&A for the year ended December 31, 2018 and its Annual Information Form.