CITIC Metal’s C$723 million strategic equity investment
September 6, 2018
CITIC Metal’s C$723 million strategic equity investment
in Ivanhoe Mines to close September 19, 2018
Additional C$78 million to be received concurrently
from Zijin Mining
CITIC Metal and Zijin Mining will purchase their Ivanhoe Mines
shares at C$3.68 per share
Upon closing, Ivanhoe will have cash of approximately
C$850 million
BEIJING, CHINA – Robert Friedland, Executive Chairman of Ivanhoe Mines (TSX: IVN; OTCQX:
IVPAF), and Lars-Eric Johansson, Chief Executive Officer, announced today that the private
placement transaction with CITIC Metal Co., Ltd. (CITIC Metal) announced on June 11, 2018, now
has received all necessary recordals and registration with Chinese government regulatory
agencies and the transaction is scheduled to close on September 19, 2018.
Upon closing, Ivanhoe will receive gross proceeds of C$723 million (approximately US$549
million) from CITIC Metal and will issue 196,602,037 common shares to CITIC Metal through a
private placement at a price of C$3.68 per share. CITIC Metal will then own approximately 19.5%
of Ivanhoe Mines’ issued and outstanding common shares. Mr. Friedland will become the
second largest Ivanhoe Mines shareholder, with an ownership stake of approximately 17%.
Approximately C$133 million of the C$723 million owing from CITIC Metal will be used to repay
an interim loan of US$100 million from CITIC Metal Group Limited that was received on August
9, 2018, but never used, resulting in a net cash payment by CITIC Metal of C$591 million. With
the repayment of the interim loan in full, the limited-recourse guarantee and share pledge by Mr.
Friedland securing Ivanhoe Mines’ obligation under the loan facility will be eliminated.
Zijin exercises anti-dilution rights at C$3.68 per share to raise an additional C$78 million
Ivanhoe’s joint-venture partner at the Kamoa-Kakula Project, Zijin Mining Group Co., Ltd., has
exercised its existing anti-dilution rights, which will yield additional proceeds to Ivanhoe of
C$78 million (approximately US$59 million). These funds will be received concurrently with the
CITIC Metal private placement. The exercise by Zijin of its anti-dilution rights also was at a price
of C$3.68 per share and will result in Zijin having a 9.7% ownership stake in Ivanhoe Mines, its
ownership level prior to the completion of the CITIC Metal strategic investment.
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With the receipt of the combined proceeds of more than C$800 million (approximately US$608
million) from CITIC Metal and Zijin, and the repayment of the interim loan, Ivanhoe will have
cash and cash equivalents of approximately C$850 million (US$645 million) and no significant
debt.
Ivanhoe intends to use the funds to continue to advance its exploration and development
activities at the Kamoa-Kakula, Platreef and Kipushi projects on current accelerated timetables.
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 enjoys
leading market positions in sectors well matched to China’s economy. CITIC’s rich history, diverse
platform and strong corporate culture across all businesses ensure that CITIC Limited is unrivalled in
capturing opportunities arising in China.
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 platinum-palladium-nickel-copper-gold discovery
in South Africa; and the extensive redevelopment and upgrading of the historic Kipushi zinc-copper-
germanium-silver mine, also in the DRC.
Information contacts
Investors Media
Bill Trenaman +1.604.331.9834 North America: Bob Williamson +1.604.512.4856
South Africa: Jeremy Michaels +27.82.772.1122
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
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.
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Such statements include without limitation: (i) all statements regarding the timing and completion of the
planned private placement of 196,602,037 common shares to CITIC Metal at a price of C$3.68 per
share for gross proceeds to Ivanhoe of approximately C$723 million; (ii) statements regarding the
timing and completion of the issuance of anti-dilution shares to Zijin Mining for proceeds of C$78
million; and (iii) statements regarding Ivanhoe Mines intention to use the proceeds from the private
placement to advance the company’s projects in Southern Africa ─ Kamoa-Kakula, Platreef and
Kipushi.
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, 2017 and its Annual Information Form.