Date Closed

May 24, 2012

Lead Office

Toronto

Value

5.80 Billion USD

Following a favourable arbitration decision in December 2011 that rendered Ivanhoe Mines’s shareholder rights plan ineffective as against Rio Tinto and the expiry of certain standstill arrangements between Rio Tinto and Ivanhoe Mines in January 2012, Rio Tinto increased its stake in Ivanhoe Mines to 51% in a private exempt takeover bid.  Rio Tinto and Ivanhoe Mines in April 2012 then entered into an agreement providing for the stepping down of Robert Friedland, Ivanhoe's founder and CEO, and certain members of the Ivanhoe Mines board and management team and their replacement with Rio Tinto nominees.  Under the agreement, Rio Tinto also agreed to provide financial support for Ivanhoe Mines's comprehensive financing plan that will underpin the near-term development to commercial production and future expansion of Ivanhoe Mines’ Oyu Tolgoi copper-gold project in Mongolia.  The primary elements of the financing plan are:

(i)          a US$3 to 4 billion project financing for Oyu Tolgoi to be provided by third party lenders with a completion support guarantee to be provided by Rio Tinto;
(ii)         a US$1.8 billion rights offering by Ivanhoe to be fully-backstopped by Rio Tinto; and
(iii)        a US$1.5 billion short-term bridge facility to be provided by Rio Tinto.

Rio Tinto Group, headquartered in London, United Kindgom, is a British-Australian multinational metals and mining corporation.

Ivanhoe Mines, headquartered in Vancouver, British Columbia, is a mineral exploration and development company.

McCarthy Tétrault LLP represented Rio Tinto, as acquiror.