Rio Tinto to manage Oyu Tolgoi project under new financial agreement with Ivanhoe Mines

Date Closed

December 15, 2010

Lead Office

Toronto

Value

4.30 Billion USD

On December 15, 2010, international mining giant Rio Tinto completed a transaction with Ivanhoe Mines pursuant to which Rio Tinto secured a pathway to increase its equity stake in Ivanhoe Mines to 49%, assumed management of Ivanhoe's Oyu Tolgoi copper and gold project in Mongolia and provided a comprehensive financial package to Ivanhoe for the development of Oyu Tolgoi project.  The financial package provided by Rio Tinto includes a US$1.8 billion interim funding facility whilst Rio Tinto and Ivanhoe work together to finalize a comprehensive project financing package; a commitment by Rio Tinto to exercise US$700 million of Ivanhoe share purchase warrants; and a commitment by Rio Tinto to participate in Ivanhoe's $1.2 billion right offering.  Under the agreement, Rio Tinto agreed to acquire a total of 20 million Ivanhoe shares from Citibank and Ivanhoe Mines executive chairman and chief executive officer Robert Friedland; received a subscription right that allows Rio Tinto to subscribe for Ivanhoe shares from treasury until January 2012; agreed to increase to 49% and extend by three months to January 2012 the standstill on the number of Ivanhoe shares it may acquire; and agreed to suspend its arbitration in relation to Ivanhoe's Shareholders Rights Plan by six months to June 2011.

McCarthy Tétrault LLP represented Rio Tinto, with a team led by Shea Small.

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