CITIC’s C$612m second equity investment in Ivanhoe to close on August 16
Chinese State-owned CITIC Metal’s C$612-million ($465-million) second equity investment in Canadian mining company Ivanhoe Mines is set to close on August 16, having received all necessary recordals and registration with Chinese government regulatory agencies.
Upon closing, Ivanhoe will receive gross proceeds of C$612-million from CITIC Metal Africa, a subsidiary of CITIC Metal, and will issue 153.82-million common shares to CITIC Metal Africa through a private placement at a price of C$3.98 apiece.
CITIC Metal Africa will then own about 29.4% of Ivanhoe Mines’ issued and outstanding common shares.
Ivanhoe co-chairperson Robert Friedland will remain the second-largest shareholder in Ivanhoe Mines, with a 14.3% stake.
This will be the second major investment by CITIC Metal Africa in Ivanhoe Mines, bringing its total investment in Ivanhoe to about $1-billion, and positions Ivanhoe to become a leading copper and zinc producer in the Democratic Republic of Congo (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 DRC, Zijin Mining Group, exercised its existing antidilution rights on May 15, which will yield additional proceeds to Ivanhoe of C$67-million ($51-million).
These funds will be received concurrently with the CITIC Metal Africa private placement.
Upon receipt of the combined proceeds of more than C$679-million ($515-million) from CITIC Metal and Zijin, Ivanhoe will have cash and cash equivalents of about C$1.1-billion ($860-million) and no significant debt.
This cash balance positions Ivanhoe to fully finance its share of about $540-million of the capital costs required to bring the Kakula copper mine into commercial production.
Initial copper concentrate production from the Kakula mine is scheduled for the third quarter of 2021.
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