TORONTO (Reuters) - Ivanhoe Mines IVN.TO said on Thursday it raised $1.18 billion through a rights offering that will help fund the initial development of its massive Oyu Tolgoi copper and gold project in southern Mongolia.
Oyu Tolgoi is one of the world’s biggest untapped copper-gold deposits. Its development was delayed for years as Ivanhoe pursued complicated royalty negotiations with the Mongolian government.
The project - 34 percent owned by Mongolia and 66 percent owned by Vancouver-based Ivanhoe - is now moving ahead in partnership with Ivanhoe’s largest shareholder -- Anglo-Australian mining giant Rio Tinto RIO.AX RIO.L.
Ivanhoe said it will issue about 85 million new shares through the rights offering, representing about 99 percent of the maximum number of common shares available under the plan, which was announced in December.
Chief Executive Robert Friedland and Rio Tinto both exercised all of the rights issued to them. Friedland also bought an additional 1.5 million rights on the open market and exercised them to acquire more common shares, the company said.
Friedland’s ownership stake now stands at 15.5 percent, while Rio Tinto has maintained ownership of 40.3 percent.
Shares of Ivanhoe rose 2.2 percent at $29.37 in trade before the morning bell.
Reporting by Euan Rocha; Editing by Frank McGurty