* Offering to result in the issue of about 85 mln shares
* Rights offering to potentially raise about $1.2 bln (All figures in U.S. dollars, unless noted)
TORONTO, Jan 18 (Reuters) - Ivanhoe Mines Ltd IVN.TO said on Tuesday its rights offering to fund the development of the first phase of its massive Oyu Tolgoi copper and gold project in southern Mongolia, is set to expire next week.
The offering, which is expected to raise roughly $1.2 billion, will result in the issue of about 85 million new common shares. This represents about 15 percent of the mining company’s outstanding shares, as of Dec. 31.
The rights offering is structured so that shareholders will receive one transferable right for each share of common stock they hold as of Dec. 31. Every 100 rights can be used to buy 15 common shares. The shares will be priced at C$13.93 on the Toronto Stock Exchange and $13.88 on the New York Stock Exchange, the company said in a statement.
Oyu Tolgoi is one of the world’s biggest untapped copper-gold deposits. Development was delayed for years due to complicated royalty negotiations between Ivanhoe and the Mongolian government. [ID:nSP495396]
The project is 34 percent owned by Mongolia and 66 percent owned by Vancouver-based Ivanhoe. The project is being developed in partnership with Ivanhoe’s largest shareholder, giant Anglo-Australian miner Rio Tinto (RIO.AX)(RIO.L). (Reporting by Euan Rocha, editing by Gerald E. McCormick)