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Ivanhoe adds to ’core lender’ group for usd4,6bn Mongolia mine
Vancouver-based Ivanhoe Mines has appinted BNP Paribas, Standard Chartered and Export Development Canada
Vancouver-based Ivanhoe Mines has appinted BNP Paribas, Standard Chartered and Export Development Canada (EDC) to complete its core lender group of five financial institutions that will lead the arrangement of a project finance debt package for the Oyu Tolgoi copper and gold mining complex in Mongolia.
Ivanhoe said in May that it had signed a joint mandate letter with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) for evaluation of a major financing package for the project, which is expected to cost 4,6-billion.
"The completion of the assembly of the core lender group is a key step in the process of securing the Oyu Tolgoi financing package, which we expect to close in the first quarter of 2011," executive chairperson Robert Friedland said said in a statement on Monday.
"The five financial institutions have indicated that they are prepared to consider providing limited recourse loans that would total more than usd2-billion, demonstrating the high level of interest in international financial circles in participating in the project and awareness of its game-changing significance to copper and gold markets," he commented.
Friedland said that Ivanhoe had evaluated expressions of interest from 13 banks and selected Paris-based BNP Paribas and London-based Standard Chartered to work with the EBRD, the International IFC and EDC in arranging the financing.
BNP Paribas and Standard Chartered have indicated that they are considering retaining a “significant” exposure to the Oyu Tolgoi project debt through a mix of facilities, including EBRD and IFC "B" loans, facilities backed by export credit agencies and commercial loans.
Under the terms of the mandate letter signed earlier this year, the IFC and the EBRD will consider directly providing up to usd600-million, representing approximately usd300-million each, as part of a group of primary lenders in limited-recourse project financing.
The EDC is also considering providing up to usd500-million in direct project financing capacity, subject to necessary approvals, including ensuring that the Oyu Tolgoi Project meets EDC"s environmental and social impact review requirements.
Significant support for the Oyu Tolgoi financing also is expected from commercial lenders under "B" loan structures and under the guarantee schemes of other export credit agencies, Ivanhoe said, and the company continues to discuss additional financing options for the balance of its capital requirements.
Ivanhoe is 29,6percents owned by the world"s third-biggest miner Rio Tinto, which can increase its holding to 46,6percents.
The two recently revealed a dispute over Ivanhoe"s new shareholder rights plan, which Rio says breaches the terms of existing agreements between the companies. The firms are headed to arbitration to resolve the issue.
Ivanhoe also announced last week it had given Rio Tinto 60 days" notice that it will terminate a covenant that has prevented it from issuing shares worth more than 5percents of the company to so-called strategic investors.
Although Oyu Tolgoi is Ivanhoe"s most high-profile asset, the company also owns 65percents of Mongolian coal-miner SouthGobi Energy Resources and a controlling interest in Ivanhoe Australia.
Ivanhoe said in May that it had signed a joint mandate letter with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) for evaluation of a major financing package for the project, which is expected to cost 4,6-billion.
"The completion of the assembly of the core lender group is a key step in the process of securing the Oyu Tolgoi financing package, which we expect to close in the first quarter of 2011," executive chairperson Robert Friedland said said in a statement on Monday.
"The five financial institutions have indicated that they are prepared to consider providing limited recourse loans that would total more than usd2-billion, demonstrating the high level of interest in international financial circles in participating in the project and awareness of its game-changing significance to copper and gold markets," he commented.
Friedland said that Ivanhoe had evaluated expressions of interest from 13 banks and selected Paris-based BNP Paribas and London-based Standard Chartered to work with the EBRD, the International IFC and EDC in arranging the financing.
BNP Paribas and Standard Chartered have indicated that they are considering retaining a “significant” exposure to the Oyu Tolgoi project debt through a mix of facilities, including EBRD and IFC "B" loans, facilities backed by export credit agencies and commercial loans.
Under the terms of the mandate letter signed earlier this year, the IFC and the EBRD will consider directly providing up to usd600-million, representing approximately usd300-million each, as part of a group of primary lenders in limited-recourse project financing.
The EDC is also considering providing up to usd500-million in direct project financing capacity, subject to necessary approvals, including ensuring that the Oyu Tolgoi Project meets EDC"s environmental and social impact review requirements.
Significant support for the Oyu Tolgoi financing also is expected from commercial lenders under "B" loan structures and under the guarantee schemes of other export credit agencies, Ivanhoe said, and the company continues to discuss additional financing options for the balance of its capital requirements.
Ivanhoe is 29,6percents owned by the world"s third-biggest miner Rio Tinto, which can increase its holding to 46,6percents.
The two recently revealed a dispute over Ivanhoe"s new shareholder rights plan, which Rio says breaches the terms of existing agreements between the companies. The firms are headed to arbitration to resolve the issue.
Ivanhoe also announced last week it had given Rio Tinto 60 days" notice that it will terminate a covenant that has prevented it from issuing shares worth more than 5percents of the company to so-called strategic investors.
Although Oyu Tolgoi is Ivanhoe"s most high-profile asset, the company also owns 65percents of Mongolian coal-miner SouthGobi Energy Resources and a controlling interest in Ivanhoe Australia.
