Ivanhoe Mines Adds BNP Paribas, Standard Chartered and Export Development Canada to Core Lender Group Arranging
LONDON, ENGLAND--(Marketwire - July 19, 2010) - Robert Friedland, Executive Chairman of Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN), and John Macken, President and Chief Executive Officer, announced today that Ivanhoe Mines has appointed BNP Paribas, Standard Chartered and Export Development Canada to the 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.
"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," Mr. Friedland said.
"The five financial institutions have indicated that they are prepared to consider providing limited recourse loans that would total more than US$2 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."
Mr. Friedland said that Ivanhoe Mines had evaluated expressions of interest from 13 banks and selected Paris-based BNP Paribas and London-based Standard Chartered to work with the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and Export Development Canada (EDC) in arranging the financing.
"As leading global institutions, BNP Paribas and Standard Chartered have a very strong presence in Asia and, consistent with the commitments of the other core lenders, have indicated that they are considering retaining a significant exposure to the Oyu Tolgoi project debt through a mix of facilities," Mr. Friedland said. The facilities include EBRD and IFC "B" loans, facilities backed by export credit agencies and commercial loans.
Ivanhoe Mines announced in May that it had signed a joint mandate letter with the EBRD and the IFC for evaluation of a major financing package for the construction of the planned Oyu Tolgoi mining complex.
Under the terms of the mandate letter, the IFC, part of the World Bank Group, and the EBRD will consider directly providing up to US$600 million, representing approximately US$300 million each from the IFC and the EBRD, as part of a group of primary lenders in limited-recourse project financing.
Export Development Canada (EDC), the Canadian government's export credit agency, is considering providing up to US$500 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 is discussing additional financing options for the balance of its capital requirements.
Mr. Macken confirmed that the Oyu Tolgoi Project will be developed to allow EDC and the commercial banks involved in the financing to comply with the Equator Principles, a set of voluntary international guidelines based on the IFC's social and environmental performance standards.
Hatch Corporate Finance advised Ivanhoe Mines on the selection of BNP Paribas and Standard Chartered.
"Mogi" Munkhdul Badral
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