By Colin Kellaher
Ivanhoe Mines on Monday said a unit of Chinese conglomerate Citic has agreed to take a 19.9% stake in the miner for about 723 million Canadian dollars (US$560 million).
Ivanhoe said it will use the proceeds to advance its mine development projects in Southern Africa.
The company said it will issue 196.6 million common shares to Citic Metal through a private placement at a price of C$3.68 each. Ivanhoe shares closed Friday at C$3.23.
Ivanhoe said Citic Metal will become its largest single shareholder with the 19.9% stake. Ivanhoe Executive Chairman Robert Friedland will be Ivanhoe's second-largest holder, with a more than 17% interest.
Ivanhoe said China's Zijin Mining Group Co, which acquired a 9.9% stake in the miner in 2015, will be entitled to exercise its anti-dilution rights through a concurrent private placement, which could result in additional proceeds of C$78 million.
Ivanhoe said Citic Metal has agreed to provide a nine-month interim loan of US$100 million while the companies seek approval for the private-placement transaction.
Write to Colin Kellaher at email@example.com