Chinese group CITIC Metal is set to overtake Robert Friedland as the largest shareholder in Ivanhoe Resources this month, when the C$723-million private placement deal with the company closes.
The transaction, announced in June, has received all necessary approvals and will close on September 19, TSX-listed Ivanhoe said on Thursday.
Upon closing, Ivanhoe would receive gross proceeds of C$723-million (about $549-million) from CITIC and would issue 196 602 037 common shares to the company through a private placement at C$3.68 a share. CITIC would own about 19.5% of Ivanhoe’s issued and outstanding common shares, with Friedland’s 17% shareholding making him the second-largest shareholder.
Ivanhoe said that it would use C$133-million of the C$723-million to repay an interim loan of $100-million from CITIC, resulting in a net cash payment of C$591-million.
Ivanhoe has also raised an additional C$78-million from its Kamoa-Kakula project joint venture partner Zijin Mining, which has exercised anti-dilution rights at C$3.68 a share. Zijin owns 9.7% of Ivanhoe.
With the receipt of the combined proceeds of more than C$800-million and the repayment of the interim loan, Ivanhoe said that it would have cash and cash equivalents of about C$850-million and no significant debt.
Ivanhoe intends to use the funds to continue to advance its exploration and development activities at the Kamoa-Kakula, Platreef and Kipushi projects on current accelerated timetables.