Base Metals


Joint venture partner Zijin Mining Group has added an extra C$67 million to Ivanhoe Mines’ checkbook through its anti-dilution rights.

Through joint venture (JV) partner Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899), Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) has added an extra C$67 million to its checkbook, putting the company in a position to finance its Kakula and Kipushi mines.

Zijin, which is Ivanhoe’s JV partner at the Kamoa-Kakula copper project in the Democratic Republic of Congo (DRC), exercised its anti-dilution rights this week. In doing so, at C$3.98 per share, Zijin raised C$67 million — or US$49 million — for Ivanhoe, and retained its 9.8 percent stake in the company.

The move comes less than a month after Ivanhoe received a C$612 million investment from CITIC Metal (OTC Pink:CTPCY,HKEX:0267) subsidiary CITIC Metal Africa Investments. The funding from CITIC also came through a payment of C$3.98 per share, which at the time represented a 29 percent premium.

CITIC boosted its stake in Ivanhoe to 29.9 percent through the investment; the company had previously earned a 19.5 percent share in Ivanhoe via a C$723 million payment in September 2018. The company stands tall as Ivanhoe’s largest shareholder.

The combination of Zijin and CITIC’s investments into Ivanhoe comes to over C$679 million, and both amounts are expected to be received by early September. According to a statement from Ivanhoe, the fresh funding will allow the company to finance its Kakula and Kipushi mines to commercial production, as well as advance its Platreef project with the potential of reaching production.

Like the Kakula mine, Kipushi is located in the DRC; Kipushi is based around redeveloping and upgrading a historic high-grade underground zinc-copper mine in the Central African Copperbelt. Kakula has access to adjacent prospective exploration areas within that same area.

As for Platreef, the company’s third principal project, it’s situated in South Africa and expands the company’s commodity portfolio as a platinumpalladiumnickel-copper-gold asset. A 2016 mineral resource estimate outlines an indicated mineral resource of 41.9 million ounces of platinum, palladium, rhodium and gold, along with 2.44 billion pounds of nickel and 1.23 billion pounds of copper.

By 10:49 a.m. EDT on Thursday (May 16), Ivanhoe shares were down 1.19 percent on the TSX at C$3.31.

As of Wednesday (May 15), copper was trading at $6,001 per tonne on the London Metal Exchange.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.


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