Three major Canadian banks are backing two mines that Ivanhoe Mines Ltd. (TSX:IVN) plans to build in the Democratic Republic of Congo (DRC) with the purchase of $125 million worth of shares in the company.
Ivanhoe announced the deal May 20, just days after announcing it was considering spinning out one of its assets – a platinum deposit in South Africa –into a separate company due to financing challenges.
Ivanhoe is developing three projects in Africa – a platinum-palladium-gold-nickel-copper deposit in South Africa called Platreef, and two copper deposits in DRC (Kamoa and Kipush).
Under the deal, a syndicate of underwriters led by BMO Capital Markets, CIBC and Macquarie Capital Market Canada Ltd. will buy 83,334,000 class A common Ivanhoe shares at $1.80 per share. (Ivanhoe shares were selling at $1.64 per share at close of markets May 20).
In addition, Ivanhoe founder and CEO Robert Friedland will acquire $25 million worth of shares at the same price through a private placement.
The $150 million raise will be used to develop Ivanhoe’s Kamoa and Kipushi projects in the DRC.
Those projects were in question just last week, when the company announced that it would not be able to move ahead with their development on its original timeline, if its did not come up with additional financing by June.
The company announced it was considering the sale of assets, joint ventures and debt and equity options to find the additional financing needed to move ahead on the two DRC projects.
