Ivanhoe Mines Discusses Deal With Chinese Gold Producer – by Alistair MacDonald (Wall Street Journal – September 24, 2013)


China’s largest gold company has talked to Ivanhoe Mines about buying a stake in or operating a part of the Toronto-listed company.

China’s largest gold company, China National Gold Group Corp., has talked to Ivanhoe Mines about buying a stake in or operating a part of the company founded by flamboyant mining magnate Robert Friedland, two people familiar with the matter said.

It is unclear where talks stand, but, if completed, such an investment would mark another step into international markets for the Beijing-based miner and further Chinese investment in African mining. It could also entail Mr. Freidland’s taking on a major international partner not long after he lost control of a major mining company to London-listed giant, Rio Tinto PLC.

On Monday, Toronto-listed Ivanhoe said it is selling $100 million worth of stock at $2 a share, a sharp discount to Friday’s closing price of $2.56. The stock fell 11% as investors digested news of the dilution and analysts said that the total falls short of the money that Ivanhoe needs to raise.

In a release Ivanhoe said that it is in discussions with a number of international, private and state-owned mining companies about raising further funds through investments in its projects and the company.

“Ongoing talks could lead to the formation of a significant strategic corporate partnership or syndicate for continued exploration and development of the company’s discoveries and associated infrastructure,” Chief Executive Lars-Eric Johansson said Monday.

A spokesman for the company declined to comment on whether it had held talks with China National Gold.

Ivanhoe Mines has projects to mine copper and zinc in the Democratic Republic of Congo and gold, nickel and copper in South Africa.

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