Ivanhoe Mines to Receive US$502 Million from Rio Tinto's Exercise of All Outstanding Warrants to Advance Construction of Oyu Tolgoi Copper-Gold-Silver Mining Complex in Mongolia

Ivanhoe Mines IVNIVN Ivanhoe Mines' Chief Executive Officer Robert Friedland announced today that the company expects to receive US$502 million from Rio Tinto later today following Rio Tinto's decision to exercise all remaining share-purchase warrants that it holds in Ivanhoe Mines. Ivanhoe Mines received notification yesterday that Rio Tinto was exercising all the remaining Series B and Series C warrants that it was granted as part of the 2006 and 2007 financing agreements associated with Rio Tinto's original investment in Ivanhoe Mines. Rio Tinto previously had committed to convert all the warrants to shares by January 2012. The additional shares will increase Rio Tinto's ownership stake in Ivanhoe Mines to 46.5% from the present 42.0%. The US$502 million from the exercise of the warrants will be applied toward the accelerated, full-scale construction of the first phase of the Oyu Tolgoi copper-gold-silver complex in southern Mongolia. Following the receipt of the proceeds from the warrants, Ivanhoe Mines' current consolidated cash balance will be approximately US$1.8 billion. The Rio Tinto payment will be comprised of US$119.7 million for the purchase of 14.1 million Ivanhoe Mines shares at US$8.51 per share from the exercise of the remaining Series B Warrants; US$379.3 million for 40.2 million Ivanhoe Mines shares priced at US$9.43 per share from the Series C warrants; and CDN$2.5 million for 827,000 anti-dilution warrants. The increased level of ownership will entitle Rio Tinto to nominate one additional director to the 14-member Ivanhoe Mines board, increasing to seven the total number of Ivanhoe directors nominated by Rio Tinto. Rio Tinto's investments in Ivanhoe Mines now total US$3.5 billion since 2006