Ivanhoe Mines on Friday announced
the closing of its recent rights offering, which expired on July 19, 2012, and
confirmed the offering generated US$1.8 billion in gross proceeds, which will
be used to advance the construction and development of the Oyu Tolgoi Project.

Upon the closing of the offering,
Ivanhoe Mines issued a total of 259,558,050 new common shares, which represents
100% of the maximum number of common shares that were available under the
rights offering.

Approximately 99.2% of the shares
were taken up in the initial subscription of the rights offering with the
balance taken up in the secondary subscription. Rio Tinto exercised all of its
respective rights and participated in the secondary subscription provision
available to all shareholders. Because the offering was over-subscribed, Rio
Tinto did not purchase any shares under its standby commitment. As a result of
the rights offering, Rio Tinto”s stake in Ivanhoe Mines increased from 50.9% to
51.0%.

Kay Priestly, Chief Executive
Officer of Ivanhoe Mines, said, “We are pleased with the strong reception
our rights offering received from shareholders and greatly appreciate their
support. The proceeds will be used to further the development of the Oyu Tolgoi
Project, which will provide far reaching economic benefits to Mongolia. The
project continues to make good progress and we look forward to the processing
of first ore in the second half of 2012 and the commencement of commercial
production in the first half of 2013.”

Ivanhoe will distribute new common
shares acquired through the rights offering to registered subscribers on or
about three business days after the closing of the offering.

This news release does not
constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or
jurisdiction.

MarketWire