Ivanhoe Mines has said it is in talks with the European Bank for Reconstruction
and Development and the International Finance Corp.
for financing to build its Oyu Tolgoi mine. It has signed a joint mandate
letter with the big financial
institutions which will consider providing a two-part package
including up to $300 million from each organization and $1.2 billion from commercial
lenders under a “B loan” structure.

Ivanhoe
Mines said it also has received expressions of interest from export credit agencies
to provide up to $500 million in direct project debt financing. A recently
released development plan
estimated that the initial
capital cost required to achieve first production from the
open-pit mine is $4.6 billion, the company said.

“Securing the proposed financing package — and combining it with possible
additional subscriptions of more than US$1 billion through our existing
agreements with Rio Tinto
and the funds from our cash position that are earmarked for project development
expenditures — would advance Ivanhoe a long way toward completion of the
construction of the Oyu Tolgoi mine,” Ivanhoe executive chairman Robert
Friedland said.

The company sais options to raise the rest of the cash required to build the
project includes additional potential debt, equity offerings, a credit
facility, the sale of subsidiaries, equity investments, project financing and various corporate
transactions.