Ivanhoe Australia Looks to Raise Up to A$80 Million

   By Rhiannon Hoyle 
 

SYDNEY--Ivanhoe Australia Ltd. (IVA.AU) said Wednesday it is seeking to raise up to 80 million Australian dollars (US$83 million) through an issue of new shares, with a unit of Rio Tinto PLC (RIO) agreeing to participate to the tune of A$40 million.

The offer price of A$0.48 a share is at an 11% discount to Ivanhoe's last close, and 42% below where it was trading just one month ago.

The company said it needs the funds to help repay a US$50 million working capital facility extended by Turquoise Hill Resources Ltd. earlier this year, and to fund the completion of the Starra 276 mine at its Osborne copper and gold operation in Queensland state. Turquoise Hill is 51% owned by Rio Tinto.

"The entitlement offer will strengthen Ivanhoe Australia's balance sheet and, together with operating cash flows from the Osborne project, ensure that the company is fully funded for planned operations and exploration," Chief Executive Ines Scotland said in a statement.

An institutional portion of the offer is expected to raise about A$74 million. The remainder will be open to retail investors.

Write to Rhiannon Hoyle at [e-mail]

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