Ivanhoe Mines Ltd. (TSX:IVN) has raised $1.8 billion through a rights offering sale of sale of common shares to help fund the construction of an $11.3 billion copper-gold mine in Mongolia.
Ivanhoe shareholders were given first refusal on the share offering. All 259,558,050 new common shares were purchased in the offer. Rio Tinto (NYSE:RIO) holds a majority stake in the company at 51%.
The money will be used towards the construction of Ivanhoe's copper-gold project in Oyu Tolgoi, Mongolia, which is being built in two phases – the first open-pit, the second underground. Ivanhoe owns 66% of the mine project and the Mongolian government owns the remaining 34%.
The company still needs to raise $4.9 billion to see both phases of the project completed.
The first phase of the project the open-pit mine, is scheduled to start commercial production in the first half of 2013.
The mine is projected to have an annual production of 425,000 tonnes of copper and 460,000 ounces of gold, employing 3,500 workers.
"We are pleased with the strong reception our rights offering received from shareholders and greatly appreciate their support," said Ivanhoe CEO Kay Priestly.
"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's shares were up 4.77% to $8.78 per share at close of markets Friday.
