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Ivanhoe Mines ‘Encouraged’ by Asset-Sale Talks Progress

Feb. 27 (Bloomberg) -- Ivanhoe Mines Ltd., owner of the $6 billion Oyu Tolgoi copper and gold project in Mongolia, said it’s “highly encouraged” by the progress of talks about the sale of other assets.

The company has received “detailed,” written expressions of interest about potential deals that may generate “significant capital” to support development of Oyu Tolgoi, Vancouver-based Ivanhoe said today in a statement.

Ivanhoe is reviewing its assets, which include mining interests in Australia and Kazakhstan, after Rio Tinto Group last month increased its stake in the Canadian company to 51 percent. Ivanhoe said today that both companies are in talks toward a “comprehensive” financing plan for Oyu Tolgoi. Ivanhoe said it’s considering options including a rights offer.

As well as Oyu Tolgoi, Ivanhoe has stakes in the Kyzyl gold project in Kazakhstan and copper, gold and molybdenum deposits in Australia. It didn’t elaborate on which assets may be sold.

Construction of the first phase of Oyu Tolgoi is more than 73 percent complete and initial production will be in the third quarter, Ivanhoe said today. The company has invested more than $5 billion in the project over the past decade, it said. Ivanhoe owns 66 percent of Oyu Tolgoi and the government of Mongolia owns the rest.

Ivanhoe fell 0.6 percent to C$17.41 at the close in Toronto.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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