Vancouver — Looking to get a foothold in China,
In June, Ivanhoe arranged a US$3-million private placement in the junior. In return for the funding, Pacific Minerals gave Ivanhoe the right to acquire a majority interest in the 217 gold project in Inner Mongolia and the JBS platinum-palladium-nickel project in China’s Yunnan province. Ivanhoe was also granted a right of first refusal to acquire a majority stake in any new project in China (excluding Anhui province) undertaken by Pacific during the next 10 years.
“Pacific Minerals is one of the leading exploration and development companies in China,” says Ivanhoe Chairman Robert Friedland. “Ivanhoe intends to be a significant player in what will be a tremendous future for the mining industry in China. This is the right time for us to assume a larger role in determining the direction of Pacific Minerals.”
Ivanhoe will pick up an additional 2 million units in the junior at $1 each. A unit consists of one share and one warrant, which is exercisable at $1.10 for two years.
In a separate deal, Ivanhoe has agreed to acquire 6.6 million Pacific Minerals shares from five shareholders in exchange for 2.3 million Ivanhoe shares.
Once these deals are complete, Ivanhoe will hold 38.4% of Pacific Minerals, or 42.2% on a fully diluted basis.
Pacific Minerals is in the midst of a 5,000-metre drill program on the 217 project and has inked three preliminary agreements to earn 70-75% of land packages in Yunnan and Guizhou provinces, which total 4,500 sq. km.
Under each of the deals, Pacific Minerals must provide US$4 million in funding to the joint venture over three years.
Under an earlier agreement with Ivanhoe, the Friedland-led junior has the first right of refusal over each of the properties and the option to earn a 60% stake by paying US$500,000 of the first US$1 million in expenses, plus completing a feasibility study. Ivanhoe can then elect to earn an additional 20% by arranging production financing.
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