The more than $5 billion spent on the development of the Oyu Tolgoi copper and gold project in Mongolia by Ivanhoe Mines Ltd., might not be enough to get the project across the finish line.
Ivanhoe Mines announced that is considering selling some of its other assets to raise the needed funds to continue to develop the mine.
The Vancouver-based mining company said it has received written expressions of interest on potential asset sales “that could realize significant capital to support the ongoing development of Oyu Tolgoi,” The Wall Street Journal reported.
Ivanhoe owns 66 percent of Oyu Tolgoi, which is expected to be one of the world's largest mines when fully operational. Rio Tinto now owns 51 percent of Ivanhoe, and is the project’s operator.
The Oyu Tolgoi is expected to be one of the top producers of gold and copper in the world when it is fully operational. The mine is is scheduled to begin commercial production in the middle of 2013, with initial production on track for the third quarter of this year.
Rio Tinto took its majority stake in Ivanhoe in January and is said to want to hold on to Oyu Tolgoi but spin off or sell Ivanhoe’s other mining assets.
Ivanhoe’s other interests include a 58 percent stake in Mongolian coal miner SouthGobi Resources Ltd., a 59 percent stake in Ivanhoe Australia Ltd. and a 50 percent interest in privately held Altynalmas Gold.
Ivanhoe said a comprehensive financing plan for the completion and start-up of Oyu Tolgoi remains under discussion with Rio Tinto.
“Both companies have exchanged proposals and we are continuing to work together in an attempt to reach agreement on a comprehensive financing approach that will accommodate our mutual interests in advancing Oyu Tolgoi’s development,” Ivanhoe's founder and chief executive, Robert Friedland, said in a press release.
Ivanhoe said key elements of its financing plan include project financing, bridge financing and equity, including a possible rights offering.