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Press release from CNW Group

Rio Tinto confirms support for Ivanhoe Mines comprehensive financing package and agrees to amend certain terms of memorandum of agreement

Wednesday, May 23, 2012

Rio Tinto confirms support for Ivanhoe Mines comprehensive financing package and agrees to amend certain terms of memorandum of agreement10:08 EDT Wednesday, May 23, 2012/THIS PRESS RELEASE CANNOT BE SENT, TRANSMITTED OR OTHERWISE DISTRIBUTED IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS IMPERMISSIBLE TO DO SO./LONDON, United Kingdom, May 23, 2012 /CNW Telbec/ - Rio Tinto and Ivanhoe Mines Ltd. (Ivanhoe) have agreed to amend certain terms of the memorandum of agreement announced on 18 April 2012, under which Rio Tinto has agreed to support and provide certain elements of a comprehensive funding package for Ivanhoe. The amended terms address conditions of regulatory approval and more closely align the terms of the proposed Ivanhoe rights offering with current market conditions.Amendments to the agreement include:Rio Tinto confirming it will take up its full basic subscription privilege under the US$1.8 billion rights offering with respect to its 51 per cent shareholding in Ivanhoe, subject to certain conditions;Rio Tinto agreeing to eliminate the material adverse change condition for its standby commitment in relation to a decline in Ivanhoe's share price;Rio Tinto continuing to provide a standby commitment for the full amount of the US$1.8 billion rights offering, subject to certain conditions including the price for Ivanhoe's common shares on the NYSE not falling below the subscription price at any time on or after the fifth business day before the expiry of the rights. Under the standby commitment, Rio Tinto is required to acquire any Ivanhoe common shares not taken up under the rights offering;Removing the previously announced US$8.34 subscription price for the rights offering. Rio Tinto and Ivanhoe have agreed to price the rights offering in the final prospectus;In consideration of eliminating the material adverse change clause for a decline in Ivanhoe's share price, re-pricing the exercise price of the Series D Warrants to US$10.84 per share, subject to adjustment upon completion of the rights offering; andConfirming the standby commitment fee will be paid in cash. Rio Tinto has agreed to waive its previously announced entitlement to reinvest its standby commitment fee in Ivanhoe common shares.Canadian early warning disclosureRio Tinto currently beneficially owns 377,397,658 common shares of Ivanhoe representing approximately 51 per cent of the outstanding common shares. As the subscription price for the rights offering will not be agreed until the final prospectus, the number of common shares Rio Tinto will beneficially own following closing of the rights offering cannot be determined at this time.  However, assuming Rio Tinto and the other holders of rights under the rights offering exercise their rights in full and the standby commitment is not utilized, Rio Tinto will beneficially own the same percentage of outstanding common shares following closing of the rights offering that it currently beneficially owns.If Rio Tinto were fully to exercise the Series D Warrants, Rio Tinto would acquire an additional 55,000,000 common shares.  Following such issuance, Rio Tinto would beneficially own 432,397,658 common shares representing 54.3 per cent of the outstanding common shares.The percentage of outstanding common shares stated in the preceding paragraphs is based on 741,386,789 outstanding common shares.Rio Tinto has anti-dilution rights that permit it to acquire additional securities of Ivanhoe and Entrée so as to maintain its proportional equity interest in Ivanhoe. Rio Tinto also has the right until 24 October 2012 to acquire additional Ivanhoe securities under its equity financing right of first offer.Except in connection with the rights offering, Rio Tinto has no present intention of acquiring additional securities of Ivanhoe. Depending upon its evaluation of the business, prospects and financial condition of Ivanhoe, the market for its securities, general economic and tax conditions and other factors, Rio Tinto may directly or indirectly acquire or sell some or all of the securities of Ivanhoe.This announcement is not an offer of securities for sale and cannot be sent, transmitted or otherwise distributed in or into the United States or any other jurisdiction where it is impermissible to do so.  No securities may be offered or sold within the United States absent registration under the US Securities Act of 1933, or an applicable exemption from such registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from Ivanhoe and that will contain detailed information about Ivanhoe and management, as well as financial statements.  Ivanhoe has agreed to file with the US Securities and Exchange Commission a registration statement on Form F-10 covering the rights offering.About Rio Tinto Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America. For further information: For further information, or to obtain a copy of Rio Tinto's early warning report once it is filed with the Canadian securities regulators, please contact: Media Relations, EMEA / Americas  Illtud Harri Office: +44 (0) 20 7781 1152 Mobile: +44 (0) 7920 503 600 Christina Mills Office:  +44 (0) 20 7781 1154 Mobile: +44 (0) 7825 275 605 Investor Relations, London Mark Shannon Office:  +44 (0) 20 7781 1178 Mobile: +44 (0) 7917 576597 David Ovington Office:  +44 (0) 20 7781 2051 Mobile: +44 (0) 7920 010 978Media Relations, Australia / Asia David Luff Office:  +61 (0) 3 9283 3620 Mobile: +61 (0) 419 850 205 Karen Halbert Office: +61 (0) 3 9283 3627 Mobile: +61 (0) 412 119 389 Bruce Tobin Office: +61 (0) 3 9283 3612 Mobile: +61 (0) 419 103 454 Investor Relations, Australia Dave Skinner Office:  +61 (0) 3 9283 3628 Mobile: +61 (0) 408 335 309 Christopher Maitland Office: +61 (0) 3 9283 3063 Mobile: +61 (0) 459 800 131Media Relations, Canada Bryan Tucker Office: +1 (0) 514 848 8151 Mobile: +1 (0) 514 825 8319 Investor Relations, North America Jason Combes Office:  +1 (0) 801 204 2919 Mobile: +1 (0) 801 558 2645 Website: Email: Twitter: Follow @riotinto on Twitter High resolution photographs and media pack available at: