Ivanhoe Mines Ltd. has reported a narrowing of its first-quarter loss as the Vancouver-based miner said its promising Oyu Tolgoi copper-gold project in Mongolia remains on track for commercial production next year.
Ivanhoe, 51 per cent owned by international mining giant Rio Tinto , said after markets closed Tuesday that its net loss in the three months ended March 31 was $80.6-million (U.S.) or 11 cents per share.
That compared with a net loss of $492.5-million or 70 cents per share in the same 2011 period when the company took a $432.5-million loss on a change in fair value of derivatives.
Ivanhoe, which also has a 58 per cent interest in Mongolian coal miner SouthGobi Resources and a 59 per cent interest in copper-gold miner Ivanhoe Australia, said revenue for the quarter was $40.2-million, up from $20.2-million in the same 2011 period.
The company said overall construction of the first phase of the Oyu Tolgoi was 77.8 per cent complete at the end of the first quarter and had advanced to 82.2 per cent complete at the end of April.
"Construction remains on track to meet the mine's targeted start of initial production in the second half of 2012. Commercial production is projected to begin in the first half of 2013."
Last month, Rio Tinto tightened its grip on Ivanhoe as part of a $3.3-billion financing deal that has seen chief executive Robert Friedland step away from the company he founded.
"With Rio Tinto's expanded support, we are counting down to the startup later this year of what I am sure will quickly grow to become one of the world's most significant and successful, mining complexes," Mr. Friedland said as the time.
Under the financing agreement, Rio Tinto will provide $1.5-billion in bridge financing to Ivanhoe and a standby commitment for a $1.8-billion rights offering by Ivanhoe.
The funding is in addition to $1.8-billion in interim funding that was agreed in December 2010
Under the rights offering, Ivanhoe shareholders will be able to buy additional shares at a subscription price of $8.34 per share on an equal proportional basis.
If shareholders fully exercise their rights, Rio Tinto will maintain its 51-per-cent stake in Ivanhoe. If shareholders do not exercise any of their rights, Rio Tinto's stake in the company will increase to about 62 per cent.