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Ivanhoe is seeking to raise financing for its massive Oyu Tolgoi copper-gold project in Mongolia.Ivanhoe Mines

Ivanhoe , an affiliate of mining giant Rio Tinto PLC, said on Wednesday it intends to proceed with a rights offering open to all existing shareholders that would raise about $1.8-billion (U.S.).

The offering, originally announced in mid-April, is part of a comprehensive financing plan to continue development of Ivanhoe's Oyu Tolgoi copper-gold project in Mongolia, the company said.

Anglo-Australian miner Rio Tinto earlier this year acquired a controlling interest in Vancouver-based Ivanhoe, whose main asset is the massive Oyu Tolgoi project.

Rio, which owns a 51-per-cent stake in Ivanhoe, said it plans to buy the maximum number of shares it is permitted to acquire under the terms of the rights offering. It has also agreed to provide a standby commitment for the full value of the rights offering, whereby it will acquire any Ivanhoe common shares not taken up by other shareholders in the offering.

This could allow Rio to boost its stake in Ivanhoe further as shareholders who do not participate in the rights offering will see their ownership interest in Ivanhoe reduced.

Ivanhoe and Rio backed away from the $8.34-a-share subscription price for the offering they had announced earlier, saying that it will be priced in the final prospectus.

"In keeping with international practice in rights offerings, each new common share of Ivanhoe Mines available for purchase by rights holders will be offered at a discount to the company's current market price," Ivanhoe said in a statement.

Shares of Ivanhoe have fallen more than 50 per cent since January, when Rio won a ruling that struck down Ivanhoe's controversial "poison pill," a decision that allowed Rio to buy a majority interest in the company without having to fork out a huge premium to other shareholders.