MELBOURNE, Australia - Ivanhoe Australia Ltd. (TSX:IVA) will receive up to US$50 million from its majority shareowner, Ivanhoe Mines Ltd. (TSX:IVN), to fund operations during the subsidiary company's previously announced strategic review.
Under a term sheet signed by the two companies, which are both listed on the Toronto stock market, Ivanhoe Australia will pay interest and fees for money drawn on the secured, 12-month working capital facility.
The interest rate will be set at five per cent above the applicable LIBOR benchmark plus fees determined by the amounts drawn by Ivanhoe Australia.
The agreement won't affect the percentage of Ivanhoe Australia equity that's owned by the Vancouver-based company. Ivanhoe Mines currently owns 59 per cent of the Australian company's outstanding shares.
Ivanhoe Australia said Monday its strategic review will be completed by the end of September, consistent with an estimate announced June 25.
It has been pursuing a range of alternatives for its Cloncurry projects. They include the Osborne complex, the Merlin molybdenum-rhenium project; the Mount Dore copper project and the Mount Elliott copper-gold project.
Based on Friday's closing stock price of 47 cents per share, Ivanhoe Australia had a market value of $260.3 million.