Ivanhoe Mines sells Jinshan Gold stake

The Associated Press

April 10, 2008 at 10:20 AM EDT

VANCOUVER — Ivanhoe Mines Ltd. its selling its 42 per cent controlling interest in Jinshan Gold Mines Inc. to China National Gold Group Corp.

Ivanhoe said Thursday it will receive $3.1115 per share for each of its 67.5 million Jinshan shares, a total of just over $210-million, plus a two-year $7.5-million promissory note paying 12 per cent.

“This is the first step toward the formation of a long-term strategic partnership between Ivanhoe Mines and China National Gold Group that will focus on gold and copper exploration and mine development opportunities in China,” Ivanhoe chairman Robert Friedland stated in announcing the deal Thursday.

Ivanhoe will retain one-year warrants to purchase up to 1.5 million Jinshan shares at $2.50, and will record a gain on the sale of its interest in Jinshan in the second quarter.

Jinshan, headquartered in Vancouver, began producing gold from its CSH Mine in Inner Mongolia last July, and has produced 33,280 ounces to date, ramping up toward projected output of 120,000 ounces a year.