Rio Tinto (NYSE: RIO) has given notice to Ivanhoe Mines Ltd (NYSE: IVN [FREE Stock Trend Analysis]) that it is exercising its remaining warrants, which will increase its ownership of Ivanhoe shares from 42.0 per cent to 46.5 per cent. Under Rio Tinto's agreement with Ivanhoe in December 2010, Rio Tinto agreed to exercise its remaining warrants for the ongoing development of the Oyu Tolgoi project by no later than January 2012.
The remaining warrants entitle Rio Tinto to acquire 55,122,253 shares at an average subscription price of approximately US$9.10 per share, for total consideration of approximately US$502 million. Rio Tinto's increased ownership will permit it to nominate an additional director to Ivanhoe's board which will increase Rio Tinto-nominated directors from six to seven out of a total of 14.
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