Global miner Rio Tinto Ltd
(ASX:RIO) and Canada’s Ivanhoe Mines have signed an agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold mine in Mongolia.
The long awaited deal, which has been in negotiations since 2001, comes after the Parliament changed a windfall profits tax in August.
Opposing members of parliament have argued that the deal short-changed Mongolia and that the government should hold a 51 per cent stake in the operation.
Under the agreement the Mongolian Government will own 34 per cent of the project with the Sydney Morning Herald reporting that it will also receive a US$250 million advance payment against royalties and taxes.
Rio says production is expected to commence in 2013 with a five year ramp up to full expected production of 450,000 tonnes of copper a year and 330,000 ounces of gold.
Rio Tinto’s 2008 net profit was US$3.676 billion, nearly half what it achieved in 2007.
Mining giant BHP Billiton Ltd (ASX:BHP) has reportedly amended a contract the miner is offering to unionised employees at the company’s Spence copper mine in Chile.
According to a report in the Australian from the Dow Jones Newswires, a spokesperson for the Spence union says there is still room for this offer to be substantially better, but that negotiations have advanced.
The Dow Jones Newswires says workers are asking for a 5.5 per cent real wage increase, as well as health and social benefits.
BHP and the union are in a five day government mediation period.
The Spence mine in Chile produced approximately 165,000 tonnes of copper cathodes last year.
BHP also owns and operates the Escondida mine Chile. BHP’s 2009 net profit took a massive fall from its high of US$15.4 billion in 2008.
Emerging lithium producer Galaxy Resources Ltd (ASX:GXY) has successfully completed an institutional capital raising of $65 million.
The capital raising is part of the funding process for its Mt Cattlin mine in Ravensthorpe and Jiangsu Lithium Carbonate Project in China.
The company placed 51 million shares at a price of $1.28 a share.
Managing director Iggy Tan says the capital raising will complete the $160 million Creat equity and debt funding package for the development of all projects.
Mr Tan says the company is delighted with the response, saying it reflects a strong endorsement for the lithium market and the company’s strategies to fast track development of its Ravensthorpe mine and China production facilities.
The company says its intention is to use funds to reduce the project debt to a level of around 60 per cent as the project meets expected cash flows.
Looking back over the past five years, Galaxy Resources is yet to post a net profit.
Drug discovery research and development company Cytopia Ltd (ASX:CYT) has announced that it has agreed to an all-scrip takeover deal by Toronto based YM BioSciences that values the company at $14 million.
Under the agreement Cytopia shareholders will be offered one YM share for every 11.737 Cytopia shares.
Cytopia option holders will receive YM options at an equivalent ratio.
The deal represents a share price offer of 16.59 cents per Cytopia share, a 58 per cent premium to the company’s last traded price prior to the agreement.
YM is a clinical stage cancer-focused life sciences company with a market cap of $92.6 million.
On successful implementation of the deal, Cytopia shareholders will own around 11 per cent of YM.
The board of Cytopia has recommended shareholders vote in favour of the deal.
Cytopia has posted net losses over the last five years.
