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Ivanhoe hires banks to assess Congo copper projects

Published: 15:23 18 Aug 2014 EDT

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Ivanhoe Mines (TSE:IVN), an Africa-focused Canadian miner, dropped in midday trades after saying it will undertake a strategic review of its two key projects in the Democratic Republic of Congo.

Shares fell 2 percent to C$1.44 at 2:37 p.m. in Toronto, expanding this year's declined to 23 percent.

Ivanhoe has hired BMO Capital Markets Ltd. and Morgan Stanley to conduct the review, which will first focus on finding possible third-party investors and/or joint-venture partners for its Kamoa copper project and the Kipushi zinc-copper mine. Both projects are in the Democratic Republic of Congo's southern province of Katanga.

Ivanhoe is exploring options to fund its development projects. It would cost about $1.4 billion to build the Kamoa copper mine, according to the company’s website.

Ivanhoe said it would continue to examine other options like a corporate reorganization and a project spin-off.

Kamoa, in the southern province of Katanga, is a proposed underground mine, with an estimated 43.5 billion pounds of indicated copper resources.

Kipushi, in the same region, is an underground copper, zinc and lead mine that was idled in 1993. Ivanhoe acquired the flooded mine in 2011 and has been removing water from the facility and exploring underground.

In May, Invahoe said it was looking at "a number of potentially significant" options at both the corporate and project level to help realize the potential value of its projects.

China's largest gold company, China National Gold Group Corp., has in the past talked to Ivanhoe about buying a stake or taking over at least part of the company. In June, China National's president said it was on the hunt for global acquisitions and partnerships, but that talks about an investment in Ivanhoe weren't active at that time.

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