China Investment Corporation Announces Completion of its Convertible
Debenture Investment in SouthGobi Energy Resources Ltd.

BEIJING, China, Nov. 19 /CNW/ - China Investment Corporation announced today the completion by a wholly-owned subsidiary ("CIC") of its previously announced US $500 million secured convertible debenture (the "Debenture") investment in SouthGobi Energy Resources Ltd. ("SouthGobi"). The aggregate subscription price was US$500 million (or approximately C$529.2 million) in cash. CIC does not currently hold any shares in SouthGobi.

The Debenture is convertible into common shares of SouthGobi at the lower of C$11.88 or the 50-day volume-weighted average price ("VWAP") at the date of conversion, with a floor conversion price of C$8.88 per share. Assuming full conversion at the base conversion price of C$11.88, the common shares would represent approximately 25% of the outstanding common shares on an undiluted basis (or approximately 22% of the outstanding common shares if full conversion occurs following SouthGobi achieving a 25% public float (on an as converted for the debenture loan basis)).

SouthGobi and CIC each has various rights to call conversion of the Debenture into common shares. CIC has the right to convert the Debenture, in whole or in part, into common shares 12 months after the date of issue. SouthGobi has the right to call for the conversion of up to US$250 million of the Debenture on the earlier of 24 months after the issue date, if the market price of its common shares is greater than C$10.66, or upon SouthGobi achieving a public float of 25% of its common shares under certain agreed circumstances. If SouthGobi fully exercises its conversion right immediately following its achieving a 25% public float (on an as converted for the debenture loan basis) and assuming conversion at the C$11.88 base price, CIC's initial shareholding interest in SouthGobi would be approximately 11%.

While the Debenture is outstanding, or while CIC has a minimum 15% direct or indirect stake in SouthGobi, CIC has the right to nominate one director to SouthGobi's Board. SouthGobi currently has eight Board members.

CIC has agreed that it will not have any voting rights in SouthGobi beyond 29.9% if CIC ever acquires ownership of such a shareholder stake through exercising the conversion right in the Debenture.

While the Debenture is outstanding, or while CIC has a minimum 15% direct or indirect stake in SouthGobi, CIC has certain pre-emption rights on a pro-rata basis to subscribe for any new shares to be allotted and issued by SouthGobi for the period which the Debenture is outstanding. The pre-emption rights will not apply to new shares issued pursuant to pro-rata public equity offerings made to all shareholders, exercise of stock options and shares issued to achieve a 25% public float.

While a portion of the Debenture is outstanding, or while CIC has a minimum 15% direct or indirect stake in SouthGobi, CIC has the right of first offer for any direct and indirect sale of Ivanhoe Mines Ltd's ownership stake in SouthGobi. Ivanhoe Mines Ltd. has publicly announced that it currently owns directly and indirectly approximately 105.8 million SouthGobi shares, or approximately 79.13% of SouthGobi's current issued and outstanding shares.

CIC has registration rights under applicable Canadian provincial securities laws in connection with the common shares issuable upon conversion of the Debenture.

Citigroup Global Markets Asia Limited acted as financial advisor and Osler, Hoskin & Harcourt LLP acted as lead legal advisor to China Investment Corporation and its subsidiaries in this transaction.

    
    China Investment Corporation
    New Poly Plaza
    No. 1 Chaoyangmen Beidajie
    Dongcheng
    Beijing 100010
    China
    

SOURCE CHINA INVESTMENT CORPORATION

For further information: For further information: China Investment Corporation, Shuilin Wang, +86 (10) 6408 6277, +86 (10) 6408-6908 (FAX)

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CHINA INVESTMENT CORPORATION

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