EXHIBIT 99.1
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[GRAPHIC OMITTED]
[LOGO -- IVANHOE ENERGY]
May 15, 2006
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Ivanhoe Energy Signs Agreement for Business Combination
Between its China Operations and a U.S. Public Company
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BEIJING, CHINA -- Ivanhoe Energy Inc. (NASDAQ: XXXX and TSX: IE) and China
Mineral Acquisition Corporation (OTCBB: CMAQ, CMAQU, CMAQW) have signed a
definitive agreement for their previously announced proposed business
combination of Sunwing Energy Ltd., Ivanhoe Energy's wholly-owned China
operating subsidiary, and China Mineral, a U.S. "blank check" public company.
If the transaction is completed, the new public company would be approximately
80% owned by Ivanhoe Energy on a primary share basis before giving effect to
the exercise of outstanding warrants, options and contingent consideration
granted to Ivanhoe Energy and assuming no China Mineral stockholders exercise
conversion rights under its charter. Immediately prior to the combination,
China Mineral will redomesticate to the British Virgin Islands as China
Ivanhoe Energy Ltd. and will acquire 100% of the issued and outstanding stock
of Sunwing for shares of China Ivanhoe Energy ordinary equity with a value of
US$100 million, subject to working capital and long-term debt adjustments. In
addition, China Mineral will also grant to Ivanhoe Energy performance warrants
and a contingent right to receive additional shares, which together may
provide Ivanhoe Energy with an additional 14% ownership interest in China
Ivanhoe Energy (not including the exercise of outstanding warrants and options
for China Mineral stock).
The proposed business combination of Sunwing and China Mineral and the
redomestication of China Mineral into the British Virgin Islands require the
approval of China Mineral stockholders.
A Form S-4 Registration Statement under the U.S. Securities Act of 1933, as
amended, which includes the proxy statement for a special meeting of the
stockholders of China Mineral to vote on the redomestication and business
combination transaction, has been filed with the U.S. Securities and Exchange
Commission. If approved by China Mineral stockholders, the proposed business
combination will be completed as soon as possible after the special meeting
but in any event on or prior to its charter requirement of August 30, 2006.
China Mineral, a Delaware corporation, is a "blank check" company formed in
March 2004 to identify and acquire an operating business having operations in
the People's Republic of China. China Mineral raised approximately US$21
million (net) in an initial public offering in August 2004 and has no assets
other than cash and has no operating business or full-time employees.
Sunwing is the corporate flagship for Ivanhoe Energy's oil and gas exploration
and production in China. One of the first foreign producers of light, sweet
crude oil on the Chinese mainland, Sunwing has operated in China for over ten
years. Its current projects include a 100% working interest in the Kongnan
enhanced oil recovery (EOR) project at Dagang, in Hebei Province, a large
natural gas exploration project on a 900,000-acre Zitong block in Sichuan
Province and a royalty interest in the Daqing oil field. The Kongnan project
is operated by Sunwing under a 30-year production-sharing contract signed in
1997 with China National Petroleum Corporation. Gross production of
approximately 2,100 barrels per day in Dagang reflects Sunwing's recent
US$28.3 million acquisition of CITIC Group subsidiary, Richfirst Holdings
Limited's, working
interest. Sunwing also recently signed a farmout agreement with Mitsubishi Gas
Chemical Company, Inc., which acquired a 10% working interest in the Zitong
block for US$4 million, pending approval of government authorities in China.
Xxxxxx Xxxxxxxxx, Ivanhoe Energy's Deputy Chairman and expected Chairman of
China Ivanhoe Energy following the business combination said, "We have long
been interested in establishing a public vehicle for our China operations. We
believe the separation of our China business into an independent
publicly-traded company will facilitate our objective of growing operations in
China."
Simon Mu, CEO of China Mineral, said, "We are pleased to have successfully
negotiated a definitive agreement for the proposed business combination with
Sunwing. Sunwing's senior management has more than a half century's experience
in oil and gas operations in China and the Asia-Pacific region and we believe
that a business combination with Ivanhoe Energy and Sunwing will provide China
Mineral stockholders with an excellent opportunity to invest in a company with
significant growth potential in China."
Ivanhoe Energy is an independent international oil and gas exploration and
development company focused on pursuing long-term growth in its reserve base
and production using key technologies, including its proprietary heavy oil
upgrading process (HTL), state-of-the-art drilling and enhanced oil recovery
(EOR) techniques and the conversion of natural gas to liquids (GTL). Core
operations are in the United States and China, with business development
opportunities worldwide.
Ivanhoe Energy trades on the NASDAQ Capital Market with the ticker symbol XXXX
and on the Toronto Stock Exchange with the symbol IE.
INFORMATION CONTACTS:
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All locations: Xxxxx Xxxxxxx 0-000-000-0000 (North America)
In Asia: Xxxxxxx Xxxx 86-1370-121-2607 / 000-0000-0000
Website: xxx.xxxxxxx-xxxxxx.xxx
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements,
including forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements relating to the continued advancement of
Ivanhoe Energy's projects, statements related to the expected outcome of the
proposed business combination with China Mineral, including Ivanhoe Energy's
shareholding in the resulting company and the effect of the proposed business
combination on the resulting company's prospects for success, statements
related to the valuation of Sunwing, statements concerning drilling
exploration and development xxxxx in the Sichuan Basin and other statements,
which are not historical facts. When used in this document, the words such as
"could," "plan," "estimate," "expect," "intend," "may," "potential," "should,"
and similar expressions relating to matters that are not historical facts are
forward-looking statements. Although Ivanhoe Energy believes that its
expectations reflected in these forward-looking statements are reasonable,
such statements involve risks and uncertainties and no assurance can be given
that actual results will be consistent with these forward-looking statements.
Important factors that could cause actual results to differ from these
forward-looking statements include the fact that the proposed business
combination may not be completed, the company's projects will experience
technological and mechanical problems, geological conditions in the reservoir
may not result in commercial levels of oil and gas production, environmental
risks, changes in product prices, our ability to raise capital as and when
required, competition, the risk of doing business in foreign countries and
other risks disclosed in Ivanhoe Energy's Annual Report on Form 10-K filed
with the U.S. Securities and Exchange Commission on XXXXX and the Canadian
Securities Commissions on SEDAR.
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