Ivanhoe reports 'remarkable' kilometre-long gold find at Oyu Tolgoi

By The Canadian Press

ULAANBAATAR, Mongolia - Ivanhoe Mines Ltd. (TSX: IVN.TO) reported a "remarkable" kilometre-long gold and copper find at its Oyu Tolgoi mine in Mongolia, sending its shares up by nearly six per cent Tuesday.

"While Oyu Tolgoi already is one of the world's largest deposits of gold and copper, (the find) is consistent with our long-held view that the Oyu Tolgoi mineralized system contains significantly more gold and copper than we have delineated to date," said Ivanhoe executive chairman Robert Friedland.

Ivanhoe stock was up $1.37 or 5.74 per cent at $25.22 Tuesday on the Toronto Stock Exchange.

The company said it found an almost one-kilometre-long section of nearly continuous mineralization at what is already considered to be one of the top three copper and gold mines in the world.

"To intercept almost one kilometre of copper and gold mineralization in a new drill hole is a remarkable development, considering that we already have drilled more than 1,650 holes totalling almost 900 kilometres at the project during the past 10 years," Friedland added.

The drill hole intercepted 112 metres grading 1.36 grams of gold per tonne and 0.34 per cent copper. And individual two-metre samples near the bottom of the hole returned gold assays of 10 grams per tonne — among the highest gold grades ever drilled at Oyu Tolgoi.

The area of the find has been named Heruga North. Heruga means "supreme happiness."

The mine, jointly owned by Ivanhoe and the Mongolian government, is scheduled to begin initial production by late 2012.

International mining giant Rio Tinto has an indirect ownership interest in the mine through its stake in Ivanhoe, although the company has expressed interest in converting its equity into a direct stake.

Oyu Tolgoi is forecast to produce 1.2 billion pounds of copper and 650,000 ounces of gold annually in its first 10 years. The mine is expected to cost US$4.6 billion to build.

Besides its stake in Oyu Tolgoi, Ivanhoe has a 57 per cent interest in Mongolian coal miner SouthGobi Resources (TSX: SGQ.TO). It also has an 81 per cent interest in Ivanhoe Australia, an exploration and development company, and a 50 per cent interest in Altynalmas Gold Ltd., a company developing the Kyzyl gold project in Kazakhstan.