Ivanhoe liquidating interest in Olympus Pacific

Vancouver – Ivanhoe Mines (IVN-T) plans on selling its 19.1 million shares of Olympus Pacific Resources (OYM-V) to a Vietnamese investment fund.

Vietnam Growth Fund (VGF) has agreed to purchase Ivanhoe’s 19% interest for $5.7 million (30 per share). VGF is managed by Ho Chi Minh City based Dragon Capital, already a major shareholder of Olympus Pacific.

The deal will give Dragon Capital about a 37% interest in the aspiring junior gold producer.

Olympus Pacific holds 80% interest in the Bong Mieu gold project (licences covering about 30 sq. km) in central Vietnam, about 80 km south of Danang. There are three known deposits at Bong Mieu: Ho Gan, Ho Ray and Nui Kem.

A positive prefeasibility study on the Ho Gan deposit in late-2004 reviewed a proposed open pit operation over three years producing a total of just over 50,000 oz. of gold. Proven and probably reserves are 858,000 tonnes grading 2.4 grams gold per tonne. With site construction well underway, the company anticipates production from Ho Gan to commence in August 2005.

The Ho Ray deposit is undergoing metallurgical testing with the view of potential open pit exploitation.

Deeper gold mineralization at the Nui Kem deposit, which had historic production of about 84,000 oz. gold, will undergo further drill testing down-dip from past underground workings.

Olympus Pacific also holds 85% interest in the 70 sq. km Phuoc Son gold project, located about 90 km southwest of Danang. A recently completed preliminary assessment of the Dak Sa underground project at Phuoc Son covered the Bai Dat and Bai Go deposits.

The study, completed by engineering firm Micon International, reviews a proposed underground operation with a 6.5 year mine life producing a total of about 200,000 oz. gold. With an estimated US$7.5 million capex, the high grade deposits are expected to deliver a 5 month payback with total life-of-mine operating costs of about US$145 per oz.

The Bai Dat and Bai Go deposits host measured and indicated resources of 318,000 tonnes grading 14.3 grams gold using a 4.5 grams gold cut-off. There are also additional inferred resources of 188,000 tonnes averaging 12.1 grams gold at the same cut-off grade.

Programs of additional metallurgical testing and infill drilling are being undertaken to further upgrade resources at Dak Sa.