Ivanhoe completes initial earn-in of properties with Entree Gold

Ivanhoe Mines (IVN-T, IVN-N, IVN-Q) has invested more than US$20 million in its joint-venture properties with Entre Gold (ETG-T, EGI-X) to earn its initial 51% interest in the Ivanhoe-Entre joint venture in the Gobi desert of southern Mongolia.

The joint venture covers about 400 sq. km. of Entres 100%-owned Shivee Tolgoi (Lookout Hill) property, which completely surrounds Ivanhoes Oyu Tolgoi property (Turquoise Hill) copper gold discovery.

The Shivee Tolgoi property includes the Heruga deposit, where significant copper, gold and molybdenum mineralization has been intersected in drill holes on five contiguous sections, representing 1.1 km of continuous strike length.

The Buddhist Hamba Lama of Mongolia proposed the name Heruga for the deposit, which means supreme happiness. It was formerly called the Javkhlant deposit.

Under the earn-in agreement, finalized in November 2004, Ivanhoe is expected to spend US$35 million on exploration and development of the property before November 2012.

That expenditure will give Ivanhoe a 80% participating interest in all minerals extracted above a sub-surface depth of 560 metres on the optioned property and a 70% participating interest in all minerals extracted below a sub-surface depth of 560 metres.

The earn-in agreement also gives Ivanhoe the right of first refusal in subsequent joint ventures that may be formed on the remaining portion of Entres Shivee Tolgoi property.

Ivanhoe currently owns about 15% of the outstanding shares of Vancouver-based Entre. British mining giant Rio Tinto (RTP-N), Ivanhoes strategic partner in the development of Oyu Tolgoi, also owns about 16% of the outstanding shares of Entre.

The Heruga deposit adjoins the southern boundary of the Oyu Tolgoi project and is about 5 km southwest of the high-grade centre of the southwest Oyu copper and gold deposit.

Drilling on Heruga has delineated a 1,100-metre coherent zone of molybdenum-rich copper and gold mineralization. The deposit is open to the east and to the south.

Four drill rigs are currently drilling on the deposit and the results from eight additional drill holes were released today. Hole EJDOO13 intersected gold mineralization starting at 790 metres grading 1.43 grams per tonne gold, 0.50% copper and 178 ppm molybdenum.

Hole EJD0011 intersected molybdenum-rich mineralization starting at 1,008 metres grading 0.31 grams per tonne gold, 0.45% copper and 212 ppm molybdenum.

Shares of Entre Gold rose $0.29 apiece to close at $3.19 on a trading volume of 935,378, while Ivanhoe shares climbed $0.92 to close at $14.39 on a trading volume of 1.5 million.