Ivanhoe mulls expansion

The solid operating performance of the S&K mine in Myanmar has prompted Ivanhoe Mines (IVN-T) and its state-owned partner to plan an expansion aimed at boosting production by 40%, to 35,000 tonnes of cathode copper per year.

Each company owns 50% of the S&K mine, which represents the first phase of the large Monywa copper project, 100 km north of the capital city of Yangon.

For the second quarter, copper production totalled 6,603 tonnes, up 7% from the first quarter of the year. In the first six months of 1999, S&K turned out 12,784 tonnes, for an annualized rate of more than 25,500 tonnes. Cash costs for the LME Grade A cathode copper produced at Monywa average US25 cents per lb., among the lowest in the world.

The US$7.5-million expansion program is currently under review by the owners.

Farther down the road, the partners will examine a larger expansion at the nearby Letpadaung deposit, which has the same metallurgical characteristics as S&K and four times the reserves. That expansion could lead to production of as much as 100,000 tonnes of copper per year.

Ivanhoe, previously known as Indochina Goldfields, is focused on mineral projects in Southeast Asia. It owns about 18% of Emperor Mines, an Australian-listed company developing its namesake gold mine in Fiji. The operation is expected to produce 135,000 oz. gold in its first year.

Ivanhoe also owns the metallurgically complex Bakyrchik gold project in Kazakstan, which was placed on care-and-maintenance in early 1998 as a result of low gold prices.