The latest drill results from the Turquoise Ridge copper-gold porphyry discovery in southern Mongolia show that the Southwest Oyu zone has high grades and considerable size potential, prompting
The company has arranged a US$15-million private placement financing with several Canadian and Australian mutual funds. The financing consists of more than 6.4 million special warrants priced at $2.50 each, and 2.9 million special warrants at $2.75. Each special warrant entitles the holder to acquire one share of Ivanhoe at no additional cost. There are almost 171.2 million shares outstanding.
The Turquoise Ridge project, or “Oyu Tolgoi” as it is known in Mongolia, lies deep in the South Gobi Desert, 560 km south of Ulaanbaatar, the country’s capital. The Southwest Oyu discovery zone is one of four targets occurring in an area measuring 3 by 2 km.
Ivanhoe has been drilling off the Southwest discovery zone on an 80-by-120-metre grid pattern. Results from the first 24 holes completed at Southwest Oyu have given Ivanhoe’s geologists a much better understanding of the geometry, nature and depth potential of the high-grade gold and copper mineralization.
By cutting a 120-metre section, between 706 and 826 metres down-hole, grading 1.28% copper and 3.44 grams gold per tonne, hole 180 has extended the high-grade core of the Southwest Oyu porphyry zone to a vertical depth of at least 600 metres. Hole 180 was drilled to a down-hole depth of 895 metres (the limit of the drill rig) and averaged 0.56% copper and 0.92 gram gold over 802 metres starting from 60 metres of depth.
Other highlights include hole 183, which was drilled to the northwest to confirm the grade and continuity of the mineralization within the Southwest zone. Hole 183 intersected 562 metres averaging 0.82% copper and 1.44 grams gold, beginning from 104 metres down-hole (including 336 metres of 1.04% copper and 1.93 grams gold). Assays below 666 metres of depth for hole 183 are pending.
Hole 172 was drilled in a northeasterly direction and tested the downdip extension of the northwestern portion of the deposit. Hole 172 undercut previously reported hole 171 (290 metres averaging 0.43% copper and 0.73 gram gold, including 100 metres of 0.67% copper and 1.29 grams gold) with a 630-metre intercept averaging 0.49% copper and 0.78 gram gold, including a higher-grade 116 metres of 0.88% copper and 2.35 grams gold.
Based on the deep drilling to date, Ivanhoe says mineralized system appears to be getting stronger at depth, with increasing gold and copper grades, and an increasing gold-to-copper ratio.
The drilling has also defined a broad continuous zone of lower-grade mineralization that forms a halo peripheral to the high-grade core at Southwest Oyu. The mineralized envelope extends 1,200 metres in a northeast-southwest direction and 300 metres in a northwest-southeast direction. Ivanhoe believes the lower-grade zone is economically significant.
The geology in the immediate area of Turquoise Hill is dominated by a thick Silurian-Devonian age sequence of andesitic to basaltic flows, with associated basaltic pillow lavas. This package has been intruded by a complex variety of monzodiorite stocks, plus syenodiorite porphyry stocks and dykes that are pre- to late-mineral in their emplacement. Post-mineral syenite porphyry stocks and dykes of rhyolite cut all observed sequences. This sequence of rocks is overlain by unaltered carboniferous volcaniclastic sediments.
The mineralization appears to be controlled by northeast- and northwest-striking structures that may be high-angle normal faults, with some component of dextral movement. Gold-copper-molybdenum mineralization occurs as chalcopyrite, pyrite vein stockworks and disseminations overprinting intense quartz-magnetite stockworks in andesite and basalt flows. Higher gold grades occur close to an intensely quartz-stockworked and strongly mineralized monzodiorite porphyry and associated hydrothermal breccia.
Ivanhoe has commissioned an independent resource estimate for an initial open-pit, based on the drilling completed to date.
The company must spend US$3 million on exploration by May 2003 before it can elect to acquire a 100% interest in the 238-sq.-km Turquoise Hill property from
BHP retains a 2% net smelter return royalty and certain back-in rights to re-purchase a 40-to-60% participating interest based on the nature and size of the deposit.
With no competition to speak of, and betting that porphyry deposits do not occur alone, Ivanhoe has been aggressively acquiring ground along the same belt of rocks that hosts Turquoise Ridge. The company now holds mineral rights to a total of 15,600 sq. km along the southern Mongolia belt. The expanded portfolio includes the earlier acquisitions of four new copper-gold porphyry prospects that were generated after conducting extensive field investigations of more than 350 mineral occurrences throughout Mongolia during the past five years.
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