Ivanhoe Mines (IVN-T, IVN-N) 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.
The joint venture, in the Gobi desert of southern Mongolia, covers about 400 sq. km. of Entre’s 100%-owned Shivee Tolgoi (Lookout Hill) property, which completely surrounds Ivanhoe’s Oyu Tolgoi (Turquoise Hill) copper- gold project.
Shivee Tolgoi 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 will give Ivanhoe an 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 Entre’s Shivee Tolgoi property.
Ivanhoe currently owns about 15% of the outstanding shares of Vancouver-based Entre. British mining giant Rio Tinto (RTP-N, RIO-L), Ivanhoe’s 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 Oyu Tolgoi 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 south.
Four rigs are currently drilling the deposit, with hole EJDOO13 recently intersecting 1.43 grams per tonne gold, 0.5% copper and 0.0178% molybdenum starting at 790 metres depth.
Another hole, EJD0011, intersected molybdenum-rich mineralization, starting at 1,008 metres, grading 0.31 gram gold, 0.45% copper and 0.0212% molybdenum.
Entre Gold stock rose 29 apiece to close at $3.19 on a trading volume of more than 935,000 shares on the news, while Ivanhoe shares climbed 92 to close at $14.39 on 1.5 million shares traded.
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