With its ever-expanding Turquoise Hill copper-gold project in Mongolia sitting on China’s doorstep,
Copper importation into China has been compounding at about 18% per year, and China has surpassed the U.S. to become the world’s largest consumer of the red metal.
“Turquoise Hill’s location, only 80 km north of China in Mongolia’s South Gobi region, creates an excellent opportunity to supply gold and copper not only to China but to other major Asian copper-consuming nations, such as South Korea and Japan,” says Ivanhoe Mines Chairman Robert Friedland. “Proximity to China also opens up the potential for access to the world’s lowest-cost fabrication.”
A new resource estimate by AMEC E&C Services establishes Turquoise Hill (or Oyu Tolgoi, as it is known in Mongolia), as one of the world’s largest copper-gold porphyry deposits. Drilling to date has delineated four co-genetic copper-gold deposits along a 4.5-km-long controlling structure, which still remains open in the south and north.
In terms of inferred resources alone, the four deposits are estimated to contain 22.3 billion lbs. copper and 9 million oz. gold in 1.6 billion tonnes averaging 0.63% copper and 0.17 gram gold per tonne, at a cutoff grade of 0.3% copper-equivalent. Using a higher cutoff of 0.6%, the inferred resource shrinks to 812 million tonnes grading 0.9% copper and 0.21 gram gold, or 16.2 billion lbs. copper and 5.5 million oz. gold.
Ivanhoe has completed well over 120,000 metres of drilling on the property to date, with the original Southwest discovery zone seeing the lion’s share of the work. The Southwest zone contains an additional indicated resource of 509 million tonnes grading 0.4% copper and 0.59 gram gold per tonne, equivalent to 4.5 billion lbs. copper and 9.7 million oz. gold, at a 0.3% copper-equivalent cutoff.
“We feel this is the correct cutoff to use for the scale and scope of mineralization, compared with other operating copper-gold mines in the world,” says Ivanhoe’s deputy chairman, Edward Flood. The inferred portion of the Southwest zone is estimated at 291 million tonnes grading 0.32% copper and 0.5 gram gold, equivalent to 2 billion lbs. copper and 4.7 million oz. silver.
The Far North zone, discovered in October 2002, has added 14.4 billion lbs. copper and 1.8 million oz. gold to the project in just over six months. Inferred resources stand at 804 million tonnes grading 0.81% copper and 0.07 gram gold. Contained in that resource is an open-ended higher-grade sweetener of 29 million tonnes grading 2.7% copper and 0.2 gram gold based on a 2% copper-equivalent cutoff.
The South zone hosts an inferred 270 million tonnes grading 0.39% copper and 0.13 gram gold, equivalent to 2.4 billion lbs. copper and 1.1 million oz. gold, whereas the Central zone contains an inferred resource of 237 million tonnes grading 0.67% copper and 0.18 gram gold, or 3.5 billion lbs. copper and 1.4 million oz. silver.
Two recent stepout holes on the Far North zone have encountered significant mineralization that extends the discovery some 600 metres northeast of the limits of AMEC’s resource calculation. Stepping out 200 metres, hole 355 intersected 36 metres grading 1.77% copper and 0.08 gram gold, followed by 56 metres of 3.01% copper and 0.11 gram gold. The hole ended prematurely in 75 metres of 1.19% copper and 0.12 gram gold. Hole 367, which is another 300 metres beyond hole 355, is in similar-looking mineralization.
Given the overall magnitude of the deposit, Ivanhoe has hired AMEC and Australia-based Ausenco to head up a senior engineering consortium that will proceed with a prefeasibility study to evaluate a range of mining, processing and infrastructure alternatives.
“Oyu Tolgoi quite clearly is the initial discovery in what we believe is a chain of mineral deposits that we have just begun to outline,” says Flood.
Ivanhoe holds a 100% interest in Turquoise Hill and has exploration rights covering about 90,000 sq. km in central and southern Mongolia.
See IVANHOE Page 10
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