Ivanhoe explores Indonesia gold target

Ivanhoe Mines (IVN-T) has met with early success in its exploration of ground near the infamous Busang property of Bre-X Minerals in northeastern Kalimantan, Indonesia.

The company, led by well-known mining promoter Robert Friedland, tied up a large land package not long after Bre-X announced impressive-sounding results from Busang. The disgraced Bre-X is now long gone, yet Ivanhoe is learning that perseverance can pay off in the long run.

At the Seruyung gold prospect, the junior has encountered encouraging gold values associated with a high-sulphidation epithermal system. Of the 41 holes drilled into the prospect to date, 33 intercepted gold mineralization greater than 0.5 gram per tonne. Highlights include:

– hole 1, which cut 73.5 metres grading 3.07 grams gold from surface;

– hole 2, which cut 93 metres of 1.15 grams from 23.9 metres downhole;

– hole 6, which returned 51 metres of 2.55 grams from surface;

– hole 8, which hit 26.7 metres grading 2.67 grams from surface; and

– hole 13, which cut 37 metres of 3.21 grams from surface.

Although early indications suggest a resource of only 350,000 oz. gold, Ivanhoe believes there is potential for expanding the mineralized zone.

At the Gupak zinc skarn prospect, the company drilled 15 holes, with all but one hitting significant zinc-lead mineralization. Highlights include:

– hole 4, which hit 3.4 metres grading 9.56% zinc and 7.89% lead;

– hole 6, which cut 10.3 metres grading 3.07% zinc;

– hole 7, which intersected 10 metres of 8.11% zinc, 0.06% lead, 1.51% copper and 87 grams silver;

– hole 10, which returned 11 metres of 3.17% zinc and 0.1% copper; and

– hole 15, which hit 8.5 metres of 6.98% zinc, 0.75% copper and 26 grams silver.

Ivanhoe believes the results point to an economical stratiform lead-zinc deposit. The company has now moved the drill rig 1 km to the south in order to test the southern soil geochemical anomaly.

At the Kelapis copper-zinc prospect, Ivanhoe has drilled 13 holes, targeting sediment-hosted mineralization identified on surface. Highlights include:

– hole 5, which cut 64.4 metres grading 0.54% zinc, 0.83% copper and 0.12% lead;

– hole 9, which cut 40.7 metres grading 0.76% zinc, 0.8% copper and 0.41% lead;

– hole 11, which intersected 32.4 metres grading 0.94% zinc, 0.49% copper and 0.22% lead; and

– hole 12, which hit 16.4 metres of 1.21% zinc, 0.15% copper and 0.23% lead.

Mineralization appears to be structurally controlled, occurring as chalcopyrite, chalcocite and sphalerite. Later this year, Ivanhoe plans to test the continuity of the mineralization along strike and at depth.

Meanwhile, at the Mamak prospect, the junior has begun a program of mapping, chip-sampling, stream-sediment-sampling and ground magnetics. In 1987, French government-owned Bureau de Recherche Geologique et Miniere drilled 12 holes into the prospect and estimated an inferred resource of 300,000 tonnes grading 13% zinc.

Ivanhoe Mines has 74.4 million shares outstanding and US$46.6 million in cash.

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