Vancouver — Buoyant prices, driven largely by unquenched demand from China, has prompted
A year-long review of prospective areas in the region, including sections of the 118,000 sq. km in land holdings already owned by Ivanhoe, has identified three major coal-bearing basins.
On the most southerly of the basins, 40 km from the Chinese border, a small independent operation is exploiting a 60-metre-thick seam exposed in outcrop. The seam has been traced along strike on to Ivanhoe Mines’ ground, which completely surrounds the operation producing metallurgical grade coal, and extends intermittently for about 120 km. The company’s exploration program, including drilling, shows that a significant portion of the basin sits on its mineral licences.
Ivanhoe is also considering joint development of the massive Tavan Tolgoi coal project in conjunction with the Oyu Tolgoi copper-gold deposit, 140 km to the southeast.
Tavan Tolgoi occurs in a 90-sq.-km sub-basin containing both thermal and metallurgical grade coals. Government estimates have outlined a resource of 5 billion tonnes (not compliant with National Instrument 43-101), of which 2.8 billion tonnes are thought to be amenable to open-pit mining to a depth of 340 metres. The late-Permian coal-bearing sequence is up to 965 metres thick in the central portion of the basin. Sixteen coal seams have been identified; these range, in thickness, from 2 to 72 metres in units of intercalated sandstone, siltstone and conglomerates. In the deepest, central portion of the basin, the coal beds have an aggregate thickness of 163 metres.
Tavan Tolgoi is a potential fuel source for power generation at Oyu Tolgoi, and as a supplier of metallurgical coal to Chinese steel mills.
The coal-bearing stratigraphy in the region is of Permian age, similar to the extensive Bowen and Sydney basins of Australia.
Meanwhile, the company has received its third payment of US$12.5 million from the Mongolian government for the US$50-million loan that was advanced by Ivanhoe last year to help the country pay down its Soviet-era debt. The final payment is anticipated by the end of 2004, upon maturity of the loan.
The company has 292.3 million shares outstanding and recently traded in the range of $8.05 per share. That’s off more than a dollar from the recent 7-month high of $9.20.
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