Ivanhoe finds more Mongolian metals

Exploration drilling at the Turquoise Hill project in southern Mongolia has returned more copper-gold-molybdenum porphyry for Ivanhoe Mines (IVN-T).

Hole 150 bored through 590 metres (from 70 metres onwards) of hypogene mineralization averaging 0.81% copper and more than 1 gram gold per tonne, including 276 metres grading more than 1% copper and about 1.5 grams gold. The hole was collared between two old holes drilled by BHP, now BHP-Billiton (BHP-N), which had returned 140 metres grading 0.55% copper plus 0.46 gram gold and 218 metres grading 0.50% copper plus 0.40 gram gold.

Dubbed Southwest Oyu, the zone occurs in extensive quartz stockworks carrying chalcopyrite, bornite and magnetite. A coincident induced polarization and magnetic anomaly trends northeasterly for 1,500 metres across widths of up to 400 metres.

Southwest Oyu is one of four separate, but genetically related, porphyry zones in an area measuring 3 km long by 2 km wide. Significant hypogene mineralization has been intersected at Southwest Oyu and at the South Oyu zone, where two earlier holes cut 74 metres grading 1.6% copper and 0.34 gram gold and 46 metres grading 1.4% copper and 0.34 gram gold. The Central Oyu area is characterized by copper oxides, and Northern Oyu remains essentially untested.

Three more drill rigs are en route to the project. About 16,000 metres will be drilled in all, adding to 5,000 metres sunk so far this year.

Ivanhoe can acquire Turquoise Hill by spending US$6 million on exploration and paying US$5 million to BHP-Billiton. The major retains a 2% net smelter return, as well as back-in rights if certain conditions are met.