Ivanhoe grows Hugo North (November 18, 2004)

The latest batch of results form step-out drilling on the Hugo North deposit has yielded the best-ever copper-gold intersection from Ivanhoe Mines‘ (IVN-T) Oyu Tolgoi copper-gold project in Mongolia.

Hole 918C, which cut 326 metres (beginning 1,026 metres below surface) grading 3.8% copper and 1.2 grams gold per tonne, included the record-breaking 96-metre section (from 1,112 m), which grades 5.9% copper and 1.8 grams gold. The company says the intersection lies about 100 metres above the base of the proposed first lift of the Hugo North block cave.

Hole 918C was sunk around 80 metres down-dip of no. 918A, which intersected 228 metres (from 984 m) averaging 3% copper and 1.9 grams gold, including 82 metres (from 1,116 m) of 4.2% copper and 1.4 grams gold.

Another 75 metres down-dip, hole 918D, yielded 120 metres (from 994 m) grading 1.1% copper and 0.04 gram gold, followed by a 188-metre interval (from 1,114 m) grading 3.9% copper and 0.8 gram gold. Assay results are pending for deeper portions of the hole.

Hole 918 returned 74 metres (from 996 m) running 3.9% copper and 1.2 grams gold. The hole was collared some 150 metres north of the northern margin of the existing Hugo North resource estimate. Hole 918B, 150 metres to the north, cut 60 metres (from 1,052 m) of 2.9% copper and 0.9 gram gold.

Hole 963, some 150 metres to the north, and down-dip of hole 918B, cut 302 metres (from (from 1,018 m) of 3.1% copper and 1 gram gold, including 216 metres (from 1,058 m) of 3.9% copper and 1.3 grams gold. Some 50 metres up-dip of hole 918B, hole 939 encountered 22 metres averaging 1.7% copper and 1.8 gram gold in the roof of the deposit.

At last count, Hugo North was home to an inferred resource of 666 million tonnes grading 1.5% copper and 0.3 gram of gold per tonne, based on a cutoff grade 0.6% copper equivalent. The resource includes a higher-grade core totalling 178 million tonnes running 2.9% copper and 0.6 gram gold. The Hugo North zone now strikes some 1.6 km.

Ivanhoe says that the recent infill drilling has extended the core by some 300 metres to the north. The core now stretches some 1.6 km, and has a vertical extent ranging from 100 metres in the southern to more than 700 metres in the north. The horizontal width ranges from 150 metres to about 200 metres in the northern extension.

The latest infill holes include hole no. 514I, which cut 178 metres (from 1,164 m) grading 3.5% copper and 0.8 gram gold in the hanging-wall, followed by 188 metres (from 1,492 m) of 1.8% copper and 2.6 grams gold in the footwall (West Gold Zone). Hole 770A returned 202 metres (from 996 m) of 3.4% copper and 1.3 grams gold, including 86 metres (from 1,112 m) of 4% copper and 2.8 grams gold.

Hugo North is one of five copper and gold deposits at Oyu Tolgoi.

The results sent shares in Ivanhoe 60, or 7%, higher to $9.05 in early trading in Toronto on Nov. 18.