Ivanhoe hits high-grade at Monywa

Vancouver — Drilling by Ivanhoe Mines (IVN-T) in the Sabetaung pit floor at the Monywa project in Myanmar has intersected spectacularly high copper grades.

Three infill holes in the Sabetaung pit floor encountered a zone of high-grade chalcocite (Cu2S) mineralization, returning intercepts of up to 42 metres of over 30% copper. The holes were drilled on 25-metre centres.

Sabetaung’s open-pit operations have been a primary source of copper ore since Monywa started up in 1998.

Highlights from drilling include the following:

– Hole 416 — 32 metres (from 72 metres down-hole) grading 5.95% copper, below which 28 metres of 1.67% copper were intersected, followed by 84 metres of 0.43% copper;

— Hole 425 — 46 metres (from 70 metres down-hole) of 7.43% copper, including a 22-metre section of chalcocite mineralization averaging 10.63% copper (farther down-hole, another 28 metres grading 1.7% copper were intersected, followed by 50 metres of 2.68% copper, 14 metres of 3% copper, and 42 metres of 0.6% copper);

— Hole 427 — 42 metres (from 3 metres down-hole) grading 30.42% copper in a high-grade chalcocite zone (a further 18 metres of 0.8% copper was encountered down-hole, followed by 30 metres of 0.3% copper).

The zone of chalcocite enrichment has an exposed strike length of 63 metres in the pit face. Drilling has so far extended the plus-1% copper mineralization over 190 metres below the present Sabetaung pit floor. Further drilling, along with geophysics, will try to upgrade this new, high-grade copper zone into the category of “measured resource.”

Ivanhoe has been active in Myanmar since 1992 and is involved in the Monywa copper mine through a 50-50 joint venture with Mining Enterprise No. 1, a state-owned company.

Operations at Monywa consist of four deposits: Sabetaung, Sabetaung South, Kyisintaung, and Letpadaung. Proven reserves stand at 506 million tonnes grading 0.43% copper; probable reserves, at 503 million tonnes grading 0.39% copper.

The mine utilizes solvent extraction-electrowinning and typically produces 99.999%-pure cathode copper, classified as LME Grade A, which trades at a premium to spot copper prices.

Ivanhoe is ramping-up copper production from the mine, which is expected to increase 40% by October 2004 to 39,000 tonnes (86 million lbs.) annually. This is the first of a 2-phase increase planned for the mine. Implementation of the second phase will see further increases in copper production to 50,000 tonnes annually.

Cash costs for the mine are estimated at US38 per lb. At current copper prices, the operation is generating cash flow of US80-$1 per lb.

Ivanhoe Mines, as of the latest figures, reports 271.7 million shares outstanding. At presstime, the issue was trading in the range of $5.60 per share — near the lower end of its yearly high/low range of $15.30-4.16.