Ivanhoe Mines to develop pure gold producer in Central Asia

Robert Friedland, executive chairman of Ivanhoe Mines (IVN-T, IVN-N, IVN-Q), is channeling his energy into developing a pure gold company in the former Soviet republic of Kazakhstan, and says he is in discussions with potential strategic investors including established gold-industry players and sovereign-wealth funds.

Friedland has upped Ivanhoe’s stake to 50% in Altynalmas Gold, a private company that owns 100% of the Kyzyl gold project in Kazakhstan, and plans to bring the project into commercial production as soon as possible. He also plans to seek a stock market listing for the company.

The Kyzyl project contains the Bakyrchik deposit, a large high-grade undeveloped system, and the nearby Bolshevik gold deposit. A drill program is underway to calculate a resource estimate and feasibility studies are planned to secure project financing.

The deposits are about 100 km southwest of Ust-Kamenogorsk, the industrial centre of eastern Kazakhstan, the last of the former Soviet republics to declare independence in 1991.

Local infrastructure includes a railway and an electricity grid. Mine-site infrastructure includes underground workings and shafts.

Friedland said Altynalmas Gold is positioned to complete a pre-feasibility study quickly and move ahead with a full feasibility study.

In the last two years Ivanhoe has successfully listed two subsidiaries: the Cloncurry project’s mining assets in Australia and coal deposits in southern Mongolia.

“SouthGobi Energy Resources and Ivanhoe Australia are models for what we are preparing to accomplish in positioning Altynalmas Gold as a major, long-term, pure gold producer,” Friedland outlined in a speech at the recent Asia Mining Congress.

Ivanhoe holds a 65% interest in Mongolian coal miner SouthGobi Energy Resources (SGQ-T, 1878-HK) and an 81% interest in Ivanhoe Australia (IVA-A), a copper-gold-uranium-molybdenum-rhenium exploration and development company.

The Kyzyl gold system consists of a series of mineralized lenses, or lodes, lying within a large, 15-km-long shear zone. The geological potential remains untested along 13 km of strike and at depth.

At midday in Toronto, Ivanhoe shares were up 39¢ or 2.35% at $17 per share. The company has traded in a range of $5.51-18.49 per share over the last 52 weeks and has 441.11 million shares outstanding.