Ivanhoe plans publicly-listed coal company

Vancouver – Ivanhoe Mines (IVN-T, IVN-N, IVN-Q) is planning on spinning out its Mongolian coal assets into a new, publicly-listed company.

Following extensive strategic review, the maneuver is aimed at enhancing shareholder value and crystallizing company focus on its core Oyu Tolgoi copper-gold project. The new, stand-alone company will hold the Nariin Sukhait and Tsagaan Tolgoi coal projects in Mongolia’s southern Gobi region and may also include power generation facilities.

Ivanhoe recently upgraded the measured and indicated resource at Nariin Sukhait, reviewing 124 million tonnes of high-volatile, bituminous coal. An additional 33.8 million tonnes of inferred resource has also been outlined at the deposit.

With more than 200 drill holes completed on the near-surface open-pittable resource, Nariin Sukhait is viewed as a near-term production possibility to potentially supply both domestic and international coal markets. Development of the project is expected to produce thermal grade coal, PCI (pulverized coal injection) coal for steel making needs and coking coal for blending in steel production.

The project, consisting of seven exploration licences covering 3,240 sq. km, is situated just 40 km north of the Chinese-Mongolian border and near a terminus of a new Chinese rail line.

Since beginning its exploration in early-2005, Ivanhoe has identified ten coal seams at Nariin Sukhait over a total coal-bearing sequence thickness of almost 1,400 metres. Individual seams range from 68-to-250 metres thick. Resources are encompassed in two separate fields (South-East and West). An initial mine development plan is expected to be completed shortly.

The company’s coal licences surround an existing coal mine operated by the MAK-Qin Hua Mongolian-Chinese joint venture. The MAK operation consists of two producing open pit mines.