Drilling by
Six holes totalling 1,600 metres tested the Swan prospect. Among the highlights was hole 1069, which cut 79 metres grading 1.45% copper and 0.99 gram gold per tonne at a down-hole depth of 83 metres. The hole also hit 21 metres grading 0.4% copper and 0.2 gram gold at 53 metres down-hole, and 28 metres grading 0.7% copper and 0.46 gram gold at 176 metres down-hole.
Hole 1068, drilled 100 metres south and about 30 metres west of hole 1069, cut 115 metres grading 0.96% copper and 0.86 gram gold per tonne at 65 metres down-hole. Shallower mineralization was also cut at 8 metres down-hole, where a 48-metre interval graded 0.85% copper and 0.57 gram gold.
Hole 1073 was drilled 300 metres west and 100 metres south of hole 1069 and cut 154 metres of 0.81% copper and 0.49 gram gold per tonne at a down-hole depth of 115 metres. Higher in the hole, at 8 metres, a 51-metre interval graded 0.49% copper and 0.07 gram gold. The hole was drilled to the east at 83, whereas earlier holes (nos. 1068-1072) were drilled in the opposite direction at 263.
Hole 1070, drilled 100 metres west of hole 1069, cut 70 metres grading 1.2% copper and 0.3 gram gold per tonne at a down-hole depth of 9 metres.
Two other holes cut several intervals 12-70 metres wide; these graded 0.5-0.8% copper and 0.3-0.5 gram gold per tonne.
Swan correlates with a magnetic anomaly 300 metres wide and 400 metres long. The deeper portion of the prospect has had a dozen holes poked into it in the past, and eight of these cut significant copper-gold intervals.
Chalcocite, bornite and magnetite are within a gold-bearing vein/breccia system which cuts calc-silicate-altered sediments and meta-basalt. The sulphide zone is capped by an oxidized supergene horizon up to 100 metres thick. Numerous shallow holes, drilled by former owners of the Mount Elliott mine, tested this resource.
The past-producing Mount Elliott gold and copper mine is 600 metres northeast of the Swan prospect. It last produced copper and gold in 2000-2002. Selwyn Mines, the owner at that time, attempted a A$42-million expansion in 2002 but was forced into receivership later that year.
Ivanhoe acquired the property in late September 2003.
Between Swan and the Mount Elliott mine is another discrete magnetic anomaly, which corresponds with the Swell zone. Previous drilling at this zone cut 109 metres grading 1.14% copper and 0.38 gram gold per tonne.
Metallurgical tests are under way on supergene material taken from Swan.
The 1,450-sq.-km Cloncurry property is owned by Ivanhoe Cloncurry Mines, a unit of Ivanhoe Mines.
The company plans to drill more holes.
In 2004, Ivanhoe produced a record amount of copper at its 50%-owned Monywa copper project, in Myanmar. However, exploration expenses were such that the company ended the year US$89.6 million in the red.
The company achieved a record operating profit of US$27.5 million through increased production. Ivanhoe’s share of Monywa production was 15,878 tonnes copper, or 14% more than in 2003.
The average realized copper price in 2004 was US$1.34 per lb., US55 higher than in 2003.
At the end of February 2005, Monywa had remaining debt of US$7.5 million, compared with US$90 million initially. The property has been in production since 1999. In the fourth quarter of last year, throughput was increased to 39,000 tonnes per year, and this is expected to increase further.
Ivanhoe sold its Savage River iron ore mine in Australia earlier this year. Two initial payments totalling US$21.5 million will be followed by five annual payments, beginning in March 2006.
The company made about US$1.3 million in interest last year, as the Mongolian government made payments towards a US$50 million treasury bill purchased by the company. Payment was received in full in December 2004.
The Oyu Tolgoi project, which includes the Southern Oyu and Hugo Dummett deposits in Mongolia, ate up US$72 million of the US$98.2 million spent on exploration in 2004.
In August 2004, Southern Oyu had a measured and indicated resource of 1.06 billion tonnes grading 0.48% copper and 0.36 gram gold per tonne. The calculation was based on a cutoff grade of 0.3% copper-equivalent down to 560 metres below surface, and 0.6% below that.
In May 2004, Hugo Dummett had an inferred resource of 1.16 billion tonnes grading 1.29% copper and 0.23 gram gold, based on a cutoff of 0.6% copper-equivalent.
An updated resource is expected in the second quarter. In addition, an integrated development plan, combining the open-pit feasibility for Southern Oyu and the underground prefeasibility for Hugo North, is being compiled.
The company plans to develop an exploration shaft at Hugo North, starting next month. It should be finished in two years.
Ivanhoe expects Oyu Tolgoi to last 40 years and is negotiating a long-term stability agreement with the Mongolian government.
In 2004, the company spent US$13.5 million on other Mongolian exploration and US$3.8 million at the Bakyrchik gold mine in Kazakstan.
At the beginning of 2005, Ivanhoe had 292.8 million shares outstanding, or 310 million fully diluted.
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