Encouraged by recent drilling on the Turquoise Hill copper-gold porphyry project in southern Mongolia, Ivanhoe Mines (IVN-T) has raised US$5.25 million via a special warrants financing.
The financing comprises 5.25 million warrants priced at US$1 apiece. A warrant allows the holder to buy one Ivanhoe share at no additional cost until five days after receipts are issued for the company’s final prospectus, or Aug. 15, 2002, whichever comes first.
If the B.C. and Ontario securities commissions do not issue receipts by Sept. 14, each special warrant will entitle the holder to acquire 1.1 common shares.
A portion of the proceeds will be used to fund Ivanhoe’s 16,000-metre drilling campaign, which is delineating the recently discovered gold, copper and molybdenum mineralization at the Turquoise Hill (Oyu Tolgoi) project.
Located 560 km south of the capital city of Ulaanbaatar, the property covers 238 sq. km of the Gobi Desert. The boundary between the South Mongolian and South Gobi tectonic units lies nearby, giving rise to a regional geology that is characterized by Paleozoic volcanic, sedimentary and intrusive rocks overlain by Mesozoic-aged sedimentary rocks.
Based on results to date, Ivanhoe believes the entire porphyry system has the potential to host more than 1 billion tonnes of copper, gold and molybdenum mineralization. Half of this may be contained at Southwest Oyu.
Three drill rigs are now turning on the property, with two more gearing up. Holes will be collared in the Southwest, Central and South Oyu areas to test for hypogene mineralization to depths of 500 metres below surface.
Ivanhoe can earn a 100% interest in the project by spending US$6 million on exploration over seven years and paying US$5 million to BHP-Billiton (BHP-N).
The major retains a back-in right, which, if not exercised, automatically converts to a 2% net smelter return.
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