Vancouver —
Vietnam Growth Fund (VGF) has agreed to purchase Ivanhoe’s 19% interest for $5.7 million, or 30 per share. VGF is managed by Ho Chi Minh City-based Dragon Capital, a major shareholder in Olympus Pacific. The deal would raise Dragon Capital’s stake in the junior to 37%.
Olympus Pacific holds an 80% interest in the Bong Mieu gold project in central Vietnam, some 80 km south of Danang. Bong Mieu contains three known gold deposits: Ho Gan, Ho Ray and Nui Kem.
A positive prefeasibility study on Ho Gan in late-2004 proposed an open-pit operation producing slightly more than 50,000 oz. gold over three years. Proven and probably reserves stand at 858,000 tonnes grading 2.4 grams gold per tonne. With construction under way, production from Ho Gan is slated to begin in August.
The Ho Ray deposit is undergoing metallurgical testing for a possible open-pit operation.
Deeper gold mineralization at Nui Kem, which witnessed historic production of some 84,000 oz. gold, will undergo further drill-testing down-dip from previous underground workings.
Olympus Pacific also holds an 85% interest in the 70 sq. km Phuoc Son gold project, situated about 90 km southwest of Danang. A recent assessment of the Dak Sa underground project at Phuoc Son examined the Bai Dat and Bai Go deposits.
The study, completed by engineering firm Micon International, reviewed a proposed underground operation with a 6.5-year mine life producing 200,000 oz. gold. With capital costs tallying to an estimated US$7.5 million, the high-grade deposits are expected to deliver a quick 5-month payback with life-of-mine operating costs of about US$145 per oz.
The Bai Dat and Bai Go deposits host measured and indicated resources of 318,000 tonnes grading 14.3 grams gold using a 4.5 grams gold cutoff. There are additional inferred resources of 188,000 tonnes averaging 12.1 grams gold, using the same cutoff.
Additional metallurgical testing and infill drilling are being conducted to further upgrade resources at Dak Sa.
Olympus Pacific has 110.4 million shares outstanding and trades in a 52-week range of 21-87 per share.
BID-ASK MAY 24-30, 2005
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