Mongolian parliament votes in favour of Ivanhoe profit-sharing deal; agreement not yet finalized

Five years of negotiations with the Mongolian government might soon come to a positive end for Ivanhoe Mines (IVN-T, IVN-N) and its Oyu Tolgoi copper-gold mine partner Rio Tinto (RTP-N, RIO-L).

Ivanhoe reported today that the Mongolian national parliament voted 75% in favour of advancing approval discussions of the latest draft of an investment agreement for Oyu Tologoi.

After the vote, Parliament discussed the agreement for six hours. Then the Standing Committee voted 13-1 in favour of authorizing the government to sign the agreement.

Now the agreement will presented for its first official reading.

The Oyu Tolgoi project is located 550 km south of Ulaanbaatar and 80 km north of the Chinese-Mongolian border.

As of March 2007, the project had measured and indicated resources of 1.4 billion tonnes grading 1.33% copper, and 0.47 gram gold per tonne for total contained copper of 40.7 million lbs. and 20.97 million oz. gold.

The deposit has an inferred resource of 1.4 billion tonnes grading 0.98% copper and 0.24 gram gold per tonne for total contained copper of 30.19 million lbs. copper and 10.78 million oz. gold.

The project is expected to produce an average of 440,000 tonnes of copper and 320,000 oz. gold per year over 35 years.

Yesterday, Ivanhoe warned investors that recent media reports that speculated on the profit-sharing deal were inaccurate.

The company’s stock has increased 44% over the last week. Shares were up 4% today, or 34¢, to $9.31 on a trading volume of 2.4 million shares.

Ivanhoe and its affiliated companies will now have the help of former Canadian prime minister, Jean Chretien, when it comes to negotiating such deals.

Yesterday, Ivanhoe announced that it appointed Chretien as a senior international adviser to the company.

Chretien, who was prime minister between 1993 and 2003, has been working in Canadian and global development circles as a lawyer for the Canada-based international law firm Heenan Blaikie since he retired from politics.

Ivanhoe executive chairman, Robert Friedland, points out that Chretien has been instrumental in advancing relationships between many Canadian businesses and China and other neighbouring countries.

“We believe that Mr. Chretien’s experience and knowledge will be a prime asset in assisting the Ivanhoe companies to continue to build their businesses through opportunities that will be encountered in the energy and mineral resource sectors around the world during what is becoming the Asian Century,” Friedland said in a statement.

During Chretien’s career he held many positions including minister of finance, minister of justice and attorney general, minister of energy, mines and resources and minister of industry trade and commerce.