CONFERENCE CALL 10 A.M. EDT MONDAY AUGUST 16 WILL DISCUSS Q2 REPORT

    ULAANBAATAR, Mongolia, Aug. 13 /PRNewswire-FirstCall/ - Ivanhoe Mines
says in its second- quarter report released today that record earnings were
generated by its copper and iron ore mines during the quarter and that its
current development schedule provides for a start of commercial production
from its planned Oyu Tolgoi copper-gold mine in southern Mongolia in mid-2007.
    The report says that initial production will come from open-pit mining
planned for the series of Southern Oyu deposits discovered by Ivanhoe during
the past three years, subject to completion of studies and project financing.
The report adds that production from underground operations planned for the
shallower, southern portion of the northerly Hugo Dummett Deposit at Oyu
Tolgoi could begin in late-2008.

    The report notes:
    "The company's current plan is to complete a feasibility study for an
open pit operation on the near-surface deposits early in 2005 and have a pre-
feasibility study for the underground operation completed by the end of the
first quarter of 2005, rather than divert critical time and resources to an
interim scoping or engineering study as previously planned. The open pit
feasibility study and underground pre-feasibility study will provide an
integrated development plan for the entire Oyu Tolgoi Project. An exploration
shaft to delineate and characterize the underground ore bodies for feasibility
purposes is currently being engineered. The shaft is scheduled to be completed
in late 2007, allowing access to both the Hugo South and Hugo North deposits
and facilitating the subsequent completion of a feasibility study for the
underground development."
    The company is preparing an updated resource estimate incorporating all
drilling results to date from the near-surface Southern Oyu deposits and
expects to release this information before the end of this month.

    Discussions on mine partnerships

    The report updates the status of Ivanhoe's discussions of financing
options for the Oyu Tolgoi mine with various parties.
    "The company is in discussions with Chinese mining and financial
companies, major Japanese mining and metal trading houses, international
mining companies and other third parties capable of financing the project,
with a view to selecting suitable strategic partners to develop the Oyu Tolgoi
Project and associated infrastructure. The company believes that significant
advantages could be realized from the participation of strategic partners and
continues to assess opportunities as they arise to extend to one or more such
partners a participating interest in the project. Although the company has had
discussions with a number of potential partners and continues to do so, no
agreement has been reached to date. The company is not soliciting bids from
potential partners and has not set a deadline or target date for concluding
any such agreement."

    Summary of other key points

    -  Fuelled by higher copper prices and improved ore grades, the Monywa
       Copper Project is generating excellent results. Production from the
       joint-venture operation in Myanmar is up 18% in the first six months
       of 2004 compared to the same period in 2003, totalling 33.5 million
       pounds of cathode copper - 50% of which is net to Ivanhoe - at a cash
       cost of approximately US$0.38 a pound. The company's share of
       operating profit from the Monywa joint venture totalled US$6.9 million
       in Q2 2004, mainly a result of increased copper prices, increased
       grades of mined ore and increased production. This compares to an
       operating loss of US$2.7 million in Q2 2003. During the quarter, the
       Monywa project deposited US$8.1 million into the debt reserve account
       that will be used to make the next loan payment due at the end of
       August, 2004. Following the August, 2004, payment, the joint venture
       debt balance will be reduced to US$15.0 million, of which
       US$7.5 million will be attributable to Ivanhoe Mines.

    -  An increase in the Monywa joint venture's copper production from
       30,000 tonnes per annum (tpa) to 39,000 tpa has been approved by the
       Myanmar Government and is scheduled for completion by October, 2004.
       The estimated US$3.7 million capital cost of the expansion is being
       funded from the project's internal cash flow. Additional planned
       expansions could see annual production increase to 200,000 tpa.

    -  ABM Mining's Savage River Mine in Australia reported an operating
       profit of US$3.2 million in Q2 2004, compared to an operating loss of
       US$2.6 million in Q2 2003. The improved results are largely due to
       improved pellet prices in Q2 2004, which were approximately US$39 a
       tonne, compared to approximately US$31 a tonne in Q2 2003. The Savage
       River mine produced approximately 508,000 tonnes of iron ore pellets
       in Q2 2004, compared to 534,000 tonnes in Q2 2003.

    -  In July, 2004, Ivanhoe closed an equity financing by issuing
       20 million common shares for gross proceeds of CDN$140 million
       (approximately US$107 million). Existing cash resources are expected
       to be sufficient to complete current feasibility and pre-feasibility
       studies at Oyu Tolgoi and to sustain planned development operations on
       the near-surface deposits and Hugo shaft excavation operations to
       facilitate underground development through the first quarter of 2005.
       Project financing will be used to implement initial open-pit
       development plans at Oyu Tolgoi.

    -  The Mongolian government recently confirmed to Ivanhoe Mines, in
       writing, that it fully expects to redeem the US$50 million treasury
       bill - purchased by the company last December - upon its scheduled
       maturity at the end of this year. The money will become available to
       supplement the funding of Ivanhoe's ongoing activities at Oyu Tolgoi.

    -  Ivanhoe is continuing to explore opportunities to rationalize non-core
       assets to maximize value and generate and preserve cash as it
       concentrates its resources on the development of the Oyu Tolgoi
       project. Several possible alternatives to dispose of non-core assets
       are being considered, including outright or partial sales and
       formation of joint ventures.

    -  Exploration expenses for all projects in Q2 2004 totalled
       US$24.8 million, compared to US$15.2 million in Q2 2003. The increase
       was mainly due to the cost of engineering evaluation studies initiated
       in 2003 on the Oyu Tolgoi project and increased drilling and
       exploration activities at Oyu Tolgoi and other Mongolian properties.

    -  Ivanhoe reported a record operating profit of US$10.1 million in the
       second quarter. The company recorded a net loss of US$20.2 million (or
       $0.07 per share) in the second quarter, compared to a net loss of
       US$19.7 million (or $0.08 per share) in Q2 2003.

    Conference call details

    Ivanhoe Chairman Robert Friedland, Deputy Chairman Ed Flood and President
John Macken will conduct a conference call to discuss the quarterly report on
Monday, August 16, at 10:00 a.m. Eastern Daylight Saving Time (7:00 a.m.
Pacific Daylight Saving Time).
    The conference call may be accessed by telephoning 1-800-387-6216 in
Canada and the United States, or 416-405-9328 in the Toronto area and
internationally. A simultaneous web cast of the conference call will be
provided through http://www.ivanhoemines.com and http://www.Q1234.com. An operator will
register participants. The conference call will be archived for later playback
through the Internet at http://www.Q1234.com, or by telephoning 1-800-408-3053 or
1-416-695-5800 and entering the pass code 3088905 followed by the number sign.
    Details of Ivanhoe's 2003 three-month and six-month financial results are
contained in the unaudited Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations,
available on the SEDAR website at http://www.sedar.com and Ivanhoe's website at
http://www.ivanhoemines.com.
    Ivanhoe Mines, with operations concentrated in the Asia Pacific region,
is a producer of copper and iron ore products. Ivanhoe's core assets are its
100%-owned Oyu Tolgoi Project in southern Mongolia, exploration rights in
central and southern Mongolia and exploration interests in the northern
Chinese province of Inner Mongolia.
    Ivanhoe shares are listed on the NASDAQ market under the symbol HUGO and
on the Toronto and Australian stock exchanges under the symbol IVN.

    Information contacts:
    Investors: Bill Trenaman: +1-604-688-5755/ Media: Bob Williamson:
    +1-604-688-5755;

    Forward-Looking Statements: This document includes forward-looking
statements. Forward-looking statements include, but are not limited to,
statements concerning estimates of planned or expected copper and iron ore
pellet production, prices and minegate cash costs, statements relating to the
continued advancement of Ivanhoe Mines' projects and other statements which
are not historical facts. When used in this document, the words such as
"could," "plan," "estimate," "expect," "intend," "may," "potential," "should,"
and similar expressions are forward-looking statements. Although Ivanhoe Mines
believes that its expectations reflected in these forward-looking statements
are reasonable, such statements involve risks and uncertainties and no
assurance can be given that actual results will be consistent with these
forward-looking statements. Important factors that could cause actual results
to differ from these forward-looking statements are disclosed under the
heading "Risk Factors" and elsewhere in the corporation's periodic filings
with Canadian and Australian securities regulators.

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