ULAANBAATAR, MONGOLIA, Sept. 16 /PRNewswire-FirstCall/ - Ivanhoe Mines'
President John Macken announced today that the company has received an initial
resource estimate for its Nariin Sukhait Coal Project in southern Mongolia.
The project contains initial measured plus indicated coal resources of
approximately 72 million tonnes, with an additional inferred coal resource of
approximately 26 million tonnes. These resources, which were discovered and
delineated in only seven months of drilling this year, are considered to be of
immediate interest as surface open-pit deposits that are amenable to near-term
production for potential buyers in Chinese markets.
Initial coal-quality testing ranks the Nariin Sukhait coal as
high-volatile bituminous under American Society for Testing and Materials
(ASTM) standards. The Nariin Sukhait Coal Project is located approximately
40 kilometres north of the Mongolia-China border and the shipping terminus for
a newly constructed, 450-kilometre Chinese rail line that is expected to be
operational into the border area by the end of this year.
The independent estimates were prepared by Norwest Corporation, of Salt
Lake City, USA. Norwest has extensive coal experience in Mongolia, including
completion of a feasibility study of the Tavan Tolgoi coal deposit for the
Mongolian Ministry of Infrastructure and Development, provision of advisory
services to the operating coal mines at Shivee Ovoo and Bagaa Nuur, and
overseeing coal exploration programs in Mongolia for other international
mining and exploration companies. The Nariin Sukhait resource estimates were
prepared in conformance with Canadian Institute of Mining (CIM) Standards and
the requirements set out in Canada's National Instrument 43-101, and were
based on drilling completed prior to August 9, 2005. A NI 43-101 technical
report will be filed within 30 days.
Table 1: Nariin Sukhait Property
In-Place Coal Resources(x) Summary ('000 Tonnes)
As of August 9, 2005
-------------------------------------------------------------------------
In-Place Resources ('000 Tonnes)
Area ASTM Group ------------------------------------------
Measured Indicated Inferred
-------------------------------------------------------------------------
South Field 6,678 7,126 11,128
------------ High- ------------------------------------------
East Field Volatile 14,978 9,906 10,752
------------ Bituminous ------------------------------------------
West Field 20,575 12,835 4,009
-------------------------------------------------------------------------
Total 72,098 25,889
-------------------------------------------------------------------------
(x) Resources that are not reserves do not have demonstrated economic
value.
Ivanhoe's Nariin Sukhait Property is adjacent to, and surrounds, the MAK
Nariin Sukhait Mine, operated by the MAK-Qin Hua Mongolian/Chinese joint
venture. See Ivanhoe Mines' website at http://www.ivanhoemines.com for project and
field location maps. The MAK Mine, which has been supplying high-rank,
low-ash, low-sulphur coal to Chinese consumers since 2003, has a reported
production capacity of two million tonnes per year of thermal and blend-coking
coal from two operating open-pits.
The Nariin Sukhait coal field consists of very thick multiple seams, with
individual seam thicknesses up to 60 metres. Ivanhoe has been using a
multi-faceted approach in its exploration program, employing field mapping,
surface-resistivity geophysics, trenching and drilling to identify coal
resources. The primary goal of the program was to delineate an initial coal
resource of between 50 and 100 million tonnes, sufficient to commence a
commercial mine operation with annual coal production of between two and
five million tonnes for export to China.
To date, Ivanhoe has spent approximately US$4.5 million on exploration at
Nariin Sukhait, representing 6 cents (US) per tonne of measured and indicated
resources discovered to date.
Ivanhoe's initial exploration was focused on the South, East and West
Fields, which are adjacent to the MAK mining lease. The program subsequently
has expanded to several other areas of interest within the
4,155-square-kilometre exploration tenements that Ivanhoe controls surrounding
the MAK Nariin Sukhait Mine. As of August 9, 2005, Ivanhoe had completed
245 drill holes on the Nariin Sukhait Property. A total of 146 holes had been
completed within the South, East, and West Fields. Norwest expects that
approximately 90 more holes will be drilled before the completion of this
season's drill program at the end of October, 2005. Norwest then will update
the current resource estimates for the South, East, and West Fields.
The South and East Fields are directly adjacent to the MAK Mine's East
Pit, currently being mined for No. 5 Seam coal by the MAK operation. The South
and East Fields are divided by a northwest trending fault that extends along
the east side of the East Pit.
South Field
-----------
Drilling in the South Field has focused on delineating the No. 5 Seam as
it projects down-dip and along strike from the East Pit. Drilling has
identified 13.8 million tonnes of measured and indicated resources in the
South Field. Thirty drill holes define the No. 5 Seam, with an average seam
thickness of 59.4 metres, dipping at 45 degrees to the south.
Table 2: South Field
In-Place Coal Resources Summary ('000 Tonnes)
As Of August 9, 2005
-------------------------------------------------------------------------
In-Place Resources ('000 Tonnes)
Seam ASTM Group ------------------------------------------
Measured Indicated Inferred
-------------------------------------------------------------------------
5 High-Volatile 6,678 7,126 11,128
Bituminous
-------------------------------------------------------------------------
Total 13,804 11,128
-------------------------------------------------------------------------
Drilling is continuing in the South Field to further define No. 5 Seam
resources. Exploration also is being carried out to further investigate the
resource potential of the Nos. 8, 9 and 10 Seams that sub-crop to the south of
the No. 5 Seam.
East Field
----------
The East Field is located on the down-thrown side of the
northwest-trending fault that separates it from the South Field. While
drilling has not intersected the No. 5 Seam coal in the East Field,
significant coal resources have been identified in the overlying Nos. 8, 9 and
10 seams. The upper seams are developed as multiple bench sequences that,
combined, carry an average coal thickness of 18 metres. Beds dip from
45 degrees to 60 degrees toward the southeast for a strike length of
1.8 kilometres. Drilling has identified 24.9 million tonnes of coal in the
measured plus indicated resource categories.
Table 3: East Field
In-Place Coal Resources Summary ('000 Tonnes)
As Of August 9, 2005
-------------------------------------------------------------------------
In-Place Resources ('000 Tonnes)
Seam ASTM Group ------------------------------------------
Measured Indicated Inferred
-------------------------------------------------------------------------
8 1,037 1,112 912
--------- High- ------------------------------------------
9 Volatile 7,986 6,086 6,907
--------- Bituminous ------------------------------------------
10 5,955 2,709 2,932
-------------------------------------------------------------------------
Total 24,884 10,752
-------------------------------------------------------------------------
West Field
----------
The West Field is located 6.5 kilometres west of the South Field,
adjacent to the MAK mining lease. The field is approximately 1.6 kilometres
southwest of the MAK West Pit. Drilling has targeted the Nos. 5, 7, 8, 9, 10
and 11 seams along the limbs of a southwest-plunging anticline. A total of
71 drill holes have defined a measured plus indicated resource of 33.4 million
tonnes in the West Field.
Along the south limb of the anticline, drilling has intersected seams
Nos. 5 through 10 in strata dipping from 45 degrees to 60 degrees toward the
southeast. Strata along the north limb have been offset and rotated by reverse
faulting. Drilling has intersected seams Nos. 7 through 11 dipping
south-southwest at approximately 35 degrees. The thickness of the No. 5 Seam
averages 59.3 metres along the south limb. The upper seams for the south limb
have a combined average thickness of 7.3 metres. The upper seams on the north
limb have a combined thickness averaging 5.4 metres.
Table 4: West Field
In-Place Coal Resources Summary ('000 Tonnes)
As Of August 9, 2005
-------------------------------------------------------------------------
In-Place Resources ('000 Tonnes)
Seam ASTM Group ------------------------------------------
Measured Indicated Inferred
-------------------------------------------------------------------------
5 4,047 2,756 185
--------- ------------------------------------------
7 100 124 152
--------- ------------------------------------------
8 High- 1,117 920 449
--------- Volatile ------------------------------------------
9 Bituminous 6,815 5,420 1,280
--------- ------------------------------------------
10 4,140 2,429 675
--------- ------------------------------------------
11 4,357 1,186 1,269
-------------------------------------------------------------------------
Total 33,411 4,009
-------------------------------------------------------------------------
Coal Quality
------------
At this time, coal quality testing has been completed for approximately
25% of the core samples. Initial coal quality testing results of the coal
seams in all three fields ranks the Nariin Sukhait coals as high-volatile
bituminous under ASTM standards. Tests indicate that much of the No. 5 Seam is
high-rank, low-ash, low-sulphur coal. Based on initial tests, typical
characteristics for the No. 5 Seam average 9% moisture, 11.5% ash, 1.1%
sulphur and a caloric value of approximately 6,400 Kcal/kg. Initial testing
has shown more variability in the upper seams. Typical combined
characteristics for the upper seams average 9.5% moisture, 15.2% ash, 0.7%
sulphur and approximately 6,050 Kcal/kg. Reverse circulation coal samples are
being tested by Mining Institute in Ulaanbaatar. Core samples are undergoing
complete thermal and metallurgical testing by SGS Minerals Services in Denver,
Colorado, USA.
New Resource Updates and Pre-feasibility Study
----------------------------------------------
Extensive field mapping has identified numerous intermittent exposures of
coal outcroppings that occur for more than 95 kilometres along the north
margin of the sedimentary basin that contains the Nariin Sukhait deposit.
Norwest also expects to be providing resource estimates on four additional
areas at Nariin Sukhait that have shown encouraging initial results. To date,
Ivanhoe has been engaged in exploration on 17 individual areas within the
Nariin Sukhait Basin.
Ivanhoe plans to bring the Nariin Sukhait resources into a
pre-feasibility-level study within the next six months. The company currently
is involved in preliminary marketing discussions with potential coal buyers.
Successful negotiations could see initial production from the Ivanhoe
properties in the second half of 2006.
Qualified Person
----------------
Mr. Steven B. Kerr, Senior Geologist with Norwest Corporation and a
Qualified Person as defined by NI 43-101, has reviewed and approved the
information contained in this release.
Norwest has been commissioned by Ivanhoe to design, implement and manage
the exploration program at Nariin Sukhait. Throughout the exploration program,
Norwest has provided on-site management and technical assistance. Norwest will
use the information gained from this program to prepare a pre-feasibility
study for the development of a surface mining operation at Nariin Sukhait.
Environmental baseline studies and geologic modelling are in progress.
Ivanhoe has a 100% interest in the Oyu Tolgoi gold and copper project in
Mongolia and owns or controls exploration rights covering approximately
134,000 square kilometres in central and southern Mongolia, where additional
copper-gold and coal discoveries have been made. Ivanhoe produces LME grade A
copper from its Monywa joint venture in Myanmar.
Ivanhoe shares are listed on the Toronto and New York stock exchanges
under the symbol IVN.
Information contacts in North America:
--------------------------------------
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 Ivanhoe's planned coal exploration and development
program, updated resource estimates, pre-feasibility studies and planned
mining, and other statements that 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, US and Australian securities regulators.
SOURCE Ivanhoe Mines Ltd.
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CONTACT:
Information contacts in North America:
Investors: Bill Trenaman, (604) 688-5755; Media: Bob Williamson,
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