Discussions underway for development of world-class Tavan Tolgoi coal
    deposit in South Gobi region

    ULAANBAATAR, MONGOLIA, Dec. 1 /PRNewswire-FirstCall/ - Ivanhoe Mines
Chairman Robert Friedland and President John Macken announced today that
Ivanhoe Mines is taking steps to develop extensive metallurgical and thermal
coal deposits in the South Gobi region of Mongolia.
    Ivanhoe, assisted by internationally recognized coal consultant Norwest
Corporation, of Salt Lake City, Utah, and a team of prominent Mongolian coal
experts, has just completed a year-long, comprehensive evaluation of the coal-
bearing basins identified on portions of Ivanhoe's 118,000-square-kilometre
land holdings along a 400-kilometre-wide swath of southern Mongolia, near the
border with China.
    In a series of coal-related developments, Mr. Friedland and Mr. Macken
reported that:

    - Work to date has delineated three major coal-bearing basins - each well
      over 100 kilometres long - located almost entirely on lands controlled
      by Ivanhoe in the southwestern Gobi region. Mr. Friedland said that
      Ivanhoe set out to stake as much of the South Gobi as possible
      following its copper-gold discovery at Oyu Tolgoi in 2001. "Early this
      year our coal experts determined that the coal-bearing stratigraphy in
      the South Gobi is of approximately the same Permian geologic age, scale
      and quality as the Bowen and Sydney basins in Australia - which are
      some of the most extensive in the world."

    - In the most southerly basin, which is within 40 kilometres of the
      Chinese border, an outcropping seam with a true thickness of
      approximately 60 metres is being mined at Nariin Sukhait on a small,
      independent licence that is completely surrounded by Ivanhoe's land
      holdings. This seam, under limited development by an independent
      Mongolian-Chinese joint venture for its metallurgical coal, has been
      traced onto Ivanhoe's licences in both strike directions and
      intermittently for a total of 120 kilometres. The full extent of the
      seam's down-dip depth remains to be determined. Ivanhoe's mapping,
      surface sampling and drilling have established that the major part of
      this very significant coal basin is on Ivanhoe's licences. This
      discovery will be described in more detail in a forthcoming news
      release.

    - In addition to developing its own coal deposits, Ivanhoe and its
      adviser, Citibank, are in broad-ranging discussions with various
      parties about the future of the world-scale Tavan Tolgoi coal deposit,
      which is 140 kilometres northwest of Oyu Tolgoi and adjacent to
      licensed ground held by Ivanhoe. Ivanhoe is exploring the potential for
      the joint development of the Tavan Tolgoi coal deposit in conjunction
      with Ivanhoe's Oyu Tolgoi copper-gold deposit and is among a number of
      companies advancing proposals for a direct role in the future operation
      of Tavan Tolgoi. Ivanhoe believes that concerted development of the two
      projects would produce a number of shared benefits, including road,
      railway, power, water and border access to Chinese markets. Ivanhoe has
      held bi-lateral discussions with Energy Resources, Tavan Tolgoi's
      licence-holder, and with the Mongolian Government, and has held
      multi-party discussions with various Asia-based parties and potential
      international partners.

    - Tavan Tolgoi has the potential to supply thermal coal to generate
      electricity for Ivanhoe's Oyu Tolgoi project and also to develop into a
      major supplier of metallurgical coal to steel mills in China. The Tavan
      Tolgoi coal deposit has been estimated by the Mineral Resources
      Authority of Mongolia (MRAM), to contain an estimated five billion
      tonnes of metallurgical and thermal coal in a sub-basin measuring
      approximately 10 kilometres by 10 kilometres. The coal estimate is
      based on reports published by MRAM and is not compliant with NI-43101
      Standards of Disclosure for Mineral Projects. Ivanhoe has not
      independently defined a mineral resource.

    "When the late Hugo Dummett first explored Oyu Tolgoi and Tavan Tolgoi
for BHP Minerals in the late 1990s, he recognized the synergistic potential of
these two world-class mineral systems," Mr. Friedland said. "The industrial
development of the South Gobi coal, copper and gold resources will be a
centrepiece of the expanding Mongolian economy."
    Mr. Friedland noted that China today is the world's largest consumer of
metallurgical and thermal coal. China's national steel production, already the
largest in the world, is expected to reach 260 million tons in 2004, up 17%
from last year.
    "Double-digit growth rates in the country's steel output are predicted
for most of the next decade," Mr. Friedland said. "Energy consumption in China
also is growing at double-digit rates and there is a race to keep up with
demand for electrical power.
    "Ivanhoe has developed a Mongolian and international team of experts and
managers with decades of experience in the metallurgical and thermal coal
business. Our team has a vision of Mongolia as a major power exporter and as a
potential base for value-added manufacturing for the supply of goods to
China."
    Charles Forster, P.Geo., Ivanhoe Mines' Turquoise Hill Manager, a
qualified person as defined by National Instrument 43-101, supervised the
preparation of the information in this release.
    Ivanhoe has a 100% interest in the Oyu Tolgoi gold and copper project in
Mongolia and owns or controls exploration rights covering approximately
118,000 square kilometres in central and southern Mongolia, where additional
copper and gold discoveries have been made. Ivanhoe produces LME grade A
copper from its Monywa joint venture in Myanmar and iron ore products from ABM
Mining's Savage River mine in Australia.
    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 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 discussions with respect to potential
development of the Tavan Tolgoi coal deposit and the 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.

Link to this page: