A new copper-molybdenum-gold zone has been discovered on an Ivanhoe Mines-BHP Billiton joint venture licence about 10km north of the Oyu Tolgoi copper-gold mining complex.
The discovery, known as Ulaan Khud North, extends the known strike length of the Oyu Tolgoi mineralized system by an additional 3km to the north, to more than 23km.
Less than half of the 23km-long mineralized trend at Oyu Tolgoi has been extensively drill-tested to date. An ongoing exploration program including proprietary, induced-polarization technology has identified additional exploration and development targets.
Ivanhoe's executive chairman and chief executive officer Robert Friedland says, “The Ulaan Khud North discovery reinforces our longstanding belief that with continued exploration there is excellent potential to discover new porphyry deposits, rich in copper and gold, which are associated with the world-class Oyu Tolgoi mineralized trend.”
Ulaan Khud North is on a 19,625-hectare exploration licence that is part of Ivanhoe's joint-venture partnership with BHP Billiton, which was formed in 2005. BHP Billiton has earned a 50% interest in the joint venture by spending US$8 million in exploration costs and conducting an airborne survey using the proprietary Falcon gravity gradiometer system over the Oyu Tolgoi area.
A total of 25 drill holes totalling 6561 metres, ranging in depth from 182 metres to 377 metres, defined the new zone of shallow porphyry copper mineralization over an area of 600 metres by 300 metres. Most of the holes are vertical and were drilled on a 100-metre-square grid.
The mineralized zone starts beneath 60 to 80 metres of Cretaceous clay and gravels, indicative of a near-surface deposit with open-pit mining potential. Ivanhoe's geologists believe that the near-surface copper mineralization discovered to date at Ulaan Khud North may be part of a much larger deposit.
Drilling highlights include 19 metres from 155 metres @ 0.941% copper, 0.098 grams/tonne gold and 0.029% moly; 9.9 metres from 171.1 metres @ 1.41% copper, 0.248 grams/tonne gold and 0.042% moly; 6 metres from 91 metres @ 1.094% copper, 0.165 grams/tonne gold and 0.037% moly; 9.6 metres from 208.1 metres @ 2.429% copper, 0.121 grams/tonne gold and 0.049% moly; and 7.65 metres from 174.35 metres @ 2.242% copper, 0.203 grams/tonne gold and 0.081% moly.
The mineralization at Ulaan Khud North starts as shallow as 60 metres below surface, much higher than the mineralized zone at Hugo Dummett to the south. The fact that Ulaan Khud North occurs in similar Devonian host rocks to Hugo Dummett suggests that the main Oyu Tolgoi porphyry system trend is relatively shallow in this area and that potential for surface-mineable targets still exist within the Oyu Tolgoi trend and Ulaan Khud North in particular.
Ulaan Khud North adjoins the Shivee Tolgoi Entree Gold-Ivanhoe Mines joint-venture property and is about 3km north of mineralization found at Ulaan Khud on that licence.
The Pre-Mining Agreement for Ulaan Khud North specifies that Ivanhoe and BHP Billiton have three years to conduct additional exploration, complete an environmental impact study, prepare a final feasibility study and gain approval for the design for the project. The agreement also specifies that a Technical and Economical Study to mine the deposit is required to be delivered to the Mineral Resources Authority of Mongolia by June 30, 2013.