Robert Friedland, Executive Chairman of Ivanhoe Mines (TSX:
IVN)(NYSE: IVN)(NASDAQ: IVN), and John Macken, President and Chief
Executive Officer, today welcomed the successful completion of the
conditions precedent that had been incorporated into the landmark
Investment Agreement to build and operate the Oyu Tolgoi
copper-gold mining complex in Mongolia's South Gobi Region.
The comprehensive Investment Agreement, which creates a stable
and long-term regulatory, fiscal and legal environment for the
project in Mongolia, now has taken full legal effect.
Under terms of the agreement, the Government of Mongolia will
become a partner in the development of Ivanhoe Mines' Oyu Tolgoi
Project. The government will acquire a 34% interest in the Ivanhoe
Mines subsidiary, Oyu Tolgoi LLC, which holds the Oyu Tolgoi mining
licences. Mongolia's interest will be held through the state-owned,
sovereign-wealth resources company, Erdenes MGL LLC. Ivanhoe Mines
will own a 66% interest in Oyu Tolgoi LLC.
The Mongolian Government announced today that it had confirmed
that the procedural and administrative conditions contained in the
Investment Agreement had been satisfied within the allocated
six-month period that has followed the agreement's official signing
on October 6, 2009. Mongolia's national Parliament voted in July
2009 to authorize the government to conclude the Oyu Tolgoi
Investment Agreement with Ivanhoe Mines and its strategic
shareholder, Rio Tinto, as part of a transparent, democratic
legislative process.
"The completion of the Investment Agreement as part of the
coalition government action program to develop the largest Mine in
Mongolia's history at the world-class Oyu Tolgoi copper-gold
deposit will allow this 'Centennial Development Project' to give a
significant boost to the economic and financial development of
Mongolia, create large-scale infrastructure projects and the
establishment of new urban centres and improve the livelihoods of
Mongolian families," the Mongolian Government said in a statement
issued in Ulaanbaatar.
Ivanhoe Mines Executive Chairman Robert Friedland said, "After
nine years of discoveries at Oyu Tolgoi, a big piece of the future
of copper and gold in Asia is poised to become a reality. With this
Investment Agreement taking full effect, we now have a long-term
partnership and a definitive blueprint to start building that
future at Oyu Tolgoi."
Mr. Friedland said the participation of Rio Tinto guarantees
that the world's best mining and environmental practices and some
of the most advanced mining technologies will be applied to the Oyu
Tolgoi Project. Rio Tinto currently owns 22.4% of Ivanhoe Mines and
holds options to increase that interest to 46.6% during the next 19
months.
Andrew Harding, Chief Executive of Rio Tinto's Copper Group,
said, "We plan to be a partner in Mongolia for decades to come and
are looking forward to moving into the development phase of the
project."
Construction budget for 2010 establishes timeline for first
copper-gold production in 2013
In anticipation of the successful satisfaction of the conditions
precedent in the Investment Agreement, the joint Ivanhoe Mines-Rio
Tinto Technical Committee has approved a US$758 million budget to
launch full-scale construction of the Oyu Tolgoi complex in the
second quarter of 2010.
"Oyu Tolgoi will be one of the world's greatest mining centres,"
Mr. Macken said.
"Our discoveries, combined with the application of the Zeus
induced-polarization exploration technology and our ongoing
exploration drilling, mean that Oyu Tolgoi still will be powering
Mongolia's economy a century from now."
"The site-wide construction that is about to begin will see the
open-pit mine in operation in 2012 and the beginning of commercial
production of copper and gold in 2013."
Work planned in the 2010 construction budget includes:
- Resumption of the sinking of the 10-metre-diameter Shaft #2, which will be
used to hoist ore to the surface from the deep, underground, copper-gold-
rich Hugo Dummett Deposit.
- Construction of a 97-metre-tall (approximately 31-storey), reinforced-
concrete headframe for Shaft #2.
- Pouring the concrete foundation for the 100,000-tonne-per-day concentrator
and deliveries of building materials for the concentrator and
infrastructure.
- Installation of a 20-megawatt power station and 35-kilovolt distribution
system.
- Initial earthworks for the open-pit mine at the Southern Oyu deposits.
- Continuation of lateral underground development off Shaft #1 at the Hugo
Dummett Deposit.
- Construction of a 105-kilometre highway link to the Mongolia-China border,
which will be fully paved by the time production begins.
- Construction of a regional airport, with a concrete runway to accommodate
Boeing 737-sized aircraft.
To the end of 2009, Ivanhoe Mines had invested approximately
US$1 billion in the exploration and development of Oyu Tolgoi since
acquiring the exploration licences in 2000. An estimated additional
US$4 billion will be required from the project's partners to build
and commission the mining complex.
Mr. Friedland said Ivanhoe Mines will provide shareholders and
stakeholders with update reports on the progress of construction.
"All of us at Oyu Tolgoi LLC are looking forward to inviting
international investors to the Oyu Tolgoi mining complex as
full-scale construction begins this spring."
Further details of the Oyu Tolgoi Investment Agreement may be
found in the Ivanhoe Mines news release from October 6, 2009,
available at www.IvanhoeMines.com.
About Ivanhoe Mines
Ivanhoe Mines is an international mining company with operations
focused in the Asia Pacific region. Ivanhoe's core assets include
its world-scale, Oyu Tolgoi copper-gold mine development project in
southern Mongolia.
Ivanhoe Mines' other core assets are its 57% interest in
Mongolian coal miner SouthGobi Energy Resources (SGQ:TSX &
1878:HK); an 81% interest in Ivanhoe Australia (IVA: ASX), a
copper-gold-uranium-molybdenum-rhenium exploration and development
company; and a 50% interest in Altynalmas Gold Ltd., a private
company developing the Kyzyl Gold Project in Kazakhstan.
Ivanhoe Mines' shares are listed on the New York, NASDAQ and
Toronto stock exchanges under the symbol IVN.
Forward-looking statements
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of our
beliefs, intentions and expectations about developments, results
and events which will or may occur in the future, constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements are typically identified
by words such as "anticipate," "could," "should," "expect," "seek,"
"may," "intend," "likely," "plan," "estimate," "will", "believe"
and similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to,
statements respecting the plannned launch of full-scale
construction of the Oyu Tolgoi complex in the second quarter of
2010, the planned purchase of an additional US$50 million Mongolian
Government treasury bill, the plan to undertake the work in the
2010 construction budget, the planned application of the world's
best mining and environmental practices and some of the most
advanced mining technologies at the Oyu Tolgoi Project, the
estimated additional US$4 billion to build and commission the Oyu
Tolgoi mining complex, the plan to commence Oyu Tolgoi's open-pit
mine operations in 2012 and commercial production of copper and
gold in 2013.
All such forward-looking information and statements are based on
certain assumptions and analyses made by Ivanhoe Mines' management
in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors management believes are appropriate in the
circumstances. These statements, however, are subject to a variety
of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected
in the forward-looking information or statements. Important factors
that could cause actual results to differ from these
forward-looking statements include those described under the
heading "Risks and Uncertainties" elsewhere in the Company's
MD&A filed at www.SEDAR.com. The reader is cautioned not to
place undue reliance on forward-looking information or statements.
Except as required by law, the Company does not assume the
obligation to revise or update these forward-looking statements
after the date of this document or to revise them to reflect the
occurrence of future, unanticipated events.
Contacts: Ivanhoe Mines Ltd. - Investors Bill Trenaman
+1.604.688.5755 Ivanhoe Mines Ltd. - Media Bob Williamson
+1.604.331.9830 www.ivanhoemines.com
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