CORRECT: Ivanhoe CEO: Construction At Oyu Tolgoi Ahead Of Schedule

Construction of the Oyu Tolgoi copper mine in Mongolia is well ahead of schedule and revenue from byproducts will substantially offset the cost of production, Ivanhoe Mines Ltd. (IVN, IVN.T) Chief Executive Officer Robert Friedland said Tuesday.

Ivanhoe is building the Oyu Tolgoi copper mine in Mongolia in partnership with Rio Tinto PLC (RIO.LN, RIO) and the Mongolian government. The underground copper mine will have two primary mine shafts, a vast copper concentrator complex and an airport, and production is "ahead of schedule," Friedland told attendees of the Metal Bulletin Global Copper Markets Forum in New York.

Oyu Tolgoi is forecast to have 59 years of mine life with about 81 billion pounds of copper reserves, with analysts projecting the reserves figure will likely increase as the project develops.

In addition to copper, Oyu Tolgoi will also produce about three million ounces of silver each year and substantial amounts molybdenum.

"There is no shortage of ore at Oyu Tolgoi," Friedland said. "By year seven we will produce 1.1 million ounces of gold, and the silver and molybdenum alone will more than cover the cost of production," he said.

The project will have a cash cost of about $35 a metric ton, one of the lowest in the world for greenfield production, he said. The mine is expected to process 100,000 tons of ore a day.

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