Ivanhoe Mines Ltd.: SouthGobi Energy Resources Establishes up to 148.9 Metres True Thickness of High Quality, Low Sulphur, Low A
January 02 2008 - 10:44AM
Marketwired
VANCOUVER, BRITISH COLUMBIA (NYSE: IVN)(NASDAQ: IVN) -
Peter Meredith, CEO of SouthGobi Energy Resources Ltd. (TSX
VENTURE: SGQ) and Gene Wusaty, COO, Coal Division, announced today
encouraging initial geologic and analytical results from the 2007
deep drilling exploration program at the Ovoot Tolgoi underground
coal project in southern Mongolia.
Highlights of the 2007 deep drilling include:
- Hole NSW 07-80C intercepting 210.6 metres (148.9 metres
estimated true thickness) of high-quality coal from 181.0 metres to
391.6 metres
- Hole NSW 07-89C intercepting 158.2 metres (111.9 metres
estimated true thickness) of high-quality coal from 238.4 metres to
396.6 metres
- Hole NSW 07-82C intercepting 94.0 metres (66.5 metres
estimated true thickness) of high-quality coal from 440.1 metres to
534.1 metres
- Coal quality ranges from 7527 kCal/kg
(kilocalorie-per-kilogram) to 7778 kCal/kg with very low ash and
sulphur
The 2007 drill results continue to identify direct shipping
coking and semi-soft coals at depth, beneath the lower boundaries
of the planned open pits at the south-east and west fields. The
intent of the 2007 drilling program was to further delineate the
structure, quantity and quality of the coal at depth.
In June, 2007, Norwest completed a study of Ovoot Tolgoi's
underground mining potential as part of SouthGobi's plans for the
development of Ovoot Tolgoi's underground coal seams - prompted by
increasing demand for high-quality metallurgical and thermal coal
from northern China.
Norwest identified two underground areas in conjunction with
planned open-pit mining activities. Mr. George Klinowski, P. Eng.
an independent underground mining consultant, has been retained to
continue the mine design and production planning. Mr. Klinowski is
a professional mining engineer with international experience in
design, construction and management of underground coal
projects.
Mr. Klinowski will lead SouthGobi's design of a safe, low-cost
underground coal mining operation that can supplement the planned
surface-mine production at the Ovoot Tolgoi coal project.
SouthGobi's objective is to mine the deeper extension of the No.
5 coal seam structure at Ovoot Tolgoi below the coal resources
delineated in the planned surface mine. The No. 5 coal seam ranges
in dip from 30 to 55 degrees and is open to depth and along
strike.
A US$5 million drill program is planned to start in the second
quarter of 2008 the objective of which will be to delineate an
underground resource in accordance with National Instrument 43-101
standards.
Summary Drill Results
---------------------------------------------------------------------------
Esti-
Inter- mated
val True Sample Sul-
Thick- Thick- Thick- TM Ash phur GCV
Hole From T0 ness ness ness (AR) (AD) (AD) (AD)
ID (M) (M) (M) (M)(i) (M) % % % kCal/kg CSN
---------------------------------------------------------------------------
NSW 07-80C 181.0 391.6 210.6 148.9 196.1 4.7 6.2 0.4 7614 6
---------------------------------------------------------------------------
NSW 07-81C 156.2 277.3 121.1 85.6 116.0 4.7 6.8 0.4 7527 6
---------------------------------------------------------------------------
NSW 07-82RC 440.1 534.1 94.0 66.5 81.0 5.4 7.6 0.4 7621 5
---------------------------------------------------------------------------
NSW 07-86C 219.2 275.8 56.6 40.0 56.5 3.9 6.6 0.5 7603 4
---------------------------------------------------------------------------
NSW 07-87C 232.3 275.3 43.0 30.4 36.7 5.9 5.7 0.5 7694 6
---------------------------------------------------------------------------
NSW 07-89C 9.3 81.0 71.7 50.7
---------------------------------------------------------------------------
NSW 07-89C 238.4 396.6 158.2 111.9 196.1(ii) 4.9 6.9 0.6 7527 5
---------------------------------------------------------------------------
NSW 07-92RC 332.8 383.7 50.9 36.0 50.5 4.2 5.5 0.5 7778 5
---------------------------------------------------------------------------
(i) Estimated true thickness is calculated by using an average dip of 45
degrees.
(ii) Sample thickness includes both intervals in hole NSW-07-89C.
TM: Total Moisture, GCV: Gross Calorific Value,
CSN: Crucible Swelling Number
Ovoot Tolgoi is the company's most advanced coal mine
development project. It is located in the Omnigovi Aimag in
southern Mongolia, next to the existing Mak/Qinhua coal mine,
approximately 45 kilometres north of the Mongolian/Chinese border
and the Ceke border crossing. The Company plans to use Ceke, in the
Peoples Republic of China, as the main distribution centre for
Ovoot Tolgoi coal. Ceke is home to a new automated coal-loading
terminal and existing railway infrastructure. (See
www.southgobi.com for maps and photos).
The Ovoot Tolgoi coal mine development coincides with the rapid
growth of global and, in particular, Chinese coal consumption.
Demand for coal from the growing economies of Asia, notably China,
and constraints in supply, has put upward pressure on coal prices.
As a result, coal prices in the region have almost doubled in the
past three years. China is the world's largest consumer of coal and
is now a net importer of coal. Analysts estimate that by 2020,
demand for thermal coal in Asia-Pacific could rise to six billion
tonnes per year, 4.6 billion tonnes which would go to power
generation. This is up from 2.5 billion tonnes, with 1.8 billion
tonnes for power generation, in 2006.
Core boxes from the 2007 program were transported for testing to
SGS Mineral laboratories in Tianjin, China (currently holds
ISO-17025 certification, accredited by the CNAS, China National
Accreditation Service for Conformity Assessment). Additional drill
hole samples from the 2007 exploration program are presently being
tested.
Gene Wusaty, COO, Coal Division, a qualified person as defined
by National Instrument 43-101, supervised the preparation of the
technical information in this release.
Ivanhoe Mines (TSX: IVN)(NYSE: IVN)(NASDAQ: IVN) is SouthGobi
Energy Resources' largest shareholder, currently owning
approximately 87% of the issued and outstanding shares.
About SouthGobi Energy Resources
SouthGobi Energy Resources is focused on exploration and
development of its Permian-age metallurgical and thermal coal
deposits in Mongolia's South Gobi Region to supply a wide range of
coal products and electricity to markets in Mongolia and China. The
company is investigating the implementation of clean coal
technologies in the development of coal generating power capacity
to benefit all of its stakeholders.
The company's metals division is focused on the exploration and
development of its copper and gold projects in Mongolia and
Indonesia.
Forward-Looking Statements: This document includes
forward-looking statements. Forward-looking statements include, but
are not limited to, statements concerning the company's plans to
develop and supply various coal products and electrical energy to
markets in Mongolia and China, 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 SouthGobi Energy Resources believe that the
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" in
SouthGobi Energy's Management's Discussion and Analysis of
Financial Condition and Results of Operations for the three months
ended September 30, 2007, which is available at www.sedar.com.
Contacts: Ivanhoe Mines Bill Trenaman (604) 688-5755 Website:
www.ivanhoe-mines.com SouthGobi Energy Steven Feldman (604)
681-6799 Website: www.southgobi.com
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