Ivanhoe Mines Ltd. (TSX: IVN)(NYSE: IVN)(NASDAQ: IVN) today
announced its financial results for the year ended December 31,
2010. All figures are in US dollars unless otherwise stated.
HIGHLIGHTS
-- Full-scale construction of the first phase of the Oyu Tolgoi copper-
gold-silver project in southern Mongolia is advancing toward the
scheduled start of commercial production in the first half of 2013.
-- Key elements of the project, including the concentrator complex, are
ahead of schedule at the end of the first quarter of 2011, in what will
be the peak year of construction activity at the site.
-- The number of workers assigned to the Oyu Tolgoi site recently surpassed
7,000 for the first time. On-site jobs at Oyu Tolgoi are expected to
peak at almost 14,000 in mid-2011, with an additional 3,700 Mongolians
receiving skills training sponsored by Oyu Tolgoi.
-- The approved 2011 capital budget for Oyu Tolgoi is estimated at $2.3
billion. Principal components of the 2011 construction program include
$561 million for the 100,000-tonne-per-day concentrator complex; $186
million for the initial mining fleet and to start pre-stripping of the
Southern Oyu open-pit mine; and $713 million for project infrastructure,
electrical power and completion of the process-water supply.
-- On December 8, 2010, Ivanhoe Mines and its strategic partner Rio Tinto
reached a comprehensive agreement to provide funding for construction of
the first phase of the Oyu Tolgoi mining complex. The full series of
funding measures, including an interim funding facility from Rio Tinto
and cash on hand available to Ivanhoe Mines, could increase to $6.5
billion the pool of development capital available to Ivanhoe Mines to
bring Oyu Tolgoi into production and also to finance associated
investments.
-- By the end of 2010, capital totalling $1.4 billion had been invested
in developing Oyu Tolgoi. The Ivanhoe Mines-Rio Tinto Technical
Committee has estimated that a further $4.5 billion in capital will
be required from the beginning of 2011 through to the start of
commercial production in 2013.
-- On February 3, 2011, Ivanhoe Mines successfully completed its
strategic rights offering to shareholders that generated gross
proceeds of $1.18 billion, to be used primarily to advance
development of Oyu Tolgoi.
-- Ivanhoe Mines and Rio Tinto are working together to achieve a
comprehensive project-finance package for Oyu Tolgoi of up to $3.6
billion, which the companies are targeting to have in place by the
second half of 2011. The package is being considered by a core
lending group comprised of the European Bank for Reconstruction and
Development, the International Finance Corporation, Export
Development Canada, BNP Paribas and Standard Chartered. Other
government credit agencies and commercial banks are expected to be
added to the core group of lenders.
-- Rio Tinto has committed to provide Ivanhoe Mines with an initial,
non-revolving interim funding facility of $1.8 billion to sustain
Oyu Tolgoi construction while the project-finance package is being
negotiated.
-- In exchange for its capital and commitments, Rio Tinto will have the
right to a maximum ownership stake in Ivanhoe Mines of up to 49.0% until
January 18, 2012. Rio Tinto's current ownership in Ivanhoe Mines is
approximately 42.1%.
-- On March 14, 2011, Ivanhoe Mines and BHP Billiton Ltd. announced that
their joint venture has discovered a zone of shallow copper-molybdenum-
gold mineralization approximately 10 kilometres north of Oyu Tolgoi. The
discovery, known as Ulaan Khud North, extends the known strike length of
the Oyu Tolgoi mineralized system by an additional three kilometres to
the north, to a total of more than 23 kilometres. The Mongolian
government has issued a three-year pre-mining agreement for the Ivanhoe
Mines-BHP Billiton joint venture.
-- On October 18, 2010, Ivanhoe Mines announced that Executive Chairman
Robert Friedland was re-assuming the duties and title of Chief Executive
Officer in a series of organizational changes, which included the
establishment of the Office of the Chairman as part of an ongoing
commitment to maximize shareholder value.
-- During 2010, Ivanhoe Mines' 57%-owned subsidiary, SouthGobi Resources
(TSX: SGQ)(HK: 1878), shipped approximately 2.5 million tonnes of coal
from its Ovoot Tolgoi Mine in southern Mongolia at an average realized
selling price of approximately $35 per tonne. This was a major
improvement over the 1.3 million tonnes of coal shipped in 2009 at an
average realized selling price of $29 per tonne - and resulted in $79.8
million of revenue being recognized in 2010, compared to $36.0 million
in 2009.
-- On September 30, 2010, Ivanhoe Mines' 62%-owned subsidiary, Ivanhoe
Australia (ASX: IVA)(TSX: IVA), completed the acquisition of the Osborne
Mine Complex, which includes a two-million-tonne per annum concentrator,
infrastructure and tenements. Integration of the Osborne operation is
expected to enable Ivanhoe Australia to commence production of
molybdenum and rhenium from its Merlin Deposit, and copper and gold from
other deposits, in 2012.
-- Ivanhoe Mines, through its 50% interest in Altynalmas Gold Ltd., is
advancing the Kyzyl Gold Project in Kazakhstan, one of the world's
largest undeveloped gold projects. A definitive feasibility study is
expected to be completed in Q2'11. Construction of a 1.5-million-tonne
per year fluidized-bed roasting plant to process the project's
refractory ores is expected to begin later this year.
-- In 2010, Ivanhoe Mines expensed $218.6 million in exploration
activities, compared to $177.1 million in 2009. In 2010, most of Ivanhoe
Mines' exploration activities were focused in Mongolia and Australia.
-- As at March 28, 2011, Ivanhoe Mines' consolidated cash position was
approximately $1.9 billion.
MONGOLIA
OYU TOLGOI COPPER-GOLD-SILVER PROJECT (66% owned)
Construction of Oyu Tolgoi complex progressing toward start of
commercial production in the first half of 2013
The Oyu Tolgoi Project initially is being developed as an
open-pit operation, with the first phase of mining planned to start
at the near-surface Southern and Central Oyu deposits. A copper
concentrator plant, related facilities and necessary infrastructure
that will support an initial throughput of 100,000 tonnes of ore
per day are being constructed to process ore scheduled to be mined
from the Southern Oyu open pit. The ore will provide feed for the
commissioning of the concentrator in advance of the planned start
of commercial production of copper-gold-silver concentrate in the
first half of 2013.
An 85,000-tonne per day underground block-cave mining operation
also is being developed at the Hugo North Deposit, with initial
production expected to begin in 2015. The throughput capacity of
the concentrator plant is expected to be expanded when the
underground mine begins production.
Fluor Corporation is in charge of overall Oyu Tolgoi program
management, as well as services related to engineering, procurement
and construction management for the ore processing plant and
mine-related infrastructure, such as roads, water supply, a
regional airport and administration buildings. Current activities
related to the phase-one concentrator are focused on finalizing the
operational readiness plan. Detailed commissioning, operation and
maintenance plans are being developed for all the components of the
concentrator circuits. Representatives of various manufacturers and
engineering groups are assisting with the preparation of the
operational readiness plan.
Key and critical activities completed in 2010 and underway in
early 2011 included:
-- Advancing contract negotiations for the supply and sale of copper-gold-
silver concentrate to be produced from the project. Most of the
concentrate initially is expected to go to major Chinese smelters.
-- The awarding of contracts to construct a 220-kilovolt electrical power
line from Oyu Tolgoi to the Mongolia-China border. The plan is to
initially import electrical power for the Oyu Tolgoi Project from Inner
Mongolia, China, while an alternative source is developed within
Mongolia, in accordance with terms of the Investment Agreement.
-- Conclusion of the competitive bidding process for the main
infrastructure works, which include on-site infrastructure required to
support mine operations and the 70-kilometre water pipeline to supply
the concentrator.
-- Preparation of bidders' packages for the 97-kilometre paved road from
Oyu Tolgoi to the Mongolia-China border at Gashuun Sukhait, and the
permanent domestic airport; contracts are expected to be awarded by end
of Q2'11.
-- Ongoing work on the Shaft #2 headframe, which reached 40 metres of a
total planned height of 97 metres by late Q1'11. Shaft-sinking work is
planned to begin in September 2011. By late in Q1'11, construction of
the shaft and ancillary facilities had reached 24.3% completion. The
staging building, mine-dry and warehouse buildings were erected;
mechanical and electrical installations will follow.
-- Construction of the concentrator building shell continued to advance,
with more than 5,200 tonnes of steel erected by late in Q1'11. Within
the process, crushing, and material-handling areas, more than 86,000
cubic metres of concrete have been poured. Shells for the SAG mills and
ball mills, wrap-around motors and ball-mill heads were received on
site. By late Q1'11, construction in the concentrator area was 23.6%
complete and ahead of schedule.
-- Completion of excavations for facilities for the primary ore crusher and
pouring of the base mat in March 2011.
-- Completion of excavation of the tailings-thickening ponds and pouring of
initial concrete.
-- Completion of the 35-kilovolt on-site power distribution loop reached
90% by late Q1'11. Commissioning began of the 12-megawatt first stage of
the diesel power station, which will provide interim construction power.
-- The steady growth of the site workforce resumed in March 2011 and the
total now exceeds 7,000; approximately 5,500 are on-site each day, the
balance are on leave. The long-term operations camp is being utilized as
it is commissioned.
-- As of late Q1'11, a total of more than 10.8 million individual safe
hours had been worked at the site without a lost-time incident.
Land-use permitting for Oyu Tolgoi's process water pipeline, the
permanent airport and roads and electrical power transmission lines
is awaiting Mongolian Government approval. These approvals are
expected in Q2'11.
$2.3 billion capital budget approved for ongoing construction in
2011
In December 2010, Ivanhoe Mines announced that a $2.3 billion
capital budget had been approved for 2011 in what will be the peak
year of construction activity on the first phase of the Oyu
Project.
Principal elements of the 2011 construction program include:
-- $561 million for the copper-gold-silver concentrator, which will see
complete enclosure of the building, completion of steel work for the
overland ore conveyor, installation of one of four ball mills and
installation of all materials-handling equipment in the pebble crusher.
-- $186 million to purchase the initial mining fleet of trucks, shovels and
ancillary equipment, and to start pre-stripping of the Southern Oyu
open-pit mine. The mining fleet will include 290-tonne trucks that will
help to move an estimated 112 million tonnes per year of ore and waste -
a 12% increase over an earlier plan.
-- $713 million for project infrastructure and electrical power, including
completion of the central substation, completion of the process-water
supply, completion of the truck maintenance shop and completion of
phases one and two of the operations camp.
-- $211 million for ongoing underground mine development at the Hugo North
Deposit, construction of the headframe on Shaft #2 and further sinking
of Shaft #2, which are critical elements of the development of the
block-cave mine planned to begin production in 2015.
In addition to the $2.3 billion capital budget, approval also
was received for an additional $150 million budget for the 2011
Ulaanbaatar office operations, and $100 million for the second tax
prepayment due to be made by June 30, 2011.
$3.5 billion in capital budgeted to reach start of concentrator
commissioning in 2012
The 2011 project budget was approved after the Ivanhoe Mines and
Oyu Tolgoi LLC boards and the joint Technical Committee reviewed
current estimates of projected capital requirements through to
project completion. The reviews included cash requirements from
January 1, 2011, for the completion of the Southern Oyu open-pit
mine; completion of the 100,000-tonne-per-day concentrator; and
advancing construction on elements of the Hugo North underground
mine, including the Shaft #2 headframe, sinking of Shaft #2,
completion of final design and ongoing development of the
underground mine.
Total capital required for phase one - from January 1, 2011, to
the start of commissioning of the ore processing plant is projected
to be $3.5 billion. This includes approximately $2.9 billion to
complete construction of the Southern Oyu open-pit mine, processing
plant and essential infrastructure, including electrical power,
water, roads, a paved airport runway and Mongolian-designed
passenger terminal; it also includes taxes and continued
underground development of the phase-two Hugo North mine.
Capital required from January 1, 2011, through to completion of
the phase-one, 100,000-tonne-per-day project in 2013 is expected to
total approximately $4.5 billion.
The 2011-2013 estimate also includes a total of approximately $1
billion that has been allocated to cover: 1) Value-Added Tax
payments to the Mongolian government ($377 million); 2) customs
duties and other taxes ($104 million); 3) contingency allowances
($403 million); and 4) escalation allowances ($159 million).
Individual contracts and sub-contracts also have built-in
contingency and escalation allowances. By the end of 2010, capital
expenditures on the progress of Oyu Tolgoi's development totalled
$1.4 billion.
2011-2013 capital estimates include almost $500 million toward
development costs for phase-two Hugo North underground mine
The $4.5 billion phase-one capital costs projected between 2011
and 2013 include an allocation of $498 million, not including taxes
and other associated costs, to continue ongoing development work on
the Hugo North underground mine that will form the second phase of
Oyu Tolgoi's planned production.
One key item is the ongoing construction of the 31-storey-high
Shaft #2 headframe and sinking of the 10-metre-diameter,
concrete-lined shaft, planned to have a total depth of 1,335 metres
below surface. Shaft #2 will be the first production shaft and the
key personnel and materials shaft for the Hugo North block-cave
mine.
Phase-one capital costs also will cover the underground lateral
development program, geotechnical program and mine planning and
expansion studies through to mid-2012. Final design of the
underground mine is set for 2012, when decisions will be made about
the mine's optimum production rates.
Capital invested in phase-one construction to support future
expansion
The engineering and construction stages have recognized the need
to accommodate a major increase in ore processing capacity in the
future while minimizing potential disruption to operations that
will be underway at the time.
Wherever possible, Oyu Tolgoi has taken the opportunity to allow
for expansion with minimal impact on operations. Oyu Tolgoi's plans
call for initial production of 100,000 tonnes of ore per day, which
is expected to increase to between 150,000 and 160,000 tonnes per
day when ore from the underground mine becomes available. To
facilitate this expansion, Oyu Tolgoi is building a third reclaim
tunnel that will increase the capacity to feed ore to the
concentrator by 50% to 60% over the initial rate of production. To
cater to future increased production, a pipeline has been installed
that, with minor modifications, can supply water for processing up
to 160,000 tonnes a day. Oyu Tolgoi also has allowed for expansion
in the concentrator by adding space in the flotation area and
installing other equipment to handle higher production rates.
Studies examining options to process additional underground ore and
stockpiled open-pit ore are ongoing.
Pre-stripping of open-pit mine expected to begin in August
2011
The open-pit operation is on schedule to begin pre-stripping
over the Southern Oyu deposits in mid-2011. All
operational-readiness activities currently are on schedule.
Final selection was made of the open-pit mining fleet, with
purchase orders issued to international manufacturers. All major
mining equipment has been secured in line with the open-pit
pre-stripping schedule.
Underground development of Hugo North Mine proceeding to
schedule
The development of the first lift of the underground block-cave
mine at the Hugo North Deposit continued successfully during 2010.
Lateral mine development on the 1,300-metre level at Hugo North is
ahead of schedule, achieving an advance during 2010 of 3,781 metres
- 113 metres ahead of the plan.
Raise-bore drilling for the first of two ventilation shafts near
Shaft #1 continued through the lower fault zone. Progress continued
through Q1'11, with raise pilot drilling from the 512-metre level
to the 1,300-metre level. Engineering is continuing for the upgrade
of the Shaft #1 hoisting system; one objective being to reduce the
expected hoisting down-time below the planned 100 days.
Construction of the reinforced-concrete headframe for Shaft #2
progressed to plan during the winter, despite cold weather during
November and December 2010. Earthworks backfilling progressed as
weather permitted and pouring of concrete proceeded as planned.
The underground development from Shaft #1 is expected to connect
with the bottom of Shaft #2 in early 2013 and production from the
first lift of the Hugo North block-cave mine is scheduled to begin
in 2015.
Landmark funding agreement between Ivanhoe Mines and Rio Tinto a
key to full-scale construction of Oyu Tolgoi's first phase
In December 2010, Ivanhoe Mines and Rio Tinto reached a
comprehensive agreement covering a series of measures intended to
provide funding to complete the accelerated, full-scale
construction of the first phase of the Oyu Tolgoi Project. As part
of the arrangements made pursuant to the agreement, Ivanhoe Mines
is working with Rio Tinto to finance the Oyu Tolgoi Project in
accordance with the Shareholders' Agreement.
The full series of funding measures, including an interim
funding facility from Rio Tinto and cash on hand available to
Ivanhoe Mines, could increase to $6.5 billion the pool of
development capital available to Ivanhoe Mines to bring the Oyu
Tolgoi Project into full production and also to finance associated
investments.
As part of the agreement, Rio Tinto committed to participate
directly in Ivanhoe Mines' $1.18 billion rights offering that was
completed in February 2011. In addition, Rio Tinto agreed to work
closely with Ivanhoe Mines to complete a major project-finance
package that Ivanhoe Mines is negotiating with a group of
international financial institutions, government credit agencies
and commercial banks.
The terms of the expanded and renewed relationship between
Ivanhoe Mines and Rio Tinto were established under a
legally-binding Heads of Agreement that was approved by the Ivanhoe
Mines Board of Directors and Rio Tinto's Investment Committee.
The agreement arranged for Ivanhoe Mines to acquire funds for
Oyu Tolgoi through a schedule of equity investments commitments by
Rio Tinto, including Rio Tinto's exercise of all of its rights
under the Ivanhoe Mines' rights offering.
Rio Tinto working with Ivanhoe Mines to complete international
project-finance package of up to $3.6 billion
Ivanhoe Mines and Rio Tinto committed to work together to
achieve a project-finance package for Oyu Tolgoi, which the
companies are targeting to have in place by the second half of
2011. Ivanhoe Mines announced in 2010 that discussions were
progressing with a group of international financial institutions on
a proposed long-term, limited-recourse, project-financing package
of up to $3.6 billion. The package is being considered by a core
lending group comprised of the European Bank for Reconstruction and
Development, the International Finance Corporation, Export
Development Canada, BNP Paribas and Standard Chartered. As
discussions continue, other government credit agencies and
commercial banks are expected to be added to the core group of
lenders.
Final terms of a third-party project-finance package for the Oyu
Tolgoi Project remain subject to the approval of the Oyu Tolgoi LLC
Board of Directors, the Ivanhoe Mines Board of Directors and the
joint Ivanhoe Mines-Rio Tinto Technical Committee.
Part of the project-finance package would be used to refinance
any drawdowns under the interim funding facility, outlined below,
if funds from the interim facility have been required. With project
financing secured, total resources available to finance the Oyu
Tolgoi Project, including foreseen expansions and associated
investments, would be up to $6.5 billion.
Rio Tinto committed to provide $1.8 billion interim funding
facility to Ivanhoe Mines
Rio Tinto has committed to provide Ivanhoe Mines with an
initial, non-revolving interim funding facility of $1.8 billion to
sustain Oyu Tolgoi construction while a project-finance package is
being negotiated. The interim facility will be drawn upon only
after all the proceeds allocated for the development of Oyu Tolgoi
from the rights offering and from the exercise of warrants have
been utilized for the development of Oyu Tolgoi and if the
project-finance package has not yet become available for
disbursement. The interim facility will be on arm's-length terms,
with funds to be advanced to the project on a month-to-month basis,
if and when required.
The function of the interim funding facility is to ensure that
Ivanhoe Mines has the required financial resources to continue
building the Oyu Tolgoi Project without interruption, even if there
is an unexpected delay in securing the project-finance package. The
interim funding facility, if drawn upon, is intended to be
refinanced with funds to be provided under the project-finance
package.
Rio Tinto to assume management of Oyu Tolgoi Project under
agreement pending approval
Ivanhoe Mines and Rio Tinto reached agreement in 2010 on terms
for a contract, subject to approval of the Oyu Tolgoi LLC board,
under which Rio Tinto will assume the right to manage the Oyu
Tolgoi Project. Rio Tinto, as Project Manager, will have full
authority over the remaining construction, mining, production of
concentrate and future smelting/refining, if any, including the
appointment of senior management for the Oyu Tolgoi Project. The
contract has not yet been submitted to the Oyu Tolgoi LLC board for
consideration.
Ivanhoe Mines will continue to directly manage ongoing
exploration on the Oyu Tolgoi licences outside the projected
life-of-mine area. Budgets greater than $30 million a year
(escalated for inflation) will require approval of the Rio Tinto
Project Manager.
Ivanhoe Mines and Rio Tinto agreed to jointly establish a
working group to study proposals for electrical power,
infrastructure and smelting/refining for Oyu Tolgoi. The working
group will consult with representatives of Erdenes MGL LLC
(Erdenes) in developing proposals to be submitted to the Oyu Tolgoi
LLC board. Erdenes is the wholly-state-owned company established by
the Mongolian Government to hold its 34% equity interest in Oyu
Tolgoi LLC.
Under the Shareholders' Agreement, Ivanhoe Mines appoints six of
the nine Oyu Tolgoi LLC directors. The other three directors are
appointed by the Mongolian Government. Under the Ivanhoe Mines-Rio
Tinto Heads of Agreement, Ivanhoe Mines will continue to select
three of its six allocated directors and Rio Tinto will select the
remaining three directors allocated to Ivanhoe Mines.
Critical mining and milling equipment acquired
In March 2010, Ivanhoe Mines used $195.4 million of the $241.1
million of proceeds received from the issue of 15 million common
shares to Rio Tinto to purchase from Rio Tinto key mining and
milling equipment to be installed during the construction of the
Oyu Tolgoi Project.
The equipment included principal components for the phase-one
concentrator, including two, 38-foot-diameter, semi-autogenous
grinding (SAG) mills, four ball mills, re-grind mills, crushers,
motors, gearless drives, conveyors, flotation cells and the hoist
and major components for the sinking of Shaft #2.
Much of the equipment originally was ordered by Ivanhoe Mines
from various manufacturers during its negotiation of an Oyu Tolgoi
Investment Agreement with the Mongolian Government. Ivanhoe Mines
subsequently transferred ownership of the equipment to Rio Tinto in
August 2008 under an agreement between the companies. Additional
equipment also was acquired by Rio Tinto directly from suppliers.
At the time, Ivanhoe Mines required funds for the ongoing
development of Oyu Tolgoi. The equipment-sale agreement with Rio
Tinto ensured that the procurement and delivery schedules for the
critical, long-lead-time major mining and milling equipment were
protected while Ivanhoe Mines and Rio Tinto worked with the
Mongolian Government to conclude the Investment Agreement, which
subsequently was signed in 2009.
Skills-training and community programs well advanced
The Oyu Tolgoi Project staffing strategy relies heavily on the
utilization of Mongolian nationals being developed and trained
during ongoing construction activities. In mid-March 2011,
approximately 4,200 Mongolians were employed by the project. These
construction employees will form the bulk of the eventual
production workforce, particularly within the open-pit operations.
For those areas requiring specialized skills, such as activities in
the concentrator, specific five-year training programs have been
established in conjunction with the Mongolian Ministry for
Education that are designed to introduce world-class curricula and
technology to vocational training schools and universities.
Principal community development activities in 2010 included:
-- Release of the Community Health, Safety and Security Program and a
Health Impact Assessment Report for local communities.
-- Ongoing establishment of the Oyu Tolgoi Cultural Heritage Program,
including formation of an advisory board.
-- Reviews of local regional planning and infrastructure, and formation of
the South Gobi Regional Development Council.
-- Local procurement activities to identify and develop small-, medium- and
large-sized businesses with capacities to support Oyu Tolgoi and
surrounding communities.
-- Development of a participatory environmental monitoring program focusing
on water management and pasture-land conservation, with the assistance
of local communities.
EXPLORATION
Less than half of Oyu Tolgoi mineralized trend has been
extensively drill tested
New copper-molybdenum-gold zone discovered on Ivanhoe-BHP
Billiton joint venture licence
In March 2011, Ivanhoe Mines announced that Ivanhoe Mines and
BHP Billiton Ltd. have discovered a new zone of shallow
copper-molybdenum-gold mineralization approximately 10 kilometres
north of the Oyu Tolgoi Project. The discovery, known as Ulaan Khud
North, extends the known strike length of the Oyu Tolgoi
mineralized system by an additional three kilometres to the north,
to a total of more than 23 kilometres.
Ulaan Khud North is located on a 19,625-hectare exploration
licence that is part of Ivanhoe Mines' joint-venture partnership
with BHP Billiton, formed in 2005. BHP Billiton has earned a 50%
interest in the joint venture, which includes the Ulaan Khud North
property, by spending $8 million in exploration costs and
conducting an airborne survey using BHP Billiton's proprietary
Falcon™ gravity gradiometer system over the Oyu Tolgoi area.
Twenty-five drill holes totalling 6,561 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 Mines' geologists
believe that the near-surface copper mineralization discovered to
date at Ulaan Khud North may be part of a much larger deposit.
The Ulaan Khud North property adjoins the Shivee Tolgoi Entree
Gold-Ivanhoe Mines joint venture property.
A Pre-Mining Agreement for the Ulaan Khud North licence was
received from the Government of Mongolia. It specifies that Ivanhoe
Mines 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 (MRAM) by June 30,
2013.
Additional 5,000 metres of underground drilling and 27,000
metres of exploration drilling in 2010
During 2010, Ivanhoe Mines completed another extensive drilling
program on the Oyu Tolgoi Project comprised of 6,196 metres of
surface resource geology drilling (including geotechnical and
mine-development investigation holes); 5,011 metres of underground
geotechnical drilling; 8,392 metres of condemnation drilling; and
27,840 metres of exploration drilling.
Of the exploration drilling, 16,152 metres were completed at the
Heruga North Zone in six holes drilled in three, 300-metre-spaced
sections stepping out to the southwest toward the Heruga Deposit
from the original discovery hole at Heruga North (OTD1487). This
drilling included seven wedges to increase the spread of the deep
drilling. Holes on all sections intersected significant copper and
gold mineralization. Although the overall limits of the Heruga
North system have yet to be defined, an approximate 2.5-kilometre
northeast-trending corridor, from the Heruga Deposit in the south
to the Solongo Fault in the north, is potentially mineralized over
a height of at least 700 metres and width of up to 700 metres.
Deep drilling also is ongoing approximately 800 metres north of
the Hugo North Deposit, where previous drill holes intersected weak
mineralization at the top of the Oyu Tolgoi Trend. To date, 4,347
metres have been drilled in the EGD147 section, consisting of one
main hole and two daughter holes.
At the Javkhlant I induced-polarization (IP) anomaly at the
southern-most end of the Oyu Tolgoi Trend, 2,729 metres of diamond
drilling were completed. Hole EJD0035A intersected 24 metres of
1.14% copper from a down-hole depth of 1,426 metres, within a
thick, advanced, argilically-altered sequence comparable to the
sequence intersected at the top of the Hugo Dummett Deposit.
Less than half of the mineralized trend at Oyu Tolgoi has been
extensively drill-tested to date. An ongoing exploration program
using a proprietary, IP technology was successfully completed along
the entire trend during 2010. Detailed evaluation of the data is
expected to identify and refine further targets.
MONGOLIA
SOUTHGOBI RESOURCES (57% owned)
Ongoing expansion of SouthGobi's Ovoot Tolgoi coal mine
SouthGobi continues to mine and sell coal produced at its Ovoot
Tolgoi Mine in Mongolia's South Gobi Region, approximately 40
kilometres north of the Shivee Khuren-Ceke crossing at the
Mongolia-China border.
In 2010, SouthGobi had sales of 2.5 million tonnes at an average
realized price of approximately $35 per tonne. This was an
improvement over the 1.3 million tonnes sold in 2009 at an average
realized selling price of $29 per tonne. Revenue increased from
$36.0 million in 2009 to $79.8 million in 2010 due to the higher
sales volume and a higher realized average price.
Cost of sales was $94.8 million in 2010, compared to $29.4
million for 2009. The increase primarily was due to the increased
sales volume, increased cash costs and the impairment of the raw,
higher-ash coal stockpiles in Q3'10. Cost of sales is comprised of
the cost of the product sold, inventory write-downs, mine
administration costs, equipment depreciation, depletion of
pre-production stripping costs and stock-based compensation
costs.
Global equity offering raised C$459.0 million in conjunction
with Hong Kong listing
On January 29, 2010, SouthGobi closed a global equity offering
of 27.0 million common shares at a price of C$17.00 per common
share, for gross proceeds of C$459.0 million.
In conjunction with the closing of the global equity offering,
SouthGobi commenced trading on the Main Board of the Hong Kong
Stock Exchange under the symbol HK: 1878.
China Investment Corporation converted $250.0 million of its
convertible debenture
On March 29, 2010, a wholly-owned subsidiary of China Investment
Corporation (CIC), at SouthGobi's request, converted $250.0 million
of its convertible debenture into common shares of SouthGobi at a
conversion price of C$11.88 per share. As a result of the
conversion, Ivanhoe Mines' ownership interest in SouthGobi was
reduced to approximately 57%.
AUSTRALIA
IVANHOE AUSTRALIA (62% owned)
Ivanhoe Australia incurred exploration expenses of $73.8 million
in 2010, compared to $41.5 million in 2009. The increase was
largely related to costs incurred for the Merlin molybdenum and
rhenium project pre-feasibility study and the commencement of the
decline to access the Merlin Deposit.
The company's key projects, all situated on granted Mining
Leases, are Merlin, Osborne, Mount Dore and Mount Elliott. During
2010, work focused on acquisition of the Osborne Complex, the
completion of the equity raising, the pre-feasibility study of the
Merlin molybdenum and rhenium project and work on the decline to
access the Merlin Deposit.
Strategic acquisition of Osborne Complex completed
On September 30, 2010, Ivanhoe Australia completed the strategic
acquisition of the Osborne Complex, which includes a
two-million-tonne per annum concentrator, infrastructure and
tenements. Osborne is a significant purchase for Ivanhoe Australia.
It is advancing the company's plans for molybdenum and rhenium
production and providing an opportunity for supplementary copper
and gold production. Importantly, the integration of the Osborne
Complex has the potential to elevate Ivanhoe Australia to producer
status in 2012, well ahead of previous plans.
Consideration for the acquisition of the Osborne Complex
consisted of A$17.2 million in cash; a 2% Net Smelter Return
royalty capped at A$15.0 million from ore extracted only from the
Osborne tenements; and the assumption of all site environmental
obligations, including the provision of an EPA Financial Assurance
of A$18.4 million (discounted).
A$269 million equity raising completed in 2010
In September 2010, Ivanhoe Australia completed its accelerated,
non-renounceable, pro rata entitlement offer, raising gross
proceeds of approximately A$269 million. The entitlement offer was
well supported by Ivanhoe Australia's current international
institutional shareholders, while also attracting a large number of
new domestic investors.
The shares offered under the entitlement offer consisted of one
ordinary share and one-half of one option, with each full option
entitling the holder to acquire one Ivanhoe Australia ordinary
share until September 20, 2011, at a price of A$3.38. A total of
46,729,404 options were issued under the entitlement offer, which
could raise a further A$158 million.
Secondary listing gained on the Toronto Stock Exchange
On November 12, 2010, Ivanhoe Australia's common shares began
trading on the Toronto Stock Exchange (TSX). There was no equity
offering as part of the TSX Listing. The dual listing enhances
Ivanhoe Australia's access to the international pool of resource
investors.
Underground decline roadway to access Merlin molybdenum and
rhenium well underway
The Merlin Deposit is the lower-most mineralized zone in the
Mount Dore Deposit, starting near the surface and dipping east at
between 45 and 55 degrees. To date, the deposit has been
intersected to approximately 500 metres down-dip. The overall
mineralized zone at Merlin has an average true thickness of
approximately 20 metres. Mineralization has been found over a
strike length of 1,300 metres in step-out holes. The mineralization
thins to the north, where it also has been noted that the copper,
zinc and gold content increases. To the south, the mineralization
flattens and pinches out. The high-grade Little Wizard Zone
represents the southern-most extent of molybdenum mineralization of
economic interest found to date.
Construction of the Merlin underground access decline began in
Q3'10; the box cut was completed and the first blast for the
decline portal was on December 6, 2010. To date, the decline has
advanced 579 metres. It is expected that the decline will be
adjacent to the Little Wizard Deposit by Q4'11.
KAZAKHSTAN
Kyzyl Gold Project (50% owned)
In March 2010, Ivanhoe Mines increased its interest from 49% to
50% in Altynalmas Gold, the company that holds 100% ownership of
the Kyzyl Gold Project in northeastern Kazakhstan. Altynalmas Gold
is proceeding to advance the development of the Kyzyl Gold Project
following the successful completion of the pre-feasibility study in
Q3'10.
The Kyzyl Gold Project contains the Bakyrchik and Bolshevik gold
deposits, as well as a number of satellite deposits.
Kyzyl Project feasibility study proceeding on schedule
The definitive feasibility study on the Bakyrchik Deposit began
in September 2010 and is expected to be completed in Q2'11. The
feasibility study is being conducted in conjunction with detailed
engineering work. Tender requests have been circulated for the
fabrication of long-lead items, including an oxygen plant and
dry-grinding mill. Procurement of long-lead items is expected to
begin during Q2'11. Altynalmas expects to begin construction of a
1.5-million-tonne per year fluidized-bed roasting plant to process
the project's refractory ores in 2011.
Altynalmas Gold is investigating financing options for the Kyzyl
Gold Project that include, but are not limited to, an initial
public offering, strategic investors, project financing or
continued financing from existing shareholders.
OTHER DEVELOPMENTS
Highly successful strategic rights offering completed in
2011
In February 2011, Ivanhoe Mines closed its strategic rights
offering in which all existing shareholders, subject to applicable
law, were able to participate on a pro rata basis in purchasing
additional common shares. The offering generated $1.18 billion in
gross proceeds, to be used primarily to advance development of the
Oyu Tolgoi Project.
Upon the closing of the rights offering, Ivanhoe Mines issued a
total of 84.9 million common shares, which represented 99.5% of the
maximum number of common shares that were available under the
rights offering.
Ivanhoe Mines' Chairman and CEO Robert Friedland and Rio Tinto,
the two largest shareholders in Ivanhoe Mines, exercised all of
their respective rights that were issued to them in the rights
offering. Mr. Friedland also purchased an additional 1.5 million
rights on the open market and exercised them to acquire additional
common shares. Mr. Friedland's ownership stake in Ivanhoe Mines now
is 15.5%.
Rio Tinto's ownership stake in Ivanhoe Mines increased from
19.7% to 42.1%
Rio Tinto, through a series of transactions, increased its
investment in Ivanhoe Mines from 19.7% at the start of 2010 to
42.1% in early 2011.
In March 2010, Ivanhoe Mines issued 15.0 million common shares
to Rio Tinto at C$16.31 per share for total proceeds of C$244.7
million ($241.1 million). Ivanhoe Mines used C$198.2 million
($195.4 million) of the proceeds to purchase from Rio Tinto key
mining and milling equipment to be installed during the
construction of the Oyu Tolgoi Project. With this transaction, Rio
Tinto increased its ownership in Ivanhoe Mines from 19.7% to
22.4%.
In June 2010, Rio Tinto exercised its 46.0 million Series A
warrants four months ahead of schedule and Ivanhoe Mines issued
46.0 million common shares to Rio Tinto at $8.54 per share, for
total proceeds of $393.1 million. This transaction increased Rio
Tinto's ownership in Ivanhoe Mines to approximately 29.6%.
In September 2010, Ivanhoe Mines issued 40.1 million common
shares to Rio Tinto upon the conversion of Rio Tinto's maturing
convertible credit facility. The convertible credit facility's $350
million outstanding principal, plus accrued interest of $50.8
million, was converted at a price of $10.00 per common share. In
October 2010, a further 0.7 million common shares were issued to
Rio Tinto upon its exercise of the first series of anti-dilution
warrants granted to Rio Tinto under Rio Tinto's private-placement
agreement with Ivanhoe Mines. Each anti-dilution warrant entitled
Rio Tinto to acquire one common share in exchange for the payment
of C$3.15. With these transactions, Rio Tinto increased its
ownership in Ivanhoe Mines to approximately 34.9%.
In December 2010, as part of the Heads of Agreement with Ivanhoe
Mines, Rio Tinto exercised $300 million worth of its Series B
warrants. The $300 million payment, covering the purchase of 33.8
million shares each priced at $8.88, was received approximately 10
months ahead of the scheduled October 2011 expiry of the Series B
warrants.
Rio Tinto, also as part of the Heads of Agreement, committed to
complete the exercise of its remaining Series B warrants by their
scheduled October 2011 expiry, which would result in a total
payment to Ivanhoe Mines of approximately $120 million.
In addition, Rio Tinto committed to exercise its entire
allotment of Series C warrants, progressively as required, by
January 2012 - at least nine months ahead of their scheduled
expiry. This would provide payments to Ivanhoe Mines totalling
approximately $380 million.
The exercise of $300 million worth of Series B warrants, and the
direct purchases of 10 million Ivanhoe Mines shares from Mr.
Friedland and 11.5 million from Citibank, increased Rio Tinto's
ownership stake in Ivanhoe Mines to approximately 42.1% by early
February 2011.
Since October 2006, Rio Tinto has acquired shares, exercised
warrants, converted a debt facility and sold equipment amounting to
a combined investment of approximately $3.0 billion in Ivanhoe
Mines.
The Heads of Agreement established a firm cap of 49% on the
maximum interest in Ivanhoe Mines that Rio Tinto may achieve
through the exercise of all warrants, the exercise of the right to
subscribe, from time to time, for additional Ivanhoe shares and
permitted open-market purchases of common shares. In addition, the
expiry of the standstill limitation, including the firm 49% cap,
has been extended for three months, from October 18, 2011, to
January 18, 2012.
The original standstill provision of the 2006 private-placement
agreement between Ivanhoe Mines and Rio Tinto, as subsequently
amended, had limited Rio Tinto's ownership to a maximum interest of
46.6% in Ivanhoe Mines until October 2011.
Executive changes include establishment of Office of the
Chairman to evaluate strategic initiatives
On October 18, 2010, Ivanhoe Mines announced that Executive
Chairman Robert Friedland was re-assuming the duties and title of
Chief Executive Officer in a series of organizational changes that
established the Office of the Chairman as part of an ongoing
commitment to maximize shareholder value. Mr. Friedland previously
had served as Chief Executive Officer of Ivanhoe Mines for 10
years, from the Company's founding until 2006.
The Office of the Chairman was joined by Peter Meredith, Ivanhoe
Mines' Deputy Chairman for the past four years and former Chief
Financial Officer, and Sam Riggall, now Ivanhoe Mines' Executive
Vice President, Business Development and Strategic Planning, and
formerly Executive Vice President of Ivanhoe Australia. Mr. Riggall
previously worked at Rio Tinto for more than a decade in a variety
of roles covering project generation and evaluation, business
development and capital market transactions. He has significant
experience working in many parts of the world, where he managed a
number of government negotiations over mine development projects.
Mr. Riggall also is a Director of Oyu Tolgoi LLC.
The Office of the Chairman is leading the assessment of
potential strategic initiatives and directing any necessary
negotiations to create and enhance value for shareholders. The
Office of the Chairman also assumed responsibilities within Ivanhoe
Mines related to the development of other subsidiary interests,
including SouthGobi Resources, Ivanhoe Australia and Altynalmas
Gold.
In February 2011, Kjeld Thygesen and John Macken relinquished
their seats on the Ivanhoe Mines board to create vacancies for two
Rio Tinto appointees. Mr. Macken will continue as a board member of
each of Ivanhoe Mines' three principal subsidiaries, SouthGobi
Resources, Ivanhoe Australia and Altynalmas Gold.
Mr. Thygesen, Managing Director of London-based Lion Resource
Advisors, completed 10 years of service on the Ivanhoe Mines'
board. Ivanhoe Mines is grateful for the knowledge and experience
that he brought to the board table and for the contributions he has
made to the Company's successes.
Corporate governance measures provide assurance of
independence
As part of the December 2010 Heads of Agreement, Rio Tinto
committed to not seek representation on the Ivanhoe Mines board in
excess of its proportional ownership in Ivanhoe Mines until the
standstill covenant expires in January 2012. Rio Tinto further
committed to maintain a majority of independent directors on the
Ivanhoe Mines board until January 2014. One incumbent director
selected by Ivanhoe Mines senior management, and two incumbent
directors selected by Mr. Friedland - on condition that Mr.
Friedland continues to own at least 10% of Ivanhoe - will remain
directors on the Ivanhoe board until January 2014. The board
believes that this assurance of independence will enable it to
continue its assessment of strategic initiatives to maximize value
for all shareholders.
To help maintain the highest standard of corporate governance,
David Huberman, the lead independent director on the Ivanhoe Mines
board, will be nominated to assume the title and responsibilities
of Chairman of the Board following Ivanhoe Mines' next annual
general meeting to be held in May 2011. Mr. Friedland then will
continue as Chief Executive Officer and as a director on the
Ivanhoe Mines board.
Appointment of additional directors
During 2010, Ivanhoe Mines announced that the company's Board of
Directors had been joined by Rio Tinto appointees Tracy Stevenson,
Michael Gordon, Dan Westbrook and Robert Holland III. Under the
terms of the October 2006 private-placement agreement between Rio
Tinto and Ivanhoe Mines, Rio Tinto is entitled to nominate a
proportionate share of members to the Ivanhoe Mines Board of
Directors, based on Rio Tinto's shareholding in Ivanhoe Mines.
In February 2011, Ivanhoe Mines announced that Andrew Harding
and Kay Priestly, senior executives of Rio Tinto's copper division,
also had been appointed to the Ivanhoe Mines Board of Directors.
Their appointments increased to six the number of Rio Tinto
appointees presently on the 14-member Ivanhoe Mines board.
REVIEW OF OPERATIONS
In 2010, Ivanhoe Mines recorded a net loss of $211.5 million
($0.42 per share) compared to a net loss of $280.2 million ($0.69
per share) in 2009, representing a decrease of $68.7 million.
Results for 2010 mainly were affected by $218.6 million in
exploration expenses, $94.8 million in cost of sales, $84.4 million
in general and administrative expenses, $32.8 million in interest
expense, $154.3 million in loss on conversion of convertible credit
facility and $42.7 million in share of loss of significantly
influenced investees. These amounts were offset by coal revenue of
$79.8 million, $16.6 million in interest income, $8.7 million in
mainly unrealized foreign exchange gains, a $135.7 million change
in the fair value of a derivative and a $100.6 million change in
the fair value of embedded derivatives.
Exploration expenses of $218.6 million in 2010 increased $41.5
million from $177.1 million in 2009. Exploration expenses included
$134.5 million spent in Mongolia ($130.9 million in 2009),
primarily for Oyu Tolgoi and Ovoot Tolgoi, and $73.8 million
incurred by Ivanhoe Australia ($41.5 million in 2009). Exploration
costs are charged to operations in the period incurred and often
represent the bulk of Ivanhoe Mines' operating loss for that
period.
Ivanhoe Mines' cash position, on a consolidated basis at
December 31, 2010, was $1.3 billion. As at March 28, 2011, Ivanhoe
Mines' consolidated cash position was approximately $1.9
billion.
QUALIFIED PERSON
Disclosure of a scientific or technical nature in this MD&A
in respect of the Oyu Tolgoi Project was prepared under the
supervision of Stephen Torr, P. Geo, an employee of Ivanhoe Mines
and a "qualified person" as that term is defined in NI 43-101.
SELECTED ANNUAL FINANCIAL INFORMATION
This selected financial information is in accordance with U.S.
GAAP as presented in the annual consolidated financial
statements.
($ in millions of U.S. dollars,
except per share information) Years ended December 31,
2010 2009 2008
---------------------------------------------------------------------------
Revenue $ 79.8 $ 36.0 $ 3.1
Exploration expenses (218.6) (177.1) (250.6)
General and administrative (84.4) (45.8) (27.5)
Foreign exchange gains (losses) 8.7 34.1 (62.9)
Gain on sale of long-term
investment and note receivable - 1.4 201.4
Change in fair value of
derivative 135.7 - -
Change in fair value of embedded
derivatives 100.6 (45.0) -
Loss on conversion of convertible
credit facility (154.3) - -
Write-down of carrying value of
long-term investments (0.5) - (7.1)
Write-down of carrying value of
other long-term investments - - (18.0)
Net loss from continuing
operations $ (218.1) $ (276.6) $ (208.4)
Net (loss) income from
discontinued operations 6.6 (3.6) 24.3
---------------------------------------------------------------------------
Net loss $ (211.5) $ (280.2) $ (184.1)
---------------------------------------------------------------------------
Net loss per share from
continuing operations $ (0.43) $ (0.68) $ (0.52)
Net (loss) income per share from
discontinued operations 0.01 (0.01) 0.06
---------------------------------------------------------------------------
Net loss per share $ (0.42) $ (0.69) $ (0.46)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total assets $ 3,218.4 $ 1,534.7 $ 742.2
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total long-term financial
liabilities $ 302.4 $ 583.0 $ 354.4
---------------------------------------------------------------------------
Ivanhoe Mines' results for the year ended December 31, 2010, are
contained in the audited Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and
Results of Operations, available on the SEDAR website at
www.sedar.com and Ivanhoe Mines' website at
www.ivanhoemines.com.
Copies of Ivanhoe Mines' 2010 Annual Report containing the
audited financial statements, and Management's Discussion and
Analysis of Financial Condition and Results of Operations
(MD&A) will be available at www.ivanhoemines.com on the
Financial and Technical Reports page under the Investors section.
Copies of the company's Annual Information Form and 40F also will
be available at the same site on March 31, 2011.
Shareholders also may request a hard copy of the Annual Report
free of charge by contacting our investor relations department by
phone at +1-604-688-5755 or by email at info@ivanhoemines.com.
Ivanhoe Mines shares are listed on the Toronto, New York and
NASDAQ 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 anticipated business activities; planned
expenditures; corporate strategies; proposed acquisitions and
dispositions of assets; discussions with third parties respecting
material agreements; the schedule for carrying out and completing
construction of the Oyu Tolgoi Project; the estimated commencement
of pre-stripping of the Southern Oyu open pit deposits; the
estimated delivery of the first ores from the Southern Oyu open pit
to the concentrator; the estimated schedule to bring the Oyu Tolgoi
Project into initial production and commercial production;
statements related to the anticipated capital costs of the Oyu
Tolgoi Project; the expected timing of production from the first
lift of the Hugo North block-cave mine; possible expansion
scenarios for the Oyu Tolgoi Project; the commencement of
construction of the water pipeline, paved road and electrical
transmission power line to the Oyu Tolgoi Project; completion of
the pouring of concrete for the pebble crushing building and
erection of structural steel for the concentrator building at the
Oyu Tolgoi Project;
the Oyu Tolgoi Project's anticipated yearly production of copper
and gold; the ability of Ivanhoe Mines to arrange acceptable
financing commitments for the Oyu Tolgoi Project and the timing of
such commitments, including the debt-finance package contemplated
by the Heads of Agreement with Rio Tinto; implementation of the Oyu
Tolgoi Project's training and development strategy; target milling
rates, mining plans and production forecasts for the coal mine at
Ovoot Tolgoi, Mongolia; the schedule for carrying out and
completing an expansion of the production capability of the Ovoot
Tolgoi Coal Project; anticipated outcomes with respect to the
ongoing marketing of coal products from the Ovoot Tolgoi Coal
Project; the anticipated timing of payback of capital invested in
the Ovoot Tolgoi Coal Project; statements respecting future equity
investments in Ivanhoe Mines by Rio Tinto; statements respecting
the implementation of the transactions contemplated by the Heads of
Agreement with Rio Tinto; the impact of arbitration proceedings
with Rio Tinto; the statements concerning the timing of
commencement of commercial operation and operating capacity of the
Ceke to Linhe railway line; the statement that the integration of
the Osborne Complex has the potential to elevate Ivanhoe Australia
to producer status by 2012; the statements concerning the timing of
the Merlin pre-feasibility study and the receipt of applicable
environmental permitting;
the statements that Altynalmas Gold's definitive feasibility
study is expected to be completed in late Q2'11 and that it will
commence construction during 2011 on a roasting plant to process
refractory ore; the impact of amendments to the laws of Mongolia
and other countries in which Ivanhoe Mines carries on business,
particularly with respect to taxation; statements concerning global
economic expectations and future demand for commodities; and the
anticipated timing, cost and outcome of plans to continue the
development of non-core projects, and other statements that are not
historical facts.
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. 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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