Ivanhoe Mines and BHP Billiton have discovered a new zone of shallow copper-molybdenum-gold mineralization 10 km north of the Ivanhoe Mines Oyu Tolgoi copper-gold mining complex currently under construction in southern Mongolia. The discovery, known as Ulaan Khud North, extends the known strike length of the Oyu Tolgoi mineralized system by an additional 3 km to the north.
Ulaan Khud North is located on a 19,625-ha exploration license that is part of the Ivanhoe-BHP Billiton joint venture formed in 2005. BHP Billiton has earned a 50% interest in the joint venture by spending $8 million in exploration costs and conducting an airborne gravity gradiometer survey over the Oyu Tolgoi area.
Twenty-five drill holes totaling 6,561 m, ranging in depth from 182 m to 377 m, defined the new zone of shallow porphyry copper mineralization over an area of 600 m by 300 m. The mineralized zone starts beneath 60 m to 80 m of Cretaceous clay and gravels. Ivanhoe’s geologists believe the near-surface copper mineralization discovered to date may be part of a much larger deposit.
Mineralization occurs in quartz monzodiorite similar to mineralized quartz monzodiorites at Oyu Tolgoi. Many holes encountered mineralization of greater than 1% copper in multiple individual 1-m samples, while almost all holes have longer intervals of mineralization grading greater than 0.3% copper. Numerous post-mineral intrusive rocks cut the mineralized quartz monzodiorite and define the boundaries of most mineralized intervals.
The pre-mining agreement for the Ulaan Khud North property 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.