Projects

Overview

Oyu Tolgoi is the world's largest undeveloped copper-gold project and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border.

On March 31, 2010, the Mongolian Government 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 in October 2009. The comprehensive Investment Agreement now has taken full legal effect.

On October 6, 2009, Ivanhoe Mines and Rio Tinto signed a long-term, comprehensive Investment Agreement with the Government of Mongolia for the construction and operation of the Oyu Tolgoi copper-gold mining complex. The agreement creates a partnership between the Mongolian Government -- which will acquire a 34% interest in the project -- and Ivanhoe Mines, which will retain a controlling 66% interest in Oyu Tolgoi. Global miner Rio Tinto, which joined Ivanhoe Mines as a strategic partner three years ago, presently holds a 29.6% interest in Ivanhoe Mines.


Based on Ivanhoe Mines' discoveries at Oyu Tolgoi during the past nine years, independently verified estimates indicate that Oyu Tolgoi contains approximately 81 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources.

Ivanhoe Mines announces 2010 construction budget of US$758 million

In December 2009, President and CEO John Macken announced that the joint Ivanhoe Mines-Rio Tinto Oyu Tolgoi Technical Committee approved a US$758 million budget for 2010 to begin full-scale construction of the copper-gold mining complex in southern Mongolia.

"The approval of the 2010 construction budget represents the next big step toward bringing this project into production," Mr. Macken said. "Ivanhoe is considering a schedule that could see construction of the initial open-pit mine completed in 2012 and commercial production begin in 2013."

The 2010 budget provides for an early start on a site-wide development program.

Work in 2010 is planned to include:

• 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 storeys), 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.

A 50-year assurance of stability

Given the extent of the discoveries associated with the Oyu Tolgoi Project and the potential for additional discoveries, Ivanhoe Mines and the Government of Mongolia agreed that the Investment Agreement should conform with the provision of Mongolia's current Minerals Law specifying that certain deposits of strategic importance qualify for 30 years of stabilized tax rates and regulatory provisions, with an option of extending the term of the Investment Agreement for an additional 20 years.

Major taxes and rates stabilized for the life of the agreement include: corporate income tax; customs duty; value-added tax; excise tax; royalties; exploration and mining licences; and immovable property and/or real estate tax.

IMMI will receive a 10% investment tax credit on all capital expenditures and investments made throughout the initial Oyu Tolgoi construction period. Any future taxes introduced will not be imposed on the project unless future legislation is more favourable, in which case Ivanhoe Mines may request the more favourable treatment. If Mongolia enters a tax or bilateral treaty that provides greater benefits to the investor, Ivanhoe Mines may request the benefit of such law, regulation or treaty to help ensure that a stable taxation and operating environment is maintained.




Cautionary Note to U.S. Investors

The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this website such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines generally prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 40-F which may be secured from us, or from the SEC's website at www.sec.gov/edgar.shtml.