Mongolian Resource Play

[Tackler]

IVN Ivanhoe Mines finds gold-rich copper porphyry targets

2004-11-29 10:04 ET - News Release

Mr. Robert Friedland reports

IVANHOE DISCOVERS IMPORTANT NEW GOLD-COPPER PORPHYRY DISTRICT IN SOUTHERN MONGOLIA; NEW PORPHYRY DISTRICT NOW NAMED BRONZE FOX

Ivanhoe Mines chairman, Robert Friedland, and executive vice-president, exploration, Douglas Kirwin, along with the company's exploration team, have discovered four significant, gold-rich copper porphyry targets in the newly named Bronze Fox district in southern Mongolia. The latest discoveries are approximately 140 kilometres northeast of Ivanhoe's world-class Oyu Tolgoi copper-gold project and 430 kilometres south-southeast of Ulaanbaatar.

This newly discovered district lies within a 100-kilometre-long, highly prospective copper-gold porphyry belt that extends northeast from the Shuteen project and hosts other well-preserved, late Devonian to early Carboniferous mineralized porphyry and skarn systems. Ivanhoe Mines has a 100-per-cent interest in the Bronze Fox district and the majority of the ground over this belt (see location map on the company website at www.ivanhoemines.com).

The Bronze Fox discovery is the result of persistent exploration efforts in Mongolia whereby systematic exploration across the extensive groundholdings has defined a new district with highly anomalous gold-copper grades.

"The large numbers of rock samples with strong gold and copper values collected throughout the district are indicative of a large and highly mineralized gold and copper porphyry system," said Mr. Kirwin. "The presence of sheeted quartz veins and unidirectional solidification textures (USTs), as well as tourmaline veins and breccias with highly significant gold and copper values, demonstrate that the upper mineralized parts of the porphyry intrusions have been preserved."

The Bronze Fox district comprises four new auriferous porphyry targets: Bronze Fox, East Fox, West Fox and Tourmaline Hills. These targets occur within a 14-kilometre-long corridor of alteration and mineralization that is associated with monzodiorite to granodiorite intrusions that were emplaced into a package of Devonian volcano-sedimentary rocks. The targets are primarily defined by surface mapping, geophysics and extensive rock-chip sampling. The recent field magnetic survey indicated that several of the prospects are characterized by central magnetic lows surrounded by circular magnetic highs, a feature similar to many gold-rich porphyry systems and related to alteration associated with magnetite destruction.

Work completed during the 2004 field season included 5,701 rock-chip samples (table 1) and a ground magnetic survey comprising 1,729 line kilometres. Work has been primarily centred on the Bronze Fox prospect, where 2,862 rock-chip samples averaged 0.51 gram per tonne gold. However, the 266 rock-chip samples at the more recently defined West Fox prospect average 3.1 grams per tonne gold. Elevated arsenic, lead and molybdenum occur at most prospects.

Summaries of the four main prospects

Bronze Fox

Gold-copper-molybdenum-arsenic mineralization at the Bronze Fox prospect is associated with sheeted quartz veins and associated quartz-albite-sericite alteration that is centred on quartz diorite porphyry dikes within a multiphase intrusive complex. The zone strikes northwest over a distance of approximately 1,500 metres and varies in width from 200 to 400 metres.

From 2,862 rock-chip samples collected from Bronze Fox, 534 samples returned results over 0.5 gram per tonne gold, including 166 samples over 2.0 grams per tonne gold, with a maximum assay of 46.50 grams per tonne. A total of 577 samples returned copper values over 0.5 per cent, including 98 samples over 2 per cent copper, with a maximum value of 8.1 per cent copper.

East Fox

East Fox lies approximately 3.5 kilometres northeast along strike from the Bronze Fox prospect. The two prospects are hosted by the same monzodiorite-granodiorite intrusive complex. Gold-copper-molybdenum mineralized sulphide veinlets and quartz veins are associated with calc-sodic (actinolite-albite-sericite-quartz) alteration. The 1,831 rock-chip samples from East Fox have an average gold content of 0.94 gram per tonne, with 116 samples assaying over 2.0 grams per tonne and a maximum assay of 109 grams per tonne. A total of 216 samples returned copper values over 0.5 per cent, including 34 samples over 2 per cent copper, with a maximum value of 11.6 per cent copper.

West Fox

Reconnaissance mapping 4.5 kilometres northwest of the Bronze Fox prospect has identified a series of gold-arsenic-lead silver mineralized in en echelon quartz-hematite veins. These are associated with narrow diorite porphyry dikes that have been emplaced into a package of hornfelsed siltstones, sandstones and basic to intermediate volcanic rocks. The veins are distributed over a 1,500-metre by 350-metre area, where 266 rock-chip samples returned an average of 3.08 grams per tonne gold, with a maximum assay of 53.4 grams per tonne, as well as anomalous silver and base metal assays.

Tourmaline Hills

The gold-copper mineralized tourmaline-hematite veins and breccias of the Tourmaline Hills prospect outcrop over an area of approximately six square kilometres and are hosted within a multiphase monzodiorite-granodiorite stock. The mineralized zone has a strike length of at least 1.5 kilometres and is open in both directions. The mineralized veins and breccias are generally less than six metres wide, but are up to 20 metres wide at vein intersections. The 742 rock-chip samples from the prospect returned 165 results over 0.5 gram per tonne gold, including 52 samples over 2.0 grams per tonne gold, with a maximum assay of 26.7 grams per tonne.

Continuing exploration and planned drilling

Geologic mapping is continuing throughout the Bronze Fox area. Ivanhoe's exploration team believes that there is a strong possibility of discovering additional mineralized porphyry gold-copper targets within the district, as well as along the defined structural corridor. Detailed induced polarization (IP) and field-based gravity surveys will commence shortly, with an aggressive drilling program planned for early in the 2005 field season.

Douglas Kirwin, a qualified person as defined by National Instrument 43-101, supervised the preparation of the information in this release.

Ivanhoe has a 100-per-cent interest in the Oyu Tolgoi gold and copper project in Mongolia, and owns or controls exploration rights covering approximately 118,000 square kilometres in central and southern Mongolia. Ivanhoe produces London Metal Exchange Grade A copper from its Monywa joint venture in Myanmar and iron ore products from ABM Mining's Savage River mine in Australia.