Ivanhoe Mines Ltd.

Ivanhoe Mines Ltd.

August 03, 2011 09:31 ET

Ivanhoe Mines: Altynalmas Gold's New Upgraded and Confirmed Bakyrchik East Mineral Resource Gold Deposit Boosts Total Gold Resources at Kyzyl Project in Kazakhstan

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 3, 2011) - Robert Friedland, founder and Chief Executive Officer of Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) and Chairman of Altynalmas Gold, and David Woodall, President and Chief Executive Officer of Altynalmas Gold, announced today a NI 43-101-compliant Mineral Resource estimate for the new Bakyrchik East Deposit at Altynalmas Gold's Kyzyl Gold Project in northeastern Kazakhstan. Ivanhoe Mines owns 50% of Altynalmas Gold.

Roscoe Postle Associates Inc. (RPA), an internationally recognized consulting firm, estimates the Bakyrchik East Deposit at 6.8 million tonnes of Inferred Mineral Resources grading 6.0 grams of gold per tonne (g/t), containing 1.3 million ounces of gold.

The Bakyrchik East Gold Deposit, consisting of the Globoki Log and Promezhutochny zones, is located 800 metres east along strike from the eastern edge of the main Bakyrchik Gold Deposit within the Kyzyl Shear Zone. The RPA estimate is based on drilling results that were available to July 11, 2011.

"The continued success of our ongoing systematic and aggressive gold exploration program further confirms the scale and geological potential of the Kyzyl Gold System," Mr. Woodall said.

"These encouraging results increasing our Indicated and Inferred Mineral Resources to 6.217 and 3.611 million ounces of gold respectively, enhance our confidence that Altynalmas Gold can successfully implement our development plans and establish the Kyzyl Gold Project as a world-class operation."

Table 1 presents a summary of the Kyzyl Gold Project's total NI 43-101-compliant Mineral Resource.

Table 1. Mineral Resource summary for the Kyzyl Gold Project as of July 11, 2011 (inclusive of Mineral Reserves)
Mineral Resource Deposit Tonnes Gold Grade Contained Gold
Classification (millions) (g/t) (ounces x1000)
Indicated Bakyrchik 22.16 8.72 6,217
Inferred Bakyrchik 9.67 7.43 2,311
Bakyrchik East 6.80 6.00 1,300
Total Inferred 16.47 6.82 3,611

See Table 2 for footnotes.

Table 2. Inferred Mineral Resource estimate for the Bakyrchik East Deposit as of July 11, 2011
Lens Tonnes Gold Grade Contained Gold
(millions) (g/t) (ounces x 1000)
Promezhutochny 4.1 6.0 790
Globoki Log 2.8 6.1 540
Total 6.8 6.0 1,300
1. CIM definitions were followed for Mineral Resources.
2. The Qualified Person for this Mineral Resource estimate is David Ross, M.Sc., P.Geo.
3. Mineral Resources are estimated at a cut-off grade of 3.0 grams per tonne gold.
4. Mineral Resources were estimated using an average long-term gold price of US$1,100 per ounce and an assumed recovery of 89%.
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
6. Totals may not add correctly due to rounding.

Exploration continuing with 60,000 metres of drilling planned

Altynalmas Gold is continuing its aggressive drilling program designed to expand and upgrade the NI 43-101-compliant Mineral Resources and Reserves at the Kyzyl Gold Project. During the first six months of 2011, a total of 42,667 metres were drilled on the Mining Lease. Recent drilling activities have been focused on exploring the down-dip extensions of known gold resources, as well as on the flanks of known gold lenses.

Altynalmas plans to drill an additional 10,000 metres focused on the depth extensions on Lenses 1, 9 and 12, as well as 50,000 metres targeting the numerous satellite gold deposits on the surrounding exploration licence.

The assayed and significant drill intercepts of high-grade gold mineralization from all of the recently assayed drilling include:

6 m @ 18.67 g/t gold - Hole BAK-119-2010;
12 m @ 10.87 g/t gold - Hole BAK-121-2010;
8 m @ 18.46 g/t gold - Hole BAK-124-2010;
13 m @ 17.04 g/t gold - Hole BAK-134-2010;
8 m @ 11.75 g/t gold - Hole BAK-136-2010;
24 m @ 10.77 g/t gold - Hole BAK-148-2010;
6 m @ 15.65 g/t gold - Hole BAK-151-2010;
15 m @ 15.53 g/t gold - Hole BAK-152-2010;
13 m @ 13.72 g/t gold - Hole BAK-153-2010;
10 m @ 10.75 g/t gold - Hole BAK-163-2010;
7 m @ 12.14 g/t gold - Hole BAK-180-2010;
12 m @ 13.12 g/t gold - Hole BAK-182-2010;
13 m @ 12.04 g/t gold - Hole BAK-183-2010;
23 m @ 12.04 g/t gold - Hole BAK-184-2010;
15 m @ 14.03 g/t gold - Hole BAK-187-2010;
22 m @ 13.20 g/t gold - Hole BAK-201-2010;
6 m @ 21.14 g/t gold - Hole BAK-206-2010;
7 m @ 19.53 g/t gold - Hole BAK-209-2010;
32 m @ 13.09 g/t gold - Hole BAK-212-2010; and,
14 m @ 13.46 g/t gold - Hole BAK-230-2010.
1. Intersection assays are a composite of one-metre assays calculated from interval-weighted assays over a minimum three metre intersection length using a 2.0 g/t gold cut-off. A maximum of three metres of waste or lower grade material also may be included in the composite.
2. No high assay values have been cut.
3. Interval widths generally are equivalent to true widths.

A complete summary of recent drill results is available on Ivanhoe Mines' website at www.IvanhoeMines.com.

Bakyrchik East Mineral Resource estimate

The Mineral Gold Resources at Bakyrchik East are hosted in two lenses comprised of more than 20 sub-zones that collectively measure 2,000 metres along strike by 1,500 metres down dip, extending from surface to a depth of 800 metres as shown in the accompanying figures. The reported Mineral Resources by lens at varying cut-off grades are shown in Table 3. There are no Mineral Reserves currently estimated at Bakyrchik East.

Table 3. Detailed Inferred Mineral Resource Estimate for the Bakyrchik East Gold Deposit as of July 11, 2011
Lens Cut-off grade Tonnes Gold Grade Contained Gold
(g/t gold) (millions) (g/t) (ounces x 1000)
Promezhutochny 6.0 1.5 8.4 410
5.0 2.5 7.2 580
4.0 3.4 6.5 720
3.0 4.1 6.0 790
2.0 4.3 5.9 810
Globoki Log 6.0 1.2 8.1 300
5.0 1.7 7.3 400
4.0 2.2 6.6 480
3.0 2.8 6.1 540
2.0 2.9 5.8 550
Total 6.0 2.7 8.3 710
5.0 4.2 7.2 980
4.0 5.7 6.5 1,200
3.0 6.8 6.0 1,300
2.0 7.2 5.9 1,400
1. CIM definitions were followed for Mineral Resources.
2. The Qualified Person for this Mineral Resource estimate is David Ross, M.Sc., P.Geo.
3. Mineral Resources are estimated at a cut-off grade of 3.0 g/t gold.
4. Mineral Resources were estimated using an average long-term gold price of US$1,100 per ounce and an assumed recovery of 89%.
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
6. Totals may not add correctly due to rounding.

The Bakyrchik East drill-hole database includes 957 historic drill holes totalling 292,087 metres of core, plus 30 recent drill holes by Altynalmas totalling 9,710 metres of core. Both data sets were verified and validated by RPA and are acceptable to estimate Mineral Resources.

A set of cross-sections and plan views were interpreted to construct three-dimensional wireframe models of the mineralized lenses using the descriptive logs, a minimum grade of 3.0 g/t gold and a minimum thickness of 1.5 metres. Prior to compositing to two-metre lengths, high grades were cut to 35 g/t gold. Gold grade was estimated using ordinary kriging. Block size is five metres by five metres by five metres. Bulk density is 2.7 t/m3. RPA classified the resources as Inferred, based on drill-hole spacing, grade continuity and reliability of data.

Quality Assurance and Quality Control

Exploration core was drilled HQ size (63.5-mm-diameter core) using western drill strings. Triple tube HQ3 (61.1-mm-diameter core) was used within, and on the shoulders, of the mineralized zone. Assaying of the samples was completed at ALS Minerals, an independent ISO-credited laboratory in Vancouver, Canada, using fire assay fusion, followed by a gravimetric analysis procedure.

Quality assurance and quality control is independently monitored and audited by RPA with a quality-control program, which includes the use of matrix matched assay standard reference samples, blanks, duplicates, repeats and internal ALS Minerals quality-assurance procedures.

Qualified Person

Disclosures of a scientific or technical nature in this release have been reviewed by Ian Blakley, P. Geo., Vice President – Exploration of Altynalmas Gold Ltd. and a "Qualified Person" for the purpose of National Instrument 43-101.

The Mineral Resources for the Kyzyl Gold Project disclosed in this news release have been estimated by David Ross, P.Geo., an employee of RPA and independent of Ivanhoe Mines. Mr. Ross is a "Qualified Person" for the purpose of National Instrument 43-101. The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves, (November 2010). Mr. Ross has read and approved the contents of this news release as it pertains to the disclosed mineral resource estimate.

About Ivanhoe Mines

Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) is an international mining company with operations focused in the Asia Pacific region. Assets include the company's 66% interest in the Oyu Tolgoi copper-gold-silver mine development project in southern Mongolia; its 57% interest in Mongolian coal miner SouthGobi Resources (TSX:SGQ)(HK:1878); a 62% interest in Ivanhoe Australia (TSX:IVA)(ASX:IVA), a copper-gold-uranium-molybdenum-rhenium exploration and development company; and a 50% interest in Altynalmas Gold Ltd., a private company developing the Kyzyl Gold Project in Kazakhstan.

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 Altynalmas Gold's planned exploration and development work; the planned drilling; and the timing for completion of the planned prefeasibility study.

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 most recent MD&A. The reader is cautioned not to place undue reliance on forward-looking information or statements.

This release also contains references to estimates of mineral reserves and resources. The estimation of reserves and resources is inherently uncertain and involves subjective judgments about many relevant factors. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, which may prove to be unreliable. There can be no assurance that these estimates will be accurate or that such mineral reserves and mineral resources can be mined or processed profitably. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

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