Vancouver — After a decade of false starts, mineral exploration is finally gaining some traction in Mongolia.
A vast highland country, Mongolia is land-locked between Russia to the north and China to the south. The breakup of the Soviet Union in 1991 ended some 70 years of influence over Mongolia and paved the way for the development of a fully democratic country considered prime hunting ground for gold and copper explorers.
Leading the exploration charge into Mongolia is
“The new areas were staked based on the extensive exploration and geophysical data that we’ve gathered during the past five years,” says Douglas Kirwin, Ivanhoe’s vice-president of exploration. “Our licences are within the major, northeast-trending South Gobi gold-copper porphyry belt that hosts the Turquoise Hill, Kharmagtai, Shuteen, Turquoise Ridges, Oyut Ulaan and Chandman Uul discoveries and prospects.”
In March, Ivanhoe tabled a preliminary, independent resource for one part of the Southwest Oyu discovery zone at Turquoise Hill. Based on a cutoff grade of 0.3% copper-equivalent, the inferred resource was estimated at 588 million tonnes grading 0.53 gram gold per tonne and 0.41% copper. Four other mineralized zones, within a 12-sq.-km area around the Turquoise Hill project, are currently being drilled and so are not included in the resource.
“The discovery of high-grade gold-copper porphyry mineralization at Turquoise Hill has highlighted the potential for finding similar deposits elsewhere in Mongolia,” states Kirwin. “The seven exploration projects we’ve assembled in recent months represent the most promising prospects identified outside Turquoise Hill.”
The Turquoise Hill project (or “Oyu Tolgoi,” as it is known in Mongolia) lies deep in the South Gobi Desert, 560 km south of Ulaanbaatar, the country’s capital, and 80 km north of the Chinese border.
Ivanhoe signed an option to buy the concession from BHP in May 2000. The company assumed ownership in early 2002 after completing its earn-in obligations by spending US$3 million on exploration and paying US$5 million. BHP retains a 2% net smelter return royalty and certain back-in rights to re-purchase a 40%-to-60% participating interest based on the nature and size of the deposit defined prior to the completion of the next, US$3-million phase of exploration.
The Central Oyu area was previously interpreted to be a high-sulphidation mineralized system unrelated to the Southwest discovery zone. However, based on strong gold values and the style of mineralization intercepted during drilling, Ivanhoe’s geological team believes the Southwest and Central Oyu zones may represent the first of several gold-rich porphyry zones originating from the same mineralizing source at depth.
“The presence of extensive high-sulphidation lithocaps and numerous mineralized skarns indicate varying levels of erosion of porphyry systems within our newly acquired licences,” says Kirwin. “This implies potential for a spectrum of epithermal and porphyry-related targets throughout the region.”
Invanhoe’s first target on the new gound is the Kharmagtai exploration licence, which covers 67 sq. km and lies 120 km north of Turquoise Hill. The potential of the claim to host porphyry mineralization has been known for several decades. From 1994 to 1999, a private firm collected 9,000 rock samples and 4,000 soil samples, completed 19 km of trenching and geophysics, and drilled 18 holes. Significant mineralization was cut in four of the holes, with results ranging from 0.71 to 2 grams gold over 34-64 metres. Surface samples returned up to 2.7 grams gold over 70 metres.
States Kirwin: “Porphyry deposits seldom occur in isolation, leading us to believe that the South Gobi region has outstanding geological potential for the discovery of other gold-rich copper porphyries.”
Since discoverying the high-grade gold-copper porphyry mineralization at Turquoise Hill in July 2001, Ivanhoe has raised an impressive US$72.8 million to fund exploration in Mongolia.
Newport
A new player in Mongolia is Ian Rozier-led
The junior recently closed $600,000 financing and inked a series of joint venture agreements with
“You can’t find a better trailblazer for mineral potential than Robert Friedland,” Rozier tells The Northern Miner.
Four of Newports’ claims are close to Ivanhoe’s ground and are believed to host similar rock types. Dubbed Shine Usny Khudag, Zuun Bogd, Khanbogd-1 and Khanbogd-2, the properties have been subjected to only limited exploration, and although no significant showings are documented, several regional magnetic anomalies have been identified.
“Based on old Russian work, we picked up ground south, east and west of Ivanhoe’s property,” says Rozier. “Subsequently, Friedland acquired a massive amount of additional ground.”
With 5,400 sq. km of prospective property tied up, Newport intends to focus on three projects just east and west of Ivanhoe’s gold-copper find.
“We already have some targets identified,” says Rozier “so the first step is probably to run ground geophysics to prove them up to a drill target in the short term.”
Newport has an 80% interest, while Bell Coast holds a 20% carried stake in these claims.
Moving 50 km to the north, Newport and Bell Coast each hold a 12.5% free carried interest in the 200-sq.-km Zuun Bogd property, with EXP owning the remaining 75%.
The three juniors have teamed up on five more properties. The Jinstei and Delgerekhiin Khaiguul properties lie in west-central and east-central Mongolia, respectively, and both are reported to host ophiolite complexes which have been intruded by granites. Historical records show several showings of skarn, copper, tungsten and chromite.
In far-northeastern Mongolia, the partners are preparing to explore the Dashbalbar property, where numerous placer gold occurrances are reported.
Bell Coast holds a 68% stake in these claims, with Newport having 17% and EXP the remaining 15%.
“The geology is great and it is virgin territory,” says Rozier. “This is probably the last place with porphyry geology that has not been really gone-over.”
Another long-time Mongolian explorer keen on exploring the Gobi region is
The 3,650-sq.-km land package host several gold, copper, lead, zinc and molybdenum showings in areas of strong structural deformation. A fie
ld program of mapping and sampling is under way.
International Uranium has been active in Mongolia for the past eight years. The company holds uranium properties through its joint venture with the government of Mongolia and the Russian geological concern Geologorazvedka; the junior has a 70% interest in the joint venture and is the operator.
In northern Mongolia, Cameco Gold, a subsidiary of Saskatoon-based uranium giant
“This investment provides us with the opportunity to leverage our gold exploration activities and business experience in central Asia,” says Cameco Gold President Len Homeniuk.
Boroo lies within 35 km of Cameco Gold’s Gatsuurt property, some 150 km north of Ulaanbaatar. Under the deal, Cameco Gold will invest US$12 million and contribute a 60% interest in the Gatsuurt property to obtain a 52% interest in AGR. The major has also committed to provide AGR with US$3 million for further exploration expenditures near Boroo and Gatsuurt in exchange for an additional 4% stake in AGR.
The Boroo deposit hosts 9.4 million tonnes of oxide and transitional oxide-sulphide material grading 3.76 grams gold, based on a cutoff of 1.2 gram gold. According to a feasibility study, an open-pit mine could be expected to operate for six years, during which time it would produce 150,000 oz. gold per year at a cost of US$164 per oz. AGR recently reviewed the bankable feasibility study and decided that the design capacity of the process plant can be increased to 1.7 million tonnes per year from the original 1.3 million tonnes. The increase partly reflects additional drilling, which boosted drill-inferred resources and mineable reserves. A revised environmental assessment is expected in the second quarter. The original capital cost estimate is US$40 million, and mine construction is slated to start this spring, followed by startup next year.
Gold mineralization is associated with zones of intense hydrothermal alteration occurring at the contacts of late-Permian-to-early-Triassic leucocratic and biotite granites and the sandy-flysch sequences of the lower Paleozoic Kharin group. The mineralized zones have been traced for 700 metres along strike and for 150-300 metres downdip. Two horizons — a 7-to-8-metre-thick upper zone and a 3.5-metre-thick lower zone, separated by a 4-metre-thick zone of weakly mineralized granites — constitute the mineralized material. Oxidation extends to a depth of 40 metres.
There is potential to increase the reserves with additional drilling, and the mill complex could be used for any resources discovered on the Gatsuurt project.
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