More Mongolian copper for Ivanhoe

The mineralized structure most noted for its swelling at Oyu Tolgoi, continues be uncovered in southern Mongolia. Ivanhoe Mines (IVN-T, IVN-N, IVN-Q) and Entre Gold (ETG-T, EGI-X) announced a resource estimate for the Heruga deposit which lies just south of the Oyu Tolgoi property boundary.

Ivanhoe Mines has spent the US$27.5 million on exploration it needed to take a 60% interest in the 400 sq. km property, and says it will continue to earn-in to the project.

If it spends US$35 million on exploration by 2012, it will take an 80%interest in all minerals extracted below a sub-surface depth of 560 metres on the optioned property and a 70% interest in all minerals taken from surface to a depth of 560 metres.

Entre will be left with the remaining stake.

Ivanhoe owns approximately 15% of the outstanding shares of Entree Gold while Ivanhoe’s partner at Oyu Tolgoi Rio Tinto (RTP-N, RIO-L), owns roughly 16% of Entre’s outstanding shares.

Inferred resources at Heruga came in at 760 million tonnes grading 0.48% copper, 0.55 grams gold per tonne and 142 parts-per-million molybdenum for a copper equivalent grade of 0.91% with a 0.60% copper equivalent cut-off grade for a total of eight billion pounds of copper and 13.4 million ounces of gold.

In all, 34 drill holes for 1,800-metres were drilled for the resource estimate. The deposit is open ended and one drill rig is currently drilling the northern most section of the deposit which is 150 metres south of the Oyu Tolgoi boundary.

The results mean that Oyu Tolgoi’s structural trend stretches over 20 km, with Oyu Tolgoi itself in the centre and extensions onto the joint Entre and Ivanhoe area both to the south and to the north.

In a prepared statement, Ivanhoe’s chief executive, John Macken said the deposit could provide more flexibility in developing Oyu Tolgoi, and could, over time, be the basis of an extension to milling operations there.