MONGOLIA - This recent update on development at the Oyu Tolgoi mine in Mongolia's South Gobi Region was included in IVANHOE MINES' second quarter results.
Site preparation continued during the Q2 2007, positioning the mine to begin full construction following final approval of the investment agreement. Activities on site focussed on sinking Shaft No.1, the pre-sinking of Shaft No.2, excavation for the concentrator building and enlargement of the construction camp facilities.
The Oyu Tolgoi No.1 shaft, the first deep underground development project of its type in Mongolia, was below the 1,170-metre mark at the end of July 2007, and sinking is expected to be completed to 1,300 metres in October 2007. Shaft No.1 will allow for additional exploration of the Oyu Tolgoi high-grade underground deposits and also will provide initial production, and ultimately ventilation, to the underground mine. Underground development will provide access to the Hugo deposit, enabling the company to complete its geotechnical assessment, which is required to advance the underground deposit to a feasibility level in 2008.
Work continued on Shaft No.2, which is planned to be the initial primary underground production and service shaft. Site work completed this quarter included finishing the pre-sink to a depth of 26 metres and mobilizing the workforce to construct the shaft liner. Engineering work is continuing on schedule. An order was placed for the production hoist for Shaft No.2 in June 2007.
Site preparation was completed for the concentrator building during the second quarter. Excavation work now is commencing on the thickener site. Concentrator engineering reached 61% completion at the end of June. Nine items of concentrator equipment were released for manufacture on July 1, 2007, to maintain the project schedule.
Work also continued on the temporary facilities during Q2 2007. Two existing accommodation camps were refurbished and are now ready for occupancy by the construction crews. The combined capacity is 1,000 beds, increasing the construction camp capacity to approximately 1,500 beds. Planning for the mobilization of the construction crew continued throughout the quarter.
Infrastructure engineering progressed during the quarter as well. Work began on the boiler house and conceptual work continued on the Oyu Tolgoi village and the truck shop. The contract for the road to China was issued to bidders in June 2007.
Discussions are well advanced with a preferred supplier for the open-pit mining equipment to ensure that the equipment is available in time to meet an anticipated late-2009 or 2010 production start.
See also www.IvanhoeMines.com.
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