IVANHOE AUSTRALIA LIMITED - ASX: IVA

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Description

Ivanhoe Australia is building a substantial Australian-based company focused on the exploration and development of its portfolio of mineral projects to build a series of operating mines within a mining-friendly, politically-safe, operating environment.

Integration of the Osborne Operation is expected to enable the Company to commence production of copper and gold from the Osborne Kulthor underground resources in Q1 2012. Resumption of the Osborne concentrator is also expected to enable mining to recommence on the Starra Line where mines were prematurely closed during a period of very low copper and gold prices in late 2002. Planning is underway for the early recommencement of copper-gold mining and treatment from these sources.

Ivanhoe Australia's key development project is Merlin, which is the highest-grade molybdenum and rhenium project in the world. The prefeasibility study for the project is scheduled for completion in April 2011 with the full feasibility study expected to be completed in Q3 2011. Mining of Merlin ore is expected to commence in Q3 2012.

A 53km haul road is to be constructed from Mount Dore to the Osborne Operation enabling efficient transportation of ore from Merlin and the Starra Line to the Osborne concentrator.

Exploration prospectivity on Ivanhoe's wholly owned and JV tenements in the Cloncurry region, Queensland, and on its JV tenements in the Tennant Creek Mineral Field, NT, Australia, remains very high.

Ivanhoe Australia has had great success in discovering a series of mineral resources rich in copper, gold, molybdenum and rhenium on the Cloncurry tenements, including Merlin, the world's highest grade molybdenum and rhenium deposit.

These discoveries and the integration of them with the recently acquired Osborne Operation, provide the opportunity for Ivanhoe Australia to start exploiting its mineral resources from as early as late 2011 from the Little Wizard Mo-Re Project.

Ivanhoe Australia's projects which have potential for development in the near term include mineral resources contained at:

* Mount Dore, including the Merlin deposit and the Little Wizard deposit;
* the Osborne Operation, particularly Kulthor and Osborne Deeps;
* Mount Elliott; and
* the Starra Line.

With the exception of Mount Elliot, these projects are being assessed for development in parallel with the Merlin project to be processed in operating campaigns to economically provide the critical mass to allow the Osborne Operation to return to its full operating rate of 2mtpa.

The currently proposed development sequence, which is being evaluated as part of the Merlin pre-feasibility study (expected to be completed by 4Q2010), is as follows:

* 2011 - Access and commence processing of high-grade Little Wizard ore
* 2012 - Continue processing Little Wizard ore: Access and commence processing of Merlin molybdenum/rhenium ore through Osborne plant and process copper-gold ore from the Kulthor deposit, acquired as part of the Osborne Operation
* 2013 - Increase processing of Merlin molybdenum/rhenium ore through Osborne: Process Kulthor copper-gold ore to maximise operational capacity
* 2014 - Full Merlin molybdenum/rhenium production processed through the Osborne treatment facilities

Future Integrated Development

The following work is being undertaken in order to integrate the Cloncurry and Osborne sites and achieve the Company's targeted production levels for the 2011-2015 period:

* Development of the Merlin Decline.
* Construction of a 58km haul road between Merlin (Lucky Luke) and the Osborne site.
* Establishment of a site operations team.
* Completion of the copper-gold study.

Mine For

molybdenum, rhenium, copper, zinc, gold, silver,

Location of operation(s)

Queensland, Northern Territory

Address

Level 9 , 479 St Kilda Road
MELBOURNE, VIC, AUSTRALIA

Phone

(03) 9090 8800

Email

Website

http://www.ivanhoeaustralia.com

Last Updated

3/5/2011