Shares of Ivanhoe Mines Ltd. soared Tuesday after announcing a “remarkable” kilometre-long gold and copper find at its Oyu Tolgoi mine in Mongolia.
“There could be an awful lot more resource there than originally thought, and that’s providing a lot of excitement out there,” said John Hughes, mining analyst at Desjardins Securities in Toronto.

Ivanhoe executive chairman Robert Friedland, seen on the stairs of the Intercontinental Hotel in Toronto. (March 12, 1996.)

The Vancouver-based miner’s shares jumped $1.34 to close at $25.19 Tuesday on the Toronto Stock Exchange. The gold price hit a new record high of $1,308.30 U.S. an ounce, up another $9.70 in New York.
“While Oyu Tolgoi already is one of the world’s largest deposits of gold and copper, (the find) is consistent with our long-held view that the Oyu Tolgoi mineralized system contains significantly more gold and copper than we have delineated to date,” Ivanhoe executive chairman Robert Friedland said in a statement.
The legendary promoter and company founder announced that the Canadian firm has found an almost one-kilometre-long section of nearly continuous mineralization at what is already considered to be one of the top three copper and gold mines in the world.
“To intercept almost one kilometre of copper and gold mineralization in a new drill hole is a remarkable development, considering that we already have drilled more than 1,650 holes totalling almost 900 kilometres at the project during the past 10 years,” Friedland added.
The drill hole intercepted 112 metres grading 1.36 grams of gold per tonne and 0.34 per cent copper. And individual two-metre samples near the bottom of the hole returned gold assays of 10 grams per tonne — among the highest gold grades ever drilled at Oyu Tolgoi.
“This is definitely rare,” noted Hughes.
“There’s not much in the world that could compare to that kind of tonnage. It’s re-confirmation that there is a lot of material there to be mined, and Canada has a toe-hold there.
“This is certainly very good news,” he added.
The area of the find has been named Heruga North. Heruga means “supreme happiness.”
The mine, jointly owned by Ivanhoe and the Mongolian government, is scheduled to begin initial production by late 2012.
International mining giant Rio Tinto has an indirect ownership interest in the mine through its stake in Ivanhoe, although the company has expressed interest in converting its equity into a direct stake.
Oyu Tolgoi is forecast to produce 1.2 billion pounds of copper and 650,000 ounces of gold annually in its first 10 years. The mine is expected to cost $4.6 billion (U.S.) to build.
Besides its stake in Oyu Tolgoi, Ivanhoe has a 57 per cent interest in Mongolian coal miner SouthGobi Resources. It also has an 81 per cent interest in Ivanhoe Australia, an exploration and development company, and a 50 per cent interest in Altynalmas Gold Ltd., a company developing the Kyzyl gold project in Kazakhstan.