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As an indication of its expectation
to receive permission to mine one of the most important sites in Mongolia,
Ivanhoe Mines Ltd., along with partner Rio Tinto, are proceeding with
work at the Oyu Tolgoi mine.
According to a statement released
in its Second Quarter 2007 report, Ivanhoe Mines said it is continuing
work at the site to better meet its mining deadlines.
Preparations include reaching
the 1,300 meter mark below ground at Shaft 1 by October 2007. Thus far,
the shaft has been excavated to a depth of 1,225 meters.
Shaft 2 will be the initial
primary underground production and service shaft. Work includes excavations
during the second quarter to hold a concentrator building and enlargement
of the construction camp facilities.
Camp facilities include accommodations
for 1,000 beds for construction crews. Ultimately, 1,500 beds will be
available at the site.
Ivanhoe Mines has negotiated
for five years with the Mongolian government to create an agreement
to mine the Oyu Tolgoi mine. The cabinet approved the agreement earlier
this summer and sent it to Parliament for final ratification.
The DP has not objected to the royalties Mongolia will receive. The OT Project will pay 5% royalty fees (as stated in the 2006 minerals law), and the length of the agreement is 30 years, plus an extension of 20 yearsfor a total of 50 years.
Oyu Tolgoi is considered to
be the largest untapped copper and gold mine in the world. 2005 estimates
put the annual yields from the mine at 450,000 tons of copper and 330,000
ounces of gold to be extracted beginning in 2010.
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