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MINING NEWS: Ivanhoe riding to riches in Mongolia? Flamboyant mining promoter Robert Friedland announces world-class copper discovery that could rival Alaska’s Pebble Sarah Hurst Mining News Contributing Writer
A new copper discovery in Mongolia’s South Gobi region could rival Alaska’s Pebble deposit as one of the most valuable in the world. Drilling on the Hugo North deposit at the Oyu Tolgoi copper-gold project has produced impressive results, according to a Nov. 18 release from Ivanhoe Mines. Ivanhoe’s controversial chairman, Robert Friedland, denies media accusations that he has been over-hyping the company’s Mongolia finds.
“Based on my 30 years of experience in the exploration business, I believe the Hugo North deposit is the highest-grade copper-porphyry system that has ever been found anywhere,” said Douglas Kirwin, Ivanhoe’s executive vice president of exploration. The recent drilling has also extended the length of the Hugo North high-grade copper-gold core to more than 1.6 kilometers — a further 300 meters beyond the discovery’s northern limit that was established six months ago.
Hugo North is part of the 2.8 kilometer-long Hugo Dummett deposit, named after a distinguished geologist who joined Ivanhoe in 2001 and was killed in a highway accident in August 2002. The Hugo North deposit, as defined by an independent resource estimate prepared by AMEC of Canada in May 2004, increases in tonnes and grade from south to north. It was estimated to have inferred resources of 666 million tonnes, grading 1.46 percent copper and 0.34 grams per tonne of gold (1.68 percent copper equivalent), at a 0.60 percent copper equivalent cut-off. The average grade of four more recent drill holes at the northern end of Hugo North is 3.16 percent copper and 1.25 grams per tonne of gold. Friedland guided sale of Fort Knox Ivanhoe’s Friedland has an Alaska connection: he guided the sale of Fairbanks Gold Mining’s Fort Knox deposit to Amax Gold for $152 million in 1992. Fort Knox, now owned by Kinross Gold, has produced more than 3 million ounces of gold since 1996.
Friedland’s other major success in North America was the sale of Diamond Fields Resources’ nickel deposit at Voisey’s Bay in eastern Canada to INCO Ltd. for C$4.3 billion in 1996.
Rather less spectacularly, he acquired the nickname “Toxic Bob” for the cyanide heap-leaching mess his bankrupt company Galactic Resources left near Summitville, Colo., in 1994.
In the past few years Friedland has turned his attention to projects in Asia, including Burma, Indonesia and Kazakhstan. Trust and Lies on web site In defense of his reputation Friedland devotes a section of Ivanhoe’s web site to “Truth and Lies: Setting Straight the Media and Public Records.”
Last year he called a Forbes magazine article that questioned the significance of the Mongolia discovery “a contrived, one-sided account” and a “shameful deception”. Respected journalists and investment analysts have examined the discovery and confirmed its significance, Friedland said.
On Oct. 13 of this year Friedland responded to a similar doubting Bloomberg news agency story by saying: “Approximately 20 companies (including Anglo American) have signed strict confidentiality agreements with Ivanhoe to obtain access to the company’s data and to the Oyu Tolgoi discovery site… It also is a matter of public record that a number of companies have expressed interest in being involved with the development of Oyu Tolgoi.” Window for copper The Mongolia find underscores the necessity for miners associated with the Pebble project to strike while copper is hot, according to Steve Borell, executive director of the Alaska Miners’ Association.
“Let’s recognize that there is a window of opportunity with copper right now,” he told Mining News. “Existing copper mines are expanding as fast as they can to take advantage of new prices, so there is less need for new copper. But if this continues for many years, these projects will be able to go forward. If you putter around and goof off, the window of opportunity may close.”
Pebble and Hugo North face similar challenges with the lack of infrastructure in their respective regions. However, Hugo North is close to the Chinese border and the Chinese government quickly built a 200-kilometer road for the project without going through the kind of lengthy permitting process required in Alaska. The state’s environmental regulations are excessive, Borell believes, but at least such issues are taken into consideration, unlike in China and Mongolia.
“One of the advantages of this country is public input,” Borell said. “People can say, here’s a better way to do what you’re trying to do.”
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