I V A N H O E M I N E S NEW HORIZONS May 2003 Shareholders’ Update Unlocking The Gobi’s Treasure Chest A camel train, a modern-day link with ancient traditions of enterprise, exploration and discovery,treks through winter snow in Mongolia's north- western Gobi region. Photo: © Chris Wilson/Exploration Manager - Mongolia, Ivanhoe Mines he stony plains around 200 holes that built success upon larger. By the end of the first quar- We recently established a Preliminary internal scoping Confidence, ,. T Turquoise Hill, known success. The result is the establish- ter of 2003, exploration had top-flight international engineering, studies indicate that the project’s investment and value regionally as Oyu Tolgoi, ment of Turquoise Hill as one of revealed a new, extremely high- construction and project manage- location is more advantageous than Discoveries of this magni- in Mongolia’s Great Gobi region, the world’s largest known deposits grade zone that extended the ment group that gives us the comparable large-scale porphyry tude are great confidence builders. just north of the border with of gold and copper mineralization. strike length of Oyu Tolgoi to essential expertise we will require projects in other parts of the world. History has shown that a major China, are half a world away from By early 2003, indepen- greater than five kilometres — and if we opt to develop the deposit on We are designing the mineral discovery can dramatically the promontories and icebergs of dent experts had verified that the discovery remains wide open our own. The group, directed by Turquoise Hill mine to be world raise the fortunes of a company Voisey’s Bay, on Canada’s Atlantic Ivanhoe’s discovery at Turquoise for significant expansion. Chief Operating Officer Paul class in every respect, including and build great value that is shared coast. During the past year, though, Hill contains an estimated nine Chare, is being assisted by an environmental design and opera- by the discoverer’s investors. a growing number of investors in million ounces of gold and 22.3 Weighing Development alliance of AMEC E&C Services tion. Our work already has created Based on our continuing Ivanhoe Mines have come to billion pounds of copper within Options Limited, of Canada, and Ausenco hundreds of skilled jobs in Mongolia, strong exploration results, we have appreciate parallels between the an inferred resource of 1.6 billion The people and science Limited, of Australia, and includes for Mongolians, and community raised approximately us$160 million landmark mineral discov- behind Turquoise Hill are making GRD Minproc Limited and SRK support initiatives will continue to in equity financings since our dis- eries at Turquoise Hill ‘‘We are reviewing a range of Ivanhoe’s founding dream a real- Consulting, of Australia.The group be an extension of our operational covery hole first revealed the gold and Voisey’s Bay, each of ity. Exploration advances during is based in Perth, a business hub planning at all of our projects. and copper porphyry system at which now is recognized as options that will accomplish our the past 18 months have brought for Australia’s advanced mining We intend to design and build a Turquoise Hill in July, 2001. a giant in the global mining our development of the Turquoise industry, and is in the same time mine that will qualify for ISO These funds were committed by industry’s yearbooks. .. goals of bringing Turquoise Hill Hill discovery to the scoping zone as Central Mongolia — facili- 14001 environmental certification, institutional investors who visited into production and strengthening study and pre-feasibility stage. tating synchronized work hours the same international standard our Mongolian projects and saw Ivanhoe Mines was The scale and significance for Ivanhoe’s project teams in achieved by our joint-venture first-hand the potential that exists founded and infused with Ivanhoe’s balance sheet.’’ of our discovery have prompted Ulaanbaatar and Perth. copper mine in Myanmar. within our company. We are in capital and ambition in the approaches by the largest interna- days of stock market enthusiasm tonnes grading 0.63% copper and tional mining companies and for mining equities that was 0.17 grams of gold per tonne at a Asian government agencies. Many Ivanhoe’s Expanding Interests In Mongolia fuelled in large part by Diamond 0.30% copper equivalent cut-off of these parties are keenly interest- Fields Resources’ discovery of grade. In addition, the project ed in participating in, and assisting n Ra y LAKE BAIKAL eria ilwa one of the world’s largest nickel contains 509 million tonnes of Turquoise IRKUTSK -Sib with, the development of Russia Trans deposits at Voisey’s Bay in the indicated resources grading 0.40% Hill and the newly recognized CHITA mid-1990s. Ivanhoe was launched copper and 0.59 g/t gold, con- Mongolian mineral province. .. and guided in part by people who taining approximately 9.7 million We are reviewing a range 4.5 T were at the centre of the successful ounces of gold and billion r of options that will accomplish our Boroo Gold Mine a n exploration and sale of the pounds of copper. We are keeping Turquoise Hill s goals of bringing -M Voisey’s Bay 24 Erdenet Copper Mine o deposit, which pro- the drills turning hours a day into production and strengthen- n g duced a cdn$4.3 billion payday Ivanhoe’s o and our discovery keeps getting ing balance sheet. Mongolia li Diamond Fields’ ULAANBAATAR an for shareholders R ai in 1996. lw SSaranaran Uul a To distinguish itself, Ivanhoe OOyutyut OOvoovoo y raised its sights to new horizons in CChandmanhandman Uul Asia. KharKharmagtaimagtai OOyutyut Ulaan SShuteenhuteen Turquoise Hill: . China TTavanavan TolgoiTolgoi a gold and copper giant The quest eventually led 0100 200 Kilometres TTurquoiseurquoise Hill Trans-Manchurian (O(Oyuyu TTolgoi)olgoi) 217 Ivanhoe to Mongolia’s largely 0 100 200 Miles BAYAN Railway unexplored southern Gobi region. GGoldold PProjectroject OBO JINING ailwa An exploration initiative to test the Ivanhoe Mines’ principal discovery and exploration projects. a R y BEIJING in Turquoise h deeper zones of the Prime exploration areas include Ivanhoe licences C - BAOTOU DATONG Hill s BOHAI mineral system produced the for approx. 90,000 sq. km. (granted & pending). n a GULF r PORT OF TIANJIN spark of initial discovery in July, Option for a 290-km rail link to T (Yellow 2001. In quick succession, a com- China's national railway network and export ports. (exports to Japan & Korea) Sea) prehensive exploration program Possible extension to coal deposit. 2002 during drilled more than Existing railways. I VA N H O E IVN NEW HORIZONS 2 3 New Independent Estimate Of Mineral Resources Ivanhoe’s discovery at Turquoise Hill (Oyu Tolgoi) in Mongolia’s southern Gobi ranks among Indicated and inferred resources based on a 0.30% copper equivalent cut-off *1 the world’s largest gold and copper deposits Gold Copper Gold Copper Zone Tonnes Grade Grade (million (billion As reported February 26th, 2003, four co-genetic copper and gold deposits discovered by (g/t) (%) ounces) pounds) Ivanhoe 4.5 Turquoise Hill along a -kilometre-long zone at , Mongolia, contain: Southwest Zone *1. Copper equivalent Estimated inferred resources totalling 1.60 billion tonnes grading 0.63% copper and Indicated 508,900,000 0.59 0.40 9.69 4.54 cut-off grades calculated 0.17 grams of gold per tonne, containing approximately 22.2 billion pounds of Inferred 290,776,000 0.50 0.32 4.70 2.03 using assumed metal prices copper and 9.0 million ounces of gold, at a 0.30% copper-equivalent cut-off grade. South Zone (US$0.80/lb. for copper 509 0.40% 0.59 Inferred 270,283,000 0.13 0.39 1.10 2.35 and US$350/oz. for PLUS million tonnes of indicated resources grading copper and grams gold); %Cu eq. = %Cu + 4.5 Central Zone of gold per tonne, containing approximately billion pounds of copper and Au (g/t) x 9.7 Inferred 236,795,000 0.18 0.67 1.36 3.51 million ounces of gold. (11.25/17.64). Resource Following the release of the updated resource estimate Feb. 26, Ivanhoe announced on Far North Zone classifications conform to March 31 that it had discovered a new zone of high-grade copper-gold mineralization Inferred 804,450,000 0.07 0.81 1.80 14.39 CIM Standards on Mineral at the Far North Zone, extending the length of the Turquoise Hill deposit to more Total Indicated 508,900,000 0.59 0.40 9.69 4.54 Resources and Reserves than five kilometres. Total Inferred 1,602,304,000 0.17 0.63 8.96 22.28 referred to in N1 43-101. I VA N H O E IVN NEW HORIZONS 4 5 excellent financial shape to fund north of the Chinese-Mongolian Monywa Copper our ongoing exploration and border, placing it right on the expansion expected development programs. doorstep of the world’s biggest We are optimistic that copper importer. China has expansion at the Monywa Copper Hallmarks of a approximately 50 principal copper Project in Myanmar will begin new mineral province smelters and the industry now soon. We believe that we are on depends heavily on imported con- The expansion, contingent the threshold of other new discov- centrate shipped from as far away on securing external project eries that could confirm that as Peru, Canada and Australia. financing, will involve a series of Mongolia is one of the world’s The copper market in staged expansions of the Letpadaung largest natural storehouses of cop- China is expected to continue its deposit — considered one of the per and gold.