“There could be an awful lot more resource there than originally thought, and that’s providing a lot of excitement out there,” says John Hughes, a mining analyst at Desjardins Securities in Toronto.
Meanwhile gold itself is skyrocketing to new heights. Yesterday gold prices reached $1,308.30USD per ounce in New York, a new record high for gold.Oyu Tolgoi already is one of the world’s largest deposits of gold and copper, the new km long vein shows that there is a lot more gold and copper than originally predicted. That combined with the new record prices for gold suggests the market for gold mining is going to be very strong in Mongolia for decades to come.
And this is good news for Canadian-owned Ivanhoe Mines (which owns 57%) and the Mongolia government (which owns 43%).
To extract the new vein of gold and copper a new drill hole will be done, but that is nothing new for the mine. So far the Oyu Tolgoi mining area already has 1,650 drill holes and have mined out 900 km of tunnels underground.
The new gold and copper vein is not just big, its also very high grade. They are getting 1.36 grams of gold per tonne and 0.34% copper. Some of the lower sections returned 10 grams per tonne. Its one of the highest gold grades ever drilled at Oyu Tolgoi.
“This is definitely rare,” says John 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...”
The area of gold vein has been named Heruga North. Heruga means “supreme happiness.”
Mining of the new vein will begin in 2012. The new mine is expected to cost $4.6 billion USD to build.
In the next decade Oyu Tolgoi is forecast to extract:
12 billion pounds of copper
6.5 million ounces of gold
Canadian Ivanhoe Mines also owns stakes in Mongolian coal mines, an 81% interest in Ivanhoe Australia, and a 50% stake in Altynalmas Gold Ltd. in Kazakhstan.
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