Exhibit 10.7
FORM 53-901F
Section 85 (1) -- Securities Act (British Columbia)
(or the equivalent thereof under
Canadian Provincial Securities Legislation)
1. REPORTING ISSUER
Ivanhoe Mines Ltd. ("Ivanhoe")
World Trade Centre
Suite 654 - 999 Canada Place
Vancouver, British Columbia
V6C 3E1
2. DATE OF MATERIAL CHANGE
July 21, 2003
3. PRESS RELEASE
Date of Issuance: July 21, 2003
Place of Issuance: Vancouver, British Columbia
4. SUMMARY OF MATERIAL CHANGE
A new independent estimate prepared by AMEC E&C Services Limited
("AMEC") of Vancouver, Canada indicates that the Far North Zone at
Ivanhoe's Turquoise Hill (Oyu Tolgoi) Project now contains estimated
inferred resources of 618 million tonnes, grading 1.19% copper and 0.10
grams of gold per tonne ("g/t") of gold, at a 0.60% copper equivalent
cut off, containing approximately 7.4 million tonnes (16.3 billion
pounds) of copper and 2.0 million ounces of gold.
5. FULL DESCRIPTION OF MATERIAL CHANGE
The new estimate for the Far North Zone at Ivanhoe's Turquoise Hill
Project was prepared by AMEC in conformance with the requirements set
out in National Instrument 43-101 ("N143-101") under the direction of
Dr. Harry Parker, Ch. P. Geol., and Dr. Stephen Juras, P.Geo.,
independent qualified persons as defined by NI 43-101.
AMEC's latest estimate is that the Far North Zone at Ivanhoe's
Turquoise Hill (Oyu Tolgoi) Project contains inferred resources of 618
million tonnes grading 1.19% copper and 0.10 g/t of gold, at a 0.60%
copper equivalent cut off, containing approximately 7.4 million tonnes
(16.3 billion pounds) of copper and 2.0 million ounces of gold.
Drilling at the Far North Zone also has delineated a high-grade core of
inferred resources greater than 2% copper equivalent within this larger
mineralized envelope that is estimated to contain 68.8 million tonnes
grading 2.92% copper and 0.28 g/t gold.
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AMEC now estimates that the Turquoise Hill Project contains inferred
resources totaling 2.4 billion tonnes grading 0.61% copper and 0.14 g/t
gold, at a 0.30% copper equivalent cut-off, containing approximately
14.7 million tonnes (32.4 billion pounds) of copper and 11.2 million
ounces of gold. This represents an increase of 45% in the amount of
copper and a 24% increase in the amount of gold since AMEC's previous
estimate issued on February 26, 2003 (the "February 2003 Estimate"). At
a higher cut-off grade of 0.60% copper equivalent, AMEC estimates an
inferred resource for the entire project of 941 million tonnes grading
1.01% copper and 0.21 g/t gold, containing approximately 9.5 million
tonnes (20.9 billion pounds) of copper and 6.3 million ounces of gold.
This represents an increase of 29% in the amount of copper and a 41%
increase in the amount of gold over the previous inferred resource at
the higher cutoff in the February 2003 Estimate. The project's indicated
resources are approximately the same as the February 2003 Estimate, as
Ivanhoe has conducted only a minimal amount of drilling in the Southwest
Zone since February, 2003. All indicated resources identified to date
are in the Southwest Zone.
The Far North deposit and its newly discovered, deeply buried porphyry
system is one of four co-genetic copper and gold zones delineated to
date along a five-kilometre-long chain of deposits at Turquoise Hill.
Analyses of the updated mineral resources for the project, at 0.30% and
0.60% copper equivalent cut-off grades, are provided in the following
two tables. As the company's drilling since February has focused on
expanding and delineating the Far North Zone, AMEC has not updated its
February resource estimates for the Southwest, South and Central zones.
The resource estimates for the Southwest, South and Central deposits
were prepared by AMEC, in February, 2003, and were previously reported
in the February 2003 Estimate.
UPDATED TURQUOISE HILL RESOURCE TABLE BY ZONE (BASED ON A 0.30% COPPER
EQUIVALENT CUT-OFF)1
Resources Gold Copper
Zone (million Copper Grade Equiv. Grade
tonnes) Grade (%) (g/t) (%) Contained Metal
-----------------------------------------
Copper Gold
(million (million Copper Equiv.
tonnes) ounces) (million tonnes)2
- -------------- ----------- ---------- -------- -------- -------- -------- -----------------
Southwest Zone
Indicated 508.9 0.40 0.59 0.78 2.06 9.69 3.98
Inferred 290.8 0.32 0.50 0.64 0.92 4.70 1.86
South Zone
Inferred 270.3 0.39 0.13 0.48 1.07 1.10 1.28
Central Zone
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Resources Gold Copper
Zone (million Copper Grade Equiv. Grade
tonnes) Grade (%) (g/t) (%) Contained Metal
-----------------------------------------
Copper Gold
(million (million Copper Equiv.
tonnes) ounces) (million tonnes)2
- -------------- ----------- ---------- -------- -------- -------- -------- -----------------
Inferred 236.8 0.67 0.18 0.79 1.59 1.36 1.86
Far North Zone
Inferred 1,610.5 0.69 0.08 0.74 11.11 3.99 11.93
Grand total:
Indicated 508.9 0.40 0.59 0.78 2.06 9.69 3.98
Grand total:
Inferred 2,408.4 0.61 0.14 0.70 14.69 11.15 16.90
UPDATED TURQUOISE HILL RESOURCE TABLE BY ZONE (BASED ON A 0.60% COPPER
EQUIVALENT CUT-OFF)1
Resources Gold Copper
Zone (million Copper Grade Equiv. Grade
tonnes) Grade (%) (g/t) (%) Contained Metal
-----------------------------------------
Copper Gold
(million (million Copper Equiv.
tonnes) ounces) (million tonnes)2
- -------------- ----------- ---------- -------- -------- -------- -------- -----------------
Southwest Zone
Indicated 267.0 0.53 0.86 1.08 1.42 7.35 2.88
Inferred 126.6 0.44 0.68 0.87 0.55 2.78 1.10
South Zone
Inferred 48.4 0.61 0.26 0.77 0.29 0.40 0.37
Central Zone
Inferred 147.5 0.84 0.24 0.99 1.24 1.14 1.46
Far North Zone
Inferred 618.4 1.19 0.10 1.26 7.38 1.95 7.77
Grand total:
Indicated 267.0 0.53 0.86 1.08 1.42 7.35 2.88
Grand total:
Inferred 940.9 1.01 0.21 1.14 9.50 6.26 10.71
1. Copper equivalent grades have been calculated using assumed metal prices
(US$0.80/lb. for copper and US$350/oz. for gold); %Cu eq. = %Cu + Au
(g/t) x (11.25/17.64).
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2. The contained gold and copper represent estimated contained metal in the
ground and have not been adjusted for the metallurgical recoveries of
gold and copper. The determination of an adjustment factor to account
for differences in relative metallurgical recoveries between gold and
copper will depend upon the completion of definitive metallurgical
testing.
3. Resource classifications conform to CIM Standards on Mineral Resources
and Reserves referred to in National Instrument 43-101. Mineral
resources that are not reserves do not have demonstrated economic
viability. An indicated mineral resource is that part of a mineral
resource for which quantity and grade can be estimated with a level of
confidence sufficient to allow the application of technical and economic
parameters to support mine planning and evaluation of the economic
viability of the deposit. An inferred mineral resource is that part of a
mineral resource for which quantity and grade can be estimated on the
basis of geological evidence and limited sampling and reasonably
assumed, but not verified.
AMEC's updated estimate for Far North inferred resources incorporated
results from 100 drill holes.
Since its discovery in the fall of 2002, the Far North Zone has
developed into the project's most important deposit. It contains
approximately 76% of the copper and 36% of the gold in Turquoise Hill's
total inferred resources defined to date, using a 0.30% copper
equivalent cut off. Given the open-ended nature of the zone and the
increasing gold grades recently announced from this area, Ivanhoe has
directed the main effort of the 13 drill rigs on site on rapidly
exploring the extent of the high-grade discovery.
Ivanhoe is reviewing various potential production scenarios that could
involve early-stage mining, including potential open-pit shell in the
Southwest Zone and bulk underground mining in a high-grade copper and
gold core in the Far North Zone. Neither scenario has been subjected to
an economic analysis, and they are still in the early planning stage.
New drill holes on the western side of the Far North Zone have
encountered chalcopyrite and bornite mineralization in a large, quartz
monzodiorite intrusion underlying the southwestern flank. This zone lies
500 to 700 metres north of holes drilled early in the Far North
exploration program and 500 to 1000 metres northwest of the Central
Zone. The holes were drilled specifically to test the southwestern side
of a chargeability anomaly (the "IP Anomaly") identified in a recent
induced polarization survey of the Far North Zone. These early holes
intersected ignimbrite containing pyrite, chalcopyrite and enargite
mineralization that overlies and/or flanks the chalcopyrite, bornite and
chalcocite mineralization in the main, high-grade Far North deposit. One
of these holes, OTD267, encountered 56 metres grading 0.50% copper and
0.45 g/t gold starting at 68 metres down hole. OTD188, collared 400
metres southeast of OTD 267, mid-way to the Central Zone, encountered 42
metres grading 0.52% copper and 0.13 g/t gold at 132 metres down hole
and bottomed in 0.88% copper and 0.81 g/t gold at 554 metres due to the
depth limitation of the drill rig. This sparsely drilled area is broadly
connected by the western flank of the IP Anomaly. Future exploration
drilling will target this broad western flank of the IP Anomaly for rear
surface and deep copper and gold mineralization.
The increase in gold grades within the high-grade core of the deposit is
attributable to drill holes in the northern portion of the Far North
Zone that have encountered strong gold mineralization occurring in
bornite-rich, quartz stockwork in altered basalt similar to the
high-grade, Southwest Zone. Numerous intersections of highly mineralized
porphyry
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beneath the northern portion of the Far North Zone indicate that a
deep-seated porphyry is the source of the mineralization.
The total strike length of the Far North Zone now included in the 0.6%
copper equivalent inferred resource estimate is approximately two
kilometres and remains open. The deposit plunges shallowly north and can
be partitioned into two mineralized zones. The northern portion,
referred to as the Far North Extension, is hosted by basalt with the
highest-grade intersections occurring in quartz stock work that replaces
up to 90% of the basalt. Intense chlorite, hematite after biotite and
magnetite alteration reinforces the gold-rich porphyry association.
Drilling for groundwater resources for the project is continuing and
several aquifers have recently been discovered near the project, the
largest identified being in a broad regional drainage basin in the
Galbyn Gobi and Javkhlant areas between 30 to 50 kilometres south of
Turquoise Hill. Another potential source of the water may be in an
aquifer in the Gunii Hooloi area, a drainage basin approximately 30
kilometres north of Turquoise Hill. Assessment of these and other sites
will continue as part of Ivanhoe's groundwater exploration and resource
evaluation work.
Charles Forster, P.Geo., Ivanhoe Mines' Turquoise Hill Manager, a
qualified person as defined by National Instrument 43-101, supervised
the preparation of the information upon which this material change
report is based. SGS Analabs Pty. Ltd. prepares the split core at the
project site and assays all samples at its facility in Ulaanbaatar,
Mongolia. Ivanhoe's quality assurance/quality control program is
monitored by independent consultant Dr Barry Smee, P.Geo., and managed
on site by Dale Sketchley, M.Sc., P.Geo. Prepared standards and blanks
are inserted at the sample preparation lab on the project site to
monitor the quality control of the assay data.
6. RELIANCE ON SECTION 85 (2) OF THE ACT
Not applicable
7. OMITTED INFORMATION
Not applicable
8. SENIOR OFFICER
For further information please contact:
Beverly Bartlett
Ivanhoe Mines Ltd.
Suite 654 - 999 Canada Place
Vancouver, British Columbia
V6C 3E1
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Telephone: (604) 688-5755
9. STATEMENT OF SENIOR OFFICER
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia this 31st day of July, 2003.
IVANHOE MINES LTD.
Per: "Beverly Bartlett"
--------------------------------------------
Beverly Bartlett
Corporate Secretary