Billionaire Robert Friedland announced on Thursday Ivanhoe Australia has started production of copper and gold concentrate at its Osborne processing facilities in northwestern Queensland in Australia.
Parent Ivanhoe Mines, which is building the massive Oyu Tolgoi copper and gold mine in Mongolia, acquired Osborne less than 18 months ago.
Ivanhoe Australia, 59%-owned by Vancouver-based Ivanhoe, said developing the Kulthor underground resource and restarting the Osborne underground mine was bang on time and concentrate production at the plant was ahead of schedule.
Production throughput at the Osborne plant for 2012 is expected to be approximately 700,000 to 900,000 tonnes of ore and 1.8 – 2.0 million tonnes in 2013. Approximately 80,000 tonnes of ore are stockpiled.
The company said in a statement the projected mine life is between 15 and 20 years.
Last week Ivanhoe said that it is looking at disposing assets (and have received written interest) to raise money to bring the Oyu Tolgoi mega-mine to completion as the project sucks up all its cash. The news gave a nice bump to the share price and $13 billion Ivanhoe is now up 9.5% this year.
Apart from Ivanhoe Australia, it also holds a 58% stake in Mongolian coal miner SouthGobi Resources and half of a private gold project in Kazakhstan.
Ivanhoe, majority owned by Rio Tinto, has already spent over $5 billion on the 66%-owned Oyu Tolgoi scheduled for production in Q3.
Oyu Tolgoi, which Ivanhoe has been advancing for the last 8 years, is one of the biggest mining projects in the world and will help turn Mongolia into the world’s fastest-growing economy with staggering GDP growth of 35%. The mine is set to produce more than 1.2 billion pounds of copper and 650,000 ounces of gold each year.