Vancouver-based Ivanhoe Mines has approved a $2,3-billion capital budget for the big Oyu Tolgoi copper/gold project in Mongolia next year.
Shares in Ivanhoe rose 2% on Monday, to C$24,73 apiece by 16:00 in Toronto.
The company said on Monday that 2011 will be the peak year of construction activity on the first phase of the operation.
Ivanhoe owns 66% of the Oyu Tolgoi project and the Mongolian government holds the other 40%. The mine is expected to start production towards the end of 2012.
"Our ramp-up to full-scale construction during 2010 was so successful that we now are targeting to deliver the first ore to the concentrator up to six months earlier than previously projected," Ivanhoe president John Macken said in a statement.
"Oyu Tolgoi should be making its first sales of copper and gold in concentrate produced from ore from the Southern Oyu open pit during the fourth quarter of 2012."
Ivanhoe said last week that it had reached a new agreement with shareholder Rio Tinto, which would result in Rio assuming management of the $6-billion project, as well as taking a bigger stake in Ivanhoe and helping with financing efforts.
Assuming all the transactions under the new agreement close and Rio exercises all the Ivanhoe warrants it holds, the group will own 48,4% of Ivanhoe.
Rio has also agreed to work with Ivanhoe on a "comprehensive" finance package for the Oyu Tolgoi project, and will provide Ivanhoe with $1,8-billion in interim financing in the meantime, the firms said last week.
The project has been designed to allow for future capacity expansions wherever possible, Macken said on Monday.
"Our plans call for initial production of 100 000 tons of ore per day and we expect to move to between 150 000 and 160 000 tons per day when ore from the underground mine becomes available."
The Oyu Tolgoi mine is expected to produce more than 1,2-billion pounds of copper and 650 000 oz of gold a year in the first ten years of operations, Ivanhoe said in May this year.
Source: rock crusher
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