Ivanhoe Mines to Sell Australian Iron Ore Mine to Focus on Development of Mongolian Assets

Vancouver’s Ivanhoe Mines Ltd. has entered into an agreement to sell 100% of the Savage River iron ore mine in Australia to a subsidiary of Stemcor Holdings Limited, of London, England. The purchase price consists of two intial payments totaling US$21.5M, plus a series of contingent, escalating-scale annual payments based on the annual Nibrasco/Japanese steel mills pellet price. The escalating-scale payments, to be made over five years, beginning March 2006, could increase the total consideration paid to Ivanhoe to US$170M. Ivanhoe’s decision to sell the Savage River Mine is part of the company’s plan to rationalize its non-core assets as it focuses on the accelerated shaft sinking and underground development of the Hugo deposit at the company’s Oyu Tolgoi copper and gold project in Mongolia.