Form 6-k
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
From: December 15, 2010
IVANHOE MINES LTD.
(Translation of Registrants Name into English)
Suite 654 999 CANADA PLACE, VANCOUVER, BRITISH COLUMBIA V6C 3E1
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.)
Form 20-F-o Form 40-F- þ
(Indicate by check mark whether the registrant by furnishing the information contained in this form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes: o No: þ
(If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82-_____.)
Enclosed:
Material Change Report
Form 51-102F3
Material Change Report
Ivanhoe Mines Ltd. (the Company)
654 999 Canada Place
Vancouver, British Columbia
V6C 3E1
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DATE OF MATERIAL CHANGE |
December 10, 2010
The news release was issued on December 13, 2010 and was disseminated through the facilities
of recognized newswire services.
4. |
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SUMMARY OF MATERIAL CHANGE |
The Companys board of directors approved a U.S.$2.3 billion capital budget for 2011 (the
2011 Budget) in respect of the Oyu Tolgoi copper and gold project in Mongolia (the OT
Project). The 2011 Budget forms part of the current estimate of approximately U.S.$4.5
billion in capital expenditures that will be required to be incurred between 2011 and 2013
to complete the 100,000-tonne-per day first phase of the OT Project.
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FULL DESCRIPTION OF MATERIAL CHANGE |
The Companys board of directors approved the 2011 Budget for the OT Project. The 2011
Budget contemplates the following expenditures:
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U.S.$561 million for the copper-gold concentrator, which will see complete enclosure
of the building, completion of steel work for the overland ore conveyor, installation
of one of four ball mills and installation of all material-handling equipment in the
pebble crusher. |
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U.S.$186 million to purchase the initial mining fleet of trucks, shovels and
ancillary equipment, and to start pre-stripping of the Southern Oyu open-pit mine. |
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U.S.$713 million for project infrastructure and electrical power, including
completion of the central substation, completion of the process-water supply,
completion of the truck maintenance shop and phases one and two of the operations camp. |
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U.S.$211 million for ongoing underground mine development at the Hugo North Deposit
and construction of the headframe on Shaft #2 and further sinking of Shaft #2, which
are critical elements of the development of the block-cave mine planned to begin
production in 2015. |
The 2011 Budget was approved after the board of directors of the Company, the board of
directors of Oyu Tolgoi LLC the Rio Tinto/Ivanhoe Technical Committee completed a series of
reviews of the estimated capital expenditure requirements through to project completion.
These reviews included cash requirements from January 1, 2011 for:
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completion of the Southern Oyu open-pit mine; |
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completion of the 100,000-tonne-per-day concentrator; |
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advancing construction on elements of the Hugo North underground mine, including the
Shaft #2 headframe, sinking of Shaft #2, completion of final design and ongoing
development of the underground mine. |
Total capital required for phase one from January 1, 2011, to the start of commissioning of
the ore processing plant, which is planned for the second half of 2012, is projected to be
approximately U.S.$3.5 billion. This includes approximately U.S.$2.9 billion to complete
construction of the Southern Oyu open-pit mine, processing plant and essential
infrastructure, including electricity, water, roads, a paved airport runway and
Mongolian-designed passenger terminal. It also includes taxes and continued underground
development of the phase-two Hugo North mine.
The commissioning is expected to be followed later in 2012 by initial phase-one production,
and then by commercial production during the first half of 2013. Capital required from
January 1, 2011, through to completion of the phase-one, 100,000-tonne-per-day project is
expected to total approximately US$4.5 billion. This estimate makes no allowance for
potential revenues from the sale of copper-gold concentrate produced from the milling of a
projected nine million tonnes of stockpiled ore in the weeks of initial production in 2012.
OT Project Phase One
Estimated Future Capital Requirements to Initial Production
(2011-2013)
(numbers have been rounded)
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Year |
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Estimated Expenditure |
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(U.S. billions) |
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2011 |
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$ |
2.3 |
(1) |
2012(2) |
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$ |
2.0 |
(3) |
2013(4) |
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$ |
0.2 |
(5) |
TOTAL: |
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$ |
4.5 |
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The 2011-2013 estimate also includes a total of U.S.$1 billion that has been allocated to
cover:
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VAT payments to the Mongolian government (U.S.$377 million); |
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(1) |
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Includes $172 million of value-added tax (VAT) and
$48 million of customs duties and taxes. |
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(2) |
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Projected initial OT Project production Q4, 2012 |
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(3) |
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Includes $195 million of VAT and $54 million of
customs duties and taxes. |
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(4) |
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Projected commercial production H1, 2013 |
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(5) |
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Includes $10 million of VAT and $2 million of
customs duties and taxes. |
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customs duties and other taxes (U.S.$104 million); |
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contingency allowances (U.S.$403 million); and |
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escalation allowances (U.S.$159 million). |
Individual contracts and sub-contracts also have built-in contingency and escalation
allowances. By the end of 2010, it is expected that capital expenditures on the progress of
the OT Projects development will have totalled US$1.4 billion (including 38 million of VAT
and $9 million of customs duties and taxes).
The U.S.$4.5 billion phase one capital costs projected between 2011 and 2013 include an
allocation of U.S.$498 million, not including taxes and other associated costs, to continue
ongoing development work on the Hugo North underground mine that will form the second phase
of the OT Projects planned production.
One key item is the ongoing construction of the 31-storey-high Shaft #2 headframe and
sinking of the 10-metre-diameter, concrete-lined shaft. Shaft #2 is the first production
shaft and the key personnel and materials shaft for the Hugo North block-cave mine,
considered a key value driver for the OT Project.
Phase one capital costs are also expected to cover the underground lateral development
program, geotechnical program and mine planning and expansion studies through to mid-2012.
Final design of the underground mine is set for 2012, when decisions are expected to be made
about optimum production rates from the underground mine.
Capital spending to the end of 2010 will have included U.S.$337 million spent on
underground-mine development off Shaft #1.
Engineering and construction to date has taken into account the need to accommodate a major
increase in ore processing capacity in the future while minimizing potential disruption to
operations that are then expected to be underway and, to the extent possible, allowances
have been made for future expansion with a view to minimizing its impact on operations.
Current plans call for initial production of 100,000 tonnes of ore per day, which is
expected to increase to between 150,000 and 160,000 tonnes per day when ore from the
underground mine becomes available.
To facilitate this expansion:
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a third reclaim tunnel is being constructed to increase the capacity to feed ore to
the concentrator by 50% to 60% over the anticipated initial rate of production; |
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a pipeline has been constructed that, with minor modifications, can supply water for
processing up to 160,000 tonnes a day; |
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space has been added in the flotation area of the concentrator; |
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other equipment has been installed to handle higher production; and |
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studies examining options to process additional underground ore and stockpiled
open-pit ore are ongoing. |
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The 2011 Budget and the current estimate of the amount of capital expenditures that will be
required to be incurred to complete the 100,000-tonne-per day first phase of the OT Project
represent estimates only and are based on certain assumptions and analyses made by the
Companys management in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as other factors management
believes are appropriate in the circumstances. These estimates, however, are subject to a
variety of risks and uncertainties and other factors that could cause actual expenditures to
differ materially from those estimated. Important factors that could cause actual
expenditures to differ from those estimated estimates include those described under the
heading Risk Factors in the Companys Annual Information Form.
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RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102 |
Not applicable
No information has been intentionally omitted from this form.
The name and business number of the executive officer of the Company who is knowledgeable of
the material change and this report is:
Beverly Bartlett
654 999 Canada Place
Vancouver, British Columbia
V6C 3E1
Telephone: (604) 688-5755
DATED at Vancouver, British Columbia this 14th day of December, 2010.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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IVANHOE MINES LTD.
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Date: December 15, 2010 |
By: |
/s Beverly A. Bartlett
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BEVERLY A. BARTLETT |
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Vice President &
Corporate Secretary |
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