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: October 13, 2005

IVANHOE MINES LTD.

(Translation of Registrant’s 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:

Amended Material Change Report
Technical Report

 

 

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.

		IVANHOE MINES LTD.
Date: October 13, 2005		By:		/s/ Beverly A. Bartlett   BEVERLY A. BARTLETT
				Corporate Secretary

Form 51-102F3

Material Change Report

(Amended and Restated)

1.		NAME AND ADDRESS OF COMPANY
		Ivanhoe Mines Ltd. (the “Company”) World Trade Centre Suite 654 — 999 Canada Place Vancouver, British Columbia V6C 3E1
2.		DATE OF MATERIAL CHANGE
		September 16, 2005
3.		NEWS RELEASE
		The news release was issued on September 16, 2005 and disseminated through the facilities of recognized newswire services. A subsequent news release was issued on October 13, 2005 and disseminated through the facilities of recognized newswire services.
4.		SUMMARY OF MATERIAL CHANGE
		The Company has received an initial resource estimate for its Nariin Sukhait coal project in southern Mongolia. Based on the estimate, the project contains measured and indicated coal resources of approximately 116 million tonnes, with an additional inferred coal resource of approximately 42 million tonnes. The independent estimates were prepared by Norwest Corporation, of Salt Lake City, USA (“Norwest”) under the supervision of Mr. Steven B. Kerr, Senior Geologist. Mr. Kerr is a Qualified Person as defined by National Instrument 43-101.
		Subsequent to the initial filing of this Form 51-102F3 Material Change Report, Norwest advised the Company that, based on a re-calculation of data made during the preparation of a Form 43-101F1 Technical Report, the resource estimate for the Nariin Sukhait coal project announced on September 16, 2005 significantly understated overall resource tonnages. Accordingly, this Form 51-102F3 Material Change Report has been amended and restated to reflect Norwest’s increased estimates.
5.		FULL DESCRIPTION OF MATERIAL CHANGE
		The Company has received an initial resource estimate for its Nariin Sukhait coal project in southern Mongolia. Based on the estimate, the project contains measured and indicated coal resources of approximately 116 million tonnes, with an additional inferred coal resource of approximately 42 million tonnes. These resources, which were discovered and delineated in only seven months of drilling this year, are considered to be of

		immediate interest as surface open-pit deposits that are amenable to near-term production for potential buyers in Chinese markets.
		Initial coal-quality testing ranks the Nariin Sukhait coal as high-volatile bituminous under American Society for Testing and Materials (“ASTM”) standards. Drill core samples are undergoing complete thermal and metallurgical testing by SGS Minerals Services in Denver, Colorado, USA.
		The independent estimates were prepared by Norwest Corporation, of Salt Lake City, USA. The Nariin Sukhait resource estimates were prepared in accordance with Canadian Institute of Mining Standards and the requirements set out in National Instrument 43-101, and were based on drilling completed prior to August 9, 2005.
		Subsequent to the initial filing of this Form 51-102F3 Material Change Report, Norwest advised the Company that, based on a re-calculation of data made during the preparation of a Form 43-101F1 Technical Report, the resource estimate for the Nariin Sukhait coal project announced on September 16, 2005 significantly understated overall resource tonnages. Accordingly, this Form 51-102F3 Material Change Report has been amended and restated to reflect Norwest’s increased estimates.
		Table 1 below summarizes the estimated resources in respect of the Nariin Sukhait coal project. Resources that are not reserves do not have demonstrated economic value.

Table 1: Nariin Sukhait Property

In-Place Coal Resources Summary (‘000 Tonnes)

As of August 9, 2005

						In-Place Resources
		ASTM				(Tonnes)
Area		Group				Measured				Indicated				Inferred
South Field							9,771,000				8,704,000				9,870,000
East Field		High-Volatile Bituminous					20,007,000				10,862,000				5,086,000
West Field							33,277,000				33,545,000				26,806,000
Total							116,166,000								41,762,000

In its initial resource calculation, Norwest had developed its geologic model using a topographic surface built from drill-hole collar elevation data. The topographic surface

		used in the initial resource calculation was built from approximately 150 points of observation. Because of the limited topographic data available at the time of initial resource estimates, Norwest had employed a conservative approach. The new data, provided by a detailed land-traverse survey, now includes several thousand points of observation for constructing the topographic surface in the geologic model. Changes to the topographic surface has vertically repositioned many of the drill hole intercepts in the geologic model. While changes in horizontal control of the drill holes were minor, elevation control of the drill holes and the surrounding landscape changed significantly by as much as 40m which in many areas of the fields significantly increased the base limit depth employed for the in-place resource estimates.
		In addition to modifying the geologic model, the detailed survey corrected a survey error in the northern boundary of the exploration licenses. This increased the size of both the South and West Field resource areas.
		The Nariin Sukhait coal project is located approximately 40 kilometres north of the Mongolia-China border and the shipping terminus for a newly constructed, 450-kilometre Chinese rail line that is expected to be operational into the border area by the end of this year. The project is adjacent to, and surrounds, the MAK Nariin Sukhait Mine, operated by the MAK-Qin Hua Mongolian/Chinese joint venture. The MAK Mine, which has been supplying high-rank, low-ash, low-sulphur coal to Chinese consumers since 2003, has a reported production capacity of two million tonnes per year of thermal and blend-coking coal from two operating open-pits.
		The Nariin Sukhait coal field consists of very thick multiple seams, with individual seam thicknesses up to 60 metres. The Company has been using a multi-faceted approach in its exploration program, employing field mapping, surface-resistivity geophysics, trenching and drilling to identify coal resources. The primary goal of the program was to delineate an initial coal resource of between 50 and 100 million tonnes, sufficient to commence a commercial mine operation with annual coal production of between two and five million tonnes for export to China.
		To date, the Company has spent approximately US$4.5 million on exploration at Nariin Sukhait, representing 6 cents (US) per tonne of measured and indicated resources discovered to date.
		The Company’s initial exploration was focused on the South, East and West Fields, which are adjacent to the MAK mining lease. The program subsequently has expanded to several other areas of interest within the 4,155-square-kilometre exploration tenements that the Company controls surrounding the MAK Nariin Sukhait Mine. As of August 9, 2005, the Company had completed 245 drill holes on the Nariin Sukhait property. A total of 146 holes had been completed within the South, East, and West Fields. Norwest expects that approximately 90 more holes will be drilled before the completion of this season’s drill program at the end of October, 2005. Norwest then will update the current resource estimates for the South, East, and West Fields.

The South and East Fields are directly adjacent to the MAK Mine’s East Pit, currently being mined for No. 5 Seam coal by the MAK operation. The South and East Fields are divided by a northwest trending fault that extends along the east side of the East Pit.

South Field

Drilling in the South Field has focused on delineating the No. 5 Seam as it projects down-dip and along strike from the East Pit. Drilling has identified approximately 18.5 million tonnes of measured and indicated resources in the South Field. Thirty drill holes define the No. 5 Seam, with an average seam thickness of 59.4 metres, dipping at 45° to the south.

Table 2: South Field

In-Place Coal Resources Summary (‘000 Tonnes)

As Of August 9, 2005

						In-Place Resources
						(’000 Tonnes)
Seam				ASTM Group			Measured			Indicated				Inferred
	5			High-Volatile Bituminous			9,771,000				8,704,000				9,870,000
Total							18,475,000								9,870,000

Drilling is continuing in the South Field to further define No. 5 Seam resources. Exploration also is being carried out to further investigate the resource potential of the Nos. 8, 9 and 10 Seams that sub-crop to the south of the No. 5 Seam.

East Field

The East Field is located on the down-thrown side of the northwest-trending fault that separates it from the South Field. While drilling has not intersected the No. 5 Seam coal in the East Field, significant coal resources have been identified in the overlying Nos. 8, 9 and 10 seams. The upper seams are developed as multiple bench sequences that, combined, carry an average coal thickness of 18 metres. Beds dip from 45° to 60° toward the southeast for a strike length of 1.8 kilometres. Drilling has identified 30.8 million tonnes of coal in the measured plus indicated resource categories.

Table 3: East Field

In-Place Coal Resources Summary (‘000 Tonnes)

As Of August 9, 2005

						In-Place Resources
						(Tonnes)
Seam		ASTM Group				Measured				Indicated				Inferred
8							1,578,000				1,251,000				604,000
9		High-Volatile Bituminous					10,450,000				6,160,000				1,777,000
10							7,979,000				3,451,000				2,705,000
Total							30,869,000								5,086,000

		West Field
		The West Field is located 6.5 kilometres west of the South Field, adjacent to the MAK mining lease. The field is approximately 1.6 kilometres southwest of the MAK West Pit. Drilling has targeted the Nos. 5, 7, 8, 9, 10 and 11 seams along the limbs of a southwest-plunging anticline. A total of 71 drill holes have defined a measured plus indicated resource of 66.8 million tonnes in the West Field.
		Along the south limb of the anticline, drilling has intersected seams Nos. 5 through 10 in strata dipping from 45° to 60° toward the southeast. Strata along the north limb have been offset and rotated by reverse faulting. Drilling has intersected seams Nos. 7 through 11 dipping south-southwest at approximately 35°. The thickness of the No. 5 Seam averages 59.3 metres along the south limb. The upper seams for the south limb have a combined average thickness of 7.3 metres. The upper seams on the north limb have a combined thickness averaging 5.4 metres.

Table 4: West Field

In-Place Coal Resources Summary (‘000 Tonnes)

As Of August 9, 2005

						In-Place Resources
		ASTM				(Tonnes)
Seam		Group				Measured				Indicated				Inferred
5							7,667,000				7,492,000				1,797,000
8							2,113,000				2,634,000				2,263,000
9		High-Volatile Bituminous					11,580,000				12,633,000				8,739,000
10							6,788,000				8,057,000				8,151,000
11							5,129,000				2,729,000				5,857,000
Total							66,822,000								26,806,000

Coal Quality

At this time, coal quality testing has been completed for approximately 25% of the core samples. Initial coal quality testing results of the coal seams in all three fields ranks the Nariin Sukhait coals as high-volatile bituminous under ASTM standards. Tests indicate that much of the No. 5 Seam is high-rank, low-ash, low-sulphur coal. Based on initial tests, typical characteristics for the No. 5 Seam average 9% moisture, 11.5% ash, 1.1% sulphur and a caloric value of approximately 6,400 Kcal/kg. Initial testing has shown more variability in the upper seams. Typical combined characteristics for the upper seams average 9.5% moisture, 15.2% ash, 0.7% sulphur and approximately 6,050 Kcal/kg. Reverse circulation coal samples are being tested by Mining Institute in Ulaanbaatar. Core samples are undergoing complete thermal and metallurgical testing by SGS Minerals Services in Denver, Colorado, USA.

New Resource Updates and Pre-feasibility Study

Extensive field mapping has identified numerous intermittent exposures of coal outcroppings that occur for more than 95 kilometres along the north margin of the sedimentary basin that contains the Nariin Sukhait deposit. Norwest also expects to be providing resource estimates on four additional areas at Nariin Sukhait that have shown encouraging initial results. To date, the Company has been engaged in exploration on 17 individual areas within the Nariin Sukhait Basin.

		The Company plans to bring the Nariin Sukhait resources into a pre-feasibility-level study within the next six months and is currently involved in preliminary marketing discussions with potential coal buyers. Successful negotiations could see initial production from the Company’s properties in the second half of 2006 although there can be no assurance that this timetable will be met.
		Qualified Person
		Mr. Steven B. Kerr, Senior Geologist with Norwest and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the information contained in this Material Change Report.
		Norwest has been commissioned by the Company to design, implement and manage the exploration program at Nariin Sukhait. Throughout the exploration program, Norwest has provided on-site management and technical assistance. Norwest will use the information gained from this program to prepare a pre-feasibility study for the development of a surface mining operation at Nariin Sukhait. Environmental baseline studies and geologic modelling are in progress.
6.		RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
		Not applicable.
7.		OMITTED INFORMATION
		No confidential information has been omitted from this material change report.
8.		EXECUTIVE OFFICER
		The name and business number of the executive officer of the Company who is knowledgeable of the material change and this report is:
		Beverly A. Bartlett Ivanhoe Mines Ltd. Suite 654 — 999 Canada Place Vancouver, British Columbia V6C 3E1
		Telephone: (604) 688-5755

9.		DATE OF REPORT
		DATED at Vancouver, British Columbia the 21st day of September, 2005 and amended and restated this l day of October, 2005.
		IVANHOE MINES LTD.

		Per:
			Beverly A. Bartlett
			Corporate Secretary

		Technical Report
		Nariin Sukhait Property
		Omnogovi Aimag, Mongolia
		Submitted to:
		Ivanhoe Mines, Ltd.
		October 13, 2005
		Norwest Corporation
		136 East South Temple 12th Floor
		Salt Lake City, Utah 84111
		Tel: (801) 539-0044
		Fax: (801) 539-0055
		Email slc@norwestcorp.com
		www.norwestcorp.com

1 TITLE PAGE

		Technical Report
		Nariin Sukhait Property
		Omnogovi Aimag, Mongolia
		Submitted to:
		Ivanhoe Mines, Ltd.
		October 11, 2005
		Norwest Corporation
		136 East South Temple 12th Floor
		Salt Lake City, Utah 84111
		Tel: (801) 539-0044
		Fax: (801) 539-0055
		Email slc@norwestcorp.com
		www.norwestcorp.com

		Authors:		Steven B. Kerr, CPG
				Richard D. Tifft III, PG
				Patrick P. Riley, CPG

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2	TABLE OF CONTENTS

1		TITLE PAGE		1-1
2		TABLE OF CONTENTS		2-1
3		SUMMARY		3-1
4		INTRODUCTION AND TERMS OF REFERENCE		4-1
5		DISCLAIMER		5-1
6		PROPERTY DESCRIPTION AND LOCATION		6-1
7		ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY		7-1
8		HISTORY		8-1
		8.1 Nariin Sukhait Mine		8-1
9		GEOLOGICAL SETTING		9-1
		9.1 Regional Setting		9-1
		9.2 Coal Occurrences		9-2
		9.3 Property Geology		9-3
10		DEPOSIT TYPES		10-1
11		MINERALIZATION		11-1
12		EXPLORATION		12-1
13		DRILLING		13-1
14		SAMPLING METHOD AND APPROACH		14-1
15		SAMPLE PREPARATION, ANALYSES AND SECURITY		15-1
16		DATA VERIFICATION		16-1
17		ADJACENT PROPERTIES		17-1
18		MINERAL PROCESSING AND METALLURGICAL TESTING		18-1
		18.1 Raw Coal Quality		18-1
		18.2 Optimized Qualities		18-8
		18.3 Washability and Metallurgical Testing		18-8
19		MINERAL RESOURCE ESTIMATES		19-1
		19.1 Approach		19-1
		19.2 Geologic Modeling Parameters		19-1
		19.3 Coal Resource Estimation		19-1
		19.4 Quantification Parameters		19-3
MINIMUM SEAM THICKNESS: 0.60M				19-3
WEATHERED ZONE EXCLUSION: 5.0M (TOPOGRAPHY MINUS 5 METERS)				19-3
		19.5 South Field Resources		19-3
		19.6 East Field Resources		19-4
		19.7 West Field Resources		19-4
20		OTHER RELEVANT DATA AND INFORMATION		20-1
21		INTERPRETATION AND CONCLUSIONS		21-1
22		RECOMMENDATIONS		22-1

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23		REFERENCES		23-1
24		DATE		24-1
25		ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES		25-1
26		ILLUSTRATIONS		26-1

List of Tables

3.1		IN-PLACE COAL RESOURCES SUMMARY		3-2
6.1		IVANHOE MINES MONGOLIA INC. PROPERTY CONTROL RIGHTS		6-2
11.1		NARIIN SUKHAIT PROPERTY COAL SEAM TRUE THICKNESS		11-2
13.1		EXPLORATION DRILLING SUMMARY		13-2
13.2		DRILL HOLE SUMMARY FOR SOUTH, EAST, AND WEST FIELDS		13-3
18.1		RAW COAL QUALITY, SOUTH FIELD, NO. 5 SEAM		18-2
18.2		2004 RAW COAL QUALITY, SOUTH FIELD, NO. 5 SEAM		18-2
18.3		RAW COAL QUALITY EAST FIELD, UPPER SEAMS		18-2
18.4		RAW COAL QUALITY WEST FIELD, NO. 5 SEAM		18-3
18.5		RAW COAL QUALITY WEST FIELD, UPPER SEAMS		18-3
18.6		NARIIN SUKHAIT PROPERTY RAW COAL QUAITY — REVERSE CIRCULATION DRILLING		18-4
18.7		NARIIN SUKHAIT PROPERTY OPTIMIZED QUANTITIES		18-9
18.8		NARIIN SUKHAIT PROPERTY FLOAT & SINK ANALYSIS (DRY BASIS		18-11
18.9		NARIIN SUKHAIT METALURGIAL PROPERTIES		18-15
18.10		NARIIN SUKHAIT COAL QUALITY WITH RANK CALCULATIONS		18-16
19.1		COAL RESOURCE/RESERVE CRITERIA		19-2
19.2		SOUTH FIELD IN-PLACE COAL RESOURCES SUMMARY		19-3
19.3		EAST FIELD IN-PLACE COAL RESOURCES SUMMARY		19-5
19.4		WEST FIELD IN-PLACE COAL RESOURCES SUMMARY		19-6
22.1		ESTIMATED EXPENDITURES, SEPTEMBER THROUGH OCTOBER, 2005		22-2

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List of Figures

3.1		LOCATION MAP		SECTION 26
3.2		COAL ZONE STRATIGRAPHY		SECTION 26
3.3		IMMI RESOURCE AREAS AND EXPLORATION PROSPECTS		SECTION 26
3.4		SOUTH FIELD IN-PLACE RESOURCES		SECTION 26
3.5		EAST FIELD IN-PLACE RESOURCES		SECTION 26
3.6		WEST FIELD IN-PLACE RESOURCES		SECTION 26
4.1		LOCATION MAP		SECTION 26
6.1		IMMI NARIIN SUKHAIT LICENSE AREAS		SECTION 26
7.1		SOUTHERN MONGOLIA INFRASTRUCTURE		SECTION 26
9.1		COAL BEARING PROVINCES OF MONGOLIA		SECTION 26
9.2		OBOTO HURAL BASIN REGIONAL GEOLOGY MAP		SECTION 26
9.3		COAL ZONE STRATIGRAPHY		SECTION 26
9.4		RESOURCE AREAS		SECTION 26
9.5		SOUTH AND EAST FIELDS EXPLORATION GEOLOGY MAP		SECTION 26
9.6		SOUTH AND EAST FIELDS GEOLOGIC CROSS SECTIONS		SECTION 26
9.7		WEST FIELD EXPLORATION GEOLOGY MAP		SECTION 26
9.8		WEST FIELD GEOLOGIC CROSS SECTIONS		SECTION 26
18.1		SOUTH AND EAST FIELDS CORE QUALITY CORE HOLES		SECTION 26
18.2		WEST FIELD CORE QUALITY CORE HOLES		SECTION 26
18.3		FSI VALUES FROM INCREMENTAL SAMPLES, NO. 5 SEAM, SOUTH FIELD		SECTION 26
18.4		FSI VALUES FROM INCREMENTAL SAMPLES, UPPER SEAMS, EAST FIELD		SECTION 26
19.1		SOUTH FIELD IN-PLACE RESOURCES		SECTION 26
19.2		EAST FIELD IN-PLACE RESOURCES		SECTION 26
19.3		WEST FIELD IN-PLACE RESOURCES		SECTION 26

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3

SUMMARY

			Ivanhoe Mines Ltd. (Ivanhoe) and its wholly owned subsidiary, Ivanhoe Mines Mongolia, Inc. (IMMI), commissioned Norwest Corporation (Norwest) to manage and provide technical supervision to a coal exploration program initiated in February, 2005 on its Nariin Sukhait Property in southern Mongolia. The purpose of this exploration program is to provide the basis to commence a commercial mining operation that will supply coal to China’s growing economy. To date, Ivanhoe has been engaged in exploration on 19 individual areas within its Nariin Sukhait Property. Norwest has prepared this Technical Report in accordance with National Instrument 43-101 to report on the initial resources that have been delineated within three of the individual areas on the Nariin Sukhait Property as of August 9, 2005.
			The Nariin Sukhait coal deposit is located in the southwest corner of the Omnogovi Aimag (Province) of Mongolia. The deposit is within the Gurvantes Soum, 320km southwest of the provincial capital of Dalanzadgad and 950km south of the nation’s capital Ulaanbaatar (Figure 3.1). The IMMI-controlled property surrounds and is adjacent to the existing Nariin Sukhait Mine, owned and operated by the MAK-Qin Hua Mongolian/Chinese Joint Venture (MAK). The MAK operation currently consists of two open-pit mines on its 28.8km2 mining license. The IMMI-controlled property is through seven exploration licences that cover an area of 3,240km2.
			The Nariin Sukhait Property is situated in the Oboto Hural Basin, located in the western part of the South Gobi province. Intermittent coal outcrops of Late Permian age occur along a strike-length of 90km in the upper plate sequence of an arcuate, east-west trending thrust fault, the dominant structural feature of the basin. Previous Russian and Mongolian government-sponsored exploration programs had identified 10 coal seams at Nariin Sukhait. Total thickness for the coal-bearing sequence is approximately 1,370m thick, with a total coal thickness ranging from 68 to 250m (Figure 3.2). Ivanhoe’s exploration has been focused on identifying resources in seams above and including the No. 5 Seam, the thickest seam within the coal-bearing sequence. An additional coal seam, No. 11, has been identified through exploration drilling.
			Ivanhoe has been using a multi-faceted approach in its exploration program, employing field mapping, surface resistivity geophysics, trenching, and drilling to identify coal resources. As of August 9, 2005, Ivanhoe has completed 245 drill holes on the Nariin Sukhait Property. Drilling has progressed on three of these areas, the South, East, and West Fields, to a point where an initial resource of 116 million (M) tonnes of coal (measured plus indicated) has been identified with an additional inferred resource of approximately 41M tonnes as illustrated in Table 3.1. As of August 9, 2005, a total of 141 drill holes have been completed in the South, East, and West Fields.

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Table 3.1
In-Place Coal Resources Summary
As of August 9, 2005

						In-Place Resources
		ASTM				(Tonnes)
Area		Group				Measured				Indicated				Inferred
South Field							9,771,000				8,704,000				9,870,000
East Field		High Volatile Bituminous					20,007,000				10,862,000				5,086,000
West Field							33,277,000				33,545,000				26,806,000
Total							116,166,000								41,762,000

			The South and East Fields are directly adjacent to the East Pit, currently being mined for No. 5 Seam coal by the MAK operation (Figure 3.3). The South and East Fields are divided by a northwest trending fault that extends along the east side of the East Pit. Drilling in the South Field has focused on delineating the No. 5 Seam as it projects down-dip and along strike from the East Pit. Drilling has identified 18.5M tonnes of measured and indicated resources in the South Field. Thirty drill holes define the No. 5 Seam with an average seam thickness of 58.2m, dipping at 45° to the south.
			The East Field is located on the downthrown side of the northwest trending fault that separates it from the South Field. Coal resources have been identified in the Nos. 8, 9, and 10 Seams. The seams are developed as multiple bench sequences that combined carry an average coal thickness of 15.8m. Beds dip from 45° to 60° towards the southeast for a strike length of 1.8km. Drilling has identified 30.9M tonnes of coal in the measured and indicated resource categories.
			The West Field is located 6.5km west of the South Field, adjacent to and south of the MAK mining license. The field is approximately 1.6km southwest of the MAK West Pit. Drilling has targeted the Nos. 5, 8, 9, 10, and 11 Seams along the limbs of a southwest plunging antiform. Seventy-one drill holes define a measured and indicated resource of 66.8M tonnes in the West Field. Along the southeast limb of the antiform, drilling has intersected seams Nos. 5 thru 10 in strata dipping from 45° to 60° toward the southeast. Strata along the northwest limb have been either offset and rotated by reverse faulting and/or represent an overturned sequence of anticlinal folding. Drilling has intersected Seams Nos. 8 through 11 dipping south-southwest at approximately 35°. The No. 5 Seam averages 52.5m thick along the southeast limb. The upper seams for the southeast limb have a combined average coal thickness of 4.3m. The upper seams on the northwest limb have a combined thickness coal averaging 4.2m.

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			Proximate and thermal testing has been completed for samples from 29 core holes and 15 reverse circulation drill holes. At this time, washability and metallurgical tests have been completed for samples from six drill holes. Coal quality testing results of the coal seams in all three fields ranks the Nariin Sukhait coals as high-volatile bituminous under ASTM standards. Tests indicate that much of the No. 5 Seam is high rank, low ash, low sulphur coal.
			In accordance with National Instrument 43-101, Norwest has used the referenced document, the Canadian Institute of Mining, Metallurgy and Petroleum’s CIM “Definition Standards on Mineral Resources and Reserves” adopted by CIM Council on November 14, 2004 and referenced the Geological Survey of Canada Paper 88-21 “A Standardized Coal Resource/Reserve Reporting System for Canada” (GSC Paper 88-21) during the classification, estimation and reporting of coal resources for the Nariin Sukhait Property.
			To facilitate the estimation of resources in the Nariin Sukhait Property, Norwest developed geological models for the South, East and West Fields using Surpac Minex® software. Key horizons or “surfaces” were modeled to provide the necessary limits for volume estimation. Volumes were converted to tonnages by application of density values representative of the coal seams as derived from available coal quality data.
			The in-place resources within the South, East, and West Fields of the Nariin Sukhait Property, summarized in Table 3.1, cover a combined area of approximately 1.8km2. The in-place resource areas are shown in Figures 3.4, 3.5, and 3.6. These resources identified through the current exploration program have been determined to be of immediate interest, suitable for surface mining to a maximum depth of 250m, with minimum thickness consistent with recommendations of GSC 88-21.
			Exploration is expected to continue through the end of October, 2005. An additional 90 drill holes are expected to be completed by the end of the exploration program. Following the completion of the exploration program, Norwest will prepare a second technical report on the coal resources at Ivanhoe’s Nariin Sukhait Property that will incorporate the results of additional drilling. Following the second technical report on resources at Nariin Sukhait, Norwest intends to prepare a pre-feasibility study for IMMI for the development of a surface mining operation. There are currently no mining activities operating on the Ivanhoe Nariin Sukhait Property.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		3-3

4

INTRODUCTION AND TERMS OF REFERENCE

			Ivanhoe Mines Ltd. (Ivanhoe) is an international mineral exploration and development company. It holds interests in numerous mineral resource properties ranging from full-production mining operations to grass-roots exploration projects, with a particular emphasis on resource properties located in Asia. The company also holds equity investments in several junior, publicly listed mineral exploration companies. Its principal mineral resource properties are the Oyu Tolgoi Project in Mongolia (100% interest) and the Monywa Copper Project in Myanmar (50% interest). Through its subsidiary, Ivanhoe Mines Mongolia, Inc. (IMMI), the company controls several large mineral licenses throughout Mongolia. IMMI is actively exploring for copper, gold, and coal deposits. Ivanhoe is currently in the advance stages of exploration and development of the Oyu Tolgoi copper and gold project (100% interest) in Mongolia as well as maintaining equity interests in Asia Gold Corp. and Jinshan Gold Mines Inc. The company was incorporated in 1994 under the name 463212 B.C., Ltd. and changed its name to Indochina Goldfields, Ltd. in 1994, and then to Ivanhoe Mines, Ltd. in 1999. Ivanhoe Mines is based in Vancouver, Canada. The company is listed on the Toronto and New York stock exchanges under the symbol IVN.
			IMMI currently controls coal resources in the Nariin Sukhait region of the Omnogovi Aimag (South Gobi Province), Mongolia. Nariin Sukhait is located 40km north of the Chinese border, and approximately 320km southwest of the city of Dalandzadgad (Figure 4.1). IMMI-controlled licenses are adjacent to the existing Nariin Sukhait Mine, which is owned and operated by MAK-Qin Hua Mongolian/Chinese Joint Venture (MAK). The existing Nariin Sukhait Mine has a reported production capacity of approximately two million tonnes per year (M tpy) of coal from two operating open-pits. These pits are referred to as the East Pit and West Pit. Produced coal is trucked to a Chinese steel mill some 400km away. IMMI wishes to further develop the Nariin Sukhait coal deposits and provide coal for domestic and Chinese markets. To assist in that effort IMMI has commissioned the Norwest Corporation (Norwest) to undertake a technical and economic study of the Nariin Sukhait resource to a ‘pre-feasibility’ level.
			IMMI initiated coal exploration in the Nariin Sukhait area in October 2004, by completing a series of five core holes. These core holes were located on IMMI-controlled ground directly south of the MAK East Pit. Norwest’s work on the Nariin Sukhait Project began in late January, 2005, with a site visit and initiation of a conceptual design for a 5M tonne ‘starter pit’, a small scale operation that was to be adjacent to the existing MAK-controlled surface operation. That work was immediately followed by an extensive and ongoing exploration program in the Narrin Sukhait region which essentially commenced in March 2005. Throughout the current exploration program, Norwest has provided on site management and technical assistance. Norwest intends to use the information gained from this program to prepare a pre-feasibility study for the development of a surface mining operation at Nariin Sukhait.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		4-1

5

DISCLAIMER

This report has been prepared for Ivanhoe and its subsidiary, IMMI by Norwest. The findings and conclusions are based on information developed by IMMI and Norwest from data collected through exploration conducted between late 2004 through August of 2005. Guidance, on-site management and data validation was provided by Norwest. This report is intended to be used by Ivanhoe and IMMI only, subject to the terms and conditions of its contract with Norwest. Any other use of, or reliance on, this report by any third party is at that party’s sole risk.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		5-1

6

PROPERTY DESCRIPTION AND LOCATION

			The Nariin Sukhait coal deposit is located in the southwest corner of the Omnogovi Aimag (Province) of Mongolia at latitude 42° 50’ N and longitude 101° 40’ E. The deposit is within the Gurvantes Soum, 320km southwest of the provincial capital of Dalanzadgad and 950km south of the nation’s capital Ulaanbaatar, shown previously in Figure 4.1.
			The IMMI-controlled property surrounds and is adjacent to the existing Nariin Sukhait Mine, owned and operated by MAK-Qin Hua Mongolian/Chinese Joint Venture. The MAK Nariin Sukhait Mine currently operates two open-pit mines on its 28.8km2 mining license. The MAK East Pit is directly adjacent to the north of the South Field where IMMI has identified resources in the No. 5 Seam (Figure 6.1).
			The IMMI property is controlled through seven contiguous exploration licences that cover an area of 3,240km2. The exploration tenements are listed in Table 6.1.
			IMMI formalized an agreement with Asia Gold on July 31, 2003 that grants IMMI rights to all coal resources and reserves on Asia Gold-controlled properties in the South Gobi region while Asia Gold retains rights to all other potential mineral resources.
			Exploration licences are granted by the Mongolian government for a period of three years with the right to extend the period twice for two additional years each. Exploration license holders have the following rights:

	1.		The exclusive right to conduct exploration for minerals within the boundaries of an exploration claim
	2.		The exclusive right to obtain a mining license for any part of an exploration
	3.		The right to transfer or pledge all or part of an exploration license in accordance with the terms and conditions of the mining law
	4.		The right to have access to, entry on, and transit through, the exploration area and a right to construct temporary structures necessary for conducting exploration activities
	5.		The right of entry to and transit through the land adjacent to the exploration area for the purpose of gaining access and entry to the exploration area
	6.		The right of entry to and transit through land owned or used by other persons in order to exercise the rights described in this Article. This right shall be determined by a contract between the license holder and the landowner or land-user in accordance with the provisions of the Civil law.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		6-1

Table 6.1
Ivanhoe Mines Mongolia, Inc.
Property Control Rights

License

Inception

License Coordinates

Mineral

Number

Licensee

Date

Corner

Easting

Northing

Area (km2)

Lessor

Interest

1

102°00’00”

43°02’00”

2

102°30’00”

43°02’00”

Ivanhoe Mongolian

Mar. 10,

3

102°30’00”

42°50’00”

100

%

9442X

Mines, Inc.

2003

4

102°00’00”

42°50’00”

914.9

Minerals

5

102°00’00”

42°56’00”

6

102°00’00”

43°01’20”

1

101°16’30”

43°01’20”

2

101°35’00”

43°01’20”

3

101°35’00”

43°00’00”

Ivanhoe Mongolian

Mar. 10,

4

101°43’00”

43°00’00”

100

%

9443X

Mines, Inc.

2003

5

101°43’00”

42°59’00”

382.4

Minerals

6

101°50’00”

42°59’00”

7

101°50’00”

42°56’00”

8

101°16’30”

42°56’00”

1

100°30’00”

42°57’00”

2

101°00’00”

42°57’00”

100

%

Ivanhoe Mongolian

Mar. 10,

3

101°00’00”

42°56’00”

493.4

Minerals

9448X

Mines, Inc.

2003

4

101°00’00”

42°50’00”

5

100°30’00”

42°50’00”

1

101°00’00”

42°56’00”

2

102°00’00”

42°56’00”

3

102°00’00”

42°50’00”

4

102°00’00”

42°45’00”

5

101°26’00”

42°45’00”

100

%

Ivanhoe Mongolian

Mar. 10,

6

101°26’00”

42°46’00”

1476.7

Minerals

9449X

Mines, Inc.

2003

7

101°20’30”

42°46’00”

8

101°20’30”

42°46’30”

9

101°10’56”

42°46’30”

10

101°10’56”

42°50’00”

11

101°00’00”

42°50’00”

1

100°36’25.4”

43°07’08”

2

101°00’00”

43°07’08”

3

101°00’00”

43°02’00”

4

101°08’05”

43°02’00”

5

101°08’05”

42°59’58”

6

101°16’30”

42°59’58”

Dec. 28,

7

101°16’30”

42°56’00”

569.7

Ivanhoe Mongolian

5820X

Asia Gold, Inc.

2002

8

101°00’00”

42°56’00”

Mines, Inc.

100% Coal

9

101°00’00”

42°57’00”

10

100°30’00”

42°57’00”

11

100°30’00”

43°04’00”

12

100°31’25”

43°04’00”

13

100°31’25”

43°05’51.4”

14

100°36’25.4”

43°05’51.4”

1

101°08’05”

43°02’00”

Dec. 28,

2

102°00’00”

43°02’00”

114

Ivanhoe Mongolian

6359X

Asia Gold, Inc.

2002

3

102°00’00”

43°01’20”

Mines, Inc.

100% Coal

4

101°08’05”

43°01’20”

1

101°35’00”

43°01’20”

2

102°00’00”

43°01’20”

3

102°00’00”

42°56’00”

Dec. 28,

4

101°50’00”

42°56’00”

204.2

Ivanhoe Mongolian

5264X

Asia Gold, Inc.

2002

5

101°50’00”

42°59’00”

Mines, Inc.

100% Coal

6

101°43’00”

42°59’00”

7

101°43’00”

43°00’00”

8

101°35’00”

43°00’00”

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		6-2

Following a successful exploration program, an exploration license holder can apply for a mining license to any portion of the exploration license. A mining license is granted for a period of 40 years and provides the licensee with the following rights:

	1.		The exclusive right to engage in mining of minerals within the mining license
	2.		The right to manage its operations and market its products
	3.		The right to sell mineral products from the mining license at market prices on domestic and foreign markets
	4.		The exclusive right to conduct exploration for minerals within the mining license
	5.		The right to transfer and pledge all or part of the mining license
	6.		The right to extend the term of the mining license once for a period of forty (40) years
	7.		The right of entry to and transit through the mining license, use of the mining license, the right to construct necessary structures, and the right to conduct other activities related to mining and exploration
	8.		The right of entry to and transit through the land adjacent to the mining license
	9.		The right of entry to and transit through land owned or used by other persons in order to exercise the above mentioned rights. This right shall be determined by a contract between the license holder and the landowner or land-user in accordance with the provisions of the Civil law
	10.		The right to use water, subject to compliance with applicable laws.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		6-3

7

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

			The Nariin Sukhait deposit is located in south-central Mongolia approximately 40km north of the border with China. The closest major center is Dalanzadgad, located approximately 320km to the northeast. The deposit lies within the Gurvantes Soum of the Omnogovi Aimag. The transportation network can be characterized as primitive, with soum centers connected by a network of unimproved roads. Within the property, access is achieved by a network of unimproved roads and cross-country trails. Nearly all the property can be reached with four-wheel-drive vehicles (Figure 7.1).
			The principal access to Ulaanbaatar is by air from Beijing, Seoul, Berlin, or Moscow. Ulaanbaatar is the main staging center for exploration projects undertaken in Mongolia. Most material goods needed for operating under remote conditions and good communications for voice and electronic transmittal are available in Ulaanbaatar. Regular air service is available from Ulaanbaatar to Dalanzadgad. Dalanzadgad provides a secondary source for material goods, primarily food and fuel. Travel from Dalanzadgad to the property takes approximately six hours by overland vehicle.
			The nearest in-country rail line is the Trans-Mongolia Railway that runs northwest to southeast and connects Ulaanbaatar to Beijing. The nearest point on this line is approximately 870km to the east at the Chinese border. A second rail line is currently under construction in China that will bring railway access to within 40km of Nariin Sukhait, providing an advantageous shipping conduit for coal.
			The Nariin Sukhait deposit is within the physiographic region of the Gobi Desert. The surface expression of the deposit ranges from flat desert plains to moderately hilly terrain. Surface elevation ranges from 1515 to 1555m above sea level. The Noyon and Tost mountain ranges are located 5 to 7km north of Nariin Sukhait, rising 150 to 300m above the basin. Vegetation is sparse, consisting primarily of small shrubs and grasses. The area supports a traditional subsistence economy in which semi-nomadic herdsman are engaged in husbandry of sheep, goats, camels, cattle and horses. The Omnogovi Aimag is the most sparsely populated province in Mongolia with a density of 0.8 people/km2.
			The region experiences a continental desert climate. Temperature typically ranges from 0° — 30°C in the winter, increasing to 30° — 40° in the summer months. High winds occur frequently; these tend to moderate the effects of summer heat and enhance the chill of winter. Average rainfall is approximately 530mm with most precipitation occurring during the summer months.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		7-1

			Over the past several years there has been substantial growth in exploration activities in Mongolia. This has led to a greater availability of support services such as drilling equipment, earth-moving and excavating equipment, analytical services, and transportation. There is an adequate source of skilled and unskilled labor, though some specialties require the services of expatriate personnel.
			There are currently no improved services or infrastructure at the Nariin Sukhait Property. Future development of the property will require installing housing, electricity, and developing a water supply.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		7-2

8

HISTORY

The first geologic investigations at Nariin Sukhait occurred between 1951 and 1952. This initial geologic investigation led by V.S. Volkhonina, included mapping at a scale of 1:500,000. Coal was first identified at Nariin Sukhait in 1971 by a Mongolian exploration survey led by D. Dashtseren. Subsequent exploration through 1991 led to the identification of a resource area 200 to 400m wide, extending for a distance of 9km. Within this resource area two detailed areas, one 800m by 400m and another 400m by 300m in size, were identified.

8.1		Nariin Sukhait Mine
		The IMMI property is adjacent to and surrounds the MAK Nariin Sukhait Mine, owned and operated by MAK-Qin Hua Mongolian/Chinese Joint Venture. Operations began at the Nariin Sukhait Mine in 2003. The operation currently mines coal from the No. 5 Seam from two open-pit mines. Annual production is estimated to be approximately 2M tpy of both thermal and coking blend coal, which is trucked to a Chinese steel mill some 400km away. The mine operates with a workforce of approximately 100 miners, a mixed Chinese and Mongolian workforce, and uses a standard truck-shovel configuration. Coal and overburden are removed by shovel, front loaders, backhoe and dozer. Road-hauling tractor-trailer trucks are loaded directly in the mine and deliver coal directly to the consumer in China.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		8-1

9

GEOLOGICAL SETTING

9.1		Regional Setting
		Pre-Mesozoic rocks of Mongolia and central Asia reflect a complex history of continental accretion (Heubeck, 2001). In southern Mongolia this has resulted in Ordovician and Silurian units interpreted as part of an accretionary wedge/ocean margin environment, and widespread Devonian to Carboniferous units derived from a volcanic arc setting. The late Paleozoic arc appears to have been complex, and to have stretched across most of southern Mongolia. The arc most likely faced south toward an ocean separating Asia from the north China and Tarim blocks. Closure of this ocean is not well constrained, but some evidence suggests it was diachronous, beginning in the early Permian in southwest Mongolia, but not until the latest Permian in the East Gobi Basin area (Lamb and Badarch, 2001). This period of accretion and deformation has been termed the Hercynian Orogeny by earlier workers. By the late Permian, a mature continental setting had developed and the overall structural grain of the region was in place.
		Continued intraplate deformation took place in the region during the late Permian and early Mesozoic. In the general area of Nariin Sukhait, this has been interpreted as the creation of a foreland style sedimentary basin (Hendrix et al, 1996; 2001). However, recent work by Meng et al (2003) has uncovered evidence of extensional tectonics and sedimentation elsewhere in southern Mongolia and northern China during this time frame. Either way, late Permian and Triassic sediment was largely derived from the uplifted regions of the former volcanic arc, and was deposited into continental basins under the influence of active tectonics. Regionally, conditions developed that allowed for the accumulation of thick coal deposits of late Permian age at localities such as Tsaagan Tolgoi, Tavan Tolgoi and at Nariin Sukhait.
		The Mesozoic geologic history of southern Mongolia is dominated by an upper Jurassic to lower Cretaceous “Basin and Range style” rifting event. The period of rifting and related sedimentation appears to have been followed by a period of “tectonic inversion” whereby crustal shortening took place and many of the normal faults in the area became reactivated as reverse faults. A package of relatively undeformed late Cretaceous overlap sediments were deposited above this unconformity. This package is widely exposed regionally and contains the dinosaur fauna for which the Gobi Desert is famous. This was followed by the excavation of large pediment surfaces and minor episodes of Paleogene, Neogene and Quaternary sedimentation (Graham et al, 2001).
		There are 15 major coal bearing provinces within Mongolia containing strata of the Carboniferous, Permian, Jurassic, and Cretaceous ages (Figure 9.1). In general, coal deposits in the western portion of the country are older and of higher rank. Progressing eastward across the country, coals are younger and decrease in rank, from bituminous and subbituminous coals found in the west and central portion of the country to Cretaceous age lignites in the east.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		9-1

			Mongolia’s coal deposits were formed in intra-cratonic basins, far removed from the tectonic plate margin environments that typify much of the world’s coal resources. Graben-like subsidence of the basement rocks led to preferred sites of deposition of sediments and the growth and accumulation of peat. The older basins experienced continued orogenic deformation through time and are folded and faulted to varying degrees.
			The Nariin Sukhait deposit is located in the South Gobi Province (Figure 9.1). The South Gobi province occupies approximately 40,000km2 in south-central Mongolia. Coal-bearing strata within the province are of Permian age and contain thick sequences of bituminous coal. The coal-bearing strata occupy a series of east-west trending foreland and intermontane basins that developed in response to compression and uplift during the end of the Hercynian orogeny.
			The Nariin Sukhait deposit is situated in the Oboto Hural Basin, located in the eastern part of the South Gobi province (Figure 9.2). An arcuate, east-west trending thrust fault, the Nariin Sukhait Fault, forms the dominant structural feature of the basin, extending across the northern margin of the property. Sediments on the south (upper plate) side of the thrust fault are primarily Late Permian, clastic rocks containing numerous coal seams, and Triassic rocks composed primarily of coarse sandstone and conglomerate. Intermittent outcrops of the coal-bearing section occur along the strike-length of the fault for approximately 90km. The lower plate of the Nariin Sukhait fault is dominated by a variety of complexly deformed late Paleozoic rocks, including limited areas of late Permian sandstone and coal-bearing rocks. Small areas of late Cretaceous overlap sediments are locally preserved immediately upslope of the Nariin Sukait fault line scarp, where the sediments appear to have ponded. A variety of late Cenozoic pediment surfaces and related gravel deposits cover significant portions of the lower plate (north) side of the fault, but are observed to cross the fault and cover portions of the upper plate as well.
	9.2		Coal Occurrences
			Coal-bearing sediments developed in an intermontane basin during the Late Permian age. Non-coal lithotypes are predominantly siltstone, sandstone, conglomerate, and mudstone. Previous Russian and Mongolian government-sponsored exploration programs had identified 10 coal seams at Nariin Sukhait. Total thickness for the coal-bearing sequence is approximately 1,370m thick, with a total coal thickness ranging from 68 to 250m (Figure 9.3). Ivanhoe’s exploration has been focused on identifying resources in seams above and including the No. 5 Seam. Drilling has not penetrated the Nos. 1 through 4 seams. The No. 5 Seam is the thickest seam in the sequence ranging in thickness from 7.9 to 94.7m, averaging 40.1m. The seam typically contains 4 to 5 prominent benches separated by thin mudstone interburden, 0 to 0.8m thick. The No. 6 Seam occurs 180 to 190m above the No. 5 Seam. The No. 6 Seam is approximately 1.0m thick and does not appear to be laterally persistent throughout the area. The No. 7 Seam is located approximately 10m above the No. 6 Seam. The No. 7 Seam has an average thickness of 0.5m. The seam lacks

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		9-2

		lateral persistence and pinches out in many areas. The Nos. 6 and 7 Seams have not been included in resource estimation. The No. 8 Seam occurs approximately 60m above the No. 7 Seam. The No. 8 Seam is a multiple bench seam, typically occurring as 1 to 3 subseams. Overall seam thickness ranges from 1.0 to 23.1m, averaging 6.7m. Total interburden between the subseams ranges from 0 to 2.5m, averaging 1.5m. Average total coal thickness for the No. 8 Seam is 5.2m. The No. 9 Seam is located approximately 10m above the No. 8 Seam. In the East Field, the No. 9 Seam is a multiple bench seam, separated by relatively thin, discontinuous partings. Average seam thickness is approximately 21.9m. Coal benches are separated by clay and rock partings ranging from 0.1 to 1.6m. In the West Field, the No. 9 Seam occurs as 2 to 8 distinct subseams. Overall seam thickness ranges from 0.4 to 73.6m, averaging 30.1m. Total interburden, between the subseams ranges from 0 to 33.0m, averaging 14.3m. Average total coal thickness for the No. 9 Seam in the West Field is 15.8m. The No. 10 Seam is located 15m above the No. 9 Seam. The No. 10 Seam is a multiple bench seam, typically occurring as 2 to 5 subseams. Overall seam thickness ranges from 1.9 to 71.7m, averaging 23.0m. Total interburden, between the subseams ranges from 0 to 39.6m, averaging 6.0m. Average total coal thickness for the No. 10 Seam is 13.4m. Drilling in the West Field has identified an additional coal seam overlying the No. 10 Seam. This Seam has been designated the No. 11 Seam. The No. 11 Seam occurs 2 to 14m above the No. 10 Seam. The No. 11 Seam is a multiple bench seam, typically occurring as 5 to 8 subseams. Overall seam thickness ranges from 8.5 to 82.0m, averaging 43.5m. Total interburden, between the subseams ranges from 4.7 to 35.6m, averaging 17.6m.
9.3		Property Geology
		The IMMI Nariin Sukhait resource area consists of three distinct and separate geographic areas which are located directly to the south, southeast and east of the existing MAK mining license. The resource areas are referred to as South Field, East Field and West Field. (Figure 9.4)
		South Field
		The No. 5 Seam is currently being mined from the MAK East Pit, adjacent to the north boundary of the field. Two structural features dominate the geologic setting of the South Field (Figure 9.5). A tightly-folded anticline projects outward from the East Pit in a south-southwest direction. Strata on the southeast limb dip 3°5 to 55° to the southeast. The strata on the northwest limb dip more steeply at 42° to 60° and strike in a northerly direction. Cross section A-A’ shown in Figure 9.6 illustrates several structural and stratigraphic elements of the south field.
		A northwest trending fault forms the second dominating feature of the South Field. The fault forms the boundary with the East Field. Drilling and field evidence indicate the east side of the fault has been downthrown approximately 72m.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		9-3

			East Field
			From the northwest-trending fault that forms the boundary between the South and East Field, Late Permian strata follows a general strike of N70E° to where they are truncated by the Nariin Sukhait Thrust Fault (Figure 9.5). Outcrop exposures belonging to the Nos. 8, 9, and 10 Seams have been traced across 1.8km of the East Field and parts of the adjacent MAK mining license. Drilling along section lines has demonstrated down-dip continuity of the Nos. 8, 9, and 10 Seams at an average dip of 52°. Lateral correlation across section lines show stratigraphic displacement. It is currently interpreted that three or more north or northeast trending faults disrupt the coal-bearing strata into three or more fault blocks (Geological Cross Section D-D’ in Figure 9.6). Several drill holes have intersected abnormally thick intervals of coal that at this time are interpreted to be the result of tectonic deformation from reverse faulting. Maximum vertical seam displacement across drill-line sections is approximately 90m.
			West Field
			A southwest-plunging antiform characterizes the structure of the West Field (Figure 9.7). The No. 5 Seam outcrops along the axis of the antiform. Outcrop mapping and trenching have traced the surface exposures of the Nos. 8, 9, and 10 seams across most of the southeast limb and along several sections of the northwest limb. Section line drilling has demonstrated down-dip continuity of the Nos. 5, 7, 8, 9, and 10 Seams, dipping 45 to 60° to the southwest as shown in the cross sections in Figure 9.8.
			Drilling on the northwest limb demonstrates down-dip and lateral continuity of the upper coal seams (Nos. 7 — 11). Bedding, however, dips to the south at 30 to 40°. This would indicate that: 1) the structure is an anticline with strata overturned to the northwest, and/or 2) much of the northwest limb has been faulted and rotated. The complexity of the structure has required splitting the field into two separate resource blocks.

		IMMI. 04-3117
		Nariin Sukhait
		Technical Report
		9-4

10

DEPOSIT TYPES

The definition of “Deposit Type” for coal properties is different from that applied to other types of geologic deposits. Criteria applied to coal deposits for the purposes of determination of coal resources and reserves include both “Geology Type” as well as “Deposit Type”. For coal deposits this is an important concept because the classification of a coal deposit as a particular Reserves and Resources.

“Geology Type” for coal deposits is a parameter that is specified in Geological Survey of Canada (GSC) Paper 88-21, which is a reference for coal deposits as specified in NI 43-101. Coal “Geology Type” is a definition of the amount of geological complexity, usually imposed by the structural complexity of the area, and the classification of a coal deposit by “Geology Type” determines the approach to be used for the resource/reserve estimation procedures and the limits to be applied to certain key estimation criteria. The identification of a particular Geology Type for a coal property defines the confidence that can be placed in the extrapolation of data values away from a particular point of reference such as a drill hole.

The classification scheme of GSC Paper 88-21 is similar to many other international coal reserve classification systems but it has one significant difference. This system is designed to accommodate differences in the degree of tectonic deformation of different coal deposits in Canada. Four classes are provided for that range:

Low — Deposits in the low category are relatively unaffected by tectonic deformation. Coal seams are flat-lying to very gently dipping (0-5°), and are generally unfaulted, although small-displacement normal faults and compaction may occur.

Moderate — Deposits in this category have been affected to some extent by tectonic deformation. They are characterized by homoclines or broad open folds (wavelength greater than 1.5km) with bedding inclinations of generally less than 30°. Faults may be present, but are relatively uncommon and generally have displacements of less than 10m.

Complex — Deposits in this category have been subjected to relatively high levels of tectonic deformation. Tight folds, some with steeply inclined or overturned limbs, may be present, and offsets by faults are common. Individual fault-bounded plates do, however, generally retain normal stratigraphic sequences and seam thicknesses have only rarely been substantially modified from their pre-deformational thickness.

Severe — Deposits in this category have been subjected to extreme levels of tectonic deformation. Tight folds, steeply inclined and overturned beds and large displacement faults are common. The stratigraphic succession between faults may be difficult to ascertain owing to the level of deformation, and coal seams are commonly structurally

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thickened and thinned from their pre-deformational thicknesses. Exploration of these deposits follows an ore-body approach, rather than more conventional strategies commonly applied to stratified deposits.

Norwest has applied the classification scheme of GSC Paper 88-21 to the Nariin Sukhait coal deposits in Mongolia. The Nariin Sukhait deposit has been subjected to a relatively high degree of tectonic deformation. Coal seams explored to date sit in the hanging wall (upper plate) of an east-west trending, regional thrust fault. The hanging wall strata has been further modified by secondary folding, normal and reverse faulting. Coal seams within the three fields are typically inclined in excess of 35°. Fold segments and fault-bounded blocks however, generally retain normal stratigraphic thicknesses and continuity. The Geology Type for the South, East, and West Fields has been determined to be “Complex”.

“Deposit Type” as defined in GSC Paper 88-21 refers to the extraction method most suited to the coal deposit. There are four categories, which are:

	1.		Surface
	2.		Underground
	3.		Non-conventional
	4.		Sterilized.

The Nariin Sukhait deposit is considered to be a “Surface” mineable deposit.

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11

MINERALIZATION

South Area

The No. 5 Seam extends from the northwest-trending fault that defines the east boundary of the field, westward approximately 0.6km toward the axial plane of the anticline. From the axial plane the No. 5 Seam trends north-northwest to where it is exposed in the East Pit on the adjoining MAK mining license.

The Nos. 8, 9, and 10 seams follow a similar trace to the No. 5 Seam, farther south and west, along the limbs of the anticline. The No. 8 Seam can be traced approximately 0.8km across the south facing limb, then northward approximately .05km to the northern property line. Drilling is widely spaced across the south and west portions of the South Field. At this time there has been insufficient drilling to characterize the resource base of the upper coal seams. Average coal thickness and ranges in thickness for the South Field are presented in Table 11.1.

East Field

The Nos. 8, 9, and 10 seams extend from the northwest trending faults that define the western boundary of the field, northeast for approximately 1.8km where it is truncated by the Nariin Sukhait Thrust Fault that transects the basin. Due to the configuration of the property boundary with the adjacent MAK mining license, the Nos. 8, 9, and 10 seams are distributed in two distinct areas within the East Field. Coal thickness ranges for the east Field are presented in Table 11.1.

West Field

Coal Seams in the West Field are divided into three distinct zones across a southwest plunging antiform. The first zone is the No. 5 Seam exposed along the axis of the antiform for approximately 1.0km. The Nos. 8, 9, and 10 Seams on the southeast limb of the antiform define the second zone. The seams extend for approximately 1.8km across the limb, southwest from the northern property line. The Nos. 8, 9, 10, and 11 Seams in the northwest portion of the field form a distinct third zone. Coal seams in this zone dip to the south-southwest between 30 to 35°. Based on current geologic data, Norwest has interpreted the northwest limb of the antiform to be either: 1) an offset and rotated block of strata, due to reverse faulting; or 2) an overturned limb of an anticline with strata dipping back towards the axis. With either interpretation, a high-angle, reverse fault likely occurs directly west of the antiform axis to account for rock-volume displacement between the two limbs of the antiform. Coal thickness and ranges for the West Field are presented in Table 11.1.

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Table 11.1
Nariin Sukhait Property
Coal Seam True Thicknesses
South Field

				Composite												Composite In-
				Seam Thickness				Sub-Seam				Composite Coal				Seam Partings				Composite Seam
Seam		Statistics		(m)				Thickness (m)				Thickness (m)				(m)				Interburden (m)
5		Minimum			7.92				0.64				0.64				0.00				0.00
		Maximum			94.68				94.68				90.51				4.17				4.17
		Average			42.65				41.88				41.14				0.74				0.77
		Intervals			26				26				26				26				26.00

East Field

				Composite												Composite In-
				Seam Thickness				Sub-Seam				Composite Coal				Seam Partings				Composite Seam
Seam		Statistics		(m)				Thickness (m)				Thickness (m)				(m)				Interburden (m)
8		Minimum			1.03				1.03				1.03				0.00				0.00
		Maximum			23.13				22.52				22.52				0.85				0.61
		Average			7.48				5.66				5.54				0.12				1.82
		Intervals			15				15				15				15				15.00
9		Minimum			6.09				6.09				2.01				0.00				0.12
		Maximum			50.65				50.65				50.53				7.85				4.08
		Average			23.45				21.90				20.32				1.54				1.58
		Intervals			27				27				27				27				27.00
10		Minimum			2.44				2.25				2.25				0.00				0.18
		Maximum			71.71				71.71				68.36				4.26				3.35
		Average			21.53				18.77				17.85				0.92				2.76
		Intervals			23				23				23				23				23.00

West Field
Southeast Limb

				Composite												Composite In-
				Seam Thickness				Sub-Seam				Composite Coal				Seam Partings				Composite Seam
Seam		Statistics		(m)				Thickness (m)				Thickness (m)				(m)				Interburden (m)
5		Minimum			12.18				12.18				12.18				0.00				0.00
		Maximum			68.18				68.18				68.18				1.10				0.00
		Average			36.26				36.12				35.98				0.14				0.14
		Intervals			11				11				11				11				11.00
8		Minimum			0.73				0.73				0.73				0.00				0.00
		Maximum			12.75				11.31				11.31				0.00				1.44
		Average			5.85				4.92				4.92				0.00				0.93
		Intervals			17				17				17				17				17.00
9		Minimum			0.37				0.37				0.37				0.00				0.00
		Maximum			57.95				32.93				32.93				0.49				25.02
		Average			27.09				13.58				13.64				0.05				13.40
		Intervals			31				31				31				31				31.00
10		Minimum			0.37				0.37				0.37				0.00				0.00
		Maximum			40.60				16.44				16.44				0.00				24.17
		Average			17.68				7.66				7.64				0.00				10.04
		Intervals			23				23				23				23				23.00

Northwest Limb

				Composite												Composite In-
				Seam Thickness				Sub-Seam				Composite Coal				Seam Partings				Composite Seam
Seam		Statistics		(m)				Thickness (m)				Thickness (m)				(m)				Interburden (m)
8		Minimum			2.29				2.29				2.29				0.00				0.00
		Maximum			13.19				10.65				10.65				0.00				2.54
		Average			7.18				5.08				5.08				0.00				2.10
		Intervals			6				6				6				6				6.00
9		Minimum			25.89				15.56				15.56				0.00				10.32
		Maximum			73.56				40.55				40.55				3.19				33.01
		Average			46.69				27.69				26.98				0.71				19.00
		Intervals			6				6				6				6				6.00
10		Minimum			5.24				2.05				2.05				0.00				3.19
		Maximum			69.55				29.98				29.98				1.39				39.57
		Average			38.47				16.22				15.72				0.50				22.25
		Intervals			12				12				12				12				12.00
11		Minimum			8.52				3.85				3.85				0.00				4.67
		Maximum			82.00				46.36				46.36				1.31				35.63
		Average			43.74				26.10				25.90				0.20				17.64
		Intervals			15				15				15				15				15.00

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12

EXPLORATION

IMMI has used a multi-faceted approach in exploration to identify drilling targets for coal resource delineation. Exploration tools and techniques that have been applied at Nariin Sukhait include:

	•		Field mapping
	•		Surface-resistivity geophysical surveying
	•		Satellite Imagery
	•		Trenching
	•		Drilling.

Field mapping was initiated in early 2005 and is currently on-going. Most of the terrain can be characterized as low-relief. Over much of the area, coal-bearing stratigraphy is overlain by a layer of unconsolidated sediments of Cretaceous and Cenezoic age, reaching thicknesses of 2 to 5m. Field mapping has been augmented with surface-resistivity geophysical surveying and satellite imagery to identify prospective areas where coal seams may be sub-cropping near surface and to aid in the delineation of structural features that may offset sections of coal-bearing strata. Potential targets identified with the above mentioned techniques are then tested with trenches cut perpendicular to the apparent strike, to expose coal seams close to surface. Trenching has been useful in identifying the near-surface expression of coal seams for locating exploratory drill holes. Coal seam thickness and structure as observed in the trenches are greatly affected by near-surface erosion, alteration, and deformation. Trenching intercepts have been found to be unreliable sources of seam characteristics and structure, and are not used in resource estimation.

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13

DRILLING

IMMI has utilized reverse circulation, conventional rotary, and core drilling in its exploration of the Nariin Sukhait Property. In 2004, IMMI completed five core holes on the South Field to confirm the down-dip extent of the No. 5 Seam being mined in the East Pit of the MAK mining license. The current exploration program commenced drilling in February, 2005. As of August 9, 2005, 245 drill holes had been completed on the Nariin Sukhait Property. One hundred forty-one drill holes have been completed on the South, East, and West fields combined. A drilling summary by method and area is presented in Table 13.1.

Drill hole core and drill cuttings descriptions, geophysical logs and coal analyses data were used to characterize and interpret the stratigraphy of the South, East, and West Fields, particularly with respect to the coal seams. Norwest’s drill hole database for the Nariin Sukhait Property contains a total of 289 drill holes. Thirty-four drill holes within the database were drilled prior to 2004 as reported by Dashkhorol et al (1992) as part of a research exploration study. The majority of these drill holes are in the proximity of what is now the MAK East Pit. Of the 34 drill holes contained in the exploration research study, 28 of the drill holes are located on the adjacent MAK mining license. The remaining 6 drill holes are located in the South and East Fields. A drill hole summary listing drill hole identification, location, and seam intercepts is presented in Table 13.2.

In the current exploration program, the majority of drill holes have been laid out in a series of section lines. Section lines have been spaced at 200 and 400m, aligned perpendicular to the apparent strike of the coal-bearing strata. Along section lines, drill holes are spaced at intervals from one another ranging from 50 to 100m. Drilling is ongoing at the Nariin Sukhait Property to further define resources in the South, East, and West Fields and to define new resources in other areas of the property.

As of August 9, 2005, 141 drill holes have been completed in the South, East, and West Fields. Drilling is ongoing at the Nariin Sukhait Property to further define resources in the South, East, and West Fields and to define new resources in other areas of the property.

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Table 13.1
Exploration Drilling Summary

						Reverse-
Area		Series				Circulation				Meters				Rotary				Meters				Core				Meters
South Field		pre-	2003				—				—								—				3				286
			2004				—				—								—				5				750
			2005				11				1,860				—				—				13				2,226
East Field		pre-	2003				—				—				—				—				3				120
			2005				28				5,092				6				800				17				2,296
West Field							41				7,438				11				1,445				19				2,799
A Field							9				1,434				1				198				4				388
B Field							10				1,731				3				453				6				590
C Field							11				1,808				2				261				—				—
E Field							4				474				8				1,174				—				—
F Field							10				1,266				3				522				—				—
G Field							5				906				—				—				—				—
H Field							1				24				—				—				—				—
I Field							—				—				—				—				4				277
J Field							—				—				4				598				—				—
N Field							12				1,982				8				1,110				—				—
MAC Mining Lease		pre-2003					—				—				—				—				28				1,133
Total							142				24,015				46				6,561				102				10,865

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Table 13.2
Drill Hole Summary for
South, East, and West Fields

Drill Hole I		Easting				Northing				Elevation				Seam				Sub-seam				From				To				Thickness
South Field
H-1			684140.3				4763237.5				1527.7				5								96.0				181.2				85.2
H-2			684411.5				4763244.8				1530.1				5								12.1				45.0				32.9
H-3			684712.1				4763201.9				1528.1				5								35.5				93.0				57.5
H-4			684729.0				4763123.3				1527.4				5								94.6				141.2				46.6
H-5			684417.9				4763185.6				1530.8				5								46.4				91.0				44.6
NS-16			684426.2				4763134.1				1532.9				5								97.6				120.8				23.2
NS-18			684263.3				4763178.8				1527.9				5								44.4				178.3				133.9
NS-21			684426.0				4763077.0				1534.0				5								143.5				162.0				18.5
NS-22			684111.0				4763203.0				1530.0				5								133.5				203.6				70.1
NS-23			684257.0				4763090.0				1530.0				5								139.8				225.0				85.2
NS-29			684742.0				4763079.0				1523.0				5								115.4				180.0				64.6
O-08			684672.4				4763274.2				1526.1				5								3.8				62.5				58.7
O-09			684029.7				4763559.6				1526.5				5								2.0				69.9				67.9
O-37			684615.3				4763340.3				1528.6				5								0.3				1.2				0.9
O-37A			684642.2				4763305.6				1528.0				5								4.1				47.0				42.9
O-38			684450.7				4763321.2				1530.0				5								7.8				86.1				78.3
O-39			684423.8				4763402.9				1529.1				5								4.0				46.1				42.1
O-40			684053.2				4763313.4				1525.6				5								25.2				93.0				67.8
O-41			684132.7				4763363.8				1527.0				5								5.3				67.1				61.8
O-42			684187.6				4763396.2				1527.5				5								7.3				53.4				46.1
O-43			684258.1				4763245.1				1526.6				5								4.5				99.2				94.7
O-44			684244.7				4763312.3				1527.1				5								4.0				78.4				74.4
O-45			684165.2				4763258.6				1526.6				5								7.7				108.9				101.2
O-46			684188.7				4763320.1				1526.8				5								3.8				77.4				73.6
O-47			684217.8				4763353.7				1527.6				5								4.3				66.6				62.3
O-48			684354.4				4763294.4				1527.5				5								4.0				15.2				11.2
O-50			684079.0				4763579.8				1538.7				5								2.0				60.2				58.2
East Field
NS-06			684787.5				4763289.2				1530.4				8				800				3.8				7.3				3.5
NS-07			685514.0				4763595.2				1537.4				10				1020				100.2				108.2				8.0
																			1010				108.2				111.9				3.7
																			1000				113.8				128.7				14.9
															9				900				184.0				202.7				18.7
NS-08			685677.4				4763714.7				159.8				10				1010				25.6				27.2				1.6
																			1000				29.5				33.2				3.7
															9				900				39.6				100.0				60.4
NS-09			684820.3				4763251.9				1529.4				10				1010				35.0				40.0				5.0
																			1000				45.5				51.4				5.9
															9				900				88.8				110.4				21.6
															8				800				123.3				127.8				4.5