The Osborne project is located at a recently operating copper and gold mine site. Facilities include a 2-million-mt/y copper and gold flotation concentrator, a gas- and diesel-fired power station, a mod-ern camp that can accommodate 470 per-sonnel, and an underground mining fleet. Ivanhoe Australia's goal is to have the pro-ject in production by March 2012, with mine life targeted at 15 to 20 years. The PEA only evaluates ore sources for an ini-tial four years of production.

Extension of the existing Osborne decline is continuing at depth. Access has been completed to the first of three planned production levels, and ore development was underway as of late October 2011.

At the Merlin project, key features include an initial mine life of more than ten years at a production rate of 500,000 mt/y using drift-and-fill and long-hole-open-stoping mining methods. Average steady state production is projected at 5,030 mt/y of molybdenum and 7.2 mt/y of rhenium. Concentrate production is planned to begin during the third quarter of 2013, followed by roaster production dur-ing the first quarter of 2014.

Average life-of-mine operating cash costs for the Merlin project are estimated at $6.78/lb of molybdenum in MoO3, after by-product credits and including royalties. Initial capital cost to first production is estimated at A$337 million.

The Merlin prefeasibility study was based on an indicated mineral resource of 6.5 million mt grading 1.3% molybdenum and 23 g/mt rhenium and an inferred min-eral resource of 0.2 million mt grading 0.9% molybdenum and 15 g/mt rhenium. A Merlin feasibility study is under way and is scheduled for completion in the first quarter of 2012. Construction is in progress on a decline that will allow further metallurgical and geotechnical testwork.