Robert Friedland, Executive
Chairman of Ivanhoe Mines Ltd. and John Macken, President and Chief Executive
Officer, have said that full-scale construction of the Oyutolgoi copper-gold
complex is proceeding on schedule and the first ore now is expected to be
processed during the fourth quarter of 2012.

“The successful ramp-up
to full-scale construction this year is a remarkable achievement by the
project”s workforce and contractors,” Macken said. “The steady
progress being logged across the site every week means we are on track to be
ahead of our construction schedule by the end of this year. Maintaining this
pace will ensure that we will be commissioning major production systems within
approximately two years, when initial ore from the new open pit is expected to
be running through the primary crusher and into storage, and when at least one
of the concentrator”s two ore-grinding circuits will be in the commissioning
stage. We expect to meet our declared goal of beginning full commercial
production at Oyutolgoi in 2013.”

Under the start-up plan
outlined in the Integrated Development Plan, ore initially would be sourced
from the open-pit mine that is to be built on the Southern Oyu deposits. At the
same time, the adjacent, higher-grade underground mine on the Hugo Dummett
Deposit is scheduled to be developed toward full production of 85,000 tons per
day. The expansion would be timed to provide for the processing of ore to be
mined from underground, as well as the open pit, when operations reach full
capacity.

Macken said two of the most
striking indications of the rate of construction progress being achieved are
the extensive foundations for the large, state-of-the-art concentrator plant
and for the 31-storey-high, reinforced concrete headframe for the
10-metre-diameter main production shaft for the underground block-cave mine at
the Hugo Dummett Deposit.

The Oyutolgoi workforce has
been steadily increasing in recent months and currently totals approximately
4,400. The budget for construction in 2010 has been set at USD754 million, with
an additional USD195 million earmarked for operations.

Prime Minister S. Batbold
recently led a first-hand inspection of the construction progress by members of
the Government”s Cabinet and members of Parliament. He was pleased with the
progress and noted that Oyutolgoi would be three times larger than the Erdenet
Copper Mine, in north-central Mongolia, which accounts for 40% of the value of
Mongolia”s exports and generates more than 30% of the country”s gross domestic
product.

The Prime Minister said the
government must work to ensure that Oyutolgoi begins production on schedule and
contributes to Mongolia”s economic growth. “Overall, the work is
progressing smoothly and the mine will be in operation in two years,” he
said during a news conference at Oyutolgoi.

Minister of Education,
Culture and Science Yo. Otgonbayar confirmed that the government had signed a
memorandum of understanding with Oyutolgoi for a USD58-million program that
will provide technical and vocational training to equip up to 3,300 trainees to
be eligible for jobs at Oyutolgoi. Training programs will begin at 12
vocational institutes in early October and extend to another 24 institutions
next year. Two new vocational training centers will be built and five selected
educational institutions will be upgraded. The program also will provide
scholarships each year to 200 students studying at Mongolian and international
universities.

Following the Oyutolgoi
visit, Cabinet members attended a ceremony to mark the laying of foundations
for a vocational training centre in the South Gobi regional capital of
Dalanzadgad. “We are pleased with this work; we are offering people from
all over the country an opportunity to lend their hands in the Oyutolgoi
Project, as well as other large developments,”  Batbold said. “The development of Oyutolgoi
also will substantially help our problems with unemployment.”

Several Cabinet ministers
were lowered 1,300 metres down Shaft #1 at Oyutolgoi and traveled through the
growing network of tunnels providing mine development and exploration access to
the copper-rich Hugo Dummett Deposit.

The Oyutolgoi Project is
committed to ensuring that Mongolians hold at least 60% of the available jobs
during construction and 90% of the jobs during production. During the period
from January 1 to August 15 this year, the Project signed 98 contracts with
Mongolian companies, with a total value of USD206 million. Mongolian companies
also filled 849 purchase orders totaling USD50.2 million during the same
period, accounting for 86% of all purchase orders for the project.