EXCO Resources is a junior resource company listed on ASX with a current market value of around A$85 million. EXCO Resources holds approximately 4,700 km² of tenements in the Cloncurry District, some of which are contiguous with Ivanhoe Australia's IAL Tenements. EXCO Resources has approximately 350,000 tonnes of copper metal in various resources throughout these tenements and many exploration targets requiring assessment.

Through a series of transactions in 2007 and 2008 Ivanhoe Australia acquired a stake of 19.6% in EXCO Resources and as a result maintains a board seat on EXCO.

As part of Ivanhoe Australia's investment in EXCO, Ivanhoe Australia entered into a joint venture exploration agreement with EXCO Resources for the purpose of conducting exploration work in relation to a number of EXCO Resources' tenements which are partly contiguous with Ivanhoe Australia's IAL Tenements. Under the terms of the joint venture exploration agreement:

• Ivanhoe Australia has the right to earn a 80% right, title and interest in the EXCO JV Tenements by expending A$5m over three years commencing from 14 May 2007 (subject to Ivanhoe Cloncurry first expending A$600,000 within one year from 14 May 2007, with this initial expenditure included in the overall expenditure requirement of A$5m.

• Upon earning the 80% interest, each party will contribute to project expenses on a pro-rata basis..

• Ivanhoe Australia is granted a first right to negotiate additional joint venture arrangements on any tenements which may return to EXCO Resources as to 100% ownership, namely those tenements currently the subject of existing joint venture agreements with BHP Billiton (Soldiers Cap Joint Venture) and Xstrata ( Black Rock Minerals Joint Venture).