The Cloncurry Project has been the subject of exploration and mining activities by a number of companies over the past 100 years. Open cut mining of oxide gold deposits was commenced along the Starra Line in 1988 by Armico Mining, and subsequently underground mining produced copper / gold concentrate from sulphide ore. Development of a modern underground mine at Mount Elliott commenced in 1993.

Ore from the Starra Line series of mines, Mount Elliott and, for a very short period, from two small open pits at Victoria and one open pit at Lady Ella, was treated through a mill located adjacent to the Starra Line mines. This mill has now been removed. Project production since start-up in 1988 to closure in 2003 totalled approximately 217,700 tonnes of copper and 1.02 million ounces of gold from a mined tonnage of approximately 12.9 million tonnes averaging 3.10g/t Au and 2.38%Cu.

In 2002 Selwyn Mines experienced difficulties due to ore production from the Starra and Mount Elliott mines not being able to sustain the required treatment rate during a period of low copper and gold prices. The Selwyn Mines operation closed as a consequence.

Ivanhoe Australia, through Ivanhoe Cloncurry Mines, acquired the IAL Mining Tenements in late 2003 and commenced low level exploration over the following three years while activity was focused on Mongolia. This activity then increased following the more complete delineation of the Oyu Tolgoi orebody in Mongolia. As part of its acquisition of the IAL Tenements, Ivanhoe Australia obtained an extensive and valuable database of technical information relating to the mining exploration and drilling undertaken by the previous project owners. In May 2007 an interest in a EXCO Resources, who were active in the region, was acquired, and a joint venture on EXCO's southern tenements entered into.

Ivanhoe Australia's exploration drilling program commenced in August 2004 on the partially drilled copper gold targets at the SWAN Zone at Mount Elliott and secondary copper Mount Dore prospect, followed by geophysical surveys and drilling at Metal Ridge and Amethyst Castle. Strong results from the SWAN Zone led to Ivanhoe Australia instigating an intensive drilling program designed to test mineralisation at depth which demonstrated a style similar to the Ernest Henry Mine, owned by Xstrata, to the north of Ivanhoe Australia's tenements, and the Osborne Mine, owned by Barrick, to the south.

The exploration pre 2006 on the tenements within the Cloncurry Project was focussed on shallow drilling in the range of 200 to 400 metres. The delineation of near surface deposits underpinned the exploration strategy of previous owners which were primarily focused on generating high grade mill feed to maintain cash flow. As a result of that approach, Ivanhoe Australia believes that the potential for larger scale IOCG targets was not tested at depth below surface indications or where geophysical surveys indicated that deposits could exist at depth.

As at 30 June 2008, Ivanhoe had completed 125 holes totalling 94.6 kilometres at Mount Elliott. Recent drilling here has focussed on exploring for a link between the Mount Elliott, SWELL and SWAN zones at depth and to the north and infill drilling prior to resource estimation. The mineralisation encountered thus far at Mount Elliott is open to the north at depth and to the west.

At Mount Dore an additional 45 diamond drill holes have now been completed by Ivanhoe Australia since 2004 bringing the total to 104 diamond drill holes. Ivanhoe Australia has also partly completed a reverse circulation drilling program up dip and to the north of the know Mount Dore mineralisation. In total 35 holes were drilled in this program to 30 June 2008.

On the Starra Line of deposits previous mining, during periods of low metal prices, concentrated on extracting thin high-grade zones within the thick mineralised ironstone rocks. Current metal prices warrant re-evaluating mining the wider zones at a lower cut-off grade. There is also an excellent potential to extend the currently defined deposits down plunge and to test at depth and along strike for new deposits.