Ivanhoe Australia, through its wholly-owned subsidiary, Ivanhoe Cloncurry Mines, holds 100% title to the Starra Line Project.

Starra Line is part of the mineral province that also includes the Mount Dore and Mount Elliott projects and is located around 1 km to the west of the Mount Dore/Merlin project on granted mining leases.

The Starra Line mineralisation was previously mined from four open pits and five underground mines, from the 222 Deposit, 244 Deposit, 251 Deposit, 257 Deposit and 276 Deposit (Figure 1). The mining of these deposits exploited the high-grade gold portions of the mineralised system and produced approximately 6.8 million tonnes grading 2.1% copper and 4.6 g/t gold.


Figure 1 - Long section along the Starra Line showing previous drilling and remaining resources

Geology

High-grade copper-gold mineralisation at Starra is hosted within a series of magnetite-hematite-quartz "ironstones". These ironstones form narrow lenses that appear to have replaced calcareous beds within the banded calc-silicates of the host Staveley Formation. These ironstones have been incorporated into a major regional shear zone (the 'Starra Shear') that has been strongly chlorite-magnetite altered. Chalcopyrite-bornite mineralisation is associated with late-stage hematite-alteration of these ironstone bodies and the host shear zone.

Two main ironstone horizons are evident on the surface, the western quartz-magnetite-hematite ironstone that hosts the copper-gold mineralisation and the eastern quartz --hematite ironstone that appears only to be mineralised near the 222 Deposit (Starra 222) where the two ridges converge.

A wide zone of chalcopyrite-pyrite mineralisation exists in the Starra Shear, however the highest grades are found in the ironstones. Previous mining concentrated on mining the high grade ironstones and in particular the gold-rich sections. The highest grade ironstones are usually the eastern-most units in the ironstone package. High gold grades are typically confined to within the ironstones, with the highest gold grades located on the margins of the ironstone bodies, while copper mineralisation may extend into the surrounding shear zone for some distance past the high-grade gold.

There appears to be a natural geological cut-off at 0.5% copper equivalent, however higher economic cut-offs have been used in the past to define mining zones in times of low metal prices and limited treatment capacity.

At the close of the mines in early 2003 there were significant resources remaining in the then active 222 deposit (Starra 222). Significant resources also remained within the 276 Deposit (Starra 276), which has not been reactivated since closure in 1999 when metallurgical problems in treating the near surface partly oxidised ore led to the suspension of mining until the decline could be deepened to access un-oxidised sulphides at depth.

Mineral Resource Estimate

A mineral resource estimate was undertaken in September 2008 by Quantitative Group Pty Ltd on behalf of Ivanhoe Australia for the Starra 222 and Starra 276 Deposits only.

The Indicated and Inferred Mineral Resource is shown in the table below, at a 0.5% copper equivalent cut-off :

Mine	Tonnes (M)	Cu (%)	Au (g/t)
Starra 222
Indicated	7.1	0.6	0.9
Inferred	5.5	0.6	0.7
Starra 276
Indicated	13.4	1.1	0.8
Inferred	4.3	1.2	1.0

Notes:

1. Including part mined material.

Both the Starra 222 and Starra 276 mineralisation is open down-plunge. Drilling in late 2010 on Starra 222 targeted the northern down-plunge extension of the deposit (Figure 2) and returned the following results²:

STQ 1036 - 58m @ 1.04% copper and 1.76 g/t gold from 550m

including a high grade gold zone of:

          18m @ 1.07% copper and 4.28 g/t gold from 551m

and a higher grade copper zone:

          10m @ 2.02% copper and 1.53 g/t gold from 598m

STQ 1042 - 19.4m @ 1.98% copper and 4.27 g/t gold from 384.6m

Including a high grade copper zone of:

          13 m @ 2.92% copper and 3.9 g/t gold from 390 m

And a high grade gold zone of:

          1.4 m @ 0.06% copper and 21.1 g/t gold from 384.6 m

A shallow hole testing the near surface gold-only mineralisation intersected:

STQ1037 - 2.48m @ 9.39 g/t gold from 54.4m.

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¹Calculated as follows: Cu(%) + Au(g/t) * 0.4.

²See announcements of October 26, 2010 and February 24, 2011 for details.


Figure 2 - 3D long section through the Starra 222 deposit showing results of Ivanhoe Australia drill holes.

At closure in 2003 the other Starra deposits (Starra 244, Starra 251 and Starra 251) had resources estimated in remnant blocks and at depth. Ivanhoe Australia is currently reassessing these potential resource extensions and the possibility to access these mines via the existing declines to test for extensions at depth and in the undrilled areas between mineralised shoots. This is particularly evident between the highest grade Starra 251 deposit and the Starra 257 deposit, where there is no drilling at depth despite there being continuous mineralisation near the surface between the two; part of this mineralisation was mined in 2002 as the underground Starra 254 mine.

Ivanhoe has an extensive drilling program planned for the Starra Line with the aims being to increase the confidence in the existing resource and to extend the resources while also testing for new shoots of mineralisation along the previously mined line.

More grass roots exploration is planned to test the southern and northern extensions of the line undercover, with geophysics indicating the Starra Line has a total strike length of at least 53km. Only 10km of this strike length has been tested to any extent around the existing mines.