Ivanhoe Mines, through its subsidiary, Ivanhoe Myanmar Holdings, Ltd., holds a 50% interest in a joint venture with No. 1 Mining Enterprise (ME1), an entity wholly-owned by the government of Myanmar, to develop and operate an open-pit, heap leach copper mine at the Sabetaung, Kyisintaung and Letpadaung deposits, collectively referred to as the Monywa Copper Project.

In November, 1998, Ivanhoe Mines commenced production at the new S&K Mine, the first phase of the large Monywa Copper Project in Central Myanmar. The S&K Mine, named for the twin Sabetaung and Kyisintaung deposits, uses an advanced, highly efficient solvent extraction-electro winning (SX-EW) recovery process to produce sheets of 99.99%-pure copper cathodes. Commercial operations at the mine began in January, 1999, and the mine is currently producing copper at a rate of approximately 63 million pounds (28,500 tonnes) a year. The minegate cash cost of production is approximately US$0.35/lb, establishing the S&K Mine one of the world's lowest cost copper mines.

In 2001, the S&K Mine produced 25,900 tonnes of copper cathode in 2001 and recorded a profit of US$2.51 million, which was applied against the mine's project loan. As of September 2002, the balance owing on the project's original US$90 million loan had been reduced to US$45 million.

COPPER SALES  After stripping, the copper cathodes are moved by truck and barge from the mine to Yangon, Myanmar. From Yangon, the copper is shipped to customers throughout Asia. Except for certain copper purchased by the government of Myanmar, Marubeni of Japan will purchase all copper cathode produced by the Monywa Copper Project during the term of the Copper Sales Agreement. The Monywa Joint Venture will grant to the government of Myanmar an option to purchase not more than 10% of copper cathode produced during each calendar year. Under a Copper Sales Agreement between the Monywa Joint Venture and Marubeni, of Japan, Marubeni currently has the exclusive right to market and sell the copper produced at the Monywa Copper Project in any country throughout the world.