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IVANHOE MINES CHAIRMAN ROBERT FRIEDLAND SAYS CORRECTIONS BY BLOOMBERG NEWS ELEVATE RECENT STORY'S FALSE PREMISE TO THE LEVEL OF ABSURDITY

October 17, 2004

The following letter was sent today to John McCorry, Executive Managing Editor of Bloomberg News, New York.

Dear Mr. McCorry:

The corrected and rewritten story distributed by Bloomberg News on October 15 under the headline, “Anglo American Geologist Says Ivanhoe Mine Overvalued,” has served to elevate the false premise underlying Bloomberg’s original news story distributed October 11 to the level of absurdity.

The October 15 story — incorporating the second set of corrections published within three days by Bloomberg in an attempt to salvage a rogue story — merely confirms that the original story was based on a premise that now has been shown to have been entirely false.

Specifically, Bloomberg’s extensively rewritten October 15 story makes several important corrections acknowledging that:

• The headline on the original October 11 Bloomberg story, claiming that Anglo American plc had stated that Ivanhoe’s Mongolian mine may be overvalued, was false. The truth is that Anglo American plc had said no such thing. (The corrected headline is still wrong; as we have previously reminded Bloomberg, there is no “Mine” of Ivanhoe’s in Mongolia at this time).

• The October 11 story’s first paragraph, claiming that Anglo American may not invest in Ivanhoe “because the share price is too high,” falsely purported to represent the Anglo American plc corporate point of view. The truth is that Anglo American had expressed no such point of view, as the corrected story shows.

• The October 11 story had falsely claimed that Anglo American had directly stated that it would not buy a stake in Ivanhoe’s Oyu Tolgoi project in Mongolia. The truth is that Anglo American had said no such thing, as the corrected story shows. 

With its corrections, Bloomberg now has publicly acknowledged that the only source of its claims was an Anglo American employee based in the Philippines — who is not a corporate authority on such matters as to whether or not his employer is interested in investing in Ivanhoe’s Oyu Tolgoi world-scale copper and gold project. It beggars belief that Bloomberg would headline an international news story based solely on an alleged, off-handed, personal and speculative opinion of a field employee of one of the world’s largest mining enterprises. 

The original story was a fictional misrepresentation with no supporting evidence. The corrected and rehashed story, hung entirely on one employee’s personal opinion, now can be seen for what it is: an absurdity as an international news story, which still has no supporting evidence.

Nowhere, in 1,100 words larded with out-of-date, uninformed and irrelevant long-distance speculation, is there anything to support the personal point of view — inflated beyond all proportion by Bloomberg — that Ivanhoe’s stock, or its Mongolian project, are overvalued. In fact, the story undermines its unsupported premise by quoting two respected research analysts who are maintaining “buy” recommendations on Ivanhoe’s stock. Although Bloomberg did not disclosure their target prices, it is a matter of record that UBS, Switzerland’s largest bank, has a target price of $11 on Ivanhoe’s stock and Global Mining Research, a leading, Australia-based independent market research firm, has a target of $15 on Ivanhoe’s shares. These important facts, known to Bloomberg but omitted from the story, would have further discredited the story’s premise.

Bloomberg’s story was unfair to the Anglo employee. And it was unfair to Ivanhoe. I appreciate Bloomberg’s willingness to correct false and misleading statements in this particular story, even though the result remains disappointing. 

Yours sincerely,

Robert M. Friedland
Chairman
Ivanhoe Mines

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