A minor amount of copper was recovered at the Southern Oyu area during the Bronze Age, as indicated by small circular pits and minor copper smelting slag. 

During the 1980s the district was investigated by joint Mongolian-Russian regional geochemical surveys which reported the Central Oyu area as a molybdenum anomaly. In 1996, Mr. Garamjav (now a senior geologist at Turquoise Hill Resources), who first visited the Oyu Tolgoi region in 1983 and noted evidence of alteration and copper staining, guided Magma Copper to the Oyu Tolgoi area. Following the visit exploration tenements were secured by Magma Copper. 

BHP Billiton (BHP, which acquired Magma Copper in late 1996) began exploration at Oyu Tolgoi as part of a regional reconnaissance program of the South Gobi desert during the 1997 field season. After geological mapping, stream and soil sediment surveys, magnetic and induced polarization surveys, BHP completed six diamond core holes totalling 1,100 metres in September and October of 1997. With encouraging results a second phase of drilling began. Commencing in April 1998, BHP completed an additional 13 core holes totalling 2,000 metres with positive results obtained in four of the holes. A third phase of drilling was then conducted in August and September, 1998, completing four holes totalling 800 metres. These holes failed to return significant mineralization and the project was suspended pending a review. 

In 1999, additional drilling and exploration was recommended; however, further exploration at Oyu Tolgoi by BHP was discontinued due to cut-backs in BHP’s exploration budgets. At this time BHP’s exploration tenements in Mongolia, including the Oyu Tolgoi exploration concession, were offered for joint venture. 

Ivanhoe Mines signed an option agreement with BHP to earn 100% interest in the Oyu Tolgoi Concession in May 2000. A reverse circulation (RC) drill program was initiated by Ivanhoe in June, 2000, completing 109 holes totalling 8,828 metres by September. The program targeted the supergene-enriched, chalcocite blanket discovered in BHP’s drill hole OT-3. The results from Ivanhoe’s drilling were encouraging, including the discovery of additional high-grade supergene copper mineralization. 

In 2001, Ivanhoe Mines continued RC drilling, mostly in the Southern Oyu area to delineate possible oxide resources followed by three diamond drill holes in Southern Oyu, Southwest Oyu and Central Oyu, respectively. These three holes were targeted to test the deep hypogene copper-gold potential. These three holes were sufficiently encouraging for Ivanhoe to mount a major follow-up drill program. Ivanhoe’s drill hole Hole OTD-150, Ivanhoe’s first deep diamond hole to test the hypogene potential of the Southwest Oyu zone, was drilled in July 2001 to a depth of 590 metres and averaged in excess of one gram of gold per tonne and 0.81% copper over a distance of 508 metres, from 70 metres to 578 metres. It included a zone of 278 metres from 188 to 466 metres, grading in excess of 1.0% copper and approximately 1.50 grams of gold. 

OTD-150 was the first deep drill hole at the Oyu Tolgoi Project to discover the new zone of porphyry mineralization containing high-grade gold, copper and molybdenum. Given the economic potential of hole OTD-150, Ivanhoe immediately expanded its exploration program by adding more drill rigs to further delineate the Oyu Tolgoi mineralized system. In March 2002, Ivanhoe issued its first, independent Oyu Tolgoi resource audit for the Southwest Oyu Discovery Zone, which estimated the deposit contained inferred resources, based on a cut-off grade above a 0.30% copper equivalent, of 588 million tonnes, grading 0.53 grams per tonne of gold and 0.41% copper, containing 10 million ounces of gold and 5.3 billion pounds of copper. It was the first of many independent resource estimates to be prepared for the Oyu Tolgoi Project as drilling continued 24 hours a day, seven days a week to expand the resources.

In early 2002, Ivanhoe earned 100% ownership of the Oyu Tolgoi project by paying BHP Billiton US$5 million and spending US$6 million on exploration. BHP Billiton’s back-in rights expired in mid-2002, giving Ivanhoe complete control over the project, except for a 2% net smelter royalty held by BHP Billiton. Ivanhoe Mines subsequently purchased the 2% royalty from BHP Billiton in November 2003 for US$37 million.

In late 2002, Ivanhoe Mines drilled a hole in the far northern portion of the Oyu Tolgoi licence (the Far North Zone) to test a broad induced polarization high. This test hole intersected 638 metres of bornite, chalcopyrite-rich copper mineralization lying 222 metres down hole under younger sedimentary rocks. This drill hole resulted in the discovery of the Far North Zone’s (now named Hugo Dummett) underground deposit, one of the world’s largest and highest-grade gold/copper porphyry systems. 

In 2003, Ivanhoe’s drilling in the Far North (Hugo Dummett) discovery area was accelerated to delineate the extent of the Hugo Deposit. By mid-2003, there were 18 exploration drill rigs on the property employing approximately 200 people, and Oyu Tolgoi was the biggest mining exploration project in the world. Several of the new drill holes at the Far North area contained intercepts of greater than 200 metres in thickness that average well in excess of 3% copper. In September, 2003, the company fulfilled its earlier undertaking to rename the Far North portion of the project to give special recognition to the work of Hugo Dummett, Ivanhoe’s former Executive Vice-President, Project Development. 

In 2004, Ivanhoe Mines entered into an earn-in and equity participation agreement with Entrée Gold to explore and potentially develop approximately 40,000 hectares of Entrée’s 100%-owned, Shivee Tolgoi (Lookout Hill) property, adjacent to Ivanhoe’s Oyu Tolgoi copper-gold discovery in Mongolia. By spending US$35 million on exploration and/or development of the property, Ivanhoe now holds a participating interest of 80% in all minerals extracted below a sub-surface depth of 560 metres on the joint venture property and a 70% interest in all minerals extracted from surface to a depth of 560 metres.

In 2006, world mining leader Rio Tinto agreed to form a strategic partnership with Ivanhoe Mines by investing in Ivanhoe and, through an Ivanhoe-Rio Tinto Technical Committee, jointly engineer, construct and operate Ivanhoe’s Oyu Tolgoi copper-gold mining complex in Mongolia’s South Gobi region. The agreement created a defined path for Rio Tinto to become the largest shareholder in Ivanhoe Mines.

In 2009, Ivanhoe’s deep exploration drilling on the Ivanhoe-Entree Joint Venture licence to the south of the Southern Oyu Deposit intersected high-grade, copper-molybdenum and gold mineralization that led to the discovery of the Heruga Deposit. Subsequent deep drilling along strike resulted in the discovery of the Heruga North Deposit that lies between the Heruga and Southern Oyu deposits.

In May 2010, Ivanhoe Mines released a new, independent Integrated Development Plan (IDP-10) produced by some of the world’s foremost engineering, mining and environmental consultants, led by Australia-based AMEC Minproc and including U.S.-based Stantec Engineering. The new plan was a comprehensive update of the original 2005 Integrated Development Plan and supported Ivanhoe Mines’ commitment to advance Oyu Tolgoi into full construction. Oyu Tolgoi’s average annual production was estimated at 1.2 billion pounds of copper, 650,000 ounces of gold and 3.0 million ounces of silver for the first 10 years of production.

In early 2011, Ivanhoe and BHP Billiton Ltd. discovered a new zone of shallow copper-molybdenum-gold mineralization approximately 10 kilometres north of the Ivanhoe Mines Oyu Tolgoi copper-gold mining complex currently under construction in southern Mongolia. The discovery, known as Ulaan Khud North, extended the known strike length of the Oyu Tolgoi mineralized system by an additional three kilometres to the north, to more than 23 kilometres.