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Ivanhoe Australia Ltd has reported another high-grade molybdenum and rhenium discovery in Queensland's Cloncurry region, which could provide the company with early cashflow if found suitable for development.
The mineralised system has been named Little Wizard and lies above Ivanhoe Australia's Merlin discovery, which was discovered in April amid claims it represented the world's highest-grade molybdenum and rhenium deposit.
The company said at the time that Merlin could be worth more than $6 billion.
Chief executive Peter Reeve said Little Wizard had a potential in-ground metal value of $100 million and was close to the surface, so should be easy to extract.
"We expected it to be oxidised but found massive sulphides," he said.
Mr Reeve said Little Wizard was up-dip to the Merlin discovery and could be the first of a series of "high-grade pods all along the top of Merlin".
He said Little Wizard was near a decline that Ivanhoe Australia planned to drill before the end of calendar 2009 to access the Merlin orebody.
A successful development of Little Wizard could bring the company cashflow 18 months earlier than expected.
Mr Reeve said Ivanhoe Australia would continue to spend $3 million to $4 million a month on exploration and had a little under $38 million cash on hand.
He said the company would need to seek funding at some stage, potentially neither equity or debt.
"We could look for an offtake partner and get lines of credit off that," he said.
Ivanhoe Australia is the local arm of Canada-based Ivanhoe Mines Ltd, which is in a joint venture with Rio Tinto Ltd to develop the Oyu Tolgoi copper-gold deposit in southern Mongolia.
Both Ivanhoe companies are chaired by mining billionaire Robert Friedland.
Shares in Ivanhoe Australia were up 13 cents, or 3.42 per cent, at $3.39.