March 28, 2011 / 12:34 PM / 7 years ago

UPDATE 2-Ivanhoe says Mongolia project ahead of schedule

* Sets 2011 capital budget for Oyu Tolgoi at $2.3 billion

* Yr net loss 42 cents/shr vs 69 cents/shr a year earlier

* Shares down 0.26 percent at C$26.77 on TSX

(Figures in U.S. dollars)

TORONTO, March 28 (Reuters) - Ivanhoe Mines Ltd <IVN.TO said on Monday that key parts of its Oyu Tolgoi copper-gold-silver project in Mongolia are currently ahead of schedule.

The massive project, which Ivanhoe is being developing in partnership with Anglo-Australian miner Rio Tinto RIO.AX RIO.L, is expected to begin commercial production in the first half of 2013.

Rio Tinto currently owns a 42.1 percent stake in Ivanhoe and can gradually raise this stake up to 49 percent. The Oyu Tolgoi project itself is 66 percent owned by Ivanhoe with the government of Mongolia owning the remainder.

Ivanhoe estimates capital expenditures on the project will be about $2.3 billion in 2011. Ivanhoe said as of March 28, its consolidated cash position was about $1.9 billion.

Ivanhoe also reported a full-year net loss of $211.5 million, or 42 cents a share. That compared with a full-year net loss of $280.2 million, or 69 cents a share in 2009.

Shares fell as much at 3.45 percent to C$25.91, but soon recovered to C$26.77. (Reporting by Euan Rocha and Julie Gordon, editing by Gerald E. McCormick)

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