SC 13D/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Ivanhoe Mines Ltd.

(Name of Issuer)

Common Shares, without par value

(Title of Class of Securities)

46579N

(CUSIP Number)

Ben Mathews
Rio Tinto plc
6 St. James’s Square
London SW1Y 4LD
United Kingdom
+44 (0) 20 7930 2399

(Name, Address and Telephone Number of Person Authorized

to Receive Notices and Communications)

with a copy to:

George Karafotias

Shearman & Sterling LLP

Broadgate West, 9 Appold Street

London EC2A 2AP

United Kingdom

+44 (0) 20 7655 5576

October 24, 2007

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

  CUSIP No.  46579N 

1	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Rio Tinto plc
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
	(a)   o
	(b)   þ (See Item 4)
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)
	WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	England and Wales
		7	SOLE VOTING POWER
NUMBER OF			0
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			205,447,400 common shares (see Items 3 and 5)
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			0
WITH		10	SHARED DISPOSITIVE POWER
			205,447,400 common shares (see Items 3 and 5)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	205,447,400 common shares (see Items 3 and 5)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	37.8 per cent (see Item 5)
14	TYPE OF REPORTING PERSON (See Instructions)
	HC, CO

Page 2 of 30 Pages

SCHEDULE 13D

  CUSIP No.  46579N 

1	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Rio Tinto International Holdings Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
	(a)   o
	(b)   þ (See Item 4)
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)
	AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	England and Wales
		7	SOLE VOTING POWER
NUMBER OF			0
SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			205,447,400 common shares (see Items 3 and 5)
EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			0
WITH		10	SHARED DISPOSITIVE POWER
			205,447,400 common shares (see Items 3 and 5)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	205,447,400 common shares (see Items 3 and 5)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	37.8 per cent (see Item 5)
14	TYPE OF REPORTING PERSON (See Instructions)
	CO

Page 3 of 30 Pages

Item 1. Security and Issuer.

          This Amendment No. 2 to Schedule 13D amends and restates (as amended and restated, the “Schedule 13D”) in its entirety the statement on Schedule 13D filed on November 3, 2006 (the “original Schedule 13D”) as amended by Amendment No. 1 to the Schedule 13D filed on September 12, 2007 (as amended, the “amended Schedule 13D”), with the Securities and Exchange Commission (the “SEC”), by Rio Tinto plc and Rio Tinto International Holdings Limited, relating to the common shares, without par value (the “Shares”), of Ivanhoe Mines Ltd., a corporation continued under the laws of the Yukon Territory, Canada (the “Company”).

Item 2. Identity and Background.

          This Schedule 13D is being filed by Rio Tinto plc, a public limited company incorporated under the laws of England and Wales (“Rio Tinto”), and Rio Tinto International Holdings Limited, a company incorporated under the laws of England and Wales (“RTIH”).

          Rio Tinto, through its group companies, has mining operations around the world. RTIH is a wholly owned subsidiary of Rio Tinto and is a major investment holding company for the group.

          The principal executive offices of each of Rio Tinto and RTIH are located at 6 St. James’s Square, London, SW1Y 4LD, United Kingdom.

          The name, business address, present principal occupation or employment and citizenship of each of the executive officers and directors of Rio Tinto and RTIH are set forth in Schedule A hereto and are incorporated by reference herein.

          During the last five years, neither Rio Tinto nor RTIH nor, to the best of their knowledge, any of the persons listed in Schedule A hereto has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

          Rio Tinto and RTIH have entered into a Joint Filing Agreement, dated November 3, 2006, a copy of which is filed with this Schedule 13D as Exhibit A, pursuant to which they have agreed to file this Schedule 13D jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act 1934, as amended (the “Exchange Act”).

Item 3. Source and Amount of Funds or Other Consideration.

          On October 18, 2006, RTIH and the Company entered into a Private Placement Agreement (as amended by the Amending Agreement, dated November 16, 2006, between RTIH and the Company (the “First Amending Agreement”) and the Amending and Additional Rights Agreement, as defined below, the “Private Placement Agreement”), a copy of which is attached as Exhibit B to the original Schedule 13D. The description of the Private Placement Agreement contained herein is qualified in its entirety by reference to Exhibit B, the First Amending Agreement and the Amending and Additional Rights Agreement, which are incorporated herein by reference.

Page 4 of 30 pages

          First Tranche Private Placement

          Pursuant to the Private Placement Agreement, RTIH agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to RTIH 37,089,883 Shares (the “First Tranche Private Placement Shares”), representing upon completion, 9.95 per cent of the Company’s outstanding Shares, at an issue price of $8.18 per First Tranche Private Placement Share for an aggregate subscription price of $303,395,242.94 in cash, at a closing that occurred on October 27, 2006 (the “First Closing Date”).

          The funds for the subscription price for the First Tranche Private Placement Shares were obtained by RTIH from the working capital of Rio Tinto.

          Pursuant to the Private Placement Agreement, RTIH agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to RTIH, immediately after the issue of the First Tranche Private Placement Shares:

     (i)     non-transferable share purchase warrants (the “Series A Warrants”), exercisable, subject to the prior approval of the Company’s shareholders, to purchase an additional 46,026,522 Shares, and

     (ii)    non-transferable share purchase warrants (the “Series B Warrants”), exercisable, subject to the prior approval of the Company’s shareholders, to purchase an additional 46,026,522 Shares,

          for an aggregate subscription price of $1,000 in cash.

          The Series A Warrants and the Series B Warrants were issued to RTIH at a closing that occurred on the First Closing Date.

          The funds for the subscription price for the Series A Warrants and the Series B Warrants were obtained by RTIH from the working capital of Rio Tinto.

          Second Tranche Private Placement

          Pursuant to the Private Placement Agreement, RTIH agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to RTIH, an additional 46,304,473 Shares (the “Basic Second Tranche Private Placement Shares”), representing, upon completion, an additional 9.95 per cent of the Company’s outstanding Shares, at a price of $8.38 per Basic Second Tranche Private Placement Share for an aggregate subscription price of $388,031,483.74 in cash, at a closing to occur on the earlier of:

     (i) the 20^th business day following the date, provided that such date is within three years of the First Closing Date (the “Approved OT Investment Contract Date”), that is the latest of (x) the date upon which the Company, or a subsidiary of the Company, enters into an investment agreement with the Government of Mongolia in respect of the Company’s Oyu Tolgoi copper and gold mineral development project (the “OT Project”) in Mongolia’s South Gobi region that is mutually acceptable to the Company and RTIH (an

Page 5 of 30 pages

“Approved OT Investment Contract”), (y) the date upon which the Company’s board of directors approves the Approved OT Investment Contract and (z) the date upon which RTIH notifies the Company that the Approved OT Investment Contract is acceptable and

     (ii)     the 10^th business day following the date upon which RTIH gives notice to the Company of its election to complete the Second Tranche Private Placement in the absence of an Approved OT Investment Contract (provided that such notice is given at any time prior to the third anniversary of the First Closing Date),

          or such later date as RTIH and the Company may agree in writing.

          RTIH’s obligation (but not its right) to complete the Second Tranche Private Placement will terminate if the prior approval of the Company’s shareholders for RTIH’s right to exercise the Series A Warrants and the Series B Warrants (the “Company Shareholder Approval Matter”) is not obtained within 60 days of the First Closing Date. The Company Shareholder Approval of the Company Shareholder Approval Matter was obtained on November 30, 2006, such date being within 60 days of the First Closing Date.

          If, upon issuance, the Basic Second Tranche Private Placement Shares would represent less than 9.95 per cent of the total number of Shares then issued and outstanding, RTIH will also have the option (the “Top Up Option”), exercisable prior to the closing of the Second Tranche Private Placement, to purchase up to that number of additional Shares, if any (the “Top Up Private Placement Shares”) that, when aggregated with the Basic Second Tranche Private Placement Shares, represent upon issuance 9.95 per cent of the total number of Shares then issued and outstanding. The issue price will be $8.38 per Top Up Private Placement Share unless, during the period commencing on the First Closing Date and ending on the date RTIH gives notice to the Company of its intention to exercise its Top Up Option, RTIH has fully exercised its pre-emptive and anti-dilution rights under the Private Placement Agreement, in which case the issue price will be equal to the lesser of (i) $8.38 and (ii) the closing market price of the Shares on the Toronto Stock Exchange on the date RTIH gives notice to the Company of its intention to exercise the Top Up Option.

          RTIH expects to obtain the funds for the subscription price for the Basic Second Tranche Private Placement Shares and the Top Up Private Placement Shares, if any, from the working capital of Rio Tinto.

          Series A Warrants and Series B Warrants

          The Series A Warrants and the Series B Warrants will not be exercisable unless and until the Company Shareholder Approval Matter has been (i) approved at a special meeting of the Company’s shareholders to be held within 45 days of, but in any event no later than 60 days after, the date of the Private Placement Agreement (the “Special Meeting”),¹ by a majority of votes cast by holders of Shares (other than RTIH) present in person or by proxy (the “Company

¹ The Special Meeting was held on November 30, 2006.

Page 6 of 30 pages

Shareholder Approval”) and (ii) approved, to the extent required in the reasonable opinion of RTIH, under the Investment Canada Act (Canada).

          The Series A Warrants and the Series B Warrants will automatically terminate if the Company Shareholder Approval Matter does not receive Company Shareholder Approval at the Special Meeting. The Company Shareholder Approval of the Company Shareholder Approval Matter was received at the Special Meeting on November 30, 2006.

          The Series A Warrants are exercisable by RTIH at any time thereafter until the 365^th day following the date (the “Warrant Determination Date”) which is the earlier of:

     (i) the Approved OT Investment Contract Date; and

     (ii) the third anniversary of the First Closing Date,

     and the Series B Warrants will be exercisable by RTIH at any time after obtaining Company Shareholder Approval until the 725^th day following the Warrant Determination Date.

          After receipt of the Company Shareholder Approval, each Series A Warrant will, subject to adjustment in accordance with its terms, be exercisable to purchase one Share at a price of:

     (i) $8.38 until the 180^th day following the Warrant Determination Date, and

     (ii) $8.54 after the 180^th day until the 365^th day following the Warrant Determination Date.

          After receipt of the Company Shareholder Approval, each Series B Warrant will, subject to adjustment in accordance with its terms, be exercisable to purchase one Share at a price of:

     (i) $8.38 until the 180^th day following the Warrant Determination Date,

     (ii) $8.54 after the 180^th day until the 365^th day following the Warrant Determination Date,

     (iii) $8.88 after the 365^th day until the 545^th day following the Warrant Determination Date, and

     (iv) $9.02 after the 545^th day until the 725^th day following the Warrant Determination Date.

          If all of the Series A Warrants and Series B Warrants were to be exercised, the aggregate purchase price payable by RTIH would be between $771 million and $808 million, depending upon the timing of the exercise of such warrants.

Page 7 of 30 pages

          RTIH expects to obtain the funds for the purchase price payable upon the exercise of the Series A Warrants and the Series B Warrants from the working capital of Rio Tinto.

          The Series A Warrants and the Series B Warrants are non-transferable by RTIH except to other members of the Rio Tinto group.

          Preemptive and Anti-Dilution Rights

          Pursuant to the Private Placement Agreement, RTIH has the right to acquire additional securities and participate in future financings by the Company, so as to maintain its proportional equity interest in the Company. RTIH is also entitled to anti-dilution rights in respect of the Series A Warrants and the Series B Warrants.

          Oyu Tolgoi Interim Funding Arrangement

          On September 11, 2007, RTIH and the Company executed a legally binding Heads of Agreement (the “Heads of Agreement”), pursuant to which a member of the Rio Tinto group (the “Lender”), to be designated by RTIH, will provide the Company with a $350 million non-revolving convertible credit facility (the “Facility”), upon the terms and subject to the conditions set forth in the Heads of Agreement. A copy of the Heads of Agreement is attached as Exhibit F to the amended Schedule 13D. The description of the Heads of Agreement contained herein is qualified in its entirety by reference to Exhibit F, which is incorporated herein by reference.

          On October 24, 2007, RTIH and the Company entered into an Amending and Additional Rights Agreement (the “Amending and Additional Rights Agreement”), pursuant to which RTIH and the Company amended the Private Placement Agreement to give effect to certain terms from the Heads of Agreement. A copy of the Amending and Additional Rights Agreement is attached as Exhibit G hereto. On October 24, 2007, RTIH and the Company also entered into a Credit Agreement (the “Credit Agreement”) with respect to the Facility. A copy of the Credit Agreement is attached as Exhibit H hereto.

          Together, the Amending and Additional Rights Agreement and the Credit Agreement supersede virtually all of the provisions in the Heads of Agreement. The description of the Amending and Additional Rights Agreement and the Credit Agreement contained herein is qualified in its entirety by reference to Exhibits G and H, which are incorporated herein by reference.

          Subject to certain conditions to funding set forth in the Credit Agreement, the Facility is available for drawdown from October 24, 2007, or on such later date as (i) all of the conditions to funding have been satisfied or, if permissible, waived by the Lender and (ii) the initial drawdown notice has been given by the Finance Committee (as defined in the Credit Agreement) on behalf of the Company to the Lender, but which date will be no later than November 30, 2007 (the “Funding Date”) until September 12, 2010 (the “Maturity Date”). The initial drawdown under the Facility must be for a minimum of $150 million. Subsequent drawdowns must be for a minimum of the lesser of $25 million and the undrawn amount of the Facility. The aggregate amount of drawdowns under the Facility may not exceed $350 million. The Company and RTIH will establish a Finance Committee which will be responsible for drawdowns on the Facility.

Page 8 of 30 pages

The initial drawdown on the Facility by the Company occurred on October 26, 2007 in the amount of $150 million.

          Interest on the outstanding principal amount of the Facility (the “Loan”) will accrue from and after the date of advance until the Facility is repaid in full. The Loan will bear interest during each three month period at LIBOR (as defined in the Credit Agreement) plus 3.3 per cent per annum calculated on an actual over 360 days basis. The first interest period will commence on the Funding Date. If no Event of Default (as defined in the Credit Agreement) has occurred and is continuing on the last date of an interest period, the interest on the Loan then accrued will be added to the Loan. Once $108 million in interest on the Loan has been added to the Loan, all additional interest on the Loan will be paid by the Company in immediately available funds to the Lender. There will be no separate commitment fee for the Facility.

          If any amount payable by the Company is not paid when due (whether at the Maturity Date, by acceleration or otherwise), the Loan will bear interest at a rate equal to LIBOR, plus 5.3 per cent per annum calculated on an actual over 360 days basis.

          After the Funding Date, the Lender will have the option, at any time and from time to time upon three business days’ prior written notice to the Company, to convert all or part of the outstanding principal of, and accrued interest, if any, on the Facility (the “Loan Amount”) into Shares at a price of $10.00 per Share, subject to customary adjustments for corporate actions (the “Conversion Price”). If the Loan Amount has not previously been repaid in full and no Event of Default has occurred and is continuing, the Loan Amount subject to a maximum of $108 million of accrued but unpaid interest will be automatically converted into Shares on the Maturity Date at the Conversion Price.

          Pursuant to the Heads of Agreement, on the October 24, 2007, the Company issued to RTIH, and RTIH subscribed for, share purchase warrants (the “Series C Warrants”) exercisable to purchase an additional 35,000,000 Shares for an aggregate subscription price of $1,000. RTIH obtained the funds for the purchase of the Series C Warrants from the working capital of Rio Tinto. At any time and from time to time and subject to customary adjustment for corporate actions, only such number of Series C Warrants as is equal to the number of Series C Warrants issued (whether or not outstanding) multiplied by the Funding Proportion may be exercised. The Funding Proportion is equal to the lesser of one and the result obtained by dividing (i) the sum of all drawdowns under the Facility (whether or not outstanding) and all interest on the Facility added to the outstanding principal amount of the Facility by (ii) $350 million. Subject to customary adjustment for corporate actions, each Series C Warrant will be exercisable at a price of $10.00 per Share during the period commencing on October 24, 2007 and ending five years thereafter. RTIH expects to obtain the funds for the purchase price payable upon the exercise of the Series C Warrants from the working capital of Rio Tinto.

Item 4. Purpose of Transaction.

          The information set forth in Items 3 and 6 is hereby incorporated by reference in this Item 4.

Page 9 of 30 pages

          RTIH has entered into the Private Placement Agreement to acquire a strategic stake in the Company in order to jointly develop and operate the OT project.

          Board of Directors

          Pursuant to the Private Placement Agreement, at all times, the board of directors of the Company will consist of at least ten (10) directors.

          From and after the First Closing Date, RTIH will be entitled (but not obliged) to nominate a number of qualified individuals (each, a “Rio Tinto Representative”) for appointment or election, from time to time, to the board of directors of the Company, as a proportion of the board of directors of the Company (the “Proportionate Number of Directors”), as is equal to the percentage of issued and outstanding Shares held by RTIH and its affiliates at that time (disregarding any unissued Shares underlying any unexercised Series A Warrants or Series B Warrants). Where such calculation results in the Proportionate Number of Directors not being a whole number, such Proportionate Number of Directors will be rounded up to the nearest whole number where such calculation ends with a figure .5 or greater and will be rounded down to the nearest whole number where such calculation ends with a figure less than .5.

          At all times, RTIH will be entitled to nominate as one of its Rio Tinto Representatives an individual who is not qualified as an independent director (defined as a director who is independent within the meaning of Multilateral Instrument 52-110 Audit Committees of the Canadian securities regulatory authorities, as amended, and who meets the equivalent independence criteria prescribed under U.S. securities laws and the listing or marketplace rules of the New York Stock Exchange or Nasdaq, to the extent applicable to the Company). If at any time RTIH is entitled to nominate more than one Rio Tinto Representative, then not less than one half of such Rio Tinto Representatives must qualify as independent directors.

          In addition, for as long as RTIH remains entitled to nominate at least one Rio Tinto Representative to the Company’s board of directors, RTIH will be entitled to nominate a Rio Tinto Representative selected by RTIH to the Company’s audit committee provided that such Rio Tinto Representative is an independent director and financially literate. Bret Clayton, currently Chief Executive of the Copper Group at Rio Tinto has been appointed to the Company’s board of directors as the Rio Tinto Representative.

          Preemptive Rights

          Pursuant to the Private Placement Agreement, if, at any time after the First Closing Date, the Company proposes, or becomes obliged, to issue any Shares (other than the issuance of Shares pursuant to certain exempt transactions) (“Dilutive Issuer Shares”), RTIH will have the right to purchase a number of additional Shares (the “Anti-Dilution Shares”) so as to maintain its proportional equity interest in the Company.

          Pursuant to the Private Placement Agreement, if, at any time prior to October 24, 2012, RTIH exercises its right to purchase all or part of the Anti-Dilution Shares to which it is entitled, RTIH will also be entitled to receive, for no additional consideration, a number of additional share purchase warrants (the “Anti-Dilution Warrants”) that would result in RTIH having the right to acquire, pursuant to the exercise or conversion of

Page 10 of 30 pages

all outstanding Convertible Securities beneficially owned by one or more members of the Rio Tinto group, a number of Shares that, upon issuance, would represent the same percentage of the outstanding Shares that RTIH would have beneficially owned if all of the then outstanding Convertible Securities beneficially owned by one or more members of the Rio Tinto group had been fully exercised immediately before the issuance of the Dilutive Issuer Shares and Anti-Dilution Shares. Each Anti-Dilution Warrant will entitle RTIH to purchase one Share at a price equal to the issue price per share of the Anti-Dilution Shares. If, when the Anti-Dilution Warrants are issued, any Series A Warrants remain unexercised and outstanding, that number of the Anti-Dilution Warrants bearing the same proportion as such outstanding number of Series A Warrants bears to the total number of Series A Warrants and Series B Warrants outstanding will have the same terms and attributes as the Series A Warrants and the remainder of the Anti-Dilution Warrants will have the same terms and attributes as the Series B Warrants, provided that, notwithstanding the foregoing, the expiry date of the Anti-Dilution Warrants will be at least one year from the date of issuance.

          If, at any time on or after the fifth anniversary of the First Closing Date, RTIH and its affiliates beneficially own, in the aggregate, a number of Shares representing less than 7.5 per cent of the total number of Shares issued and outstanding at such time, all of RTIH’s preemptive rights will immediately terminate and be of no further force or effect.

          Equity Financing Right of First Offer

          The Amending and Additional Rights Agreement provides that, if, at any time and from time to time until October 24, 2012, the Company is contemplating to, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, or issue any Shares or Convertible Securities to any person other than a member of the Rio Tinto group in any transaction (an “Equity Financing Transaction”), except for certain exempt transactions, the Company may only effect such Equity Financing Transaction subject to a right of first offer of RTIH (the “Right of First Offer”), exercisable within 30 days of receipt of written notice (the “Financing Notice”) of the contemplated Equity Financing Transaction (the “Exercise Period”). If the Right of First Offer is not exercised by RTIH prior to the expiry of the Exercise Period, the Company will have the right for a period of 60 days following the Exercise Period (the “Closing Period”) to issue all, but not less than all, of the Shares or Convertible Securities to the person or persons named in the Financing Notice for cash consideration having a value equal to or higher than the value of the cash consideration for which the Company offered the Shares or Convertible Securities to RTIH and on terms and conditions no less favourable to the Company than those set out in the Financing Notice.

          Restrictions on Share Acquisitions and Dispositions

          Pursuant to the Private Placement Agreement, RTIH has agreed that, until the fifth anniversary of the date of such Agreement, the Rio Tinto group will not, except with the prior approval of the Company:

Page 11 of 30 pages

     (i) engage in any Specified Activity,²

     (ii) prior to having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Shares or any securities convertible into or exchangeable for Shares (“Convertible Securities”) (other than Shares or Convertible Securities acquired through an issuance made by the Company or, with the consent of the Company, from Robert M. Friedland or any of his affiliates) representing, in the aggregate, more than 6.65 per cent of the then issued and outstanding Shares from time to time, or

     (iii) after having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Shares if, following such acquisition, the Rio Tinto group and all persons with whom the Rio Tinto group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under applicable law, to beneficially own, or exercise control or direction over, (excluding any Shares issuable upon the conversion, exchange or exercise of any Convertible Securities) more than 46.65 per cent of the then issued and outstanding Shares.

          If the Company has terminated the Strategic Purchaser Covenant or given notice to RTIH of its intention to terminate the Strategic Purchaser Covenant and, as a result of the exercise of the Right of First Offer, the Rio Tinto group and all persons with whom the Rio Tinto group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under applicable law, to beneficially own, or exercise control or direction over (assuming the conversion, exchange or exercise of all Convertible Securities held by them and the completion of the acquisition of all Shares or Convertible Securities specified in the applicable Financing Notice), more than 46.65 per cent of the then issued and outstanding Shares, the foregoing restrictions as set forth in the Private Placement Agreement will be deleted in their entirety and cease to have any force and effect.

          The foregoing restrictions will not apply to the acquisition by RTIH of any Shares that Robert M. Friedland beneficially owns, directly or indirectly, pursuant to any rights of first refusal in favour of RTIH arising under the Shareholders’ Agreement between Robert M.

2	For purposes of the Private Placement Agreement, “Specified Activity” is defined to mean, in respect of the Company and, except as specifically contemplated or permitted by the terms of the Private Placement Agreement, any actions by a member of the Rio Tinto group to:
	(i) make a takeover bid or a tender offer or participate as a bidder in any takeover bid or tender offer for any or all issued and outstanding Shares or Convertible Securities,
	(ii) otherwise acquire, directly or indirectly, any Shares or Convertible Securities or any rights or options to acquire any Shares or Convertible Securities,
	(iii) propose any merger, statutory arrangement or business combination between the Company and any member of the Rio Tinto group,
	(iv) make any solicitation of proxies to vote any Shares, or
	(v) form, join or in any way participate in a “group” within the meaning of Section 13(d)(3) of the Exchange Act, with respect to any of the foregoing.

Page 12 of 30 pages

Friedland and RTIH, dated October 18, 2006 (the “Shareholders’ Agreement”), a copy of which is attached as Exhibit C to the original Schedule 13D, by reason of any proposed sale or disposition of Shares by Robert M. Friedland or any of his affiliates to any person who is not an institutional investor who meets certain prescribed criteria under the Private Placement Agreement.

          If, at any time, a person or persons jointly or in concert (other than a member of the Rio Tinto group or a person that is not at arm’s length to the Rio Tinto group), publicly announces its intention to commence a transaction which would result, if consummated, in any person, or group of persons acting jointly or in concert, acquiring beneficial ownership of more than 50 per cent of the outstanding Shares (a “Change of Control” and such transaction, a “Company Control Transaction”), or the Company publicly announces that its board of directors has approved an agreement which contemplates a Company Control Transaction, the Rio Tinto group will be immediately released from the foregoing restrictions but only for the limited purpose of giving the Rio Tinto group a reasonable opportunity to propose to the Company and/or commence an alternative Company Control Transaction. Unless a Company Control Transaction results in a Change of Control within 75 days after the Rio Tinto group is released from the foregoing restrictions or, after the end of such period, RTIH or any of its affiliates is actively pursuing an alternative Company Control Transaction that was commenced during such period, such restrictions will be deemed to have been re-imposed as of the later of the end of such 75 day period and the date that RTIH or any such affiliate completes or ceases actively pursuing its alternative Company Control Transaction, pending their expiry or the public announcement of another Company Control Transaction as contemplated above. For the purposes of the foregoing:

     (i) RTIH or any of its affiliates will be deemed to be actively pursuing an alternative Company Control Transaction at a particular time if, at that time, RTIH or any such affiliate has made a “formal bid” (as defined under Canadian securities laws) that has not expired for a sufficient number of Shares to effect a Change of Control or RTIH or any such affiliate is engaged in active negotiations with the Company with respect to such alternative Company Control Transaction, and

     (ii) nothing in the Shareholders’ Agreement will be construed as creating a non-arm’s length relationship between the parties to the Shareholders’ Agreement or their respective affiliates.

          Pursuant to the Private Placement Agreement, until the first anniversary of the First Closing Date, RTIH has agreed that the Rio Tinto group will not, except (i) pursuant to a Company Control Transaction, (ii) with the prior written consent of the Company, or (iii) to any person who is a member of the Rio Tinto group, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, make any short sale, transfer, assign, gift, enter into any derivative transaction in respect of, or otherwise dispose of, alienate or create any encumbrance in respect of (or announce any intention to effect the foregoing) (any of the foregoing, a “Transfer”) any Shares or Convertible Securities (or any voting rights or other rights attributable thereto) beneficially owned, directly or indirectly, by the Rio Tinto group, whether presently owned or subsequently acquired, or in respect of which the Rio Tinto group exercises control or direction.

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          Thereafter, until the fifth anniversary of the date of the Private Placement Agreement, if RTIH intends to Transfer Shares representing 5 per cent or more of the total number of Shares then issued and outstanding to any person other than (i) a member of the Rio Tinto group, or (ii) an institutional investor who meets certain prescribed criteria under the Private Placement Agreement, and the proposed Transfer is not being made pursuant to a Company Control Transaction, the Company will have the right, for a period of not less than 60 days, to arrange for the sale of such Shares to a third party selected by the Company in its absolute discretion and reasonably acceptable to RTIH, on the same terms upon which RTIH intended to sell such Shares, failing which RTIH will be free to sell such Shares.

          If, at any time, the Rio Tinto group and all persons with whom the Rio Tinto group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under applicable law, to beneficially own, or exercise control or direction over (assuming the conversion, exchange or exercise of all Convertible Securities held by them), more than 46.65 per cent of the then issued and outstanding Shares, the restrictions described in the previous two paragraphs will not apply to the Transfer of any Shares by any of them provided that after such Transfer the Rio Tinto group and all persons with whom the Rio Tinto group is acting jointly or in concert continue to beneficially own or exercise control or direction, or be deemed, under applicable law, to beneficially own, or exercise control or direction over (assuming the conversion, exchange or exercise of all Convertible Securities held by them), more than 45 per cent of the then issued and outstanding Shares.

          Divestiture of Non-Core Assets

          Pursuant to the Private Placement Agreement, the Company has agreed to dispose of its entire interest in the Monywa Copper Project, a joint venture between the Company’s wholly-owned subsidiary, Ivanhoe Myanmar Holdings Ltd., and Mining Enterprise No. 1, an entity wholly-owned by the Government of the Union of Myanmar, and any other rights, interests or investments held, directly or indirectly, by the Company in the Union of Myanmar (collectively, the “Myanmar Assets”), by no later than February 1, 2007. If such disposition does not occur by that date, RTIH has the right to cause the Company to transfer all of the Myanmar Assets to a trust of which none of the Company, RTIH, Robert M. Friedland, their respective affiliates, any person related to any of them or any person that is a resident of Myanmar or the United States or controlled by a resident of Myanmar or the United States are trustees or beneficiaries. In consideration of such transfer, the Company would receive a promissory note issued by the trust in an amount not less than $40 million plus 50 per cent of the cash receivable from the Myanmar Assets at the time of their sale to the trust. The Company would be entitled to additional compensation from any future sale of the Myanmar Assets by the trust in an amount to be determined but not less than 50 per cent of the amount by which such sale proceeds exceed the amount outstanding under the promissory note.

          In February 2007, the Company established and transferred all of the Myanmar Assets to a trust of which none of the Company, RTIH, Robert M. Friedland, their respective affiliates, any person who owns more than 5 per cent of the Company, RTIH or their respective affiliates, any person related to any of them or any person that is a resident of Myanmar or the United States or controlled by a resident of Myanmar or the United States are trustees or beneficiaries.

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          The Company has also agreed to consult with RTIH in good faith and to use its best efforts to formulate timetables and strategies for the orderly disposition of all of its non-core assets situated outside of Mongolia as soon as reasonably practicable, having regard to the best interests of the holder of Shares as a whole. The Company has agreed to use its best efforts to divest itself of such other non-core assets in accordance with such timetables and strategies, provided that the precise timing and terms of any such disposition by Company will be subject to the prior approval of the Company’s board of directors in its absolute and exclusive discretion, acting reasonably and in good faith.

          Shareholders’ Agreement

          Pursuant to the Shareholders’ Agreement, Robert M. Friedland has agreed for a period of five years from the First Closing Date to vote or cause to be voted all of securities of the Company, including all Shares and Convertible Securities, held directly or indirectly by him and any of his affiliates (the “Owned Securities”), and, so long as they are held by Goldamere Holdings SRL, an additional 4,071,093 Shares, in favour of (i) the right of RTIH to exercise the Series A Warrants and the Series B Warrants, and (ii) any other transaction contemplated by the Private Placement Agreement for which the approval of the Company’s shareholders is required.

          Robert M. Friedland has agreed that he will not, and will procure that each of his affiliates will not, except as expressly permitted by the Shareholders’ Agreement, directly or indirectly, Transfer any of his Owned Securities without the express prior written consent of RTIH, subject to certain limited exceptions, including a Transfer to a permitted transferee or pursuant to a Company Control Transaction.

          Robert M. Friedland has also agreed to grant RTIH a right of first refusal and/or rights of placement with third parties, in respect of the Transfer by him of his Owned Securities to a third party, subject to certain limited exceptions, including a Transfer to a permitted transferee or pursuant to a Company Control Transaction.

          The Shareholders’ Agreement will terminate on the earlier of (i) the date Robert M. Friedland holds no Owned Securities and (ii) the fifth anniversary of the First Closing Date.

          The description of the Shareholders’ Agreement contained herein is qualified in its entirety by reference to Exhibit C attached to the original Schedule 13D, which is incorporated herein by reference.

          Registration Rights Agreement

          On the First Closing Date, the Company and RTIH entered into a Registration Rights Agreement (the “Registration Rights Agreement”), a copy of which is attached as Exhibit D to the original Schedule 13D, pursuant to which the Company has agreed to provide RTIH with certain registration rights in respect of the Shares held by RTIH.

          At any time after the first anniversary of the First Closing Date, RTIH may request that the Company file a registration statement with the SEC relating to all of the Shares in respect of which RTIH has requested registration (a “Demand Registration”). RTIH is entitled to demand up to five Demand Registrations provided that (i) the aggregate sale price of any Shares to be registered pursuant to a Demand Registration must be equal or greater than $35 million, (ii)

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no more than two Demand Registrations may be requested in any twelve month period, and (iii) no request for a Demand Registration may be made within 90 days of the date of effectiveness of any other registration statement filed by the Company pursuant to the Registration Rights Agreement.

          If, at any time, the Company files a registration statement with the SEC, RTIH will be entitled, subject to certain exceptions, to exercise “piggyback” registration rights requiring the Company to include in any such registration that number of Shares held by RTIH as RTIH may request, subject only to certain prescribed limitations provided in the Registration Rights Agreement.

          The Company may, on a limited number of occasions, and in certain prescribed circumstances, delay the filing or effectiveness of any registration statement required to be filed pursuant to the Registration Rights Agreement.

          The description of the Registration Rights Agreement contained herein is qualified in its entirety by reference to Exhibit D attached to the original Schedule 13D, which is incorporated herein by reference.

          Facility Agreement

          The purpose of the Facility is for RTIH to provide to the Company interim financing with respect to the development of the OT Project pending the execution of the Approved OT Investment Contract.

          Although Rio Tinto and RTIH have no present intention to acquire securities of the Company other than pursuant to the Private Placement Agreement, the Shareholders’ Agreement, the Heads of Agreement or the Amending and Additional Rights Agreement, they intend to review their investment on a regular basis and, as a result thereof and subject to the terms and conditions of the Private Placement Agreement, the Heads of Agreement and the Amending and Additional Rights Agreement, may at any time or from time to time determine, either alone or as part of a group, (i) to acquire additional securities of the Company, through open market purchases, privately negotiated transactions or otherwise, (ii) to dispose of all or a portion of the securities of the Company owned by them in the open market, in privately negotiated transactions or otherwise, or (iii) to take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in the next paragraph of this Item 4. Any such acquisition or disposition or other transaction would be made in compliance with all applicable laws and regulations. Notwithstanding anything contained herein, each of Rio Tinto and RTIH specifically reserves the right to change its intention with respect to any or all of such matters. In reaching any decision as to its course of action (as well as to the specific elements thereof), each of Rio Tinto and RTIH currently expects that it would take into consideration a variety of factors, including, but not limited to, the following: the Company’s business and prospects; other developments concerning the Company and its businesses generally; other business opportunities available to Rio Tinto and RTIH; the taxation implication of any such action; changes in law and government regulations; general economic conditions; and money and stock market conditions, including the market price of the securities of the Company.

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          Except as set forth in this Schedule 13D, Rio Tinto and RTIH have no present plans or proposals which relate to or would result in:

     (i) The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company,

     (ii) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries,

     (iii) A sale or transfer of a material amount of assets of the Company or of any of its subsidiaries,

     (iv) Any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board,

     (v) Any material change in the present capitalization or dividend policy of the Company,

     (vi) Any other material change in the Company’s business or corporate structure,

     (vii) Changes in the Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person,

     (viii) A class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association,

     (ix) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act of 1933, as amended, or

     (x) Any action similar to any of those enumerated above.

Item 5. Interest in Securities of the Issuer.

          The responses of Rio Tinto and RTIH to Rows (11) through (13) of the cover pages of this Schedule 13D and the information set forth in Item 3 are hereby incorporated by reference in this Item 5.

          Pursuant to the Private Placement Agreement, on the First Closing Date, RTIH acquired 37,089,883 Shares, representing upon completion 9.95 per cent of the Company’s outstanding Shares. RTIH has also agreed to subscribe for an additional 46,304,473 Shares (and has the right to subscribe for Top Up Placement Shares if necessary), representing upon completion 9.95 per cent of the Company’s then outstanding Shares, upon the Company entering into an Approved OT Investment Contract as set forth in Item 3.

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          On the First Closing Date, RTIH acquired the Series A Warrants and the Series B Warrants which are exercisable to purchase an additional 92,053,044 Shares. On the Funding Date, RTIH acquired the Series C Warrants which, pursuant to the Funding Proportion³, are currently exercisable to purchase an additional 15,000,000 Shares. As of October 26, 2007, the Loan Amount is convertible into an additional 15,000,000 Shares.

          Therefore, each of Rio Tinto and RTIH is deemed to beneficially own 205,447,400 Shares which, assuming the subscription by RTIH for an additional 46,304,473 Shares (and any Top Up Placement Shares if necessary), the exercise of all the Series A Warrants and the Series B Warrants, the exercise of certain of the Series C Warrants and the conversion of the Loan Amount into Shares, in addition to the 37,089,883 Shares acquired by RTIH on the First Closing Date, would represent 37.8 per cent of Company’s outstanding Shares on a fully diluted basis.

          The percentage of the class of securities identified pursuant to Item 1 beneficially owned by each of Rio Tinto and RTIH is based on 374,749,332 Shares outstanding as of June 30, 2007, as contained in the Company’s quarterly report for the quarterly period ended June 30, 2007, furnished to the SEC on August 14, 2007.

          In addition, the Shares deemed beneficially owned by each of Rio Tinto and RTIH with respect to which such person (i) has sole voting power, (ii) shares voting power, (iii) has sole dispositive power and (iv) shares dispositive power are listed in the responses to Items 7, 8, 9 and 10, respectively, of the cover page of this Schedule 13D relating to such person.

          Except as disclosed in this Schedule 13D, neither Rio Tinto nor RTIH nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, beneficially owns any Shares or has the right to acquire any Shares.

          Except as disclosed in this Schedule 13D, neither Rio Tinto nor RTIH nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Shares which they may be deemed to beneficially own.

          Except as disclosed in this Schedule 13D, neither Rio Tinto nor RTIH nor, to the best of their knowledge, any of the persons listed in Schedule A hereto, has effected any transaction in the Shares during the past 60 days.

          To the best knowledge of Rio Tinto and RTIH, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares beneficially owned by Rio Tinto and RTIH.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

          The information set forth in Items 3 and 4 is hereby incorporated by reference in this Item 6.

³ As at October 26, 2007, the Funding Proportion is 3/7, which is equal to the lesser of one and the result obtained by dividing (i) $150 million, the total drawdown under the Facility, by (ii) $350 million.

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          Oyu Tolgoi Interim Funding Facility

          The Company will not be permitted to make prepayments of the Loan Amount.

          The indebtedness of the Borrwer in respect of the Credit Agreement will rank in priority to other current and future indebtedness of the Company, except certain Permitted Debt (as defined in the Credit Agreement). The Company must ensure that its subsidiaries do not incur any indebtedness except for Permitted Debt.

          Security for the Facility will comprise (i) pledges of and first ranking charges over the shares of Ivanhoe Mines Delaware Holdings, LLC, Ivanhoe Mines, Aruba Holdings LLC A.V.V. and Ivanhoe Oyu Tolgoi (BVI) Ltd., all subsidiaries of the Company, and (ii) a general security agreement between the Lender and the Company creating a security interest and floating charge over all present and after-acquired personal property and interests in land and real property of the Company, including the 2 per cent net smelter returns royalty from the OT Subsidiary (as defined below) that the Company purchased from BHP Minerals International Exploration Inc. The security will terminate (a) 60 days following the Approved OT Investment Contract Date if no Event of Default has occurred and is continuing at such time or (b) upon the repayment or conversion in full of the Loan Amount in accordance with the terms thereof.

          The Lender may call the Loan Amount upon delivery of notice (the “Demand Notice”) to the Company (i) contemporaneously or within 30 days of the completion of the Second Tranche Private Placement, (ii) contemporaneously or within 30 days after the exercise by RTIH of any Series A Warrants, Series B Warrants and/or Series C Warrants having an aggregate exercise price equal to or greater than the Loan Amount on the date of exercise, (iii) following a Change of Control, and (iv) upon an Event of Default (as defined in the Credit Agreement). If the Lender calls the Loan Amount, the Company must repay the Loan Amount within five business days of receipt of the Demand Notice and the Facility will be canceled.

          Pursuant to the Amending and Additional Rights Agreement, the Company agrees that the repayment of the Loan Amount pursuant to a Demand Notice delivered in accordance with the terms of the Credit Agreement may be satisfied by RTIH, upon notice to the Company, setting off such amount of the subscription price of the Second Tranche Private Placement or the exercise price of any Series A Warrants, Series B Warrants or Series C Warrants as is specified in the notice and is equal in the aggregate to the Loan Amount. The Company agrees to accept such set-off as full payment and satisfaction of such subscription price or exercise price, as the case may be.

          Following and within 30 days after the completion of (i) an equity financing by the Company or any of its subsidiaries (including a financing of debt convertible into equity but excluding (x) a financing that is made solely to one or more members of the Rio Tinto group or (y) a financing that is made by a subsidiary of the Company in which the proceeds of such financing is solely to fund the operations of one or more mineral exploration or mine

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development projects owned directly or indirectly by that subsidiary (other than the OT Project) or (ii) the sale by the Company or any of its subsidiaries of any assets (including shares of any subsidiary of the Company) with an aggregate value in excess of $50 million, in each case, the Lender may deliver a notice to the Company requiring the funds therefrom to be used, within five business days, to repay the Loan Amount or such portion thereof as is equal to such proceeds (each such payment a “Mandatory Repayment”). A Mandatory Repayment will not cancel the Facility.

          The Credit Agreement provides that until the Funding Date, the Company (i) will not cause or permit an Adjustment Event (as defined in the Private Placement Agreement) to occur; and (ii) will not issue any Shares or Convertible Securities except pursuant to certain exempt transactions. The Company has agreed to certain other covenants and also made certain representations pursuant to the Credit Agreement.

          The Amending and Additional Rights Agreement provides that, until October 24, 2012, the Company will not, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, or issue any Shares or Convertible Securities to a person who is not a retail investor or an institutional investor who meets certain prescribed criteria under the Private Placement Agreement (any such person, a “Strategic Purchaser”) if, following such acquisition, the Strategic Purchaser and all persons with whom the Strategic Purchaser is acting jointly or in concert, would beneficially own or exercise control or direction over, or be deemed, under applicable law, to beneficially own, or exercise control or direction over, more than 5 per cent of the then issued and outstanding Shares (the “Strategic Purchaser Covenant”). The Company may terminate the Strategic Purchaser Covenant upon 60 days’ written notice to RTIH. The Company may not terminate the Strategic Purchaser Covenant during the Exercise Period or the Closing Period.

          The description of the Heads of Agreement, the Amending and Additional Rights Agreement and the Credit Agreement contained herein is qualified in its entirety by reference to Exhibits F, G and H, respectively, which are incorporated herein by reference.

          Equity Financing Right of First Offer

          The Amending and Additional Rights Agreement provides that, if, at any time and from time to time until October 24, 2012, the Company is contemplating to, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, or issue any Shares or Convertible Securities to any person other than a member of the Rio Tinto group in any Equity Financing Transaction, except for certain exempt transactions, the Company may only effect such Equity Financing Transaction subject to the Right of First Offer, exercisable within the Exercise Period. If the Right of First Offer is not exercised by RTIH prior to the expiry of the Exercise Period, the Company will have the right during the Closing Period to issue all, but not less than all, of the Shares or Convertible Securities to the person or persons named in the Financing Notice for cash consideration having a value equal to or higher than the value of the cash consideration for which the Company offered the Shares or Convertible Securities to RTIH and on terms and conditions no less favourable to the Company than those set out in the Financing Notice.

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          Use of Proceeds

          Pursuant to the Private Placement Agreement, the Company has agreed that it will use not less than 90 per cent of the proceeds received from the issuance of the Shares to RTIH under the Private Placement Agreement and from the exercise of the Series A Warrants, the Series B Warrants and the Series C Warrants to fund expenditures in respect of the development of the OT Project.

          Pursuant to the Credit Agreement, the Company has agreed that it will apply all amounts borrowed by it under the Facility exclusively on expenditures in accordance with, as applicable, the Operations Plan and Budget or the Suspension Plan (each as defined in the Credit Agreement). No part of the amount borrowed by the Company under the Facility may be spent on or in relation to any project other than the OT Project, except that up to $17.5 million of such amount may be spent on or in relation to other projects located in Mongolia. Any departure in the application of amounts borrowed under the Facility from the Operations Plan and Budget or the Suspension Plan, as applicable, must be agreed by the unanimous vote of the Technical Committee. Notwithstanding the foregoing, if RTIH has appointed the chairman of the Technical Committee, any departure in the application of amounts borrowed under the Facility from the Operations Plan and Budget or the Suspension Plan may be agreed by a majority vote of the Technical Committee. These obligations will survive any repayment, conversion or cancellation of the Facility, except that upon a Mandatory Repayment resulting from the sale by the Company or any of its subsidiaries of any assets with an aggregate value in excess of $50 million, these obligations will not apply in respect of the amount of such Mandatory Repayment.

          OT Project Right of First Refusal

          Pursuant to the Private Placement Agreement, RTIH has been granted a right of first refusal in respect of the Company’s interests in the OT project that is exercisable for a period of 60 days, subject to certain limited exceptions, if the Company intends to dispose of any interest in the OT Project to a third party. In respect of any such proposed disposition, the Company must first offer such interests to RTIH at an equivalent price and on equivalent terms and conditions to those available to the third party to whom such proposed disposition is to be made and from whom the Company has received an offer on bona fide arm’s length terms. RTIH’s right of first refusal is inoperative unless, at the time the Company proposes to make any such disposition, Rio Tinto and its affiliates beneficially own (disregarding any unissued Shares underlying unexercised Series A Warrants or Series B Warrants), in the aggregate, a number of Shares that is equal to or greater than the First Tranche Private Placement Shares.

          If the Company proposes to dispose of any interest in the OT Project in respect of which Rio Tinto would be entitled to exercise its right of first refusal but for the fact that the Rio Tinto group then owns an insufficient number of Shares, RTIH will nonetheless be entitled to exercise its right of first refusal if it elects to complete the Second Tranche Private Placement in the absence of an Approved OT Investment Contract.

          The Private Placement Agreement also provides that the Company and RTIH will consult with one another regarding further opportunities for the Rio Tinto group to participate in the OT Project.

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          Technical Committee

          Pursuant to the Private Placement Agreement, RTIH and the Company have agreed to establish a technical committee (the “Technical Committee”) to manage all aspects of the engineering, construction, development and operation of the OT Project. The Company and RTIH will, through the Technical Committee, cooperatively oversee and supervise all operations in respect of the OT Project. All material activities and operations in respect of the OT Project must be approved by the Technical Committee before they can be undertaken.

          The Technical Committee will consist of two members from the Company, two members from RTIH and a fifth member who will act as the chairman of the Technical Committee and as the senior manager of the OT Project. The chairman of the Technical Committee will be an individual reasonably acceptable to both the Company and RTIH. The Company has the right to appoint the chairman of the Technical Committee during the first three years following the First Closing Date. The Company’s President and Chief Executive Officer, John Macken, will serve as the first chairman of the Technical Committee and senior manager of the OT Project. After three years, RTIH will have the right to appoint the chairman of the Technical Committee and senior manager of the OT Project.

          RTIH’s right to appoint members and be represented on the Technical Committee will immediately terminate if Rio Tinto and its affiliates beneficially own (disregarding any unissued Shares underlying any unexercised Series A Warrants or Series B Warrants), in the aggregate, a number of Shares that is less than the number of First Tranche Private Placement Shares.

          Any decision of the Technical Committee in respect of which a consensus cannot be reached among its members will be subject to a vote in respect of which each of the five members of the Technical Committee will have one vote.

          During the three year period following the First Closing Date, the unanimous consent of all Technical Committee members will be required for matters involving (a) asset or property acquisitions or contractual commitments requiring expenditures exceeding $100 million, (b) acquisitions of interests in land or mineralization within the geographical areas comprising the OT Project requiring expenditures exceeding $10 million, or (c) any material amendments to the existing OT Project long term mine plan or the adoption of any new long term mine plan.

          Pursuant to the Amending and Additional Rights Agreement, while RTIH maintains a representative on the Technical Committee, RTIH will have the right to appoint the Managing Director of Ivanhoe Mines Mongolia Inc. XXK, a wholly-owned subsidiary of the Company (the “OT Subsidiary”) who (i) will report to the chairman of the Technical Committee, (ii) will be responsible for the matters set out in a position description to be agreed by all members of the Technical Committee and (iii) may be replaced by RTIH at any time and from time to time.

          While RTIH maintains a representative on the Technical Committee, RTIH will have the right to appoint the Chief Financial Officer of the OT Subsidiary who (i) will report to the Managing Director of the OT Subsidiary, (ii) will be responsible for the matters set out in a position description to be agreed by all members of the Technical Committee and (iii) may be replaced by RTIH at any time and from time to time.

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          The Company will cause the OT Subsidiary to appoint the Managing Director and Chief Financial Officer appointed by RTIH. The position description for each of the Managing Director and Chief Financial Officer may only be amended by the unanimous vote of the Technical Committee. Notwithstanding the foregoing, if RTIH has appointed the chairman of the Technical Committee, the position description for each of the Managing Director and Chief Financial Officer may be amended by a majority vote of the Technical Committee.

          Technical Assistance

          For as long as RTIH is represented on the Technical Committee, the Company may request RTIH’s assistance with certain matters pertaining to the development and operation of the OT Project including engineering, mine planning and design, metallurgical and process design, procurement of plant and equipment and environmental planning and management. RTIH will provide such services subject to having the available resources and to the parties negotiating mutually acceptable agreements. During the five year period following the First Closing Date, these services will be provided to the Company at RTIH’s out-of-pocket cost and, thereafter, at a cost no less favourable than that charged by any Rio Tinto group member to any other Rio Tinto group member.

          OT Investment Contract Negotiations

          Pursuant to the Private Placement Agreement, the Company has agreed to keep RTIH fully informed from time to time of the status of the negotiations with the Government of Mongolia for an OT Investment Contract. RTIH, acting reasonably, will have the right to consult with the Company from time to time with respect to all aspects of such negotiations and will be entitled to appoint at least two individuals acceptable to the Company, acting reasonably, to the group of Company representatives participating in such negotiations.

          Except as described above or elsewhere in this Schedule 13D or incorporated by reference in this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Rio Tinto and RTIH or, to the best of their knowledge, any of the persons named in Schedule A hereto or between Rio Tinto or RTIH and any other person or, to the best of their knowledge, any person named in Schedule A hereto and any other person with respect to any securities of the Company, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

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Item 7. Materials to be Filed as Exhibits.

Exhibit No.	Description
A	Joint Filing Agreement between Rio Tinto plc and Rio Tinto International Holdings Limited
B	Private Placement Agreement between Ivanhoe Mines Ltd. and Rio Tinto International Holdings Limited*
C	Shareholders’ Agreement between Robert M. Friedland and Rio Tinto International Holdings Limited*
D	Registration Rights Agreement by and between Ivanhoe Mines Ltd. and Rio Tinto International Holdings Limited*
E	Amending Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.**
F	Heads of Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.**
G	Amending and Additional Rights Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.
H	Credit Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.

*	Filed as an exhibit to the original Schedule 13D on November 3, 2006
**	Filed as an exhibit to the amended Schedule 13D on September 12, 2007

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SIGNATURE

          After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: October 26, 2007

Rio Tinto plc

/s/ Roger P. Dowding
Signature

Roger P. Dowding / Deputy Secretary
Name/Title

Rio Tinto International Holdings Limited

/s/ Roger P. Dowding
Signature

Roger P. Dowding / Secretary
Name/Title

Page 25 of 30 Pages

SCHEDULE A

Rio Tinto plc
Directors and Executive Officers

	Present Principal
Name	Occupation	Business Address	Citizenship
Directors
Paul Skinner	Chairman of Rio Tinto	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Tom Albanese	Chief Executive of Rio Tinto	6 St. James’s Square London SW1Y 4LD United Kingdom	United States of America
Guy Elliott	Finance Director of Rio Tinto	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Dick Evans	Chief Executive of Rio Tinto Alcan	1188 Sherbooke Street West, Montreal, Quebec H3A 3G2, Canada	Canada
Ashton Calvert	Non-executive director of Rio Tinto	6 St. James’s Square London SW1Y 4LD United Kingdom	Australia
Sir David Clementi	Chairman of Prudential plc	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Vivienne Cox	Executive Vice-President of BP plc	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Sir Rod Eddington	Chairman of JPMorgan	6 St. James’s Square London SW1Y 4LD United Kingdom	Australia
Mike Fitzpatrick	Director of Squitchy Lane Holdings	6 St. James’s Square London SW1Y 4LD United Kingdom	Australia

Page 26 of 30 Pages

	Present Principal
Name	Occupation	Business Address	Citizenship
Richard Goodmanson	Executive Vice President and Chief Operating Officer of DuPont	6 St. James’s Square London SW1Y 4LD United Kingdom	United States of America
Andrew Gould	Chairman and Chief Executive Officer of Schlumberger Ltd.	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Yves Fortier	Non-executive director of Rio Tinto	1188 Sherbrooke Street West, Montreal, Quebec H3A 3G2, Canada	Canada
Lord Kerr	Chairman of the Court and Council of Imperial College, London	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
David Mayhew	Chairman of Cazenove Group plc	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Sir Richard Sykes	Director of Rio Tinto and director of Lonza Group Ltd.	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Paul Tellier	Non-executive director of Rio Tinto	1188 Sherbrooke Street West, Montreal, Quebec H3A 3G2, Canada	Canada
Executive Officers
Bret Clayton	Chief Executive of the Copper group	6 St. James’s Square London SW1Y 4LD United Kingdom	United States of America
Preston Chiaro	Chief Executive of the Energy group	6 St. James’s Square London SW1Y 4LD United Kingdom	United States of America
Eric Finlayson	Head of Exploration	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Oscar Groeneveld	Chief Executive of the Aluminum group	Level 33 55 Collins Street Melbourne Victoria 3000 Australia	Australia
Keith Johnson	Group Executive, Business Resources	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom

Page 27 of 30 Pages

	Present Principal
Name	Occupation	Business Address	Citizenship
Andrew Mackenzie	Chief Executive of the Diamonds and Minerals group	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Ben Mathews	Company Secretary	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Grant Thorne	Group Executive Technology and Innovation	Comalco Place 12 Creek Street Brisbane QLD 4000 Australia	Australia
Sam Walsh	Chief Executive of the Iron Ore Group	6 St. James’s Square London SW1Y 4LD United Kingdom	Australia

Page 28 of 30 Pages

Rio Tinto International Holdings Limited
Directors and Executive Officers

	Present Principal
Name	Occupation	Business Address	Citizenship
Directors
Dan Larsen	Head of Controllers	6 St. James’s Square London SW1Y 4LD United Kingdom	United States of America
Christopher Lenon	Head of Taxation	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Ian Ratnage	Head of Treasury	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Ben Mathews	Company Secretary of Rio Tinto plc	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom
Executive Officers
Roger Dowding	Deputy Secretary of Rio Tinto plc	6 St. James’s Square London SW1Y 4LD United Kingdom	United Kingdom

Page 29 of 30 Pages

EXHIBIT INDEX

Exhibit No.	Description
A	Joint Filing Agreement between Rio Tinto plc and Rio Tinto International Holdings Limited
B	Private Placement Agreement between Ivanhoe Mines Ltd. and Rio Tinto International Holdings Limited*
C	Shareholders’ Agreement between Robert M. Friedland and Rio Tinto International Holdings Limited*
D	Registration Rights Agreement by and between Ivanhoe Mines Ltd. and Rio Tinto International Holdings Limited*
E	Amending Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.**
F	Heads of Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.**
G	Amending and Additional Rights Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.
H	Credit Agreement between Rio Tinto International Holdings Limited and Ivanhoe Mines Ltd.

*	Filed as an exhibit to the original Schedule 13D on November 3, 2006
**	Filed as an exhibit to the amended Schedule 13D on September 12, 2007

Page 30 of 30 Pages

EX-99.A

EXHIBIT A

JOINT FILING AGREEMENT

BETWEEN RIO TINTO PLC AND RIO TINTO INTERNATIONAL HOLDINGS LIMITED

          The undersigned hereby agree that the Statement on Schedule 13D, dated November 3, 2006, with respect to the common shares, without par value, of Ivanhoe Mines Ltd. is, and any amendments thereto executed by each of us shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k)(1) under the Securities and Exchange Act of 1934, as amended, and that this Agreement shall be included as an Exhibit to the Schedule 13D and each such amendment. Each of the undersigned agrees to be responsible for the timely filing of the Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning itself contained therein. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 3^rd day of November, 2006.

Rio Tinto plc
By:	/s/ Anette V Lawless
	Name:	Anette V Lawless
	Title:	Company Secretary
Rio Tinto International Holdings Limited
By:	/s/ Anette V Lawless
	Name:	Anette V Lawless
	Title:	Director

EX-99.G

EXHIBIT G

AMENDING AND ADDITIONAL RIGHTS AGREEMENT

     THIS AMENDING AND ADDITIONAL RIGHTS AGREEMENT is made as of the 24^th day of October, 2007, by and between IVANHOE MINES LTD. (“Ivanhoe”) and RIO TINTO INTERNATIONAL HOLDINGS LIMITED (“Rio Tinto”).

     WHEREAS Ivanhoe and Rio Tinto are parties to a private placement agreement made as of October 18, 2006, as amended November 16, 2006 (the “Private Placement Agreement”);

     AND WHEREAS the parties hereto desire to amend the Private Placement Agreement to give effect to certain terms from the heads of agreement (the “Heads of Agreement”) between Ivanhoe and Rio Tinto made as of September 11, 2007;

     NOW THEREFORE, in consideration of the payment by each party to the other party of the sum of $1 (the receipt and sufficiency of which is hereby acknowledged by each of the parties), the parties agree as follows:

1.	Capitalized terms used, but not otherwise defined, herein have the meaning given to them in the Private Placement Agreement.
2.	The definition of “Affiliate” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	““Affiliate” means, in respect of a specified person, any person which Controls, is Controlled by, or is under common Control with, such specified person and, in the case of Rio Tinto, “Affiliate” includes any member of the Rio Tinto Group;”
3.	The definition of “Applicable Law” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	““Applicable Law” means all applicable governmental laws (statutory or common), rules, ordinances, regulations, grants, concessions, franchises, licenses, orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar requirements, whether legislative, municipal, administrative or judicial in nature;”
4.	The definition of “Approved OT Investment Contract Date” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	““Approved OT Investment Contract Date” means the latest of (i) the date upon which Ivanhoe, or a subsidiary of Ivanhoe, enters into the Approved OT Investment Contract, (ii) the date upon which the Ivanhoe board of directors approves the Approved OT Investment Contract and (iii) the date upon which Rio Tinto notifies Ivanhoe that the Approved OT Investment Contract is acceptable;”
5.	The definition of “Business Day” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:

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	““Business Day” means any day other than Saturday and Sunday on which banks are ordinarily open for business in Vancouver, British Columbia and London, England;”
6.	The definition of “OT Subsidiary” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	““OT Subsidiary” means Ivanhoe Mines Mongolia Inc. XXK, a wholly-owned Subsidiary of Ivanhoe;”
7.	The following definition of “Series C Warrants” is added to Section 1.1 of the Private Placement Agreement:
	““Series C Warrants” means the share purchase warrants issued by Ivanhoe to Rio Tinto on October 24, 2007 exercisable to purchase an additional thirty five million (35,000,000) Ivanhoe Shares at a price of ten dollars ($10.00) per share during the period commencing on October 24, 2007 and ending on October 24, 2012;”
8.	The following definition of “Strategic Purchaser” is added to Section 1.1 of the Private Placement Agreement:
	““Strategic Purchaser” means is a person who is not an Eligible Institutional Investor or a retail investor;”
9.	The definition of “Subsidiary” in Section 1.1 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	““Subsidiary” means, in respect of a specified person, any person that is Controlled by such specified person;”
10.	Section 2.14 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	“Ivanhoe covenants and agrees that it will use not less than ninety per cent (90%) of the proceeds from the sale of the Ivanhoe Shares hereunder and from the exercise of the Series A Warrants, Series B Warrants and Series C Warrants to fund expenditures in respect of Operations.”
11.	Section 5.6 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	“If, at any time prior to October 24, 2012, Rio Tinto exercises its right to purchase all or part of the Anti-Dilution Ivanhoe Shares to which it is entitled, Rio Tinto will also be entitled to receive, for no additional consideration, a number of additional share purchase warrants (“the Anti-Dilution Ivanhoe Warrants”) that would result in Rio Tinto having the right to acquire, pursuant to the exercise or conversion of all outstanding Ivanhoe Convertible Securities beneficially owned by one or more members of the Rio Tinto Group, a number of Ivanhoe Shares that, upon issuance, would represent the same percentage of the outstanding Ivanhoe Shares that Rio Tinto would have beneficially owned if all of the then outstanding Ivanhoe

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Convertible Securities beneficially owned by one or more members of the Rio Tinto Group had been fully exercised immediately before the issuance of the Dilutive Ivanhoe Shares and Anti-Dilution Ivanhoe Shares. Each Anti-Dilution Ivanhoe Warrant will entitle Rio Tinto to purchase one (1) Ivanhoe Share at a price equal to the issue price per share of the Anti-Dilution Ivanhoe Shares. If, when the Anti-Dilution Ivanhoe Warrants are issued, any Series A Warrants remain unexercised and outstanding, that number of the Anti-Dilution Ivanhoe Warrants bearing the same proportion as such outstanding number of Series A Warrants bears to the total number of Series A Warrants and Series B Warrants outstanding will have the same terms and attributes as the Series A Warrants and the remainder of the Anti-Dilution Ivanhoe Warrants will have the same terms and attributes as the Series B Warrants, provided that notwithstanding the foregoing the expiry date of the Anti-Dilution Ivanhoe Warrants shall be at least one (1) year from the date of issuance.”

12.	Paragraph 6.1(b) of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	“prior to having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Ivanhoe Shares or Ivanhoe Convertible Securities (other than Ivanhoe Shares or Ivanhoe Convertible Securities acquired through an issuance made by Ivanhoe or, with the consent of Ivanhoe, from Robert M. Friedland or any of his Affiliates) representing, in the aggregate, more than six and sixty five-hundredths per cent (6.65%) of the then issued and outstanding Ivanhoe Shares from time to time; or”
13.	Paragraph 6.1(c) of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	“after having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Ivanhoe Shares if, following such acquisition, the Rio Tinto Group and all persons with whom the Rio Tinto Group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, (excluding, for greater certainty, any Ivanhoe Shares issuable upon the conversion, exchange or exercise of any Ivanhoe Convertible Securities) more than forty six and sixty five-hundredths per cent (46.65%) of the then issued and outstanding Ivanhoe Shares.”
14.	Section 7.2 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:
	“The OT Right of First Refusal will be inoperative unless, at the time that Ivanhoe proposes to enter into an OT Disposal Transaction, Rio Tinto and its Affiliates beneficially own (disregarding any unissued Ivanhoe Shares underlying any unexercised Series A Warrants or Series B Warrants), in the aggregate, a number of Ivanhoe Shares that is equal to or greater than the First Tranche Private Placement Shares.”
15.	Section 8.2 of the Private Placement Agreement is hereby deleted in its entirety and replaced as follows:

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	“The Technical Committee shall consist of two (2) members appointed by Ivanhoe, two (2) members appointed by Rio Tinto and the Technical Committee Chair. Each of Ivanhoe and Rio Tinto may terminate the appointment of any member appointed by it to the Technical Committee and appoint another person in his or her place. Each of Ivanhoe and Rio Tinto may appoint one or more alternates to act in the absence of one or more of its regular members. Any alternate so acting shall be deemed a member. Appointments by a party (including alternates) may be made or changed by Notice to the other party. Rio Tinto’s right to appoint members and be represented on the Technical Committee will immediately terminate if Rio Tinto and its Affiliates beneficially own (disregarding any unissued Ivanhoe Shares underlying any unexercised Series A Warrants or Series B Warrants), in the aggregate, a number of Ivanhoe Shares that is less than the First Tranche Private Placement Shares.”
16.	All references to “fifth (5th)” in Sections 8.4, 8.5 and 8.7 of the Private Placement Agreement will be replaced with “third (3rd)”.
17.	The first reference to “First Closing Date” in Section 13.4 of the Private Placement Agreement is hereby replaced with “Second Closing Date”.
18.	If, at any time and from time to time until October 24, 2012, Ivanhoe is contemplating to, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, or issue any Ivanhoe Shares or Ivanhoe Convertible Securities to any person other than a member of the Rio Tinto Group in any transaction (an “Equity Financing Transaction”) other than an Exempt Ivanhoe Share Transaction, Ivanhoe must give written notice (a “Financing Notice”) to Rio Tinto, identifying the contemplated form of the Equity Financing Transaction (e.g., prospectus offering or private placement) and the contemplated ultimate purchaser or purchasers (other than underwriters, agents and retail or de minimis purchasers) under the Equity Financing Transaction (e.g., a Strategic Purchaser), and offering the equity financing to Rio Tinto on such bona fide arm’s length terms and conditions as Ivanhoe may determine. Upon receiving a Financing Notice, Rio Tinto or, at its direction, another member of the Rio Tinto Group, will have the right (the “Right of First Offer”) to acquire all or, if Ivanhoe has not terminated the Strategic Purchaser Covenant or given written notice to Rio Tinto of its intention to terminate the Strategic Purchaser Covenant, part of the Ivanhoe Shares or Ivanhoe Convertible Securities specified in the Financing Notice for the cash consideration stipulated in the Financing Notice. Rio Tinto or, at its direction, another member of the Rio Tinto Group, may exercise the Right of First Offer by providing written notice to Ivanhoe within 30 days of receipt by Rio Tinto of the Financing Notice (the “Exercise Period”). If Rio Tinto or another member of the Rio Tinto Group, as applicable, exercises the Right of First Offer, then a binding agreement will exist between Rio Tinto or such other member of the Rio Tinto Group, as applicable, and Ivanhoe with respect to the Ivanhoe Shares or Ivanhoe Convertible Securities specified in the Financing Notice for the consideration stipulated in the Financing Notice, and on the terms and conditions therein contained. If the Right of First Offer is not exercised prior to the expiry of the Exercise Period, Ivanhoe will have the right for a period of 60 days following the Exercise Period (the “Closing Period”) to issue all, but not less than all, of the Ivanhoe Shares or Ivanhoe Convertible Securities specified in the Financing Notice to the person or persons named in the Financing Notice for cash consideration having a value equal to or higher than the value

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of the cash consideration for which Ivanhoe offered the Ivanhoe Shares or Ivanhoe Convertible Securities to Rio Tinto and on terms and conditions no less favourable to Ivanhoe than those set out in the Financing Notice. Ivanhoe may only deliver one Financing Notice to Rio Tinto in any 90 day period. Ivanhoe not may deliver a written notice to terminate the Strategic Purchaser Covenant during the Exercise Period or the Closing Period. For greater certainty, Rio Tinto’s rights under Part 5 of the Private Placement Agreement will continue to apply if the Right of First Offer is not exercised.

19.	Until October 24, 2012, Ivanhoe will not, directly or indirectly, offer, sell, contract to sell, grant any option or right to purchase, or issue any Ivanhoe Shares or Ivanhoe Convertible Securities to a Strategic Purchaser if, following such acquisition, the Strategic Purchaser and all persons with whom the Strategic Purchaser is acting jointly or in concert, would beneficially own or exercise control or direction over, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, more than five per cent (5%) of the then issued and outstanding Ivanhoe Shares (the “Strategic Purchaser Covenant”). Upon sixty (60) days prior written notice to Rio Tinto, Ivanhoe may terminate the Strategic Purchaser Covenant.
20.	If Ivanhoe has terminated the Strategic Purchaser Covenant or given written notice to Rio Tinto of its intention to terminate the Strategic Purchaser Covenant and, as a result of the exercise of the Right of First Offer, the Rio Tinto Group and all persons with whom the Rio Tinto Group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, (assuming the conversion, exchange or exercise of all Ivanhoe Convertible Securities held by them and the completion of the acquisition of all Ivanhoe Shares or Ivanhoe Convertible Securities specified in the applicable Financing Notice) more than forty six and sixty five-hundredths per cent (46.65%) of the then issued and outstanding Ivanhoe Shares, Section 6.1 of the Private Placement Agreement will be deleted in its entirety and cease to be of any force and effect.
21.	If, at any time, the Rio Tinto Group and all persons with whom the Rio Tinto Group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, (assuming the conversion, exchange or exercise of all Ivanhoe Convertible Securities held by them) more than forty six and sixty five-hundredths per cent (46.65%) of the then issued and outstanding Ivanhoe Shares, Sections 6.4 and 6.5 of the Private Placement Agreement shall not apply to the Transfer of any Ivanhoe Shares by any of them provided that after such Transfer the Rio Tinto Group and all persons with whom the Rio Tinto Group is acting jointly or in concert continue to beneficially own or exercise control or direction, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, (assuming the conversion, exchange or exercise of all Ivanhoe Convertible Securities held by them) more than forty five per cent (45%) of the then issued and outstanding Ivanhoe Shares.
22.	While Rio Tinto maintains a representative on the Technical Committee, Rio Tinto will have the right to appoint the Managing Director of the OT Subsidiary who:

(a) will report to the Technical Committee Chair;

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(b)	will be responsible for the matters set out in a position description agreed by all members of the Technical Committee; and
(c)	may be replaced by Rio Tinto at any time and from time to time.

Ivanhoe will cause the OT Subsidiary to appoint the Managing Director appointed by Rio Tinto. The position description for the Managing Director may only be amended by the unanimous vote of the Technical Committee. Notwithstanding the foregoing, if Rio Tinto has appointed the Technical Committee Chair, the position description for the Managing Director may be amended by a majority vote of the Technical Committee.

23.

While Rio Tinto maintains a representative on the Technical Committee, Rio Tinto will have the right to appoint the Chief Financial Officer of the OT Subsidiary who:

(a)	will report to report to the Managing Director of the OT Subsidiary;
(b)	will be responsible for the matters set out in a position description agreed by all members of the Technical Committee; and
(c)	may be replaced by Rio Tinto at any time and from time to time.

	Ivanhoe will cause the OT Subsidiary to appoint the Chief Financial Officer appointed by Rio Tinto. The position description for the Chief Financial Officer may only be amended by the unanimous vote of the Technical Committee. Notwithstanding the foregoing, if Rio Tinto has appointed the Technical Committee Chair, the position description for the Chief Financial Officer may be amended by a majority vote of the Technical Committee.
24.	Ivanhoe agrees that the repayment of the Loan Amount (as defined in the Credit Agreement between Ivanhoe and Rio Tinto dated the date hereof) pursuant to a Demand Notice (as defined in the Credit Agreement) delivered in accordance with Section 4.4(a) or (b) of the Credit Agreement may be satisfied by Rio Tinto, upon notice to Ivanhoe, setting off such amount of the subscription price of the Second Tranche Private Placement or the exercise price of any Series A Warrants, Series B Warrants and Series C Warrants as is specified in the notice and is equal in the aggregate to the Loan Amount and Ivanhoe agrees to accept such set-off as full payment and satisfaction of such subscription price or exercise price.
25.	Rio Tinto hereby represents and warrants to Ivanhoe as follows:

(a) Rio Tinto is acquiring the rights to convert the Loan Amount (as defined in the Credit Agreement between Ivanhoe and Rio Tinto dated the date hereof) into Ivanhoe Shares (the “Conversion Rights”) and the Series C Warrants (collectively, the “Credit Transaction Securities”) as principal for its own account, not for the benefit of any other person outside the Rio Tinto Group, for investment only and not with a view to the resale or distribution of all or any of the Credit Transaction Securities or any underlying Ivanhoe Shares nor for the purposes of acquiring Control of Ivanhoe either by itself or in concert with any other person;

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(b)	Rio Tinto is resident in, or otherwise subject to, the Applicable Laws of England and Wales and is an “accredited investor”, as defined under National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian securities regulatory authorities;
(c)	Rio Tinto is not (and is not acquiring the Credit Transaction Securities for the account or benefit of) a U.S. Person and did not execute or deliver this Agreement in the United States;
(d)	Rio Tinto has not received or been provided with a prospectus, offering memorandum or similar document and the decision to acquire the Credit Transaction Securities has not been based on representations as to fact or otherwise made by or on behalf of Ivanhoe except as expressly set forth in the Heads of Agreement and the Credit Agreement between Ivanhoe and Rio Tinto dated the date hereof or by any officer, director, employee or agent of Ivanhoe;
(e)	no person has made to Rio Tinto any written or oral representation:

(i)	that any person will resell or repurchase any of the Credit Transaction Securities or any underlying Ivanhoe Shares to be acquired by Rio Tinto;
(ii)	that any person will refund the consideration paid for any of the Credit Transaction Securities or any underlying Ivanhoe Shares; or
(iii)	as to the future price or value of any of the Credit Transaction Securities or any underlying Ivanhoe Shares;

(f)

Rio Tinto is knowledgeable of, or has been independently advised as to, the Applicable Laws of Rio Tinto’s jurisdiction of residence which would apply to the issuance by Ivanhoe, and the acquisition by Rio Tinto, of the Credit Transaction Securities and such issuance and acquisition complies with all such Applicable Laws and, save as provided in the Private Placement Agreement, will not cause Ivanhoe to become subject to or comply with any disclosure, prospectus or reporting requirements under any such Applicable Laws nor to make any filings or disclosures or seek any approvals of any kind whatsoever from any regulatory authority of any kind whatsoever in Rio Tinto’s jurisdiction of residence; and

(g)

Rio Tinto acknowledges that Ivanhoe will rely on the representations and warranties made herein by Rio Tinto in issuing the Credit Transaction Securities to Rio Tinto.

26.	The parties agree that this Amending and Additional Rights Agreement is an integral part of the transactions contemplated by, and form part of, the Private Placement Agreement. For greater certainty, all references to “this Agreement” in the Private Placement Agreement are deemed to include the amendments and additional provisions set forth in this Amending and Additional Rights Agreement.
27.	Ivanhoe acknowledges and agrees that the breach of any of the terms of Section 18 or 19 of this Amending and Additional Rights Agreement would cause Rio Tinto irreparable harm

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that may not be compensable in damages. Ivanhoe further acknowledges and agrees that it is essential to the effective enforcement of the Private Placement Agreement and this Amending and Additional Rights Agreement that Rio Tinto be entitled to equitable remedies including, but not limited to, specific performance and injunction without being required to show irreparable harm. Ivanhoe acknowledges and agrees that the terms of the Private Placement Agreement and this Amending and Additional Rights Agreement are just and reasonable having regard to all the circumstances.

28.	All other terms of the Private Placement Agreement shall remain unamended and in full force and effect.
29.	This Amending and Additional Rights Agreement supersedes the following sections of the Heads of Agreement:
	Section 6: Use of Proceeds
	Section 7: Negative Covenants: Last Paragraph re Strategic Purchaser Covenant
	Section 7: Positive Covenants: Paragraphs (g) and (h)
	Section 7: Equity Financing Right of First Offer
	Section 11: PPA Amendments
30.	This Amending and Additional Rights Agreement shall be governed by the laws of the Province of British Columbia and the laws of Canada applicable therein.
31.	This Amending and Additional Rights Agreement may be executed in counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument. Delivery of an executed signature page by any party by electronic or facsimile transmission will be as effective as delivery of a manually executed copy of this Amending and Additional Rights Agreement by such party.

[INTENTIONALLY BLANK]

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     IN WITNESS WHEREOF the parties have executed this Amending and Additional Rights Agreement as of the date first written above.

IVANHOE MINES LTD.
By:	/s/ Beverly A. Bartlett
	Title: Vice President & Corporate Secretary
RIO TINTO INTERNATIONAL HOLDINGS LIMITED
By:	/s/ Ben Mathews
	Title: Director

EX-99.H

CREDIT AGREEMENT

THIS AGREEMENT dated for reference the 24^th day of October, 2007

BETWEEN:

IVANHOE MINES LTD.

(the “Borrower”)

AND:

RIO TINTO INTERNATIONAL HOLDINGS LIMITED

(the “Lender”)

WHEREAS:

A. capitalized terms used in these recitals without definitions have the meanings assigned to them in Section 1.1 hereof;

B. the Borrower and the Lender are parties to the PPA pursuant to which the Lender has made an equity investment in the capital of the Borrower and has agreed, subject to certain conditions precedent that remain unfulfilled as of the date hereof, to make additional equity investments in the capital of the Borrower; and

C. pending the fulfillment of the conditions precedent to the Lender’s additional equity investments in the capital of the Borrower under the PPA, the Borrower and the Lender have entered into the Heads of Agreement which contemplates, inter alia, that the Lender will make the Facility available to the Borrower on the terms and conditions herein set forth.

NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree with one another as follows:

ARTICLE 1

INTERPRETATION

1.1 The terms hereinafter defined shall, for all purposes of this Agreement, have the meanings set out below unless the context otherwise requires:

(a) “ABCP Encumbrances” means the security interests in the Borrower’s asset-backed commercial paper investments which may be registered in favour of HSBC Bank Canada or Bank of Montreal with the British Columbia Property Security Registry securing the Borrower’s obligations under ABCP Indebtedness;

(b)	“ABCP Indebtedness” means indebtedness to HSBC Bank Canada or Bank of Montreal of up to CDN$57,000,000 and US$14,000,000 in the aggregate which may be incurred by the Borrower, provided that recourse in respect thereof is limited solely to the Borrower’s asset-backed commercial paper investments and not to any other assets of the Borrower;
(c)	“Advance Date” has the meaning given in Section 2.2;
(d)	“Agreed Currency” has the meaning given in Section 14.14;
(e)	“Amending and Additional Rights Agreement” means the amending and additional rights agreement dated as of the date hereof between the Borrower and the Lender;
(f)	“Applicable Laws” means all applicable governmental laws (statutory or common), rules, ordinances, regulations, grants, concessions, franchises, licences, orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar requirements, whether federal, provincial, territorial, municipal, or local, and whether legislative, administrative or judicial in nature (including Environmental Laws);
(g)	“Availability Period” means the period commencing on the Funding Date and terminating on the Maturity Date or such earlier date as the Facility may be cancelled in accordance with the terms hereof;
(h)	“Borrower Convertible Securities” means securities of the Borrower which are convertible into, exchangeable for or exercisable to acquire Borrower Shares;
(i)	“Borrower Shares” means common shares without par value in the capital of the Borrower, as presently constituted;
(j)	“Closing Conditions” has the meaning given in Section 2.4;
(k)	“Conversion Date” means the date which is three (3) Business Days following the date the Lender provides the written notice to the Borrower referred to in Section 6.1 that it wishes to convert all or part of the Loan Amount into Borrower Shares;
(l)	“Conversion Price” means US$10.00 per Borrower Share as adjusted pursuant to Article 7;
(m)	“Current Market Price” of the Borrower Shares at any date, means the weighted average of the sale prices per Borrower at which the Borrower Shares have traded on the TSX, or, if the Borrower Shares are not listed on the TSX, then on such stock exchange or securities market on which such shares are listed or quoted as may be selected for such purpose by the Borrower’s board of directors, or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market, for any twenty (20) consecutive trading days selected by the

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Borrower commencing not more than forty five (45) trading days and ending not fewer than five (5) trading days before such date; provided, however, if the Borrower Shares are not traded during such forty (40) trading day period for at least twenty (20) consecutive trading days, the simple average of the following prices established for each of twenty (20) consecutive trading days selected by the Borrower commencing not more than forty five (45) trading days before such date:

(i)	the average of the bid and ask prices for each day on which there was no trading; and
(ii)	the closing price of the Borrower Shares for each day on which there was trading,

or, in the event that, at any date, the Borrower Shares are not listed on any stock exchange or securities market or on the over-the-counter market, the current market price shall be as determined by the Borrower’s board of directors or such firm of independent chartered accountants as may be selected by the Borrower’s board of directors, acting reasonably and in good faith in their sole discretion; for these purposes, the weighted average price for any period shall be determined by dividing the aggregate sale prices during such period by the total number of Borrower Shares sold during such period;

(n)

“Debt” means, with respect to any person, all obligations that, in accordance with GAAP, would then be classified as a liability of such person, and, without duplication, includes, with respect to such person:

(i)	an obligation in respect of borrowed money or for the deferred purchase price of assets, property or services or an obligation that is evidenced by a note, bond, debenture or any other similar instrument;
(ii)	a transfer with recourse or with an obligation to repurchase, to the extent of the liability of such person with respect thereto;
(iii)	an obligation under a capital lease;
(iv)	an obligation under a residual value guarantee made with respect to an operating lease in which such person is the lessee;
(v)	a reimbursement obligation or other obligation in connection with a bankers’ acceptance or any similar instrument, or letter of credit or letter of guarantee issued by or for the account of such person;
(vi)	a contingent obligation to the extent that the primary obligation so guaranteed would be classified as “Debt” (within the meaning of this definition) of such person; or

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(vii) the aggregate amount at which any shares in the capital of such person that are redeemable or retractable at the option of the holder of such shares for cash or obligations constituting Debt or any combination thereof;

	provided, however, that there shall not be included for the purpose of this definition any obligation that is on account of trade accounts payable incurred in the ordinary course of business provided such trade accounts are not delinquent and in no event are outstanding for more than ninety (90) days;
(o)	“Demand Notice” means a written notice delivered by the Lender to the Borrower in accordance with Section 4.4 demanding repayment of the Loan Amount;
(p)	“Disclosed Encumbrances” means the Encumbrances in respect of the Security Assets as fully and fairly described in Schedule A;
(q)	“Environmental Claims” means any and all enforcement, clean-up, remedial or other governmental or regulatory actions, orders, directions or proceedings instituted, pending or completed or, to the best of the knowledge of the Borrower, after due inquiry, threatened or anticipated pursuant to any Environmental Laws, and all claims made or, to the best of the knowledge of the Borrower, after due inquiry, threatened, by any third party against the Borrower, or any Material Subsidiary relating to damage, contribution, costs recovery, compensation, loss or inquiry resulting from any violation or alleged violation of any Environmental Laws;
(r)	“Environmental Laws” means laws relating to environmental matters, including abatement of pollution, protection from harm or damage to the environment, protection of wildlife and other living organisms, including endangered species, ensuring public safety from environmental hazards, protection of cultural or historic resources, management, storage or control of Hazardous Substances, releases or threatened releases of Hazardous Substances as wastes into the environment, including air, surface water and groundwater, and all other Applicable Laws relating to the generation, processing, distribution, use, treatment, storage, disposal, handling or transport of Hazardous Substances;
(s)	“Event of Default” has the meaning given in Section 12.1;
(t)	“Facility” means the non-revolving convertible credit facility in the principal amount of US$350,000,000 constituted by this Agreement;
(u)	“Finance Committee” means the finance committee established by the Borrower and the Lender as described in and subject to Article 5;
(v)	“Funding Date” means the date hereof or such later date as:

(i) all of the Closing Conditions have been satisfied or waived (other than Section 2.4(e)); and

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(ii) the initial drawdown notice has been given by the Finance Committee on behalf of the Borrower to the Lender,

	but in any event, not later than November 30, 2007;
(w)	“GAAP” has the meaning given in Section 1.4;
(x)	“Hazardous Substance” means any substance or material whether natural or artificial and whether in solid or liquid form or in the form of a gas or vapour whether alone or in combination (chemically or physically) with any other substance that is causing or capable of causing harm to any living organism or damage to the environment;
(y)	“Heads of Agreement” means the heads of agreement dated as of September 11, 2007 between the Borrower and the Lender relating to the Facility and the Transaction Documents;
(z)	“Interest Period” means a three month period, with the first Interest Period commencing on the Funding Date and ending on the day preceding the three-month anniversary thereof and successive Interest Periods commencing on the same day of the month as the three-month anniversary of the Funding Date and ending on the day preceding the next three-month anniversary thereof; provided that:

(i)	the last day of each Interest Period will be a Business Day; if the last day of an Interest Period is not a Business Day, the last day of that Interest Period only shall be deemed to be the next following Business Day; and
(ii)	the last Interest Period shall be deemed to expire on the later of the Maturity Date and the date on which the Loan Amount is fully repaid or converted into Borrower Shares.

(aa) “LIBOR Rate” means in relation to each Interest Period, the rate per annum at which deposits in US dollars are offered in the London interbank market for a term comparable to such Interest Period, quoted as the Official BBA LIBOR Fixing for such term conducted by the British Bankers’ Association at or about 11 a.m. (London time) on the second business day in London prior to the first day of such Interest Period, and accessed through the appropriate Bloomberg page (or such other page as may replace such page on such service or system, or on another service or system designated by the British Bankers’ Association for the purpose of displaying the rates (expressed to five decimal places) at which dollar deposits are offered by leading banks in the London interbank market) provided that if no rate is quoted as the Official BBA LIBOR Fixing for such term conducted by the British Bankers’ Association for such Interest Period, there shall be taken instead the arithmetic mean of the rates quoted to the Lender by three leading banks selected by the Lender in the London interbank market, at or about 11 a.m. (London time) two business days in London before the first day of such Interest Period for the making of deposits in US dollars for a term comparable to such Interest Period, provided further that if no rate is quoted to the Lender by three leading banks selected by the Lender in the London interbank market, LIBOR shall be determined by the Lender acting reasonably;

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(bb) “Loan” means the aggregate principal amount of the Facility for the time being owing but unpaid by the Borrower;

(cc) “Loan Amount” means the aggregate principal amount of the Facility for the time being owing but unpaid by the Borrower together with all accrued but unpaid interest thereon and other costs, charges and expenses payable by the Borrower hereunder or pursuant to the Property Security Documents;

(dd) “Loan Conditions” means the Closing Conditions and the Subsequent Funding Conditions;

(ee)	“Loan Documents” means this Agreement and the Property Security Documents;
(ff)	“Mandatory Repayment Notice” has the meaning given to it in Section 4.8;

(gg) “Material Adverse Effect” means, in the sole opinion of the Lender, acting reasonably, the effect of any event or circumstance which is or is likely to be materially:

(i)	adverse to the ability of the Borrower to perform or comply with any of its obligations under the PPA or any of the Transaction Documents;
(ii)	prejudicial to the aggregate value of the assets secured by the Property Security Documents;
(iii)	prejudicial to the business, operations or financial condition of the Borrower or any of the Material Subsidiaries taken as a whole; or
(iv)	adverse to the ability of the Borrower or any of the Material Subsidiaries to develop and operate the OT Project in a manner which is consistent with the Operations Plan and Budget

	provided that under no circumstances will the failure by the Borrower or a Subsidiary of the Borrower to enter into an Approved OT Investment Contract in a timely manner or at all be construed as an event or circumstance having a Material Adverse Effect;
(hh)	“Material Subsidiary” means, collectively, the OT Subsidiary and each other Subsidiary of the Borrower through which the Borrower beneficially owns, directly or indirectly, any interest in the OT Subsidiary, the OT Project or any mineral resource situated in Mongolia;
(ii)	“Maturity Date” means September 12, 2010;

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(jj)	“Non-Material Security Assets” means (i) securities issued by SGER or any of its Subsidiaries, (ii) securities issued by any Non-Material Subsidiary, and (c) securities issued by any issuer that, were it a Subsidiary of the Borrower, would be a Non-Material Subsidiary, but for greater certainty does not include any securities issued by any Material Subsidiary (other than SGER or any of its Subsidiaries), the Royalty or any assets of the Borrower comprising the OT Project;
(kk)	“Non-Material Subsidiary” means a Subsidiary of the Borrower which is not a Material Subsidiary;
(ll)	“Notice” has the meaning given in Section 14.4;
(mm)	“Operations Plan and Budget” means the operations plan and budget prepared by and agreed between the Borrower, the Lender and the Technical Committee dated October 12, 2007 providing for, inter alia, the use of the proceeds of the Facility on expenditures in respect of the Operations at the OT Project, as such plan and budget may be amended in accordance with Article 3;
(nn)	“Orders” means all applicable orders, decisions, directives, declarations, decrees, injunctions, writs, judgments, rulings, awards, requests, or the like, rendered by any Governmental Authority having the force of law including those issued under or pursuant to any Environmental Laws;
(oo)	“Parties” means the Lender and the Borrower, collectively, and “Party” means either of them;
(pp)	“Payment Currency” has the meaning given in Section 14.14;
(qq)	“Permitted Debt” means (i) Debt under this Agreement; (ii) Debt of Material Subsidiaries (other than SGER and its Subsidiaries) in favour of the parties and in the amounts specified in Schedule B; (iii) ABCP Indebtedness; (iv) any OT Project parent guarantees granted by the Borrower in relation to any Debt of Material Subsidiaries (other than SGER and its Subsidiaries) in favour of the parties and in the amounts specified in Schedule B; (v) any parent guarantee or letter of credit issued after the date hereof by or for the account of the Borrower in favour of a third party to secure a contractual obligation (other than an obligation to repay borrowed money) of a Material Subsidiary (other than SGER and its Subsidiaries) to such third party in furtherance of Operations contemplated by the Operations Plan and Budget or, if the Suspension Plan is in effect, the Suspension Plan; (vi) and parent guarantee granted by the Borrower in the ordinary course of business in relation to any Subsidiary for business related office equipment leases, including photocopiers, office furniture and computers; (vii) Debt of the Borrower for business related office equipment leases, including photocopiers, office furniture and computers; (viii) Debt secured by Permitted Encumbrances (other than paragraph (viii) of the definition thereof); and (ix) Debt existing on the date hereof secured by Permitted Encumbrances within the meaning of paragraph (viii) of the definition thereof;

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(rr) “Permitted Encumbrances” means at any time and from time to time:

(i)	undetermined or inchoate Encumbrances incidental to construction, maintenance or operations which have not at the time been filed pursuant to law;
(ii)	the Encumbrance of taxes and assessments for the then current year, the Encumbrance for taxes and assessments not at the time overdue and Encumbrances securing worker’s compensation assessments which are not overdue;
(iii)	cash or governmental obligations deposited in the ordinary course of business in connection with contracts, bids, tenders or to secure worker’s compensation, unemployment insurance, surety or appeal bonds, costs of litigation, when required by law, public and statutory obligations, Encumbrances or claims incidental to current construction, mechanics’, warehousemen’s, carriers’ and other similar Encumbrances;
(iv)	security given in the ordinary course of business to a public utility or any Governmental Authority when required by such utility or Governmental Authority in connection with the operations of the Borrower or its Subsidiaries in the ordinary course of business;
(v)	easements, rights of way and servitudes in existence at the date hereof and future easements, rights of way and servitudes which in the reasonable opinion of the Lender will not in the aggregate materially impair the use of real property concerned for the purpose for which it is held or used by the Borrower or its Subsidiaries;
(vi)	all rights reserved to or vested in any Governmental Authority by the terms of any lease, licence, franchise, grant or permit held by the Borrower or its Subsidiaries or by any statutory provision to terminate any such lease, licence, franchise grant or permit or to require annual or periodic payments as a condition of the continuance thereof or to distrain against or to obtain an Encumbrance on any property or assets of the Borrower or its Subsidiaries in the event of failure to make such annual or other periodic payments;
(vii)	the Encumbrances constituted by or pursuant to the Loan Documents and any registrations made in respect thereof;
(viii)	the Disclosed Encumbrances;
(ix)	the ABCP Encumbrances; and
(x)	such other Encumbrances as may from time to time be consented to in writing by the Lender;

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(ss)	“person” means any entity, whether an individual, bank, trustee, corporation, partnership, joint venture, association, joint stock company, trust, estate, executor, administrator, unincorporated organization, business association, firm, Governmental Authority or otherwise a person, firm, corporation or other entity;
(tt)	“PPA” means the private placement agreement dated as of October 18, 2006 between the Borrower and the Lender, as amended November 16, 2006 and by the Amending and Additional Rights Agreement and as it may be further amended, supplemented or restated, from time to time;
(uu)	“Property Security Documents” has the meaning given in Section 8.1;
(vv)	“Royalty” means the 2% net smelter returns royalty from the OT Subsidiary purchased by the Borrower from BHP Minerals International Exploration Inc. pursuant to an agreement evidenced by a letter of BHP Minerals International Exploration Inc. dated October 31, 2003 accepted by the Borrower on November 1, 2003;
(ww)	“Security Assets” means all present and future assets, effects, undertaking and property of the Borrower, both real and personal including, without limitation, the Royalty;
(xx)	“SGER” means SouthGobi Energy Resources Ltd.;
(yy)	“Stock Exchanges” means, collectively, the NASDAQ, the NYSE and the TSX;
(zz)	“Subsequent Funding Conditions” has the meaning given in Section 2.5;
(aaa)	“Suspension Date” means the date specified as the Suspension Date in the Operations Plan and Budget or such later date as may be determined by the unanimous decision of the Technical Committee;
(bbb)	“Suspension Plan” means the suspension plan prepared by and agreed between the Borrower, the Lender and the Technical Committee dated October 12, 2007 providing for, inter alia, the orderly cessation of operations and the ongoing care and maintenance of the OT Project commencing on the Suspension Date, as such plan may be amended in accordance with Article 3;
(ccc)	“Taxes” means taxes, rents, rates, deductions, withholdings, imposts, levies, premiums, assessments, governmental fees or dues of any kind or nature whatsoever imposed by any Governmental Authority having power to tax, together with any penalties, fines, additions to tax and interest thereon; and
(ddd)	“Transactions Documents” means:

(i)	the Loan Documents;
(ii)	the warrant certificate relating to the Series C Warrants; and
(iii)	the Amending and Additional Rights Agreement.

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1.2 Capitalized terms used, but not otherwise defined, herein have the meaning given to them in the PPA.

1.3 The following rules shall be applied in interpreting this Agreement:

(a)	“this Agreement” means this Agreement, including the schedules hereto, as it may from time to time be supplemented, amended or modified and in effect; and the words “hereby”, “herein”, “hereto”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, subsection, clause, subclause, paragraph, subparagraph or other subdivision;
(b)	any reference to “interest” means interest at the rate calculated and payable as herein provided;
(c)	all references in this Agreement to designated “Articles”, “Sections”, “subsections”, “clauses”, “subclauses”, “paragraphs”, “subparagraphs” and other subdivisions are to the designated Articles, Sections, subsections, clauses, subclauses, paragraphs, subparagraphs and other subdivisions of this Agreement;
(d)	the headings are for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;
(e)	where the context so admits, all references in this Agreement to the singular shall be construed to include the plural, the masculine to include the feminine and neuter gender and, where necessary, a body corporate, and vice versa;
(f)	the word “including”, when following any general statement, term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather such general statement, term or matter is to be construed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;
(g)	any reference to a statute includes and is a reference to such statute and to the regulations made pursuant thereto and, unless otherwise expressly provided herein, includes a reference to all amendments made thereto and in force from time to time, and to any statute or regulation that may be passed which has the effect of supplementing or superseding such statute or such regulation;
(h)	all references to currency are deemed to mean lawful money of the United States of America (unless expressed to be in some other currency) and all amounts to be calculated or paid pursuant to this Agreement are to be calculated in lawful money of the United States of America and paid in immediately available funds;

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(i)	any reference to an entity includes and is also a reference to any entity that is a successor to such entity;
(j)	in the event that any date on which an action is required to be taken hereunder by any of the Parties is not a Business Day, such action will be required to be taken on the next succeeding day which is a Business Day; and
(k)	where any amount to be calculated pursuant to this Agreement is in Canadian dollars, such amount shall converted into U.S. dollars using the Bank of Canada noon rate of exchange on the applicable date.

1.4 Wherever in this Agreement reference is made to generally accepted accounting principles, such reference shall be deemed to be to the generally accepted accounting principles from time to time approved by the Financial Accounting Standards Board of the United States of America (or its relevant successor institute), and applicable on a consolidated basis as at the date on which such calculation is made or required to be made in accordance with generally accepted accounting principles (“GAAP”). Where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other accounting computation is required to be made for the purpose of this Agreement or any Loan Document, such determination or calculation shall, to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the Parties, be made in accordance with generally accepted accounting principles applied on a basis consistent with its past practice (and where no past practice exists, on a consistent basis).

1.5 The following schedules are appended to and form a part of this Agreement:

Schedule A	-	Disclosed Encumbrances
Schedule B	-	Permitted Debt
Schedule C	-	General Security Agreement

ARTICLE 2

THE LOAN

2.1 Subject to the terms and conditions of this Agreement, and based and relying upon the representations and warranties set forth herein, the Lender agrees that it will advance the Facility to the Borrower.

2.2 During the Availability Period, the Finance Committee, on behalf of the Borrower, shall be entitled to provide five (5) Business Days’ (or such shorter period as may be consented to by the Lender) irrevocable written notice to the Lender that it wishes the Lender to advance a draw of the Facility to the Borrower. The initial advance of the Facility shall be in a minimum amount of US$150 million and all subsequent advances of the Facility shall be in a minimum amount of the lesser of US$25 million and the undrawn amount of the Facility, provided that the aggregate amount of Loans under the Facility shall not exceed US$350 million

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and provided that the Lender shall not be required to make more than one advance of a Loan in any 30 day period. On the fifth (5^th) Business Day (or such earlier date as may be consented to by the Lender) (the “Advance Date”) following receipt of the relevant notice from the Finance Committee, on behalf of the Borrower, and in any event following satisfaction or waiver of the Loan Conditions, the Lender shall advance the relevant portion of the Facility to the Borrower or procure such advance to the Borrower by wire transfer into the bank account designated by the Finance Committee in the relevant notice. For greater certainty, only the Finance Committee on behalf of the Borrower, and not the Borrower itself, shall be entitled to request the Lender to advance a draw of the Facility to the Borrower.

2.3 The Facility is not a revolving facility and no amounts repaid or converted thereunder may be redrawn by the Borrower.

2.4 The obligations of the Lender (i) pursuant to this Agreement; and (ii) to make the first advance of the Facility to the Borrower are subject to and conditional upon each of the following terms and conditions (collectively, the “Closing Conditions”) being satisfied:

(a)	the Borrower shall have provided or caused to be provided to the Lender the constating documents of the Borrower and each of the Material Subsidiaries (other than SGER and its Subsidiaries), together with evidence that all necessary corporate authorizations have been obtained by the Borrower and each of the Material Subsidiaries (other than SGER and its Subsidiaries) with respect to the transactions contemplated by the Transaction Documents;
(b)	the Borrower and the Lender shall have finalized the Operations Plan and Budget and the Suspension Plan;
(c)	the Borrower and the Lender shall have finalized the position descriptions for the Managing Director and the Chief Financial Officer of the OT Subsidiary;
(d)	all consents, waivers, permits, orders and approvals of all regulatory authorities in connection with, or in order to permit, the transactions contemplated by the Transaction Documents shall have been obtained or received on terms and conditions satisfactory to the Lender, including but not limited to the approval of the Stock Exchanges to the listing of all Borrower Shares to be issued pursuant to the Transaction Documents;
(e)	the Borrower shall have executed and delivered, and caused each Material Subsidiary that is a party to any of the Transaction Documents to execute and deliver, to the Lender each of the Transaction Documents in form and substance satisfactory to the Lender and each shall be in full force and effect;
(f)	the Property Security Documents, all ancillary documents required by the Lender, all share certificates representing shares pledged by the Borrower to the Lender pursuant to the Property Security Documents and any applicable financing statements or other notices in respect thereof shall have been filed, registered, entered or recorded in all offices of public record in the opinion of the Lender, acting reasonably, necessary or desirable to preserve and protect the security created in favour of the Lender against the interests or claims of third parties;

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(g)	the Lender shall have received legal opinions from counsel to the Borrower and each Material Subsidiary that is a party to any of the Transaction Documents, in form and substance acceptable to the Lender, regarding the status, capacity and corporate power of the Borrower and each such Material Subsidiary, as the case may be, the due execution and delivery by it of any agreements contemplated herein to which it is a party, including the Transaction Documents, that such agreements have been duly authorized, executed and delivered, that such agreements constitute legal, valid and binding obligations of the Borrower and each such Material Subsidiary, as the case may be, enforceable against the Borrower and each such Material Subsidiary, as the case may be, in accordance with their terms, that all Borrower Shares to be issued pursuant to the Transaction Documents will, when issued, be duly issued and non-assessable and will be listed on the Stock Exchanges and such other matters as the Lender or its counsel may reasonably request;
(h)	no representation or warranty made by the Borrower in or pursuant to the Loan Documents shall be untrue or incorrect in any material respect;
(i)	no event shall have occurred and be continuing which constitutes an Event of Default or, with the giving of notice or the lapse of time, would constitute an Event of Default hereunder;
(j)	no Material Adverse Effect shall have occurred, is continuing or is likely to continue in the reasonably formed opinion of the Lender;
(k)	neither the Borrower nor any Material Subsidiary shall be in breach of any covenant contained in any Transaction Document; and
(l)	all other documents required by the terms hereof shall have been executed and delivered to the Lender in form and substance satisfactory to the Lender and each shall be in full force and effect.

2.5 Notwithstanding any other provision of this Agreement, the obligation of the Lender to advance the Facility in accordance with Section 2.2 is subject to and conditional upon each of the following terms and conditions (collectively, the “Subsequent Funding Conditions”) being satisfied:

(a)	no representation or warranty made by the Borrower in or pursuant to the Loan Documents shall be untrue or incorrect in any material respect on and as of the Advance Date with reference to the facts subsisting at that time;
(b)	no event shall have occurred and be continuing on and as of the Advance Date which constitutes an Event of Default or potential Event of Default or, with the giving of notice or the lapse of time, would constitute an Event of Default hereunder;

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(c)	no Material Adverse Effect shall have occurred or be continuing prior to or on the Advance Date; and
(d)	neither the Borrower nor any Material Subsidiary shall be in breach of any covenant contained in any Transaction Document.

ARTICLE 3

USE OF PROCEEDS

3.1 The Borrower shall apply the proceeds of the Facility exclusively on expenditures in accordance with the Operations Plan and Budget prior to the Suspension Date and the Suspension Plan on and after the Suspension Date. The Borrower shall not spend any amount borrowed under the Facility on or in relation to any project other than the OT Project, except that up to US$17.5 million of the Facility may be spent on or in relation to other projects located in Mongolia. Any departure in the application of amounts borrowed under the Facility from the Operations Plan and Budget or the Suspension Plan, as applicable, or any amendment to the Operations Plan and Budget or the Suspension Plan must be agreed by the unanimous vote of the Technical Committee. Notwithstanding the foregoing, if the Lender has appointed the Technical Committee Chair, any departure in the application of amounts borrowed under the Facility from the Operations Plan and Budget or the Suspension Plan or any amendment to the Operations Plan and Budget or the Suspension Plan may be agreed by a majority vote of the Technical Committee. For greater certainty, the obligations contained in this Section 3.1 shall survive any repayment, conversion or cancellation of the Facility, except that upon a Mandatory Repayment pursuant to Section 4.8(b), the obligations contained in this Section 3.1 shall not apply in respect of that portion of the proceeds of the Facility equal to the amount of such Mandatory Repayment.

ARTICLE 4

PAYMENT OF INTEREST AND REPAYMENT OF THE LOAN

4.1 The Borrower shall pay interest on the principal amount of the Facility from time to time outstanding, calculated as and from the date of the advance thereof, after as well as before demand, default and judgment, in accordance with the following provisions:

(a)	the Loan shall bear interest during each Interest Period at a rate equal to the LIBOR Rate in effect at such time plus 3.3% per annum calculated on an actual over 360 day basis;
(b)	if no Event of Default has occurred and is continuing on the last day of an Interest Period, the interest on the Loan then accrued will be added to and form part of the Loan;
(c)	if an Event of Default has occurred and is continuing on the last day of an Interest Period, the interest on the Loan then accrued shall be paid by the Borrower in immediately available funds to the Lender unless the Lender directs, in writing, that such interest may be added to and form part of the Loan;

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(d)	notwithstanding any other provision of this Section 4.1, once US$108 million in interest on the Loan has been added to and forms part of the Loan, all additional interest accrued on the Loan shall be paid by the Borrower in immediately available funds to the Lender at the end of each Interest Period;
(e)	notwithstanding any other provision of this Section 4.1 and the other provisions of this Agreement, if any amount payable by the Borrower to the Lender is not paid when due (whether at the Maturity Date, by acceleration or otherwise), the Loan shall thereafter bear interest during each Interest Period at a rate equal to the LIBOR Rate in effect at such time plus 5.3% per annum on an actual over 360 day basis;
(f)	interest will be calculated by the Lender and the determination of the Lender will, in the absence of manifest error, be binding upon the Borrower; and
(g)	changes in the LIBOR Rate shall cause an adjustment of the interest rate applicable to the Loan in respect of the next Interest Period without the necessity of any notice to the Borrower but upon the request of the Borrower the Lender shall inform the Borrower of the rate from time to time being applied.

4.2 For greater certainty, interest on the Loan which is added to and forms part of the Loan will not reduce the amount of the Facility available to the Borrower.

4.3 The Borrower may not prepay the Loan Amount.

4.4 The Lender may demand repayment of the Loan Amount in full by delivering a Demand Notice to the Borrower:

(a)	contemporaneously or within 30 days after the completion of the Second Tranche Private Placement;
(b)	contemporaneously or within 30 days after the exercise of any Series A Warrants, Series B Warrants and/or Series C Warrants having an aggregate exercise price equal to or greater than the Loan Amount on the date of exercise, or
(c)	following an Ivanhoe Change of Control;

and the Borrower shall repay the Loan Amount within five (5) Business Days of receipt from the Lender of the Demand Notice. The Facility will be cancelled upon the Lender delivering a Demand Notice to the Borrower.

4.5 Notwithstanding any other provision in this Article 4, but subject always to Section 6.2, on the Maturity Date: (i) the Loan Amount due and owing to the Lender under this Agreement shall be paid by the Borrower to the Lender; and (ii) the Facility shall be cancelled.

4.6 Whenever any payment to be made hereunder is due on a day that is not a Business Day, such payment shall be made on the immediately following Business Day and interest shall accrue due and be payable to such following Business Day.

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4.7 All payments to be made to the Lender hereunder shall be made at such place which the Lender may specify by notice in writing, by wire transfer or by other method of payment in immediately available funds acceptable to the Lender, on the due date for payment of the same, and, if any payment made to the Lender hereunder is made after 11:00 a.m. (Pacific time) on any day, such payment shall be deemed to have been made on the immediately following Business Day for purposes of the calculation of interest and interest shall accrue due to such following Business Day.

4.8 Following and within 30 days after the completion of:

(a)

an equity financing by the Borrower or any of its Subsidiaries (including for greater certainty a financing of debt convertible into equity but excluding (i) a financing that is made solely to one or more members of the Rio Tinto Group or (ii) a financing that is made by a Subsidiary of the Borrower where the use of proceeds of such financing is solely to fund the operations of one or more mineral exploration or mine development projects owned directly or indirectly by that Subsidiary (other than the OT Project); or

(b)

the sale by the Borrower or any of its Subsidiaries of any assets (including issued shares of any Subsidiary of the Borrower) with an aggregate value in excess of US$50 million,

the Lender may at its option deliver a notice (a “Mandatory Repayment Notice”) to the Borrower requiring the funds therefrom to be used to, and the Borrower shall within five Business Days of receipt of the Mandatory Repayment Notice, repay the Loan Amount or such portion of the Loan Amount as is equal to such proceeds. For greater certainty, a repayment pursuant a Mandatory Repayment Notice will not cancel the Facility.

4.9 The Lender shall determine in its absolute discretion the order and manner in which payments made to the Lender in respect of principal, interest, and other amounts payable under the Loan Documents are to be applied hereto or thereto, and the Borrower hereby irrevocably waives the right to direct the application of any such payment or proceeds. The Lender shall have the continuing and exclusive right to apply and reverse and re-apply any and all such payments and proceeds to any portion of the amounts due under any Loan Document.

4.10 All payments required to be made by the Borrower under this Agreement shall, unless otherwise agreed in writing with the Lender, be calculated without reference to any set-off or counterclaim and shall be made free and clear of and without any deduction for or on account of (i) any set-off or counterclaim, (ii) exchange and (iii) any bank charges.

4.11 A certificate by the Lender as to the Loan Amount payable by the Borrower or as to a certain interest rate applicable to a Loan Amount shall be conclusive and binding on the Borrower absent manifest error.

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ARTICLE 5

FINANCE COMMITTEE

5.1 The Borrower and the Lender have established a Finance Committee which is responsible for drawdowns on the Facility. The Finance Committee is also responsible for reviewing, and reporting to the Borrower and the Lender on, actual expenditures versus the Operations Plan and Budget and the Suspension Plan, as applicable, at least once every eight weeks and immediately prior to each drawdown. The Finance Committee shall consist of one member appointed by the Borrower (currently Tony Giardini) and one member appointed by the Lender (currently Jo-Ann Goh). Each of the Borrower and the Lender may terminate the appointment of any member appointed by it to the Finance Committee and appoint another person in his or her place. Each of the Borrower and the Lender may appoint one or more alternates to act in the absence of one or more of its regular members. Any alternate so acting shall be deemed a member. Appointments by a Party (including alternates) may be made or changed by notice to the other Party. All decisions of the Finance Committee require unanimity.

ARTICLE 6

CONVERSION

6.1 At any time until the Loan Amount is fully paid by the Borrower to the Lender, or automatically converted pursuant to Section 6.2, the Lender shall have the option, at any time and from time to time, to convert all or part of the Loan Amount (subject to a maximum equal to the Loan plus all accrued but unpaid interest (subject to a maximum of $108 million of accrued but unpaid interest) less the amount of any interest added to the Loan pursuant to Section 4.1(b) or (c)) into Borrower Shares at the Conversion Price upon three (3) Business Days’ prior written notice by the Lender to the Borrower.

6.2 If the Loan Amount has not previously been repaid in full and no Event of Default has occurred and is continuing, the Loan Amount (subject to a maximum equal to the Loan plus all accrued but unpaid interest (subject to a maximum of $108 million of accrued but unpaid interest) less the amount of any interest added to the Loan pursuant to Section 4.1(b) or (c)) will be automatically converted into Borrower Shares on the Maturity Date at the Conversion Price.

6.3 Upon the Lender delivering the written notice to the Borrower referred to in Section 6.1, the Borrower shall issue to the Lender (or such other person as the Lender may direct) the number of Borrower Shares as is equal to the quotient obtained by dividing (x) the Loan Amount to be converted, by (y) the Conversion Price.

6.4 Once the Lender has provided the written notice to the Borrower referred to in Section 6.1, the number of Borrower Shares to be issued upon such exercise of the conversion right shall be deemed to have been issued and the Lender (or such person in whose name any certificate representing Borrower Shares shall be deliverable upon such conversion) shall be deemed to be a registered holder of such Borrower Shares as of and from the Conversion Date.

6.5 The Borrower shall immediately after the Conversion Date deliver to the Lender a certificate or certificates registered in the name of the Lender (or such person in whose name such certificate or certificates shall be deliverable) representing the number of Borrower Shares to which the Lender is entitled hereunder.

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6.6 Conversions pursuant to this Article 6 will extend only to the maximum number of whole Borrower Shares into which all or a portion of the Loan Amount to be converted may be converted in accordance with the provisions hereof. The Borrower will not be required to issue fractional Borrower Shares upon conversion of all or a portion of the Loan Amount, but any fractional Borrower Share shall be rounded up to the next whole number.

6.7 The Borrower undertakes in favour of the Lender, so long as any conversion right in respect of this Agreement may be exercised, and, without limiting the generality of the foregoing, as a condition to the taking of any action which would require an adjustment to the Conversion Price pursuant to Article 7, to ensure that any and all Borrower Shares issued upon the conversion of the Facility shall be duly and validly issued and allotted and shall be fully paid, freely tradable and free of any prior subscription or other right, subject to resale restrictions under applicable securities legislation. The Borrower will, at its expense and as expeditiously as possible, use its reasonable commercial efforts to cause all Borrower Shares issuable upon the conversion of all or a portion of the Facility to be duly listed on the Stock Exchanges and/or any other stock exchange upon which the Borrower Shares may be then listed prior to the issuance of such shares no later than seven (7) days from the date of issue.

ARTICLE 7

ADJUSTMENTS FOR THE PURPOSES OF CONVERSION PROVISIONS

7.1 The Conversion Price in effect at any time is subject to adjustment from time to time in the events and in the manner provided in this Article 7.

7.2 If, and whenever at any time prior to the repayment of the Facility by the Borrower, the Borrower:

(a)	issues Borrower Shares or securities exchangeable for or convertible into Borrower Shares to all or substantially all the holders of the Borrower Shares as a stock dividend; or
(b)	makes a distribution on its outstanding Borrower Shares payable in Borrower Shares or securities exchangeable for or convertible into Borrower Shares; or
(c)	subdivides its outstanding Borrower Shares into a greater number of shares; or
(d)	consolidates its outstanding Borrower Shares into a lesser number of shares;

(any of such events being called a “Borrower Share Reorganization”), then the Conversion Price will be adjusted effective immediately after the effective date or record date, whichever is earlier, for the happening of a Borrower Share Reorganization at which the holders of Borrower Shares are determined for the purpose of the Borrower Share Reorganization by multiplying the Conversion Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which is the number of Borrower Shares outstanding on such effective date or

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record date before giving effect to such Borrower Share Reorganization and the denominator of which is the number of Borrower Shares outstanding immediately after giving effect to such Borrower Share Reorganization (including, in the case where securities exchangeable for or convertible into Borrower Shares are distributed, the number of Borrower Shares that would have been outstanding had all such securities been exchanged for or converted into Borrower Shares on such effective date or record date).

7.3 To the extent that any adjustment in the Conversion Price occurs pursuant to Section 7.2 as a result of the fixing by the Borrower of a record date for the distribution of securities exchangeable for or convertible into Borrower Shares, the Conversion Price shall be readjusted immediately after the expiry of any relevant exchange or conversion right to the Conversion Price which would then be in effect based upon the number of Borrower Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right. If the Lender has not converted all of the Loan Amount pursuant to Article 6 on or prior to the record date of any stock dividend or distribution or the effective date of any subdivision or consolidation, as the case may be, upon the conversion of such unconverted part of the Loan Amount thereafter, the Lender shall be entitled to receive and shall accept in lieu of the number of Borrower Shares then subscribed for and purchased by the Lender, at the Conversion Price determined in accordance with Section 7.2, the aggregate number of Borrower Shares that the Lender would have been entitled to receive as a result of such Borrower Share Reorganization, if, on such record date or effective date, as the case may be, the Lender had been the holder of record of the number of Borrower Shares so subscribed for and purchased.

7.4 If, and whenever at any time prior to the repayment of the Facility by the Borrower, the Borrower fixes a record date for the issue of rights, options or warrants to the holders of all or substantially all of its outstanding Borrower Shares under which such holders are entitled to subscribe for or purchase Borrower Shares or securities exchangeable for or convertible into Borrower Shares, where:

(a)	the right to subscribe for or purchase Borrower Shares, or the right to exchange securities for or convert securities into Borrower Shares, expires not more than forty five (45) days after the date of such issue (the period from the record date to the date of expiry being referred to as the “Rights Period”); and
(b)	the cost per Borrower Share during the Rights Period (inclusive of any cost or acquisition of securities exchangeable for or convertible into Borrower Shares in addition to any direct cost of Borrower Shares) (such cost being referred to as the “Per Share Cost”) is less than ninety-five (95%) percent of the Current Market Price of the Borrower Shares on the record date;

(any of such events being referred to as a “Rights Offering”), then the Conversion Price will be adjusted to a price determined in accordance with Section 7.5.

7.5 In the event of a Rights Offering, the Conversion Price will be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Conversion Price in effect immediately prior to the end of the Rights Period by a fraction:

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(a) the numerator of which is the aggregate of:

(i)	the number of Borrower Shares outstanding as of the record date for the Rights Offering; and
(ii)	a number determined by dividing the product of the Per Share Cost and:

A.

where the event giving rise to the application of this Section 7.5 was the issue of rights, options or warrants to the holders of Borrower Shares under which such holders are entitled to subscribe for or purchase additional Borrower Shares, the number of Borrower Shares so subscribed for or purchased during the Rights Period, or

B.

where the event giving rise to the application of this Section 7.5 was the issue of rights, options or warrants to the holders of Borrower Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Borrower Shares, the number of Borrower Shares for which those securities so subscribed for or purchased during the Rights Period could have been exchanged or into which they could have been converted,

	by the Current Market Price of the Borrower Shares as of the record date for the Rights Offering; and
(b)	the denominator of which is

(i)	in the case described in subsection 7.5(a)(ii)A, the number of Borrower Shares outstanding, or
(ii)	in the case described in subsection 7.5(a)(ii)B, the number of Borrower Shares that would be outstanding if all the Borrower Shares described in subsection 7.5(a)(ii)B had been issued,

as at the end of the Rights Period.

Any Borrower Shares owned by or held for the account of the Borrower or any Subsidiary of the Borrower will be deemed not to be outstanding for the purpose of any such computation.

7.6 If, by the terms of any rights, options or warrants referred to in this Article 7, there is more than one purchase, conversion or exchange price per Borrower Share, the Per Share Cost will be calculated for purposes of the adjustment with reference to the aggregate price of the total number of additional Borrower Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible securities so offered, on the basis of the lowest purchase, conversion or exchange price per Borrower Share, as the case may be.

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7.7 To the extent that any adjustment in the Conversion Price occurs pursuant to Section 7.5 as a result of the issue or distribution of rights, options or warrants referred to in Section 7.5, the Conversion Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Conversion Price which would then be in effect based upon the number of Borrower Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

7.8 If the Lender has converted any part of the Loan Amount pursuant to Article 6 in accordance herewith during the period beginning immediately after the record date for a Rights Offering and ending on the last day of the Rights Period therefor, the Lender will, in addition to the Borrower Shares to which it is otherwise entitled upon such exercise, be entitled to that number of additional Borrower Shares equal to the result obtained when the difference, if any, between:

(a)	the Conversion Price in effect immediately prior to the end of such Rights Offering; and
(b)	the Conversion Price as adjusted hereunder for such Rights Offering;

is multiplied by the number of Borrower Shares received upon the conversion of such part of the Loan Amount pursuant to Article 6 during such period, and the resulting product is divided by the Conversion Price as adjusted hereunder for such Rights Offering, provided that the provisions of Section 7.1 will be applicable to any fractional interest in a Borrower Share to which the Lender might otherwise be entitled. Such additional Borrower Shares will be deemed to have been issued to the Lender immediately following the end of the Rights Period and a certificate for such additional Borrower Shares will be delivered to the Lender within ten (10) Business Days following the end of the Rights Period.

7.9 If, and whenever at any time prior to the repayment of the Facility by the Borrower, the Borrower fixes a record date for the issue or the distribution to the holders of all or substantially all of its Borrower Shares of:

(a)	shares of the Borrower of any class other than Borrower Shares,
(b)	rights, options or warrants to acquire:

(i)	Borrower Shares or securities exchangeable for or convertible into Borrower Shares (other than rights, options or warrants of the nature described in Section 7.4), or
(ii)	shares other than Borrower Shares or securities exchangeable for or convertible into shares other than Borrower Shares or property or other assets of the Borrower,

(c)	evidences of indebtedness, or
(d)	any property or other assets

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and if such issuance or distribution does not constitute a Borrower Share Reorganization or a Rights Offering (any of such non-excluded events being referred to as a “Special Distribution”), the Conversion Price will be adjusted in accordance with Section 7.10.

7.10 In the event of a Special Distribution, the Conversion Price will be adjusted effective immediately after the record date for the Special Distribution to a price determined by multiplying the Conversion Price in effect on such record date by a fraction:

(a) the numerator of which is:

(i)	the product of the number of Borrower Shares outstanding on such record date and the Current Market Price of the Borrower Shares on such record date; less
(ii)	the aggregate fair market value (as determined by the board of directors of the Borrower, acting reasonably and in good faith) to the holders of the Borrower Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and

(b) the denominator of which is the number of Borrower Shares outstanding on such record date multiplied by the Current Market Price of the Borrower Shares on such record date.

Any Borrower Shares owned by or held for the account of the Borrower or any Subsidiary of the Borrower will be deemed not to be outstanding for the purpose of any such computation.

7.11 To the extent that any adjustment in the Conversion Price occurs pursuant to Section 7.10 as a result of the issue or distribution of rights, options or warrants referred to in Section 7.10, the Conversion Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Conversion Price which would then be in effect based upon the number of Borrower Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

7.12 If, and whenever at any time prior to the repayment of the Facility by the Borrower, there is a reclassification or redesignation of the Borrower Shares outstanding at any time or change of the Borrower Shares into other shares or into other securities (other than a Borrower Share Reorganization), or a consolidation, amalgamation or merger of the Borrower with or into any other corporation or other entity (other than a consolidation, amalgamation or merger which does not result in any reclassification or redesignation of the outstanding Borrower Shares or a change of the Borrower Shares into other shares), or a transfer of the undertaking or assets of the Borrower as an entirety or substantially as an entirety to another corporation or other entity (any of such events being referred to as a “Capital Reorganization”), the Lender, upon any conversion pursuant to Article 6 after the effective date of such Capital Reorganization, will be entitled to receive in lieu of the number of Borrower Shares to which such Lender was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property which the Lender would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, the Lender had been the registered holder of the number of Borrower Shares to which such Lender was theretofore entitled upon the such conversion.

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7.13 If, and whenever at any time prior to the repayment of the Facility by the Borrower, there is a Borrower Share Reorganization, a Rights Offering or a Special Distribution, that results in an adjustment pursuant to Section 7.2, 7.5 or 7.10, as the case may be, or a readjustment pursuant to Section 7.3, 7.7 or 7.11, as the case may be, in the Conversion Price, then the number of Borrower Shares acquirable upon the subsequent conversion of any or all of the Loan Amount pursuant to Article 6 shall be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of Borrower Shares acquirable upon the conversion immediately prior to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction used in the adjustment or readjustment of the Conversion Price.

7.14 The adjustments provided for in this Article 7 are cumulative and will, in the case of adjustments to the Conversion Price, be computed to the nearest one-tenth of one cent and will be made successively whenever an event referred to therein occurs, subject to the provisions of Sections 7.14 to 7.24.

7.15 No adjustment in the Conversion Price is required to be made unless such adjustment would result in a change of at least one (1%) percent in the prevailing Conversion Price; provided, however, that any adjustments which, except for the provisions of this Section 7.15, would otherwise have been required to be made, will be carried forward and taken into account in any subsequent adjustments.

7.16 No adjustment in the Conversion Price (or in the number of Borrower Shares acquirable pursuant to Section 7.13 upon the conversion of any or all of the Loan Amount pursuant to Article 6) will be made in respect of any event described in this Article 7, other than the events referred to in subsections 7.2(c) and (d), if the Lender is entitled to participate in such event on the same terms, mutatis mutandis, as if the Lender had converted any or all of the Loan Amount prior to or on the effective date or record date of such event, or if the Borrower makes adequate provision for the Lender to participate in such event on the same terms or with the same effect, mutatis mutandis, upon the subsequent conversion of any or all of the Loan Amount pursuant to Article 6 (the adequacy of such provisions to be determined by the Lender in its sole discretion, acting reasonably).

7.17 No adjustment in the Conversion Price will be made under this Article 7 in respect of the issue from time to time of Borrower Shares as dividends paid in the ordinary course to holders of Borrower Shares who exercise an option or election to receive substantially equivalent dividends in Borrower Shares in lieu of receiving a cash dividend, and any such issue will be deemed not to be a Borrower Share Reorganization.

7.18 If at any time a dispute arises with respect to adjustments provided for in this Article 7, such dispute will be conclusively determined by the auditors of the Borrower or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by the board of directors of the Borrower, acting reasonably and in good faith, and any such determination will be binding upon the Borrower, the Lender and the shareholders of the Borrower.

7.19 If, and whenever at any time prior to the repayment of the Facility by the Borrower, the Borrower takes any action affecting the Borrower Shares, other than action described in this Article 7, which in the opinion of the board of directors of the Borrower, acting reasonably

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and in good faith, would materially affect the rights of the Lender, the Conversion Price will be adjusted in such manner, if any, and at such time, by action of the board of directors of the Borrower, acting reasonably and in good faith, but subject in all cases to any necessary approval of the Stock Exchanges or other regulatory approval. Failure by the board of directors of the Borrower to take action so as to provide for an adjustment on or prior to the effective date of any action by the Borrower affecting the Borrower Shares will be conclusive evidence that the board of directors of the Borrower has determined that it is equitable to make no adjustment in the circumstances.

7.20 If the Borrower sets a record date to determine the holders of the Borrower Shares for the purpose of entitling them to receive any dividend or distribution or sets a record date to take any other action and, thereafter and before the distribution to such shareholders of any such dividend or distribution or the taking of any other action, decides not to implement its plan to pay or deliver such dividend or distribution or take such other action, then no adjustment in the Conversion Price will be required by reason of the setting of such record date.

7.21 In the absence of a resolution of the board of directors of the Borrower fixing a record date for a Special Distribution or Rights Offering, the Borrower will be deemed to have fixed as the record date therefor the date on which the Special Distribution or Rights Offering is effected.

7.22 As a condition precedent to the taking of any action which would require any adjustment that the Lender is entitled to receive on a conversion pursuant to Article 6, including the Conversion Price, the Borrower must take any corporate action which may be necessary in order that the Borrower have unissued and reserved in its authorized capital, and may validly and legally issue as fully paid and non-assessable, all the shares or other securities which the Lender is entitled to receive on the full exercise thereof in accordance with the provisions hereof.

7.23 The Borrower will from time to time, immediately after the occurrence of any event which requires an adjustment or readjustment as provided in this Article 7, forthwith give notice to the Lender specifying the event requiring such adjustment or readjustment and the results thereof, including the resulting Conversion Price.

7.24 The Borrower covenants to and in favour of the Lender that at any time prior to the repayment of the Facility by the Borrower, it will give notice to the Lender of its intention to fix a record date for any Borrower Share Reorganization (other than the subdivision or consolidation of the Borrower Shares), Rights Offering or Special Distribution which may give rise to an adjustment in the Conversion Price, and, in each case, such notice must specify the particulars of such event and the record date and the effective date for such event; provided that the Borrower is only required to specify in such notice such particulars of such event as have been fixed and determined on the date on which such notice is given. Such notice must be given not less than fourteen (14) days in each case prior to such applicable record date or effective date.

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ARTICLE 8

SECURITY

8.1 The Loan Amount and the obligations of the Borrower herein contained shall be secured by:

(a)	a general security agreement in the form attached hereto as Schedule C creating a security interest and floating charge over all present and after-acquired personal property and interests in land and real property of the Borrower including the Royalty; and
(b)	pledges of and first ranking charges over the shares of each of Ivanhoe Mines Delaware Holdings, LLC, Ivanhoe Mines, Aruba Holdings LLC A.V.V. and Ivanhoe Oyu Tolgoi (BVI) Ltd.

(the “Property Security Documents”).

8.2 Provided that no Event of Default has occurred and is continuing, the Property Security Documents shall terminate sixty (60) days following the Approved OT Investment Contract Date. The Property Security Documents shall also terminate upon the repayment or conversion in full of the Loan Amount in accordance with the terms hereof.

8.3 The indebtedness of the Borrower under this Agreement shall rank in priority to all other indebtedness of the Borrower other than the Permitted Debt. The ABCP Indebtedness shall rank in priority to the indebtedness of the Borrower under this Agreement and the Lender covenants and agrees to execute subordination documentation, as and when necessary, to give effect to such priority on such terms and conditions that are acceptable to the Lender, acting reasonably.

8.4 Provided that no Event of Default has occurred that is continuing, the Lender covenants and agrees to execute, in favour of a bona fide, arm’s length acquirer of any Non-Material Security Assets, such documentation as may be necessary to discharge the security interest in favour of the Lender created pursuant to the Property Security Documents in respect of the Non-Material Security Assets disposed of by the Borrower and acquired by such acquirer.

ARTICLE 9

RECOURSE

9.1 During the Availability Period, there shall be no limitation or restrictions on the Lender’s rights of recourse against the Borrower or any of the Material Subsidiaries and any rights under the Property Security Documents will be in addition to any rights which the Lender may have against the Borrower for repayment of the Loan Amount.

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ARTICLE 10

REPRESENTATIONS AND WARRANTIES

10.1 The representations and warranties of the Borrower contained in Section 12.1 of the PPA are incorporated herein by reference, except that all references to the words “this Agreement” contained therein shall be replaced with the words “the Transaction Documents” and the Borrower hereby represents and warrants to the Lender that all such representations and warranties are true and correct as of the date hereof.

10.2 The representations and warranties of the Borrower contained in Sections 12.2(a) to (h), (j) to (v), (gg) to (kk) and (nn) to (oo) of the PPA are incorporated herein by reference, except that all references to (i) the date “December 31, 2005” contained therein shall be replaced with the date “December 31, 2006” and (ii) the words “this Agreement” contained therein shall be replaced with the words “the PPA”. In addition, for purposes of such representations and warranties, “Ivanhoe Disclosure Letter” means the Ivanhoe Disclosure Letter delivered by the Borrower to the Lender on September 11, 2007.

10.3 The Borrower hereby further represents and warrants to the Lender as follows:

(a)	The Borrower is a “reporting issuer” not in default of its obligations under Canadian Securities Laws, and no material change relating to the Borrower (except in respect of the transactions contemplated by this Agreement) has occurred with respect to which the requisite material change report has not been filed under Canadian Securities Laws and no such disclosure has been made on a confidential basis.
(b)	The Borrower Shares to be issued upon the conversion of the Loan Amount have been duly reserved and approved by all requisite corporate action for issuance and will, when issued, be (i) duly and validly issued, fully paid and non-assessable and free of all Encumbrances and (ii) approved for listing or quotation on the Stock Exchanges.
(c)	The Borrower’s obligations under this Agreement rank senior to all its obligations except for the Permitted Debt.
(d)	Each of the Property Security Documents confers the security interest it purports to confer (subject to any limitations on enforcement under law).
(e)	No Event of Default has occurred and is continuing and, to the knowledge of the Borrower, there exists no state of facts which after notice or lapse of time or both or otherwise would constitute such an Event of Default.
(f)	Except upon the presentation of any of the Property Security Documents before an Aruban Court, the Transaction Documents do not need to be stamped or registered.
(g)	Neither a formal valuation nor minority approval is required for the transactions contemplated by the Transaction Documents under OSC Rule 61-501 or any other Applicable Law.

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(h)	The Borrower has not, directly or indirectly, transferred the revenues or cash flows from the OT Project (including, without limitation, by way of royalties, technical fees or management fees) or any direct or indirect interest therein to any person.
(i)	Except as permitted hereunder, the Borrower has not, directly or indirectly, entered into any off-take contracts or marketing contracts with respect to the OT Project.
(j)	There are no Encumbrances, directly or indirectly, on the whole or any part of any of the OT Project’s assets or properties or the revenues or cash flows derived therefrom other than the Permitted Encumbrances.
(k)	Unless previously terminated in accordance with the terms thereof or by agreement of the parties thereto, the PPA, the Registration Rights Agreement and the Transaction Documents are in full force and effect.
(l)	Each Loan Document to which the Borrower or any Material Subsidiary is a party constitutes a valid and binding obligation of the Borrower or the Material Subsidiary, as the case may be, enforceable against the Borrower or the Material Subsidiary, as the case may be, in accordance with its terms, except that:

(i)	enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally;
(ii)	equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court;
(iii)	a court may stay proceedings before them by virtue of equitable or statutory proceedings; and
(iv)	rights of indemnity and contribution hereunder may be limited under Applicable Laws.

(m)	The Borrower owns all of its assets, property and undertaking, including 100% of all beneficial title to the Security Assets, and has good and marketable title to such assets, property and undertaking, in each case free and clear of all Encumbrances and claims, except Permitted Encumbrances.
(n)	The Borrower is not in default under any instrument evidencing any Debt or under the terms of any instrument pursuant to which any Debt has been issued or made and delivered, and there exists no state of facts which after notice or lapse of time or both or otherwise would constitute such a default.
(o)	The Property Security Documents are fully perfected and create a first ranking charge over all of the assets, subject to the Permitted Encumbrances, over which they purport to create or evidence security in favour of the Lender and such security is not liable to avoidance on liquidation or bankruptcy, composition or other similar insolvency proceedings.

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10.4 The representations and warranties set out in Sections 10.1, 10.2 and 10.3 survive the execution and delivery of this Agreement and all other Loan Documents and will be deemed to be repeated by the Borrower as at each Advance Date, except to the extent that on or prior to any such date (a) the Borrower has advised the Lender in writing of a variation in any such representation or warranty, and (b) if such variation, in the opinion of the Lender, acting reasonably, could have, or be reasonably likely to result in, a Material Adverse Effect, the Lender has approved such variation in writing.

10.5 The Borrower acknowledges that the Lender will rely on the representations and warranties set out above in this Article 10 in completing the transactions contemplated by the Transaction Documents and agrees that such representations and warranties will survive the date of this Agreement, the Funding Date and the date of each Advance Date and will continue in full force and effect until the date which is two years after the later of the Maturity Date and the repayment or conversion in full of the Loan Amount.

10.6 All representations, warranties, covenants and agreements contained in this Agreement or any certificate, exhibit, or other document or instrument furnished to the Lender by or on behalf of the Borrower in connection with the transactions contemplated hereby shall survive any investigation made by or on behalf of the Lender at any time with respect to any of the foregoing, the execution, delivery and performance of this Agreement and instruments contemplated hereby.

ARTICLE 11

COVENANTS

11.1 Until the Funding Date, the Borrower covenants and agrees to observe and perform the following covenants:

(a)	the Borrower will not cause or permit an Adjustment Event to occur; and
(b)	the Borrower will not issue any Borrower Shares or Borrower Convertible Securities except pursuant to an Exempt Ivanhoe Share Transaction.

11.2 Until the later of the Maturity Date and the repayment or conversion in full of the Loan Amount, the Borrower covenants and agrees to observe and perform the following covenants:

(a)	the Borrower will not, directly or indirectly, create or permit the creation of an Encumbrance on the whole or any part of any of the OT Project’s assets or properties or the revenues or cash flows derived therefrom other than a Permitted Encumbrance;
(b)	the Borrower will not, directly or indirectly, transfer the revenues or cash flows derived from the OT Project (including, without limitation, by way of royalties, technical fees or management fees) or any direct or indirect interest therein to any person;

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(c) the Borrower will not, directly or indirectly, enter into any off-take contracts or marketing contracts with respect to the OT Project unless:

(i)	the terms thereof have been approved in writing by the Lender, acting reasonably; and
(ii)	are with buyers or agents approved in writing by the Lender, acting reasonably; and

(d) the Borrower will not, directly or indirectly, transfer the whole or any part of any of the OT Project’s assets or properties to any person other than (i) a transfer to which the OT Right of First Refusal applies or (ii) the Borrower or a Material Subsidiary (other than SGER and its Subsidiaries).

11.3 Subject to Section 11.4, so long as any of the Loan Amount or other amounts payable hereunder remain outstanding or this Agreement is in effect, and except as otherwise permitted by the prior written consent of the Lender, the Borrower covenants and agrees to observe and perform the following covenants:

(a)	The Borrower will duly and punctually pay or cause to be paid on demand by the Lender pursuant to Section 4.4 above or, in the absence of automatic conversion, on the Maturity Date, the Loan Amount and will duly and punctually pay or cause to be paid when due any interest accrued on such Loan Amount in accordance with the terms of this Agreement and any other costs and charges which are due and owing under the terms of this Agreement.
(b)	The Borrower will not create any Encumbrance on the Security Assets, or any part thereof, to secure any indebtedness of the Borrower or of any other person, other than Permitted Encumbrances.
(c)	Save and except as permitted by Section 11.3(d) in respect of SGER and its Subsidiaries and Non-Material Subsidiaries, the Borrower will not create, incur, assume or permit any Debt to remain outstanding other than Permitted Debt.
(d)	The Borrower will ensure that its Subsidiaries do not create, incur, assume or permit any Debt to remain outstanding, other than Permitted Debt, provided that SGER and its Subsidiaries and Non-Material Subsidiaries shall be permitted to incur Debt and create Encumbrances on its own present or future revenues, assets, property, effects and undertaking for the sole purpose of financing its own business and operations, including without limitation, project-related finance debt, provided that recourse in respect thereof is limited solely to the assets of SGER and its Subsidiaries and Non-Material Subsidiaries.

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(e)	The Borrower will, and will ensure that each of its Material Subsidiaries (other than SGER and its Subsidiaries), in all material respects, comply with all Applicable Laws to the extent affecting its business.
(f)	The Borrower will provide all information which the Lender may reasonably request provided that under no circumstances will the Borrower be required to provide to the Lender any information if the provision of such information will result in or give rise to a contravention of any Applicable Laws or any reasonably required written contractual confidentiality agreements (provided further that the Borrower will use commercially reasonable endeavours to secure consent to disclose any such information pursuant to any such laws or agreements).
(g)	Notwithstanding (f) above, the Borrower will notify the Lender promptly of:

(i)	any change of name or address of the Borrower or any Material Subsidiary (other than SGER and its Subsidiaries);
(ii)	details of any litigation, dispute, arbitration or other proceeding to which the Borrower or any Material Subsidiary (other than SGER and its Subsidiaries) is a party, the result of which if determined adversely would be a judgement or award against it (A) in excess of US$500,000, or (B) would be reasonably likely to have a Material Adverse Effect;
(iii)	any loss or damage of a material amount (for the purpose hereof “material” shall mean an amount equal to the greater of (A) $15,000,000 or (B) 10% of the Loan) to the assets of the Borrower;
(iv)	any Environmental Claims which could reasonably be expected to have a Material Adverse Effect;
(v)	particulars of any Event of Default or any event which constitutes an event of default under any contract, mortgage, debenture, indenture, lease, licence, agreement or other document or instrument made by the Borrower or any Material Subsidiary (other than SGER and its Subsidiaries), including the Transaction Documents, or any event which with the giving of notice or the lapse of time or both would constitute such an event, and particulars of the action which the Borrower proposes to take with respect thereto, forthwith after the Borrower has obtained knowledge of the occurrence of such event;
(vi)	any event that may give rise to a Mandatory Repayment or
(vii)	any event or circumstance which could reasonably be expected to have a Material Adverse Effect;

(h) The Borrower will not change its business in any material respect or, subject to the terms of this Agreement, cease to carry on all or a substantial part of its business.

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(i)

The Borrower will, and will ensure that each of its Material Subsidiaries (other than SGER and its Subsidiaries), at all times maintain its corporate existence in good standing under Applicable Laws and obtain and maintain in good standing all necessary licences and registrations in any jurisdiction where the nature of the business carried on by the Borrower or such Material Subsidiary makes such licences necessary or advantageous and carry on and conduct its business in a prompt and efficient manner.

(j)

The Borrower will immediately and duly pay when due (and will furnish to the Lender when required or requested by the Lender evidence establishing such payments):

(i)	all obligations to its employees and all obligations to others which relate to the employees of the Borrower including, without limitation, all Taxes related thereto;
(ii)	all Taxes before the imposition of any fine, interest or penalty for the late payment thereof, unless the Borrower shall in good faith contest its obligation so to pay and has satisfied the Lender that the contestation will not jeopardize the business of the Borrower, an appropriate financial reserve in accordance with GAAP and satisfactory to the Lender has been established, and during such contest shall furnish such additional security that the Lender may reasonably require; and
(iii)	without derogating from the terms hereof, any obligation secured by any Encumbrance and any obligation incurred by, or imposed on, the Borrower or any of its assets, property, effects and undertaking, or any part thereof, by virtue of any contract, mortgage, debenture, indenture, lease, licence, agreement, permit or other document or instrument or otherwise, the breach or default of which could result in any Encumbrance or any right of distress, forfeiture, sale or termination or any other remedy being enforced against the Borrower or its assets, property, effects and undertaking, or any part thereof.

(k)	The Borrower will observe and perform all of its material obligations, covenants, terms and conditions under any contract, mortgage, debenture, indenture, lease, licence, agreement or instrument to which the Borrower is a party, including the Transaction Documents, or by which it is bound or by which it or any of its assets is subject.
(l)	The Borrower will not:

(i)	amend the constating documents of the Borrower;
(ii)	enter into a merger, amalgamation or arrangement or effect an acquisition with a value in excess of US$5,000,000, or propose a material reorganization (including, without limitation, any reclassification or change of the Borrower’s outstanding shares), liquidation, or dissolution; or

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(iii) enter into any transaction, whether by way of reconstruction, reorganization, consolidation, amalgamation, merger, transfer, sale, lease or otherwise whereby all or substantially all of the assets, property, effects or undertaking of the Borrower or any Material Subsidiary (other than SGER and its Subsidiaries) (including any sale of shares of any such Material Subsidiary) would become the property of any other person.

(m)	The Borrower will provide the Lender with such other documents, opinions, consents, acknowledgments and agreements including additional security in the securities of the Material Subsidiaries (other than SGER and its Subsidiaries and the OT Subsidiary) upon request of the Lender as the Lender considers reasonably necessary to implement this Agreement and the other Loan Documents from time to time.
(n)	The Borrower will use and operate all of its property and assets in compliance with all, and in a manner which would not result in liability under any, Environmental Laws and keep all necessary permits relating to environmental matters in effect and remain in compliance therewith.
(o)	The Borrower will use the proceeds of all advances of the Loan made available to it only for the purposes set forth in Section 3.1.
(p)	The Borrower will, and will ensure that its Material Subsidiaries (other than SGER and its Subsidiaries):

(i)	comply with the provisions of the Operations Plan and Budget prior to the Suspension Date and the Suspension Plan on and after the Suspension Date; and
(ii)	not restart operations at the OT Project on or after the Suspension Date without the prior written approval of the Lender.

(q) The Borrower will, and will ensure that its Material Subsidiaries (other than SGER and its Subsidiaries), take all actions necessary (including the making or delivery of filings and payment of fees) to:

(i)	ensure that the Subsequent Funding Conditions are satisfied;
(ii)	comply with its obligations under the Transaction Documents; and
(iii)	preserve and keep in full force and effect its existence and rights.

(r) The Borrower will, and will ensure that its Material Subsidiaries (other than SGER and its Subsidiaries), take all actions necessary and reasonably required by the Lender to preserve and protect its title to and the value of the Security Assets,

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to protect and enforce the title of the Lender as mortgagee or chargee of the Security Assets (including the making or delivery of filings and payment of fees), and to maintain the security constituted by the Property Security Documents in full force and effect (including the priority thereof).

(s)	The Borrower will ensure that its payment obligations under the Transaction Documents rank senior to any other obligations except as expressly provided herein and for Permitted Debt.
(t)	The Borrower will take all actions necessary to (i) maintain the listing or quotation of the Borrower Shares on (A) the TSX and (B) the NYSE or NASDAQ and (ii) maintain its status as a “reporting issuer” in a province of Canada not in default of Canadian Securities Laws.

11.4 Survival of Covenants. The covenants contained in Section 11.3(o) and (p) shall survive any repayment, conversion or cancellation of the Facility.

ARTICLE 12

EVENTS OF DEFAULT

12.1 The occurrence of any one or more of the following shall constitute an “Event of Default” by the Borrower:

(a)	the Borrower fails to pay when due all or any part of the Loan under this Agreement or the Borrower fails to pay when due any interest, fees or other amounts payable by it under the terms of this Agreement, unless such failure to pay is caused by a technical or administrative error and remedied within three Business Days of its due date;
(b)	the Borrower commits any breach or fails to perform or observe any obligation, covenant or provision contained in any of the Transaction Documents or the PPA or any other agreement between the Lender and the Borrower and such breach or failure to perform is not (if capable of remedy) remedied in a manner which is acceptable to the Lender within ten (10) Business Days of the Lender notifying the Borrower of such non-compliance or, if earlier, the date of the Borrower becoming aware of such non-compliance;
(c)	an Ivanhoe Change of Control;
(d)	any representation or warranty made or given by the Borrower in any of the Transaction Documents, the PPA or the Heads of Agreement or any notice, certificate or statement delivered or made hereunder or thereunder would be materially inaccurate or misleading or proves to have been materially inaccurate or misleading when made and, if capable of remedy, has not been remedied in a manner which is acceptable to the Lender within five (5) Business Days of the representation and warranty being made;

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(e)	any indebtedness for money borrowed of the Borrower or any of its Subsidiaries in an amount in excess of US$1,000,000 (or its equivalent) in aggregate is not paid when due (taking into account any applicable grace period) or is accelerated or otherwise becomes due and payable (or is capable of being accelerated) prior to its specified maturity date as a result of an event of default (however described);
(f)	an order is made or a resolution is passed for the winding-up of the Borrower or any Material Subsidiary or a liquidator, trustee in bankruptcy, administrator or receiver or the equivalent under the laws of its jurisdiction is appointed or if the Borrower or any Material Subsidiary is unable to pay its debts, or stops or suspends or threatens to stop or suspend payment of its debts, as they fall due;
(g)	the security constituted by the Property Security Documents does not or ceases to confer the security interest it purports to create;
(h)	any Transaction Document is repudiated (other than by the Lender) or is or becomes void or unenforceable against the Borrower or the PPA is terminated, repudiated (other than by the Lender) or is or becomes void or unenforceable;
(i)	the Government of Mongolia takes, or states officially in writing to the Borrower or any of its Subsidiaries that it intends to take, any step with a view to the revocation of any material license for the OT Project or the seizure, expropriation or nationalisation of the shares in any Material Subsidiary or any of their assets or revenues, unless within 60 days thereof, in the case of any such step taken, the Government of Mongolia cancels or otherwise undoes such step and, in the case of any such official statement, the Government of Mongolia officially retracts in writing such statement;
(j)	there occurs any acts of war (declared or undeclared), civil war, revolution, insurrection, or acts of terrorism in Mongolia which would reasonably be expected to have a Material Adverse Effect, unless within 60 days thereof, such occurrence did not, and would not reasonably be expected to continue to have, a Material Adverse Effect;
(k)	any litigation, arbitration or administrative proceeding taking place against the Borrower, a Material Subsidiary (other than SGER and its Subsidiaries) or the OT Project is reasonably likely to have an adverse outcome and such outcome might have a Material Adverse Effect, unless within 60 days of the initiation thereof, such litigation, arbitration or administrative proceeding is either (i) dismissed or (ii) no longer reasonably likely to have an adverse outcome or such outcome no longer might have a Material Adverse Effect;
(l)	the Borrower Shares are delisted or suspended from trading for more than five days on (i) the TSX or (ii) the NYSE and NASDAQ;
(m)	the Borrower ceases to be a “reporting issuer” in a province of Canada;

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(n)	the Borrower carries on a business which its constating documents prohibit it from carrying on, or loses its charter by expiration, forfeiture or otherwise, or ceases or threatens to cease to carry on business as a going concern; or
(o)	if in the opinion of the Lender, acting reasonably, an event that is likely to have a Material Adverse Effect has occurred.

12.2 Upon the occurrence of an Event of Default (other than that event set out in Section 12.1(j)), the Lender may, at its option and without prejudice to any other rights and remedies available to it, serve upon the Borrower a written notice requiring the Loan Amount to be immediately repaid in full and cancelling the Facility.

12.3 Upon the occurrence of an Event of Default pursuant to Section 12.1(j) above, the Lender may, at its option, deliver a notice to the Borrower cancelling the Facility.

ARTICLE 13

REMEDIES

13.1 Upon the Lender declaring that all of the Loan Amount to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable without protest, presentment, demand or notice of any kind, all of which are expressly waived by the Borrower, the Lender may proceed to protect, exercise and enforce its rights and remedies under the Loan Documents, and such other rights and remedies as are provided by law or by equity or by statute. Such remedies shall include the right of the Lender to appoint a receiver and/or manager or receiver-manager of the Borrower.

ARTICLE 14

MISCELLANEOUS

14.1 Fees and Expenses. The Borrower shall pay to the Lender on demand all reasonable and necessary expenses incurred by the Lender in connection with the Loan Documents. In addition, the Borrower agrees that the Lender may charge on its own behalf and pay to others sums for expenses reasonably incurred and for services reasonably rendered (expressly including legal advice and services) in or in connection with maintaining, protecting, realizing, disposing of, retaining or collecting the assets and property charged by the Loan Documents or any part thereof, and such sums shall be a charge on the proceeds of realization, disposition or collection.

14.2 Waiver. No waiver or delay on the part of the Lender in exercising any right or privilege hereunder and no waiver as to any default or Event of Default hereunder shall operate as a waiver thereof unless made in writing and signed by an authorized officer of the Lender. No written waiver shall preclude the further or other exercise by the Lender of any right, power or privilege hereunder, or extend to or apply to any further default or Event of Default.

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14.3 Dealings by Lender. The Lender may grant extensions of time and other indulgences, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with the Borrower, debtors of the Borrower, sureties and others and with the Transaction Documents and other securities as the Lender may see fit without prejudice to the liability of the Borrower under the Transaction Documents or the Lender’s right to hold and enforce the Transaction Documents.

14.4 Notices. All notices, payments and other required or permitted communications (each a “Notice”) to either Party will be in writing, and will be addressed respectively as follows:

If to the Lender:	Rio Tinto International Holdings Limited
	6 St. James’s Square
	London
	W1Y 4LD
	United Kingdom
Attention:	Company Secretary
Fax:	44 20 7930 3249
With a copy to:	Chief Executive Copper Group
	Rio Tinto plc
	6 St. James Square
	London SW1Y 4LD
Fax:	44 20 7930 3249
If to the Borrower:	Ivanhoe Mines Ltd.
	654 – 999 Canada Place
	Vancouver, B.C.
	Canada V6C 3E1
Attention:	Corporate Secretary
Fax:	604 682 2060

or at such other address of fax number or to such other contact person as a Party may give Notice to the other Party. All Notices will be given by registered mail with acknowledgement of receipt, or by courier, or by fax, with confirmation by registered mail or courier with acknowledgement of receipt. All Notices will be effective and will be deemed given:

(a)	if delivered by hand, immediately;
(b)	in the case of delivery by mail or courier, two Business Days after the date of posting (if posted or couriered to an address in the same country) or five Business Days after the date of posting (if sent by courier to an address in another country); and
(c)	in the case of fax, on receipt by the sender of a transmission control report from the dispatching machine showing the relevant number of pages and the correct destination fax machine number and indicating that the transmission has been made without error,

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but if the result is that a Notice would be taken to be given or made on a day which is not a Business Day in the place to which the notice or communication is sent or is received later than 4.00 pm (local time), it will be taken to have been given or made at the commencement of the next Business Day in that place.

14.5 Further Assurances. Each of the Parties will take, from time to time and without additional consideration, such further actions and execute such additional documents and instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement.

14.6 Inconsistency with Other Loan Documents. To the extent that any condition, representation, covenant or other provision contained in the Loan Documents other than this Agreement in effect as of the date hereof and unamended is at any time inconsistent or conflicts with any term, condition, representation, covenant or other provision contained in this Agreement, then the provisions of this Agreement shall govern.

14.7 Severability. If any provision of this Agreement or any of the other Loan Documents or any part hereof or thereof shall be found or determined to be invalid, illegal or unenforceable in any jurisdiction, it shall for the purposes of such jurisdiction only be severable from this Agreement or such other Loan Document, as the case may be, and the remainder of this Agreement or such Loan Document, as the case my be, shall for the purposes of such jurisdiction only be construed as if such invalid, illegal or unenforceable provision or part had been deleted herefrom or therefrom.

14.8 Non-Exclusive Remedies. Nothing contained in this Agreement or any of the other Transaction Documents shall prejudice or impair any other right or remedy which the Lender may otherwise have with respect to the Facility or any right or remedy the Lender may have with respect to other loans which the Lender may make to the Borrower.

14.9 Time of Essence. Time shall be of the essence in this Agreement.

14.10 Successors and Assigns. This Agreement shall be binding upon and shall enure to the benefit of the Borrower and the Lender and to their permitted assigns. The Lender shall have the right to assign and transfer to one or more persons all or a portion of its rights and obligations under any Transaction Document with the prior written consent of the Borrower, such consent not to be unreasonably withheld or delayed. The Lender may assign its rights and transfer its obligation under any Transaction Document to any member of the Rio Tinto Group without the consent of the Borrower. The Borrower will not be responsible to gross up and indemnify the Lender for any additional cost or liability for Taxes under this Agreement which arises after an assignment of rights or transfer of obligations which would not have arisen if the assignment or transfer had not occurred. The Borrower shall not assign its rights or transfer its obligation under any Transaction Document.

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14.11 Governing Law. This Agreement, the other Loan Documents and all certificates and other documents delivered to the Lender hereunder shall, unless expressly stated to the contrary, be construed and interpreted in accordance with the laws of British Columbia and the laws of Canada applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of any British Columbia court sitting in Vancouver, British Columbia and each of the Parties hereto irrevocably attorns to the jurisdiction of such courts. The Parties shall not contest jurisdiction of or venue before the courts identified in the prior sentence on grounds of forum non conveniens or other grounds. The Parties hereby waive any defence of or relating to lack of personal jurisdiction with respect to any such action or proceeding in any such court.

14.12 Modification. No modification, rescission, waiver, release, or amendment of any provision of this Agreement shall be made, except by a written agreement signed by the Borrower and a duly authorized officer of the Lender.

14.13 Entire Agreement. This Agreement is intended by the Borrower and the Lender to be the final, complete, and exclusive expression of the agreement between them relating to the subject matter hereof. This Agreement supersedes the following sections of the Heads of Agreement:

Section 1: Facility, Parties and Availability

Section 2: Interest

Section 3: Conversion

Section 4: Transferability, Seniority and Security

Section 5: Operations Budget and Plan and Suspension Plan

Section 7: Negative Covenants (all paragraphs other than last paragraph re Strategic Purchaser Covenant)

Section 7: Positive Covenants (all paragraphs other than paragraphs (g) and (h))

Section 8: Conditions to Funding

Section 9: Representations and Warranties (to the extent such section relates to representations and warranties given on the Funding Date and the date of each drawdown)

Section 10: Events of Default

14.14 Currency Conversion Indemnity. If:

(a)

any amount payable under, or in connection with any matter relating to or arising out of, the Loan Documents, is received by the Lender in a currency (the “Payment Currency”) other than that agreed to be payable thereunder (the “Agreed Currency”), whether voluntary or pursuant to an order, judgment or decision of any court, tribunal, arbitration panel or administrative agency or as a result of any bankruptcy, receivership, liquidation or other insolvency type proceedings or otherwise; and

(b)

the amount so received by converting the Payment Currency so received into the Agreed Currency is less than the relevant amount of the Agreed Currency;

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then:

(c)	the amount so received shall constitute a discharge of the liability of the Borrower under or in connection with the Loan Documents only to the extent of the amount received following the conversion described in paragraph (b) above; and
(d)	the Borrower shall forthwith indemnify and save the Lender harmless from and against such deficiency and any loss or damage arising as a result thereof.

Any conversion pursuant to this Section 14.14 shall be made at such prevailing rate of exchange on such date within three (3) Business Days following the date the Payment Currency is received by the Lender and in such market as is determined by the Lender as being the most appropriate for such a conversion. The Borrower shall in addition pay the reasonable costs of such conversion.

14.15 Counterparts. This Agreement may be executed in any number of counterparts, and by the Lender and the Borrower in separate counterparts, each of which shall be an original, but all of which shall together constitute one and the same agreement.

14.16 Facsimiles. Delivery of an executed signature page to this Agreement by either Party by electronic transmission will be as effective as delivery of a manually executed copy of the Agreement by such Party.

[INTENTIONALLY BLANK]

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          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above.

IVANHOE MINES LTD.
By:	/s/ Beverly A. Bartlett
Name:	Beverly A. Bartlett
Title:	Vice President & Corporate Secretary
RIO TINTO INTERNATIONAL HOLDINGS LIMITED
By:	/s/ Ben Mathews
Name:	Ben Mathews
Title:	Director

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