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Pacific Minerals And Ivanhoe Mines Restructure Joint-Venture Agreement


October 24, 2003

Pacific Minerals Announces CDN$9.2 Million Financing

BEIJING --- Pacific Minerals Inc. (PMZ: TSXV) and Ivanhoe Mines Ltd. (IVN: TSX & ASX) announced today that the two companies have reached an agreement-in-principle to restructure their mineral exploration and development joint venture, the terms of which were originally announced in Pacific Minerals' June 2, 2002, news release.

The revised agreement will reduce from 80% to 50% Ivanhoe's maximum earn-ins on Pacific Minerals' interests in Pacific's most significant projects in China, including:
- the 217 Gold Project in the Inner Mongolia Region;
- the Dandong (QCZ) Gold Project in Liaoning Province; and 
- the JBS Platinum and Palladium development and exploration projects in Yunnan Province.

Ivanhoe retains the right to earn up to 80% of the available interest in any new projects acquired by Pacific Minerals in China (excluding properties acquired by Pacific Minerals in Anhui and Liaoning provinces), under terms similar to those announced in June, 2002.

The revised agreement also contains a mutual non-compete clause, whereby Pacific Minerals agrees not to compete for any new mineral properties in the Inner Mongolia Region and Ivanhoe undertakes not to compete for any new mineral properties in Liaoning Province. 

"Pacific Minerals is entering an exciting new phase of growth and development and the revised joint-venture agreement provides us with much greater upside potential on our key projects," said Daniel Kunz, Pacific Minerals' President. "It also will provide us with additional flexibility regarding the potential commercial development of these projects."

Ivanhoe has agreed to transfer to Pacific Minerals 50% of its interest in the Shuteen exploration licence in southern Mongolia. The project has similar geological characteristics and is within the same copper-rich mineral belt that hosts Ivanhoe's Turquoise Hill and Kharmagtai porphyry copper-gold projects. The Shuteen licence covers approximately 93 square kilometres (36 sq. miles), approximately 100 kilometres east of Kharmagtai. Ivanhoe acquired the right to earn an 80% interest in Shuteen in early 2002 by undertaking to complete a US$1.5 million exploration program before December 31, 2004. To date, Ivanhoe has spent approximately US$1.4 million on the project. 

Ivanhoe also may, in appropriate circumstances, make available to Pacific Minerals future opportunities in Mongolia and China. If any such opportunity falls within a 20-kilometre radius of Ivanhoe's then existing properties, Ivanhoe will retain the right to earn up to 80% of the available interest.

In exchange for the transfer of an interest in the Shuteen Project and for agreeing to restructure the China joint venture, Pacific Minerals has agreed to issue Ivanhoe 2.5 million Pacific Minerals common shares. Ivanhoe also has agreed to purchase an additional 2.5 million units of Pacific Minerals at a price of $1.75 per unit, for net proceeds to Pacific Minerals of $4.375 million. Each unit will consist of one common share and one common-share purchase warrant. Each warrant will be exercisable for one common share at a price of $2.20 per share for two years from the closing date.

Pacific Minerals also has arranged a private placement to sell an additional three million units at a price of $1.60 per unit, for net proceeds to Pacific Minerals of $4.8 million. Each unit will consist of one common share and one-half of a common-share purchase warrant. Each whole warrant will be exercisable for one common share at a price of $2.20 per share for two years from the closing date.

The private-placement financing and the agreement-in-principle to restructure the joint venture are subject to requisite regulatory and board approvals.

Pacific Minerals is a Canadian company focused on the exploration and development of precious and base metals (platinum, palladium, gold, nickel, and copper) in the People's Republic of China. 

Ivanhoe Mines holds a 100% interest in the Turquoise Hill Project and owns or controls exploration rights covering approximately 100,000 square kilometres in central and southern Mongolia. Ivanhoe produces copper, gold and iron ore products from mines in Asia and Australia.

Information contacts:
Investors: Bill Trenaman/ Media: Bob Williamson: +1.604.688.5755

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy or this release.