Production officially started yesterday, with steady-state volumes of concentrate and the haulage of first concentrate to the Townsville port.

Throughput at the site has ramped up to 220 tonnes of ore per hour, or an annualised rate of 1.65 million tonnes. Once fully operational it is set to deliver 700,000-900,000t of ore this calendar year before climbing to a rate of up to 2 Mtpa in 2013.

A run-of-mine stockpile of 80,000t provides a 20-day milling buffer.

Following the acquisition of the Osborne complex less than 18 months ago, the company has developed the Kulthor underground resource and resumed operations in the Osborne underground mine.

Mining of both is now well underway and with work on the Starra 276 decline kicking off last December, volumes from here are scheduled to start in the first quarter of next year and drive the expanded 2Mtpa production rate.

A key piece of infrastructure, construction of the Osborne-Mount Dore haul road, is due to come on line between now and October.

"This haul road is an important piece of infrastructure, not only for our production requirements, but also because it allows the substantial assets at the Osborne operating complex to be utilised throughout Ivanhoe Australia's northern tenements," Ivanhoe Australia chief executive Peter Reeve said in a statement.

Meanwhile, an aggressive exploration program is aimed at further boosting resources at its three key mining areas.

At Kulthor, a surface drilling program is underway, testing the southwest and along strike and down plunge extensions of mineralisation, while at Osborne Deeps, work is focused on resource extensions north of the planned mining area and existing decline utilising various geophysical targeting methods.

Such analysis within the Osborne-Kulthor region has previously identified targets including the Avalon prospect, a 5km long magnetic and gravity target located 2km west of Kulthor that extends more than 2km in depth. This will be one of the targets to be drilled in the current program.

Late last year a helicopter-borne sub-audio magnetic survey over the Avalon and Kulthor trends also identified extensions to the Kulthor structure 3.5km to the southwest.

In addition, a new 3.4km long conductivity anomaly was identified parallel to and 300-400m west of the Avalon trend.

Further afield, further resources are being targeted from a number of prospective areas on the company's tenements located within trucking distance of the Osborne concentrator.

High priority targets include Houdini, Starra Line, Southern Extensions and Lucky Luke.

Shares in Ivanhoe Australia were down 1% or 2c in morning trade to $1.805.