Vancouver-based Ivanhoe Mines is set to sign a deal with the government of Mongolia to develop its Oyu Tolgoi copper and gold mine, the company announced Monday.

Ivanhoe and Rio Tinto are partners in the project, ranked as one of the largest copper finds in the world. It is 80 kilometres north of the border with China.

Ivanhoe Mines, 3-month chart.

Ivanhoe's chairman is billionaire Robert Friedland, known for the discovery of one of the world's biggest nickel deposits, in Voisey's Bay, Labrador.

Geologists have estimated there are 21 million ounces of gold and 17 million tonnes of copper at the Mongolia site.

Ivanhoe said the agreement will set tax rates and set out regulations relating to construction and operation of the mine and will be signed in the capital — Ulan Bator — on Tuesday.

Last month, the Mongolian government announced it would cancel its 68 per cent tax on copper and gold effective Jan. 1, 2011. Ivanhoe and Rio Tinto have been negotiating a profit-sharing agreement with the Mongolian government for several years.

Ivanhoe shares closed up 28 cents, or two per cent, at $13.91 on the Toronto Stock Exchange Monday.