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Ivanhoe concludes Kipushi PFS, embarks on DFS

13th December 2017

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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JOHANNESBURG (miningweekly.com) – TSX-listed Ivanhoe Mines has outlined the “outstanding” findings of a prefeasibility study (PFS) to revive the historic Kipushi zinc/copper/silver/germanium mine, in the Democratic Republic of Congo.

The PFS, undertaken to refine the findings of the 2016 preliminary economic assessment (PEA) and optimise the mine’s redevelopment schedule, highlights a redevelopment plan to bring Kipushi’s Big Zinc Zone into production in less than two years. The mine will have an estimated average production rate of 381 000 t/y zinc concentrate over an 11-year initial mine life at a total cash cost of $0.48/lb of zinc.

“The PFS is the latest validation that Kipushi has the resources to become one of the world’s largest and lowest-cost zinc producers, plus the potential to also produce significant quantities of copper, silver and germanium,” said Ivanhoe executive chairperson Robert Friedland.

A definitive feasibility study is now under way to further refine and optimise the project’s economics and is expected to be completed in the second half of 2018.

The PFS focuses on the mining of Kipushi’s Big Zinc Zone, which has an estimated 10.2-million tonnes of measured and indicated mineral resources grading 34.9% zinc.

The mine has an aftertax net present value (NPV) of $683-million and a 35% internal rate of return (IRR) based on a long-term zinc price of $1.10/lb, with preproduction capital of $337-million.

At the current zinc price of $1.40/lb, Kipushi has an aftertax NPV of $1.2-billion and an IRR of 51%.

“Discussions are continuing with potential strategic partners and lenders to support our continuing advance toward a new era of production at Kipushi. We’ve made significant progress in upgrading the mine’s underground infrastructure and now we have a much clearer path to a resumption of production from this incredibly rich orebody,” he said.

Ivanhoe has subsequently signed a memorandum of understanding (MoU) with leading mining contractor Byrnecut, as well as an MoU with the national railway to rebuild the railway spur line to facilitate the export of concentrate.

“The planned return to production would establish Kipushi as the world’s highest-grade major zinc mine. Its exceptional zinc grade is more than twice as high as the measured and indicated mineral resources of the world’s next-highest-grade zinc project, according to Wood Mackenzie,” Friedland concluded.

Edited by Creamer Media Reporter

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