Name of the Project
Kamoa-Kakula copper mine development project.

Location
The project is located in the Kolwezi district of Lualaba province, in the Democratic Republic of Congo (DRC).

Project Owner/s
The project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global (0.8%) and the DRC government (20%).

Project Description
A prefeasibility study (PFS) on the Kakula copper mine and the expanded preliminary economic assessment (PEA) for the overall development of the Kamoa and Kakula copper discoveries at the Kamoa-Kakula project have reinforced that Kamoa-Kakula is one of world’s best undeveloped copper discoveries.

In February 2020, Ivanhoe announced an updated independently verified indicated mineral resource, which increased the combined Kamoa-Kakula project’s indicated mineral resource to 423-million tonnes, with a grading of 4.68% copper, at a 3% cutoff.

The combined Kamoa-Kakula project indicated that the mineral resource is 1.4-billion tonnes grading 2.70% copper, at a 1% cutoff.

Kakula benefits from an ultra­high, average feed grade of 6.40% copper over the first ten years of operations, and 5.50% copper on average over a 25-year mine life.

The Kakula 2019 PFS proposes the development of an initial six-million-tonne-a-year mine at the Kakula deposit, in the southerly portion of the Kamoa-Kakula project’s discovery area. The study envisages an average production of 291 000 t/y of copper for the first ten years of operation and peak copper production of 360 000 t in Year 4.

Mining at the Kakula deposit will be through drift-and-fill using paste backfill, and room-and-pillar methods. The method has been chosen to maximise the extraction of high-grade Kakula ore and is suitable for large-scale bulk mechanised mining.

Mine access to the Kakula deposit will be through twin declines on the north side, which have been completed, and a decline on the south side of the deposit. One of the north declines will serve as the primary mine access while the other will include the conveyor haulage system.
The south decline will provide additional ventilation, serve as a secondary operational ingress/egress and will facilitate critical early mine development.

The Kakula concentrator will be built in a phased approach, with two three-million-tonne-a-year modules, as the mining operations ramp up to full production of six-million tonnes a year. The Kakula concentrator design incorporates a run-of-mine stockpile, followed by crushing and screening, high-pressure grinding rolls, ball milling, flotation, concentrate thickening and filtration.

The Kamoa-Kakula 2019 PEA presents the sequential development plan of the Kamoa-Kakula’s high-grade copper deposits.

Initial production is proposed to occur at six-million tonnes a year from the Kakula mine before increasing to 12-million tonnes a year, with mill feed from the Kansoko mine. A third six-million-tonne-a-year mine will then be developed at Kakula West, bringing total production to 18-million tonnes a year.

As resources at Kakula and Kansoko are mined, the PEA envisages that production will begin at several mines in the Kamoa North area to maintain the 18-million-tonne-a-year throughput over a 37-year mine life.

Each mining operation is expected to be a separate underground mine, with a shared processing facility and surface infrastructure located at Kakula.

Included in this scenario is the construction of a direct-to-blister flash copper smelter – with a capacity of one-million tonnes of copper concentrate a year, to be funded from in-house cash flows – at the Kakula plant site. This would be completed in Year 5 of operations, achieving significant savings in treatment charges and transportation costs.

The 18-million-tonne-a-year scenario delivers average production of 472 000 t/y of copper over the life-of-mine, with peak production of 740 000 t/y by Year 12.

Potential Job Creation
Ivanhoe has said that more than 4 400 employees and contractors are helping to build the Kakula mine, of whom 90% are Congolese nationals.

Net Present Value/Internal Rate of Return
The Kakula PFS estimates an after-tax net present value (NPV), at an 8% discount rate, of $5.40-billion and an internal rate of return (IRR) of 46.90%, with a project payback of 2.6 years.

The Kamoa-Kakula PEA estimates an after-tax NPV, at an 8% discount rate, of $10-billion and an IRR of 41%, with a payback of 2.9 years.

Capital Expenditure
The Kakula PFS estimates a peak project funding of $1.1-billion.

The Kamoa-Kakula three-phase sequential operation envisages peak funding capital of $1.1-billion.

Planned Start/End Date
Kakula is being fast-tracked to commercial production, with the mining operation scheduled to produce first concentrate in the third quarter of 2021.

Latest Developments
Ivanhoe Mines’ Kakula mine is said to be making “excellent progress”, with civil works advancing rapidly and initial copper concentrate production from the mine on schedule for the third quarter of 2021.

In parallel with the construction of Kamoa-Kakula’s Phase 1 Kakula mine, work has progressed on the independent Kakula definitive feasibility study (DFS) and an integrated development plan for the entire mining complex.

The integrated development plan will include details on the planned expansion phases for the greater Kamoa-Kakula mining complex, and will incorporate updates for mineral resources, production rates and economic analysis.

Following the completion of basic engineering and procurement, as part of the forthcoming Kakula DFS, Kakula’s initial processing plant capacity has increased from three-million tonnes a year to 3.80-million tonnes a year.

The expansion in initial plant capacity requires increasing the underground mining crews from 11 to 14 members this year to ensure “sufficient mining operations” to feed the expanded plant and create preproduction stockpiles of about 1.50-million tonnes of high-grade ore and an additional 700 000 t of material grading between 1% and 3% copper. According to Ivanhoe, this should allow the plant to ramp up quickly and maintain a steady throughput of 3.80-million tonnes a year.

In November 2019, the Kamoa-Kakula project team completed basic engineering design and costing for Kakula's initial mine and underground infrastructure, the first concentrator module and associated surface infrastructure. The updated estimate of the project's initial capital costs is about $1.30-billion, which Ivanhoe has said assumes commissioning of the processing plant in the third quarter of 2021.

Ivanhoe has confirmed that it will continue to fund its share of about 40% of the initial capital costs and that it will fund its share of the capital associated with the 20% carried interest owned by the government and the DRC, from existing cash resources.

Key Contracts and Suppliers
Amec Foster Wheeler E&C Services, DRA Global, KGHM Cuprum R&D Centre, OreWin, Stantec Consulting International and SRK Consulting (PFS and PEA).

Contact Details for Project Information
Ivanhoe Mines, tel +1604 688 6630 (North America)/+27 11088 4300 (South Africa) or email info@ivanhoemines.com.