Name of the Project
Kamoa-Kakula copper project.

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

Project Owner/s
Kamoa Copper, a joint venture (JV) between base and precious metals developer Ivanhoe Mines, with 39.6% ownership; Zijin Mining Group, with 39.6% ownership; Crystal River Global, with 0.8% ownership; and the DRC government, with 20% ownership.

Project Description
Ivanhoe Mines has announced outstanding economic results in the independent integrated development plan for the tier-one Kamoa-Kakula copper project.

The Kamoa-Kakula Integrated Development Plan 2020 comprises three development scenarios: the Kakula definitive feasibility study (DFS), the Kakula-Kansoko prefeasibility study (PFS) and the Kamoa-Kakula preliminary economic assessment (PEA).

Kakula
The Kakula DFS proposes the development of a Stage 1, six-million-tonne-a-year underground mine and surface processing complex at the Kakula deposit, with a capacity of 7.6-million tonnes a year built in two modules of 3.8-million tonnes a year. For this option, 110-million tonnes will be mined at an average grade of 5.22% copper, producing 8.5-million tonnes of high-grade copper concentrate and containing about 10.8-billion pounds of copper.

Kakula-Kansoko
The Kakula-Kansoko 2020 PFS evaluates the development of mining activities at the Kansoko deposit in addition to the Kakula mine, initially at a rate of 1.6-million tonnes a year, to supply the concentrator at Kakula, eventually ramping up to six-million tonnes a year as the reserves at Kakula are depleted.

Kamoa-Kakula
The Kamoa-Kakula 2020 PEA assesses an additional development option of mining several deposits on the Kamoa-Kakula project as an integrated, 19-million-tonne-a-year mining, processing and smelting complex, built in multiple stages.

An initial six-million-tonne-a-year mining operation will be established at the Kakula mine on the Kakula deposit, which will be followed by a separate six-million-tonne-a-year mining operation at the Kansoko mine. A third six-million-tonne-a-year mine will then be established at the Kakula West mine, in addition to a fourth initial mine in the Kamoa North area operating at one-million tonnes a year. The processing plant will be built in five modules of 3.8-million tonnes a year, with an ultimate capacity of one-million tonnes a year.

As the resources at the Kakula, Kansoko and Kakula West mines are mined out, production will begin sequentially at five other mines in the Kamoa North area to maintain throughput of 19-million tonnes a year to the existing concentrator and smelter complex.

Each mining operation is expected to be a separate underground mine, with a shared processing facility and surface infrastructure located at Kakula. Material will be transported to the Kakula processing complex using a system of overland conveyors. Included in this scenario is the construction of a direct-to-blister copper smelter with a capacity of one-million tonnes of copper concentrate a year.

Potential Job Creation
Once the two processing plants at Kakula are operating, Ivanhoe expects to employ almost 2 000 permanent Kamoa employees.

Net Present Value/Internal Rate of Return
The Kakula DFS yields an after-tax net present value (NPV), at an 8% discount rate, of $5.5-billion and an internal rate of return (IRR) of 77% over a 21-year mine life, with a payback of 2.3 years.

The Kakula-Kansoko PFS yields an after-tax NPV, at an 8% discount rate, of $6.6-billion and an IRR of 69% over a 37-year mine life, with a payback of 2.5 years.

The Kamoa-Kakula PEA yields a potential after-tax NPV, at an 8% discount rate, of $11.1-billion and an IRR of 56% over a mine life of more than 40 years, with a payback of 3.6 years.

Capital Expenditure
The Kakula DFS estimates peak funding at $775-million, remaining initial capital costs at $646-million and expansion capital costs at $594-million.

The Kakula-Kansoko PFS estimates peak funding at $848-million, remaining initial capital costs at $695-million and expansion capital costs at $750-million.

The Kamoa-Kakula PEA estimates peak funding at $784-million, remaining initial capital costs at $715-million and expansion capital costs at $4.46-billion.

Planned Start/End Date
The initial production of copper concentrate at the Kakula mine processing plant began on May 25, 2021 and achieved commercial production on July 1, 2021.

The expansion of the Kakula processing plant will be brought forward from the first quarter of 2023 to the third quarter of 2022.

Latest Developments
During its first quarter of production, ended September 30, the Kamoa-Kakula JV sold 41 490 t of payable copper and recognised revenue of $342.6-million.

The initial 2021 production guidance range for copper-in-concentrate of between 80 000 t and 95 000 t was raised to between 92 500 t and 100 000 t, reflecting the successful completion of ramp-up of the Kakula Phase 1 concentrator.

Kamoa-Kakula's Phase 2 construction is progressing well towards a startup in the second quarter of 2022, which will result in doubling the mine's nameplate milling throughput to 7.6-million tonnes a year.

Phases 1 and 2 combined are forecast to produce about 400 000 t/y of copper.

Meanwhile, Ivanhoe is continuing its 2021 copper exploration programme on its Western Foreland licences that cover about 2 550 km2, in close proximity to Kamoa-Kakula.

Work in the third quarter was primarily focused on completing the project's infrastructure programme, which was needed to enable Ivanhoe's drilling crews to access the highly prospective exploration licences located to the south and west of the Kamoa and Kakula orebodies.

Geophysical surveys were advanced during the quarter and are either complete or are nearing completion. Drilling focused on extending the copper discoveries at Makoko and Kiala during the quarter.

Based on current market conditions, Ivanhoe anticipates that shareholder loan repayments from Kamoa-Kakula will start in 2022.

Key Contracts, Suppliers and Consultants
DFS/PFS/PEA:
OreWin (overall report preparation, mining, logistics, power and economic analysis); China Nerin Engineering (smelter design); DRA Global (mine surface infrastructure and metallurgical processing); Epoch Resources (tailings storage facility design); Golder Associates (hydrology models and recommendations); KGHM Cuprum R&D Centre (technical adviser on certain mining methods and geotechnical); Outotec Oyj (smelter technology); Paterson and Cooke (paste backfill plant design and surface/underground paste distribution system); SRK Consulting (mine geotechnical recommendations); Stantec Consulting International (mining and mineral reserves), Wood (mineral resources estimation) and Kamoa Copper and SNEL, together with Stucky SA (engineering procurement and construction management – Turbine 5) and Voith Hydro (contractor Turbine 5), have started a technical assessment to define the scope of work and associated-costs estimate.

Contact Details for Project Information
Ivanhoe Mines, tel +1604 688 6630 (North America), +27 11 088 4300 (South Africa) or email info@ivanhoemines.com.