Name and Location
Kamoa copper project, Democratic Republic of Congo.

Client
The project is a joint venture (JV) between Ivanhoe Mines and Zijin Mining.

Project Description
The project has been independently ranked as the world’s largest undeveloped, high-grade copper discovery by international mining consultant Wood Mackenzie.

An independent prefeasibility study (PFS) on the first phase of development envisages the construction of an underground mine, a concentrator processing facility and associated infrastructure.

The PFS proposes a yearly mine production of three-million tonnes at an average grade of 3.86% copper over a 24-year mine life, resulting in production of 100 000 t/y.

The first phase of mining will target high-grade copper mineralisation from shallow underground resources to yield a high-value concentrate.

The planned second phase will entail a major expansion of the mine and mill, and construction of the smelter to produce blister copper.

Ivanhoe announced in January 2016 that the Kamoa exploration team had discovered a major new high-grade and flat-lying stratiform copper discovery, named Kakula, about 5 km south-west of Kamoa’s currently defined resources. The 60 km2 Kakula exploration area is about 10 km south-west of the Kamoa project’s planned initial mining area at Kansoko Sud. Although the discovery represents a major extension of the Kamoa copper deposit, it has not been included in the independent PFS.

The Kansoko Sud initial mining footprint contains high-grade intercepts of up to 7.04% copper and a potential mining thickness of more than 15 m. The mineralised horizon is expected to be intersected by the declines at about 150 m vertically below surface, where initial mining operations will start.

Net Present Value/Internal Rate of Return
The life-of-mine average mine-site cash cost is $0.75/lb of copper.

The project has an after-tax net present value (NPV), at an 8% discount rate, of $986-million and an internal rate of return (IRR) of 17.2%, with a payback period of 4.6 years.

Improvements to the mining methods could potentially reduce average mine-site cash costs during the first phase to $0.61/lb of copper, and improve the after-tax NPV, at an 8% discount rate, to $1.18-billion, the IRR to 18.9% and the payback period to 4.3 years.

Value
The initial capital cost of the project, including contingency, is estimated at $1.2-billion, about $200-million less than estimated in the preliminary economic assessment completed on Kamoa in 2013.

Duration
Not stated.

Latest Developments
Ivanhoe has received the second installment of $41.2-million from a subsidiary of Zijin Mining Group as part of the subsidiary’s acquisition of 49.5% of Ivanhoe’s stake in the Kamoa copper discovery.

Zijin – through its subsidiary Gold Mountains International – has agreed to pay $412-million for the 49.5% interest in Ivanhoe subsidiary Kamoa, which currently owns 95% of the Kamoa project.

Zijin paid an initial $206-million at closing in December last year, followed by the payment of the first of five scheduled $41.2-million installments in March.

The receipt of the second installment from Zijin has increased Ivanhoe’s consolidated working capital to $455-million.

The remaining $123.6-million will be settled in three further equal installments, every three-and-a-half months, with the next installment due on October 24.

Key Contracts and Suppliers
OreWin (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ivanhoe Mines, tel +1-604 688 6630 or email info@ivanhoemines.com.