Name of the Project
Kamoa copper project.

Location
Democratic Republic of Congo (DRC).

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 Mines is preparing to embark on a preliminary economic assessment for its “game-changing” Kakula discovery as soon as it receives an initial, independent mineral resource estimate at the end of the third quarter of 2016.

The latest drilling results from the deposit within the Kamoa copper project, in the DRC, indicate the significance of the copper discovery, which Ivanhoe has described as substantially “richer, thicker and more consistent” than other known mineralisation elsewhere on the project.

During the second quarter of theis year, Ivanhoe-appointed contractor Titan Drilling Congo drilled about 30 holes, with another six in progress, resulting in 11 563 m of diamond drilling at Kakula using seven drill rigs, with two on standby.

“As a result of the ongoing success of the Kakula programme and the extension along trend of the central, well-mineralised, chalcocite-rich core to the north-west and south-east at relatively shallow depths, the Kakula drilling programme has been expanded by an additional 9 000 m to a total of 34 000 m of exploration drilling,” Ivanhoe said in its second-quarter update to shareholders.

Further expansions to the drilling programme will be accelerated as the full scale of the find is unpacked.

Initial indicators for the 60 km2 Kakula exploration area, 10 km south-west of the Kamoa project’s planned initial mining area at Kansoko Sud, show an amenability to bulk, mechanised mining, which will have a significant, positive impact on the Kamoa project’s future development plans.

“[The] initial metallurgical test results received in July from a sample of drill core from exploration drilling in the Kakula discovery zone achieved copper recoveries of 86% and produced a copper concentrate with an extremely high grade of 53% copper,” Ivanhoe has noted.

The company has explained that joint venture partner Zijin Mining Group tested a composite of drill holes DD996 and DD998, assaying 4.1% copper, at its laboratory in China.

“As a comparison, testing of a previous development composite sample from the planned, initial mining deposit at Kamoa’s Kansoko Sud zone and the adjacent Kansoko Centrale zone, assaying 3.61% copper, achieved an 85% recovery and a concentrate grade of 37% copper,” the company has pointed out.

Further, the results to date indicate that the material from Kamoa’s Kakula and Kansoko zones can be processed through the same concentrator plant, yielding significant operational and economic efficiencies.

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.