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 (JV) between Ivanhoe Mines, Zijin Mining Group Co, the DRC government and Crystal River Global.

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.

The total Kamoa-Kakula deposit hosts indicated resources of 1.39-billion tonnes grading 2.64% copper and inferred resources of 316-million grading 1.76% copper.

Kakula, which has mineral reserves of 119.7-million tonnes, benefits from an ultra­high, average feed grade of 6.4% copper over the first ten years of operations, and 5.5% 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 undertaken by 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
Not stated.

Net Present Value/Internal Rate of Return
The Kakula PFS estimates an after-tax net present value (NPV), at an 8% discount rate, of $5.4-billion and an internal rate of return (IRR) of 46.9%, 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 a peak funding capital of $1.1-billion.

Planned Start/End Date
First copper concentrate production is expected in the third quarter of 2021.

Latest Developments
Ivanhoe Mines and its JV partner, Zijin Mining, have made good progress with developing the Kamoa-Kakula copper mine, with initial production on track for the third quarter of 2021.

Development of the Kakula mine is making “excellent progress”, Ivanhoe has said in a statement.

The first underground access drives intersected Kakula’s initial high-grade ore, grading about 3% copper, in late August, and then intersected an even higher-grade zone, grading about 6% copper, in late October. The drives are advancing towards mining zones grading more than 8% copper in the centre of the Kakula deposit.

Ivanhoe and Zijin are rapidly advancing the earthworks for the processing plant and other surface infrastructure. The JV has issued purchase orders for the long-lead mining and processing equipment.

Following the completion of basic engineering and procurement, as part of the forthcoming Kakula definitive feasibility study, Kakula’s initial processing plant capacity has increased from 3-million tonnes a year to 3.8-million tonnes a year.

The expansion in initial plant capacity will require increasing the underground mining crews in 2020 from 11 to 14. This will ensure sufficient mining operations to feed the expanded plant and create preproduction stockpiles of about 1.5-million tonnes of high-grade ore and an additional 700 000 t of lower-grade material, with grades of between 1% and 3% copper.

This should allow for the plant to ramp up quickly and maintain a steady-state throughput of 3.8-million tonnes a year.

The project team recently 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 was about $1.3-billion, from January 1 this year, which assumed commissioning of the processing plant in the third quarter of 2021.

The Kamoa-Kakula JV incurred $182.5-million in capital costs for the nine months to September 30.

Other engineering and construction activities under way include the refurbishment of six turbines at the Mwadingusha hydroelectric power plant and associated 220 kV infrastructure to supply the mine with clean hydropower, construction of a permanent road between the mine site and the Kolwezi airport, construction of the first phase of accommodation for 1 000 employees and contractors, as well as earthworks for the processing plant and other surface infrastructure.

Ivanhoe is also continuing to drill on its wholly owned Western Foreland licences, which are adjacent to the Kamoa-Kakula mining licence, with assay results expected soon.

The company also intersected high-grade mineralisation at the Kamoa North Bonanza zone earlier this year and work on an initial mineral resource estimate for the Bonanza zone is under way.

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).

On Budget and on Time?
Not stated.

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