Name of the Project
Kamoa-Kakula copper project.

Location
Kamoa-Kakula is a very large, near-surface, stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt, about 25 km west of Kolwezi, in the Democratic Republic of Congo (DRC).

Client
Ivanhoe Mines and Zijin Mining each hold an indirect 39.6% interest in the Kamoa-Kakula project, Crystal River Global holds an indirect 0.8% interest and the DRC government holds a direct 20% interest.

Project Description
Three potential development scenarios have been examined for the project.

The initial mine development scenario – the Kakula 2017 preliminary economic assessment (PEA) evaluates the development of a six-million-tonne-a-year underground mine and surface processing complex at the Kakula deposit (a discovery announced in early 2016) as the project’s first phase of development. For this option, the PEA envisages an average production rate of 246 000 t/y of copper for the first five years of operation and 385 000 t/y by Year 4.

The expanded, two-mine development scenario – the Kakula 2017 PEA also includes an option for an integrated, 12-million-tonne-a-year, two-stage development. This entails initial production from the Kakula mine, followed by a separate underground mining operation at the nearby Kansoko mine, along with the construction of a direct-to-blister smelter, with a capacity of 690 000 t/y of copper concentrate. This scenario delivers average production of 370 000 t/y of copper in the first ten years of operation and production of 542 000 t/y by Year 9.

Kamoa 2017 prefeasibility study (PFS): the PFS evaluates the development of the Kansoko mine as a standalone six-million-tonne-a-year underground mine and surface processing complex, which will be supplied with ore from the planned development of the Kansoko Sud and Kansoko Centrale areas of the Kamoa deposit, discovered in 2008. The PFS envisages average copper production at 178 000 t/y of copper for the first four years and 245 000 t/y by Year 7. Kamoa has an estimated mineral reserve of 125.1-million tonnes grading 3.81% copper.
 

Ivanhoe continues to explore options to increase Kamoa-Kakula production to 18-million tonnes a year and beyond. 
 

The ultrahigh-grade Kakula discovery contains indicated mineral resources of 174-million tonnes at 5.62% copper, at a 3% copper cutoff grade, and 585-million tonnes at 2.92% copper, at a 1% cutoff.

The combined Kamoa-Kakula deposit has indicated mineral resources of 1.03-billion tonnes at 3.17% copper, containing about 72-billion pounds of copper, as well as an additional 183-million tonnes of inferred mineral resources at 2.31% copper, at a 1.5% cutoff.

This mineral resource has established the project as the world’s fourth-largest copper discovery.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The initial mine development scenario has an estimated after-tax net present value (NPV), at an 8% discount rate, of $4.2-billion and an internal rate of return (IRR) of 36.2%, with a payback of 3.1 years.

The expanded, two-mine development scenario has an estimated NPV, at an 8% discount rate, of $7.2-billion and an IRR of 33%, with a payback of 4.7 years.

The Kamoa 2017 PFS estimates an after-tax NPV, at an 8% discount rate, of $2.1-billion – an increase of 109%, compared with the after-tax NPV of $986-million projected in the March 2016 Kamoa PFS. The IRR is estimated at 24%, with a payback OF five years.

Value
The initial mine development scenario has an initial capital cost of $1.2-billion. For the expanded, two-mine development scenario, the PEA envisages $1.2-billion in initial capital costs. The Kamoa 2017 PFS estimates that the Kansoko mine will cost $1-billion to develop.

Duration
Not stated.

Latest Developments
Exploration drilling at Ivanhoe Mines’ Kamoa North prospect area, which forms part of the 397 km² Kamoa-Kakula mining licence, has successfully delineated two new, continuous corridors of shallow copper mineralisation containing zones of thick, high-grade copper.

The newly delineated copper corridors occur on the western flank of the unmineralised Kamoa Dome at Kamoa North.

The most significant corridor trends north and south for more than 9 km before swinging to the north-west and is projected to continue onto the adjacent Western Foreland exploration licences that are 100%-owned by Ivanhoe.

The second corridor trends west-south-west, away from the Kamoa Dome and toward the West Scarp Fault, over a distance of 3 km to 4 km.

In October this year, Ivanhoe Mines made an important new discovery of high-grade copper on its 100%-owned Western Foreland licences, west of the Kamoa-Kakula mining licence.

This discovery, Makoko, is the first of multiple high-potential target areas identified by Ivanhoe’s exploration team to be tested by drilling and is Ivanhoe’s third major copper discovery in the DRC.

An initial, independent resource estimate for the Makoko copper discovery is expected to be completed in the current financial quarter.

Ivanhoe has also started exploration drilling on other targets in the Western Foreland area to test for high-grade copper.

Given the early drilling success at Makoko, Ivanhoe remains highly confident that it has the “secret blueprint” for additional exploration successes in the Western Foreland area in 2019 and beyond.

Key Contracts and Suppliers
Amec Foster Wheeler (mineral resources estimate – Kakula).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ivanhoe Mines (North America), tel +1 604 688 6630/+27 11 088 4300 (South Africa) or email info@ivanhoemines.com.