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 holds 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.

The Kamoa 2017 prefeasibility study (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
The Kamoa North prospect area has delivered an “unprecedented” 22.3 m intersection of 13.05% copper in a thick, flat-lying deposit.

The new drill hole at the project includes grades of up to 40% copper and is within 190 m of the surface. At a cutoff grade of 5% copper, the intersection is 15.92% copper over 16.8 m. Using a cutoff grade of 1%, the intersection is 10.29% copper over 29.4 m.

“DD1450 exceeds anything previously encountered in all of our years of delineating resources on this project,” Ivanhoe co-chairperson Robert Friedland has said.

“The flat-lying, 10% copper intersection in hole DD1450 is almost 30 m, or 100-feet thick – essentially equivalent to a ten-storey building – and the high-grade copper is less than 200 m below surface. If we apply a 5% copper cutoff to the intersection, the grade increases to approximately 16% copper and it’s still almost 17 m thick, or approximately 56 feet,” he has explained.

Hole DD1450 is three times richer on a copper-grade-times-thickness measurement than any previous hole drilled at Kamoa-Kakula, where drilling started more than a decade ago.

The new drill hole is about 18 km north of the Kamoa-Kakula project’s planned initial mine at the Kakula deposit and about 8 km north of Kaoma’s Kansoko mine development.

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.