Name of the Project
Kamoa/Kakula copper Copper projectProject.

Location
Democratic Republic of Congo (DRC).

Client
The project is a joint venture (JV) between Ivanhoe Mines, and Zijin Mining and the Government of the Democratic Republic of Congo.

Project Description
The project has been independently ranked by UK-based mining consultancy Wood Mackenzie as the largest copper discovery ever made on the African continent and 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 the Kamoa/Kakula 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.

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.

Jobs to be Created
Not stated.

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
Following the release of a maiden resource statement for the Kakula discovery, which forms part of the larger Kamoa project, Ivanhoe Wood Mackenzie has confirmed the project already is as theamong the 10 largest copper discovery deposits ever made on the continentin the world.

Kakula now is the second major discovery on the Kamoa mining licence in the past eight years.

The companyIvanhoe Mines has published a technical report for Kakula, prepared by US-based firm Amec Foster Wheeler, outlining a compliant indicated Indicated resource totalling 192-million tonnes grading 3.45% copper, containing 14.6-billion pounds of copper at a 1% cutoff.

At a higher cutoff of 3% copper, Ivanhoe has said reported that the discovery holds indicated resources totalling 66-million tonnes grading 6.59% copper, containing 9.6-billion pounds of copper.

The project also holds inferred resources totalling 101-million tonnes at a grade of 2.74% copper, containing 6.1-billion pounds of copper at a 1% copper cutoff. At the higher cutoff of 3% copper, inferred Inferred resources total 27-million tonnes at a grade of 5.26% copper, containing 3.2-billion pounds of copper.

“With the initial resource now established, we are evaluating technical and infrastructure options to rapidly advance the development of the near-surface, highest-grade copper resources at Kakula. Our mine planning will focus on how to expeditiously develop the zones of thick, bottom-loaded chalcocite, grading at more than 6% copper, near the centre of Kakula’s high-grade area.,” Ivanhoe executive chairperson Robert Friedland has said.

“Given that the copper grades at Kakula are significantly higher than the average grades found elsewhere at Kamoa, we are highly confident that fast-tracking the development of Kakula will have a profound and positive impact on the economics of the overall Kamoa-Kakula project,” said Mr. Friedland. Ivanhoe executive chairperson Robert Friedland has said.

According to the technical report, the average true thickness of the selective mineralised zone (SMZ) at a 1% cutoff is 14.27 m in the indicated resources area and 10.33 m in the inferred resources area. At a higher 3% cutoff, the average true thickness of the SMZ is 5.91 m in the indicated resources area and 5.15 m in the inferred resources area, the company has stated.

Ivanhoe has said that the resource estimate is based on the results of about 24 000 m of drilling in 65 holes. A further 13 holes, totalling more than 7 000 m, have been completed and assay results are pending. Mineralisation is open along trend to the north-west and the south-east, while the remainder of the Kakula exploration area remains untested, providing significant potential for resource expansion.

Kakula is the second major discovery on the Kamoa mining licence in the past eight years. With the addition of Kakula’s mineral resource, UK-based industry research and consulting group Wood Mackenzie has independently demonstrated that the Kamoa-Kakula project is the largest copper discovery in Zambia and the DRC, making it the largest copper discovery ever made in the history of mining on the African continent. Wood Mackenzie research also shows that Kamoa/Kakula already ranks among the ten largest copper deposits in the world. (RW note: with preceding hilited changes, this underlined block is repetitious)

Key Contracts and Suppliers
OreWin (prefeasibility study), Amec Foster Wheeler (technical report – Kakula).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ivanhoe Mines, tel +27 11 088 4300 or +1 -604 688 6630 or email info@ivanhoemines.com.