Name of the Project
Platreef project – platinum group metals (PGMs), nickel, copper and gold mine.

Location
Limpopo, South Africa.

Client
Ivanhoe Mines owns 64% of the Platreef project through its subsidiary Ivanplats and manages all project development work. The South African beneficiaries of the approved broad-based black-economic-empowerment (BBBEE) structure have a 26% stake in the project and the remaining 10% is owned by a Japanese consortium of Itochu Corporation; Japan Oil, Gas & Metals National Corporation; ITC Platinum Development, an Itochu affiliate; and JGC.

Ivanplats is the top-ranked platinum-sector mining company in terms of compliance with South Africa’s black-economic-empowerment laws. The company achieved Level 3 status on the BBBEE scorecard in 2015, 2016 and 2017.

The communities around the Platreef project are widely consulted, with about 150 000 members becoming equity shareholders and an estimated 70% of employees and contractors coming from surrounding communities.

Project Description
The Platreef project is a Tier 1 discovery, which contains the underground Flatreef deposit of PGMs, copper, nickel and gold, located on the northern limb of South Africa’s Bushveld Igneous Complex – the world’s premier platinum-producing region. Ivanplats has declared an initial probable mineral reserve of 15.51-million ounces of platinum, palladium, rhodium and gold (3PE+Au). The mineral reserve is expected to support a 31-year mine life at steady-state production of four-million tonnes a year.

An independent preliminary economic assessment (PEA), which was completed in March 2014, proposed a three-phased approach to Platreef’s long-term development. The Platreef prefeasibility study (PFS), which was completed in January 2015, validated the results of Phase 1 of the independent PEA. The company is busy with the feasibility study for Phase 1, which is due for public release in the second quarter of 2017.

Key features of Phase 1 include:
• the development of a large, mechanised underground mine, with an initial four-million-tonne-a-year concentrator and associated infrastructure; and
• a planned, initial average yearly production rate of 433 000 oz of 3PE+Au,19-million pounds of nickel and 12-million pounds of copper a year.
Among the current and future northern limb producers, Platreef will rank near the bottom of the operating cash-cost curve, at an estimated $322/oz of 3PE+Au, net of by-product credits.

Phase 2 involves an expansion of the mine to double production to eight-million tonnes a year.

The third phase involves a further expansion of the mine to a steady state of 12-million tonnes a year, placing it among the largest PGM mines in the world.

Mining zones in the current Platreef mine plan occur at depths ranging from about 700 m to 1 200 m below surface.

Access to the mine will be through two vertical shafts. Shaft 1, which is currently under development and 250 m deep, will be used for initial access, early underground development and ventilation. The shaft will have an internal diameter of 7.25 m and is projected to reach a total depth of 975 m in 2018. Additional dedicated ventilation shafts will be provided to support mine development. Shaft 2 will comprise the main personnel, materials and ore-handling system.

Highly productive mechanised methods will be used for mining, including longhole stoping and drift-and-fill mining. Ore will be hauled from the mechanised stopes to the bottom of Shaft 2, where it will be crushed and then hoisted to the surface. Shaft 2 will have a finished internal diameter of 10 m and will be equipped to hoist up to six-million tonnes a year.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Phase 1 has an after-tax net present value of $972-million, at an 8% discount rate, and an after-tax internal rate of return of 13%.

Value
The estimated preproduction capital requirement for Phase 1 is about $1.2-billion, including $114-million in contingencies.

Duration
According to the latest PEA released, Phase 1 is expected to be completed by 2019.

Phase 2 is expected to be completed by 2024 and Phase 3 by 2028.

Latest Developments
The sinking of Shaft 1 at the Platreef project has reached a depth of more than 283 m below surface, 697 m away from its target depth.

Proceeding at an average rate of about 45 m a month, the shaft, with an internal diameter of 7.25 m, is expected to reach the Flatreef deposit at a depth of 777 m below surface in 2018, according to Ivanhoe Mines’ March 28 statement on its 2016 year-end results and review of operations.

Ivanhoe points out that sinking will continue to a planned final depth of 980 m below surface. Development work will include four shaft stations at depths of 450 m, 750 m, 850 m and 950 m below surface.

Shaft 1 will provide development access into the Platreef deposit while Shaft 2 is being developed.

The design has been completed for Platreef’s Shaft 2, which will have a total hoisting capacity of six-million tonnes a year and an internal diameter of 10 m. Construction of the boxcut for Shaft 2 is expected to begin in the second quarter of this year. When completed, Shaft 2 will be the main production shaft at the Platreef mine.

On February 24, the five-million-volt-ampere power line connecting the Platreef site to the South African national grid was energised and is now supplying electricity to the project for shaft sinking and construction activities. The new line, a collaboration between Platreef, government and local authorities, is also providing energy to the neighbouring community of Mzombane, which was previously without electricity.

The feasibility study for the first phase of the underground mine development at Platreef, which is being finalised by engineering consultant DRA Global, is expected to be completed in the second quarter of this year.

Key Contracts and Suppliers
DRA Global (PFS, feasibility study, mining, concentrator and infrastructure); OreWin (National Instrument 43-101 technical report); Aveng Mining (Shaft 1 sinking contractor); Murray & Roberts Cementation (design and engineering for shaft infrastructure); Stantec Consulting (mine planning); Golder Associates (water studies, backfill and tailings); Digby Wells Environmental (social and environmental); SRK (geotechnical); and Mintek (metallurgical testwork).

On Budget and on Time?
Phase 1 is under development, during which an operating platform will be established to support the start of production.

Contact Details for Project Information
Ivanplats VP and executive head: capital projects Gerick Mouton, tel +27 11 088 4300 or email gerickm@ivanplats.com.