Ivanhoe moves to fast-track new Kakula resource estimate, PEA

24th January 2017 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

JOHANNESBURG (miningweekly.com) – TSX-listed Ivanhoe Mines is fast-tracking a new resource estimate and an expanded preliminary economic assessment (PEA) at its Kamoa-Kakula copper project, in the Democratic Republic of Congo, to examine expanded development options.

This follows the latest assay results from another 25 holes in the ongoing 2016/17 drilling campaign that has significantly expanded the Kakula copper discovery and reinforced the “exceptional continuity” of high-grade copper mineralisation and the relatively flat-lying geometry.

“The open-ended nature of the extremely high-grade copper mineralisation at the unfolding Kakula discovery certainly has caught the attention of the mining industry. The ongoing results speak for themselves – and leave me speechless,” said Ivanhoe executive chairperson Robert Friedland in an update to shareholders this week.

On the back of what Friedland described as “spectacular exploration success”, a new Kakula mineral resource estimate is expected early in the second quarter of 2017 to update the mineral resource that was defined in October following a drilling programme covering a total area of 8.7 km2 within the larger 60 km2 Kakula exploration area.

Kakula contained an estimated indicated mineral resource of 66-million tonnes at 6.59% copper, as well as an inferred resource of 27-million tonnes at 5.26% copper, at a 3% cutoff.

At a lower 1% cutoff, Kakula contained an indicated mineral resource of an estimated 192-million tonnes at 3.45% copper and an inferred resource estimate of 101-million tonnes at 2.74% copper.

“Kakula’s addition boosted the combined Kamoa-Kakula indicated mineral resources to 944-million tonnes at 2.83% copper, plus inferred resources of 286-million tonnes at 2.31% copper, at a 1% cutoff,” the company explained.

Further, Ivanhoe is planning the expanded PEA to analyse the potential of mining the combined Kamoa and Kakula discoveries under expanded development scenarios of up to 16-million tonnes a year.

The December 2016 PEA estimated that the initial phase of production from Kakula, at a rate of four-million tonnes a year, would have a projected average grade of 7.52% copper over the initial five years of operation.

“Given the potential to significantly expand Kakula’s high-grade resources, the project engineering team is targeting a life-of-mine average yearly copper production scenario for a mine of up to eight-million tonnes a year at Kakula, potentially producing in excess of 400 000 t/y,” Friedland said.

“The next version of the PEA will focus on determining the optimal initial development scenario, as well as the best steady-state mining rate, which balances capital efficiency with effective scale and long-term operating costs to maximise the project’s net present value.”

Further, Ivanhoe said data collection and testwork to support a subsequent prefeasibility study were also under way to enhance the findings of the Kakula 2016 PEA.

Ivanhoe and partner Zijin Mining have now accelerated the Kakula exploration programme with the mobilisation of additional contracted drill rigs.

“Nine rigs now are drilling at Kakula, focused in the northwest resource expansion area, where the aim is to initially infill an area of 2.6 km2 immediately northwest of Kakula’s current inferred resource boundary.

Infill drilling of inferred resources is ongoing in the central section of Kakula. To the southeast, step-out drilling is continuing to explore extensions of the Kakula high-grade zone along trend,” the company said.

Ivanhoe also highlighted the potential of the untested 200 km2 of the 400 km2 Kamoa-Kakula project area, with the geology team and technical advisers now “intensively” evaluating the structural and stratigraphic controls on mineralisation of the broader Kamoa-Kakula basin to define and rank priority targets located within the untested parts of the licence.

Initial work has highlighted a number of high-priority drill targets that are planned to be tested this year.

Ivanhoe’s latest drilling results on the site have revealed high-grade, chalcocite-rich copper mineralisation outlined along a one-kilometre-wide and 5.5-kilometre-long corridor.

The DD1093 step-out hole intersected 11.1 m true width of 5.82% copper at a 3% copper cutoff, beginning at a downhole depth of 993 m; 11.1 m of 5.82% copper at a 2.5% copper cutoff; 11.9 m of 5.57% copper at a 2% copper cutoff; and 12.88 m of 5.26% copper at a 1% copper cutoff.

DD1080 intersected 4.49 m of 8.51% copper at a 3% copper cutoff, beginning at a downhole depth of 857.6 m; 4.99 m of 7.96% copper at a 2.5% copper cutoff; 4.99 m of 7.96% copper at a 2% copper cutoff; and 10.23 m of 4.75% copper at a 1% copper cutoff.

The DD1065 step-out hole intersected 6.24 m of 6.44% copper at a 3% copper cutoff, beginning at a downhole depth of 638 m; 7.24 m of 5.96% copper at a 2.5% copper cutoff; 8.39 m of 5.43% copper at a 2% copper cutoff; and 8.39 m of 5.43% copper at a 1% copper cutoff.

“It is remarkable to drill a step-out hole more than 1.6 km beyond the limits of the previous mineral resource boundary and intersect almost identical, high-grade, chalcocite-rich mineralisation,” commented Friedland.

“In addition to the three step-out drill holes that extend the Kakula discovery to the northwest, hole DD1079, drilled 400 m southeast of Kakula’s current inferred resources and beyond a line of poorly mineralised drill holes, intersected significant Kakula-style chalcocite mineralisation within a siltstone unit,” he added.

The hole intersected 3.51 m of 3.63% copper at a 3% copper cutoff, beginning at a downhole depth of 851 m; 3.51 m of 3.63% copper at a 2.5% copper cutoff; 3.51 m of 3.63% copper at a 2% copper cutoff; and 3.51 m of 3.63% copper at a 1% copper cutoff.