Name and Location
Kamoa copper project, Democratic Republic of Congo.

Client
The project is a joint venture between Ivanhoe Mines and Zijin Mining.

Project Description
The Kamoa copper project has been independently ranked as 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 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. Although, the discovery represents a major extension
of the Kamoa copper deposit, it has not been included in the independent PFS.

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
The independent PFS has identified several areas for further evaluation to optimise the project’s economics, including the use of controlled convergence room-and-pillar mining and increased production of up to four-million tonnes a year from the proposed initial mining area, with
only limited adjustments to the ore-handling and ventilation systems, resulting in a more efficient use of capital.

Key Contracts and Suppliers
OreWin (PFS).

On Budget and on Time?
Not stated.

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