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 hold 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:
1. 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.
2. 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, beginning with 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.
3. Kamoa 2017 prefeasibility study (PFS) – the 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, which were 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. 

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 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
Ivanhoe Mines executive chairperson Robert Friedland and CEO Lars-Eric Johansson, have announced that the company has completed an independently verified updated mineral resources estimate for the Kakula discovery on the Kamoa-Kakula copper project.

The estimate, prepared under the direction of independent consultant Amec Foster Wheeler, covers a mineralised strike length of 13.3 km. The updated estimate incorporates mineral resources contained in the Kakula West discovery area and the saddle area between the main Kakula discovery area and Kakula West. 

The new estimate boosts the total tonnage of Kakula’s indicated mineral resources by 50%, at a 3% copper cutoff, compared with the previous Kakula resource estimate issued in May 2017 that covered a strike length of 7.7 km. 

Kakula’s new indicated mineral resources at a 3% cutoff grade have increased by 58-million tonnes and currently total 174-million tonnes at a grade of 5.62% copper. This compares to the May 2017 estimate of 116-million tonnes at 6.09% copper, at the same cutoff grade. Estimated inferred mineral resources now total an additional nine-million tonnes at a grade of 3.66% copper, at a 3% cutoff.

At a 1% copper cut-off, Kakula’s indicated mineral resources have increased by 58% to now total 585-million tonnes at 2.92% copper.

The Kakula high-grade mineralised trend remains open in multiple directions. Friedland has said that Ivanhoe expects that ongoing in-fill and step-out drilling will yield significant expansions and further upgrades to the current resources.

Kakula’s new estimate boosts combined Kamoa-Kakula indicated mineral resources to 1.03-billion tonnes at 3.17% copper, containing about 72-billion pounds of copper, plus an additional 183-million tonnes of inferred mineral resources at 2.31% copper, at a 1.5% cutoff.

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.