Name and Location
Platreef platinum group metals, copper, nickel and gold project, Limpopo, South Africa.



Client
Ivanhoe Mines.

Project Description
The Platreef project involves the construction of a mechanised underground mine to access the underground Flatreef discovery at Ivanhoe’s Platreef project, on the northern limb of the Bushveld Igneous Complex, in Mokopane, Limpopo. The company is sinking a bulk-sample shaft to obtain mineralised bulk samples for further studies.

The Flatreef mineral resource, with a strike length of 6 km, predominantly lies within a flat to gently-dipping portion of the Platreef mineralised belt at relatively shallow depths of about 700 m to 1 100 m below surface.

As of March 2013, Flatreef's National Instrument 43-101-compliant, indicated mineral resources were 214-million tonnes, grading 4.1 g/t platinum, palladium, gold and rhodium (4PE), 0.34% nickel and 0.17% copper at a 2.0 g/t 4PE cutoff grade, containing an estimated 28.5-million ounces of 4PE, 1.61-billion pounds of nickel and 794-million pounds of copper.


Shaft 1, with an internal diameter of 7.25 m, will initially extend to about 800 m below the surface and facilitate the collection of a mineralised bulk sample in the latter half of 2015 to complete the company’s development assessment of the Flatreef deposit. This will further assist the mine planning work and complement the understanding of the deposit. This understanding has been developed since 2002 using the results of 1 134 exploration drill holes.

About 250 contract employees will be working on the shaft once the sinking work begins.



Value
Shaft 1 is expected to cost an estimated $80-million and will be fully funded by a Japanese consortium's 10% interest in the Platreef project, acquired in two tranches in 2011 for a total investment of $290-million.

Duration
Ivanhoe received approval in September 2013 from the Department of Mineral Resources (DMR) to proceed with the bulk-sample shaft. Terrace and shaft-collar designs have been completed and issued for construction. Contractor mobilisation and site preparation works started in November 2013.


Latest Developments
Ivanhoe Mines together with the Japanese investment consortium is working on a scoping study, based on a mining operation of up to 12-million tonnes a year, with multiple shafts and access points. The study is expected to be completed in early 2014.

DRA Mineral Projects, of South Africa, in consultation with Stantec, SRK, Geotail, Golder Associates and Digby Wells, is continuing with the prefeasibility study (PFS) planned for completion in the second quarter of 2014.

Meanwhile, Ivanhoe has revealed it has uncovered new thick high-grade mineralisation in an area that has become a new extension of the Flatreef nickel/copper/4PE discovery at the company's Platreef project.

Drill hole UMT400, recently bored in the Ga-Madiba extension zone, on the eastern flank of the Flatreef extension, has intersected 48.6 m that contain 4.63 g/t of platinum, palladium and gold (3PE), and 0.30% nickel and 0.13% copper, at a cutoff of 1 g/t of 3PE.

The ratio of platinum to palladium is about 1:1 in the mineralised intercept, while rhodium assays are still pending. The vertical intersection has a true thickness of about 34.4 m when adjusted for the dip of the mineralised zone.

The Ga-Madiba zone, covering about 3.7 km², adjoins and stretches to the south from the established area of Canadian National Instrument 43-101-compliant inferred resources. The arear, in turn, surrounds the area of indicated resources at the heart of the Flatreef discovery, and where Ivanhoe is planning to develop an underground mine.

The combined grade and thickness of the platinum group and base metals mineralisation found in UMT400 further reinforces Ivanhoe's belief that the Flatreef deposit remains open along strike for potential expansion.

The company plans to aggressively drill the area in pursuit of its objective of infilling and expanding this new discovery area.

Another new drill hole in the Ga-Madiba zone – UMT409, which collars 818 m south of UMT400 – has also intersected substantial mineralisation on a portion of the Flatreef.

Holes UMT400 and UMT409 have been collared at about 3.5 km and 4.3 km, respectively, south of the site of the planned bulk-sample shaft on the Flatreef.

The high-grade mineralisation in the T2 reef starts at a depth of 967 m below surface and continues to 1 016 m in UMT400. The mineralised reef in UMT409 has been intersected at much shallower depths of 720 m to 729 m below surface.

Fifteen parent drill holes have been completed on about 400 m drill centres within the Ga-Madiba area. Ivanhoe intends to prepare a maiden inferred resource estimate for the Ga-Madiba area after completing ten more holes from the planned exploration programme.

Drilling to date has successfully identified the T1 and T2 mineralised reefs, confirming the initial interpretation that the Ga-Madiba target represents the southern strike extension to the shallow-lying Flatreef. The overall drill results’ depth, range of grade, thickness and grade-thickness are comparable to the initial, 400-m-spaced drill results in Flatreef's Zone 1, before a 100 m x 100 m indicated infill programme was completed.

The positive results of ongoing drilling at Ga-Madiba and elsewhere on the Platreef project has enabled Ivanhoe to update and expand the potential quantity and grade of mineralisation at its two primary exploration targets.

At Target 1, the Ga-Madiba extension zone currently covers 3.7 km² and, based on the results of 14 drill holes completed from October 26, 2012, to February 18 this year, Ivanhoe has estimated that the target could contain between 115-million and 235-million tonnes of ore grading 1.2 g/t to 1.7 g/t platinum, 1.7 g/t to 2.3 g/t palladium, 0.17 g/t to 0.26 g/t gold, 0.06 g/t to 0.14 g/t rhodium (3.1 g/t to 4.5 g/t 4PE), 0.23% to 0.28% nickel and 0.11% to 0.14% copper. The tonnage and grades are based on intersections of 2 g/t 3PE in drill holes completed in Target 1.

At its Target 2, which surrounds the currently estimated mineral resources in zones 1 and 2 and covers an area of 7.6 km2, the company estimates that the area could contain about 260-million to 450-million tonnes grading 1.7 g/t to 2.4 g/t platinum, 1.2 g/t to 1.6 g/t palladium, 0.26 g/t to 0.33 g/t gold, 0.14 g/t to 0.20 g/t rhodium (3.4 g/t to 4.5 g/t 4PE), 0.30% to 0.35% nickel and 0.15% to 0.18% copper over 7.6 km². The tonnage and grades are based on 2 g/t 3PE intersections of mineralisation in 19 drill holes completed, in Target 2 and adjacent drill holes within the inferred resources.

The company notes, however, that the potential quantity and grade of these exploration targets are conceptual in nature.

Further, there were about 37 km² of unexplored ground beyond these two exploration target areas on the property, under which the Platreef mineralisation is projected to lie, indicating “excellent potential” to significantly increase the mineralisation with further step-out drilling to the south-west.

There are currently eight drill rigs operating at the Platreef project, focused on resource delineation and expansion. In addition to the Ga-Madiba prospect, Ivanhoe is conducting infill drilling to potentially expand the indicated resources of the initial planned mining area to support potential production scenarios of up to 12-million tonnes a year.

Ivanhoe's previous drilling at the Flatreef discovery produced combined intercepts of the T1 and T2 mineralised reefs that averaged 24 m in thickness at a 2g/t 4PE cutoff, which was recognised as exceptional results for the Bushveld Complex, where many underground platinum mines have average reef thicknesses of 0.4 m to 1.5 m.

Meanwhile, surface construction work is under way for the 7.25-m diameter bulk-sample shaft (Shaft No 1).

The vertical shaft is planned to be sunk to a depth below surface of 800 m, which will enable Ivanhoe to take a bulk sample at some point in the first half of 2016 to complete the company's development assessment of the Flatreef.

South Africa-based Aveng Mining, the sinking contractor for Shaft No 1, is continuing surface preparation work at the site and has started excavating the boxcut access. Further, the company is upgrading the hoisting equipment to be installed in the shaft headframe and excavating holes for the concrete foundations of the shaft collar. Ventilation casing are scheduled to start this month.

Key Contracts and Suppliers
Aveng Mining (primary sinking contractor) and DRA Mineral Projects, in consultation with Stantec, SRK, Geotail, Golder Associates and Digby Wells (PFS).

On Budget and on Time?
The Platreef project is on target for initial underground development in 2018 and concentrator startup in the fourth quarter of 2019.



Contact Details for Project Information
Ivanhoe Mines VP communications & public affairs, Jeremy Michaels, tel +27 11 088 4300 or email jeremy.michaels@ivanplats.com.
Ivanhoe Mines, VP and project director, Gerick Mouton, tel +27 11 088 4300 or email gerickm@ivanplats.com.