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

Client
Ivanhoe Mines.

Project Description
The project involves the sinking of a bulk-sample shaft to access the underground Flatreef platinum/palladium/nickel/copper/gold/rhodium discovery at Ivanhoe’s Platreef project, on the northern limb of the Bushveld Igneous Complex, in Limpopo.

The 7.25-m-diameter vertical shaft (Shaft 1) will extend 800 m below the surface and facilitate the collection of a mineralised bulk sample in the second half of 2015 to complete the company’s development assessment of the Flatreef.

Ivanhoe is working with a Japanese consortium – comprising Itochu Corporation, Japan Oil, Gas & Metals Corporation and JGC Corporation – on an integrated Flatreef development plan, based on an exclusively underground mining operation of up to 12-million tonnes a year using multiple shafts. The study is expected to be completed late this year or early next year.

Value
Shaft 1 is expected to cost R818-million.

Duration
Contractor mobilisation and site preparation for the shaft will begin in the fourth quarter of this year.

Latest Developments
Ivanhoe Mines has intersected “unprecedented” mineralisation in an exploration drill hole at its Platreef precious metals project.

The company has found 4.51 g/t of platinum, palladium, rhodium and gold (4E) over 90.64 m, at a 1 g/t platinum, palladium, rhodium cutoff in Hole TMT006 at the underground Flatreef 4E/nickel/copper discovery, which is part of the Platreef project.

The intersection also holds more nickel and copper, grading 0.37% nickel and 0.20% copper, and a platinum-to-palladium ratio of about one-to-one, over the entire 90 m intersection.

"This is an extraordinary drill hole. The 90 m thickness of the intercept, which roughly is the same height as a 30-storey building, is unprecedented at Flatreef and I believe it also is without precedent in an underground platinum discovery in South Africa,” says company founder and executive chairperson Robert Friedland.

"The scale of the mineralised intercept has obvious implications for the contained platinum-group metals (PGMs) and base metals in the open-ended Flatreef polymetallic discovery. The combined grade and thickness of the PGMs and base metals mineralisation in this hole far exceeds anything we've previously encountered in all of our years of delineating resources on our Platreef project,” says Friedland.

The company states that the gentle dips in the Flatreef discovery area means that the drilled thickness is close to the deposit’s true thickness.

The high-grade mineralisation starts 803.43 m below the surface and continues to a depth of 894.07 m. The T1 and T2 mineralised reefs that comprise the uppermost mineralised portion of the Flatreef discovery are next to each other in this area, which is a contributing factor to the size of the intersection.

Hole TMT006 is collared about 360 m south of the location of the $80-million bulk-sample shaft, which recently received approval to proceed from the South African government's Mineral Resources Department.

Previous drilling by Ivanhoe Mines at the Flatreef discovery has produced combined intercepts of the T1M and T2 zones that average 24 m in thickness. This is exceptional for the Bushveld, where many underground platinum mines have averaged thicknesses of 0.4 m to 1.5 m.

Since drilling resumed at the Platreef project in June, of 24 759 m have been drilled in 22 holes and 11 deflections, representing about 70% of the planned 2013 development drilling programme. Ivanhoe expects to complete the 2013 drilling programme in mid-December, which will bring the total drilling to 709 400 m at the Platreef project since the prospecting rights for the Turfspruit and Macalacaskop licences were acquired in February 1998.

Ivanhoe intends to undertake a three-dimensional (3D) geophysical seismic survey over the Flatreef discovery before beginning site preparation work for the bulk-sample shaft. The seismic survey is expected to begin this month and will be completed in early November.

Terrace and collar designs for the 7.25-m-diameter bulk-sample Shaft 1 have started and contractor mobilisation and site preparation are expected to start in December once the preliminary results from the 3D survey have been received.

About 250 contract employees will be working on the 800-m-deep shaft once the sinking work begins, increasing the number of people employed at the Platreef project to 550. The vertical shaft will facilitate Ivanhoe collecting a mineralised bulk sample in the second half of 2015 to complete the company's development assessment of the Flatreef.

Shaft 1 construction will be funded from the $180-million in dedicated funds remaining in Ivanhoe's treasury, from the $280-million received in 2011 from a Japanese consortium of Itochu Corporation, the Japan Oil, Gas and Metals National Corporation and JGC Corporation for an 8% interest in the Platreef project.
Key Contracts and Suppliers
Aveng Mining (sinking contractor).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ivanhoe Mines, Jeremy Michaels, tel +27 11 088 4348 or email jeremy.michaels@ivanplats.com.
Aveng Mining , tel +27 11 821 1800.