Name of the Project
Platreef project – platinum group metals (PGMs), nickel, copper and gold mine.

Location
Mokopane, Limpopo, South Africa.

Client
Ivanhoe Mines indirectly owns 64% of the Platreef project through its subsidiary, Ivanplats, and is directing all project development work. The South African beneficiaries of the approved, broad-based, black economic-empowerment (BBBEE) structure have a 26% stake in the Platreef project. The remaining 10% is owned by a Japanese consortium of Itochu Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation.

Ivanplats is one of the top performers in terms of compliance with South Africa’s BBBEE laws. The company achieved Level-3 status on the BBBEE scorecard in 2015, 2016 and 2017.

The 20 communities surrounding the Platreef project are widely consulted. About 150 000 local residents have become equity shareholders with an estimated 70% of employees and contractors being from the surrounding and directly affected communities.

Project Description
The Platreef project is a Tier-1 discovery, containing the underground Flatreef deposit of PGMs, nickel, copper and gold, located on the northern limb of South Africa’s Bushveld Igneous Complex – the world’s premier platinum-producing region. Ivanplats has declared initial, probable mineral reserves of 17.6-million ounces of platinum, palladium, rhodium and gold (3PE+Au) – an increase of 13% following stope optimisation and mine sequencing work. The mineral reserve is expected to support a 32-year mine life at steady-state production of four million tonnes a year.

Platreef’s Phase 1 start-up plan – to process four-million tonnes of ore a year and produce 476 000 oz of 3PE+Au, plus 21-million pounds of nickel and 13-million pounds of copper – was the subject of an independent definitive feasibility study (DFS) completed in July 2017.

Phase 2 will involve a doubling of mine production to eight-million tonnes a year, placing it among the world’s largest PGM mines. Phase 3 will involve further mine expansion to a steady-state 12-million tonnes a year, which would establish Platreef as the world’s largest primary PGM mine.

Key features of the Platreef DFS include:

indicated mineral resources containing an estimated 41.9-million ounces of 3PE+Au, with additional inferred resources of 52.8-million ounces of 3PE+Au; and

that the Platreef project will rank at the bottom of the cash-cost curve, at an estimated $351/oz of 3PE+Au produced, net of by-products and including sustaining capital costs, and $326/oz before sustaining capital costs.

Mining zones in the current Platreef mine plan occur at depths from about 700 m to 1 200 m below the surface. The main access to the Flatreef deposit and ventilation system is expected to be through five vertical shafts. Shaft 2 will host the main personnel transport cage, and the material and ore-handling system.

Shafts 1, 3, 4 and 5 will provide ventilation for the underground workings. Shaft 1, currently under development, will also be used for initial access to the deposit and early underground development. Low-cost, mechanised mining methods will be incorporated, including long-hole stoping and drift-and-fill mining. Mined-out areas will be backfilled with tailings from the processing plant and cement. 

The ore will be hauled from the stopes to a series of ore passes that will connect to a main haulage level at Shaft 2, from where it will be crushed and hoisted to the surface for processing. 

Shaft 2 will have a hoisting capacity of six-million tonnes a year.

The flowsheet for Phase 1 comprises a four-million-tonne-a-year, three-stage crushing circuit, which will feed into two parallel milling-flotation modules, each with a capacity of two-million tonnes a year. Flotation will be followed by a four-million-tonne-a-year tailings-handling and concentrate-thickening, filtration and storage circuit.

Potential Job Creation
About 2 000 permanent employees will be employed for Phase 1. In addition, several thousand indirect jobs are expected to be created.

Net Present Value/Internal Rate of Return
Phase 1 has an after-tax net present value of $916-million, at an 8% discount rate, and an after-tax internal rate of return of 14.2%.

Value
The estimated preproduction capital requirement for Phase 1 is about $1.5-billion.

Duration
According to the latest DFS released, Phase 1 is expected to support initial concentrate production by 2022.

Latest Developments
Ivanhoe’s sinking of Shaft 1 has reached a depth of 750 m below surface and development of a 750 m level station – the second of four planned shaft stations – is nearing completion.

Shaft 1 is expected to reach the top of the Flatreef orebody, at a depth of about 783 m, in the third quarter. Sinking of the shaft will continue to a planned final depth of 982 m.

Surface construction for Platreef’s Shaft 2 is progressing. Blasting and excavation of a boxcut to about 29 m below surface is under way, while construction of a concrete hitch for the headframe is expected to be completed by the end of the year.

Meanwhile, CITIC Metal Group has provided Ivanhoe Mines with an interim loan of $100-million in accordance with a term loan facility that is an integral part of the long-term strategic cooperation and investment agreement  between Ivanhoe and CITIC Metal.

The interim  loan is subject to an annual interest rate of 6% and will be repaid from the proceeds of the C$723-million strategic investment by CITIC.

CITIC agreed to acquire 19.5% of Ivanhoe’s shares in June this year, in exchange for the C$723-million investment.

Having drawn the $100-million facility, Ivanhoe has working capital  of about $165-million.

Key Contracts and Suppliers
DRA Global (prefeasibility study, feasibility study, mining, concentrator and infrastructure); OreWin (economics and National Instrument 43-101 technical report); Aveng Mining (Shaft 1 sinking contractor); Murray & Roberts Cementation (design and engineering of shaft infrastructure); Stantec Consulting (mine planning); Golder Associates (water studies, backfill and tailings); Digby Wells Environmental (social and environmental); SRK (geotechnical); and Mintek (metallurgical testwork).

On Budget and on Time?
Phase 1 is under development, during which an operating platform will be established to support the start of production.

Contact Details for Project Information
Ivanplats VP and executive head: capital projects Gerick Mouton, tel +27 11 088 4300 or email gerickm@ivanplats.com.