Ivanhoe Mines Announces Exceptional Results of Independent 2022 Feasibility Study for Tier- one Platreef Palladium, Rhodium, Nickel, Platinum, Copper and Gold Project in South Africa Platreef ranks as world's largest precious metals deposit under development
Ivanhoe Mines Announces Exceptional Results
of Independent 2022 Feasibility Study for Tier-
one Platreef Palladium, Rhodium, Nickel,
Platinum, Copper and Gold Project in South
Africa
Platreef ranks as world's largest precious metals deposit under development
Phase 1 mine in construction, advancing towards first production in Q3 2024
2022 Feasibility Study yields an after-tax NPV
8%
of US$1.7 billion and IRR of 18.5% at long-term
consensus metal prices
After-tax NPV
8%
of US$4.1 billion and IRR of 29.3% at current spot metal prices
Shaft 2 accelerated to 2027, advancing Phase 2 expansion with annual forecast production of
greater than 590,000 ounces of palladium, platinum, rhodium, gold and more than 40 million
pounds of nickel and copper
2022 Feasibility Study confirms Platreef's potential to be the industry's largest and lowest-cost
primary PGM producer
Fort Lauderdale, Florida--(Newsfile Corp. - February 28, 2022) - Ivanhoe Mines (TSX: IVN) (OTCQX:
IVPAF) Co-Chair Robert Friedland announced today at the 31
st
BMO Global Metals & Mining
Conference that the company's South African subsidiary, Ivanplats, and its partners, welcome the
outstanding positive findings of an independent
Platreef 2022 Feasibility Study
for the tier-one Platreef
palladium, rhodium, nickel, platinum, copper and gold project in South Africa.
The 2022 Feasibility Study provides the blueprint for the ongoing development of Platreef and builds on
the excellent results of the preliminary economic assessment (PEA) for a phased-development scenario
to expedite production, announced in November 2020, alongside the 2020 Feasibility Study. The
Platreef 2022 Feasibility Study is based on a steady state production rate of 5.2 million tonnes per
annum (Mtpa), as well as an accelerated ramp up to steady state through the earlier development of
Shaft 2. The 2022 Feasibility Study is based on the detailed design and engineering scenario first
presented in the 2020 PEA, confirming the viability of a new phased development pathway to fast-track
Platreef into production by Q3 2024.
The Platreef 2022 Feasibility Study first phase of production includes an initial 700,000 tonnes per
annum (700 ktpa) underground mine and 770-ktpa-capacity concentrator, targeting high-grade mining
areas close to the project's recently completed Shaft 1 (Figure 1).
Platreef's Phase 2, 5.2-Mtpa steady state production rate would rank it as the world's fifth largest primary
platinum-group metals (PGM) mine on a palladium equivalent basis, with annual forecast production of
more than 590,000 ounces of palladium, platinum, rhodium and gold, plus more than 40 million pounds
of nickel and copper (Figure 8).
The Platreef 2022 Feasibility Study reflects the initial two phases of development for the Platreef Mine.
Previous studies have demonstrated the resource base for future expansions up to 12 Mtpa, which
would position Platreef among the very largest PGM producing mines in the world (Figure 8).
Watch a new video showcasing Platreef:
https://vimeo.com/682603861/dce81b5e3a
Construction activities at the Platreef Project site, including Shaft 1 on the left, and the hitch-to-collar
advancement for Shaft 2 on the right
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Platreef poised to complete journey from tier-one discovery to one of the world's largest and
lowest-cost PGM producers
The Platreef Project, which includes an underground deposit of thick, high-grade PGE-nickel-copper-
gold mineralization discovered by Ivanhoe's geologists, is in the northern limb of the Bushveld Complex
approximately 11 kilometres from Mokopane, and 280 kilometres northeast of Johannesburg.
PGE-nickel-copper-gold mineralization in the northern limb is primarily hosted within the Platreef, a
mineralized sequence which is traced more than 30 kilometres along strike. The Platreef Project is
situated in the southern sector of the Platreef on two contiguous properties, Turfspruit and
Macalacaskop, which comprise, in aggregate, approximately 7,842 hectares. The northernmost
property, Turfspruit, is contiguous with and along strike from Anglo Platinum Limited's Mogalakwena
group of properties and mining operations.
Ivanplats acquired a prospecting permit for Macalacaskop and Turfspruit in February 1998. In 1999,
Ivanhoe began a series of drilling campaigns, totalling more than 726,000 metres, to advance Platreef
from a greenfield exploration project focused on shallow mineralized zones through to focusing on
deeper underground targets. At the height of the drilling campaign, 30 diamond drill rigs were producing
more than 10,000 metres of core a week.
Since 2007, Ivanplats has focused its Platreef exploration and development activities on defining and
advancing the thick, high-grade, down-dip extension of its original discovery at Platreef, now known as
the Flatreef Deposit. In 2012, the Merensky Reef analogue was recognized.
The Flatreef Deposit lies entirely on the Turfspruit and Macalacaskop properties that form part of
Ivanhoe's mining right. The thickness of the mineralized reef (T1 & T2 mineralized zones) intersected in
Shaft 1 is 29 metres, with average grab sample grade of 6.35 grams per tonne (g/t) platinum, palladium
and rhodium plus gold (3PE+Au), ranging up to 9.6 g/t 3PE+Au, as well as significant quantities of nickel
and copper. This thickness is exceptional when compared to the typical, approximately one-metre-thick
reefs being mined elsewhere on South Africa's Bushveld Complex.
A Japanese consortium led by JOGMEC, a Japanese government entity, and including Itochu and Japan
Gas Corporation, acquired a 10% interest in the Platreef Project for approximately US$290 million.
The thick, high-grade, flat-lying Flatreef deposit was discovered in 2010. Ivanplats conducted an
exploration program with 30 drill rigs totalling over 260,000 metres in 2011. Platreef has excellent
exploration upside for further expansion and discovery.
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In June 2020, Ivanplats completed the sinking of Platreef's initial shaft, Shaft 1, to its final depth of 996
metres below surface. Shaft 1 is located approximately 450 metres away from a high-grade area of the
Flatreef orebody, which will provide initial mining areas for Phase 1 production in 2024.
The thick Flatreef orebody also is flat-lying, which is ideal for safe, bulk-scale, mechanized mining and
processes optimized for maximum ore extraction. Flatreef is characterized by its high-grade
mineralization and a palladium-to-platinum ratio of approximately 1:1, which is considerably higher than
other PGMs discoveries on the Northern Limb of the Bushveld.
Through phased development, Platreef is projected to become one of the world's largest and lowest-cost
producers of palladium, platinum, rhodium, nickel, copper and gold. The 2022 Feasibility Study
considers Phase 1 and Phase 2 development, including only one third of Platreef's Indicated Resources
above an US$80/tonne Net Smelter Return (NSR) cut-off.
2022 Feasibility Study re-affirms outstanding economics of phased development at Platreef
with an accelerated ramp up to 5.2 Mtpa
Mr. Friedland commented: "The Platreef discovery remains the world's greatest precious metals deposit
under development, with a peerless endowment of palladium, rhodium, platinum, and gold; as well as
highly significant quantities of strategic 'electric' metals such as nickel and copper. These outstanding
economic results define our commitment to advance Platreef to first production, alongside our local
communities and Japanese partners. We are counting down to less than 30 months from now. This
achievement will only mark the first milestone, as we plan to expand this world-scale operation into one
of the largest and lowest-cost, integrated PGM producers on the planet … all while generating
outstanding returns on capital for a major, disruptive mine.
"PGMs have an integral role to play in the global transition to clean technologies, specifically the
adoption of hydrogen energy systems; as well as the international push for lower emissions, which is led
by developed economies … but let us not forget that emerging markets are catching up quickly …
Platreef will be a responsible, industry leading, long-life supplier of palladium, rhodium, nickel, platinum,
copper and gold … as well as a leading economic driver for South Africa. Ivanhoe Mines remains
committed to 're-inventing mining' and will continue to leverage the most sustainable technologies
available … as evidenced by our commitment to zero-emission, battery-powered equipment, and the
adoption of the safest possible tailings method utilizing dry-stack technology, which has the added
benefit of minimizing water consumption.
"Palladium and rhodium have reached all-time highs in recent years, currently trading at approximately
$2,480 an ounce and $18,750 an ounce respectively, as progressively stricter air-quality rules increase
demand for the metals used in vehicle pollution-control devices. Meanwhile, copper and nickel will
continue to realize historic and sustained rallies due to underinvestment in new mine supply and massive
growing demand tied to electric vehicles and global clean-energy initiatives."
Platreef's Indicated Mineral Resources contain an estimated 18.9 million ounces of palladium, 18.7
million ounces of platinum, 3.1 million ounces of gold, and 1.2 million ounces of rhodium (a combined
41.9 million ounces PGMs plus gold), plus 2.4 billion pounds of nickel and 1.2 billion pounds of copper,
at a 2.0 g/t 3PE+Au cut-off.
Platreef's Inferred Mineral Resources contain an additional 23.8 million ounces of palladium, 23.2 million
ounces of platinum, 4.3 million ounces of gold, and 1.6 million ounces of rhodium (a combined 52.8
million ounces PGMs plus gold), plus 3.4 billion pounds of nickel and 1.78 billion pounds of copper, also
at a 2.0 g/t 3PE+Au cut-off.
Mr. Friedland added: "The thick and flat-lying nature of the high-grade mineralization of the Flatreef
deposit allows for the use of state-of-the-art, automated, electric mining machinery, including cutting-
edge battery driven underground vehicles.
"For Ivanhoe Mines, achieving first production at Platreef will mark the next milestone in the journey to
become a new-age, major diversified mining company ..... we intend to build on the achievements of the
Kamoa-Kakula Copper Joint Venture in the Democratic Republic of Congo, and leverage the countless
lessons we have learned during phased development at our tier-one copper asset … and let us not
forget, Platreef still has vast potential to significantly expand the already enormous resource base … as
well as a plethora of new nickel-sulphide exploration opportunities, many of which are near surface."
Phase 1 construction underway, with first production expected in Q3 2024
Detailed engineering studies are underway on the initial 770-ktpa mine and concentrator, in parallel with
the changeover of Shaft 1 into a production shaft, with expected completion in March 2022. First delivery
of the initial battery-electric underground fleet is expected imminently, and the first blast on the 950-metre
level is anticipated in April 2022. The initial underground development focus from Shaft 1 will be the on
the first ventilation raise and ore passes connecting the 750-metre level to the 950-metre level.
Earthworks for the first concentrator are planned to begin in Q2 2022, followed by civil works and the
ordering of long-lead-time items in H2 2022. First ore feed to the concentrator is planned for Q3 2024.
Phase 1 average annual production is estimated at 113,000 ounces (oz.) of platinum, palladium,
rhodium and gold (3PE+Au), plus 5 million pounds of nickel and 3 million pounds of copper.
Figure 1: Production and timeline schematic of Platreef 2022 Feasibility Study.
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William Mamashela (left) and William Mello, with local contractor Somuthwa Construction, assisting with
construction of the Platreef Mine.
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Shaft 2 commissioning accelerated to 2027, expediting Phase 2 expansion
While the 700-ktpa initial mine is operating using Shaft 1, the sinking of the project's second, larger shaft
(Shaft 2), that drives the Phase 2 expansion to 5.2 Mtpa, will progress at the same time. The 2022
Feasibility Study envisions Shaft 2 equipped for hoisting in 2027, an accelerated schedule by
approximately 18 months compared to the 2020 PEA, coming online just over three years from first
production of Phase 1.
Once Shaft 2 is complete, two 2.2-Mtpa concentrator modules will be commissioned, and the initial
concentrator will be ramped up to its full capacity of 770-ktpa; increasing the steady-state production to
5.2 Mtpa (Figure 1).
The Phase 2 expansion would result in Platreef becoming the world's fifth largest primary platinum-group
metals (PGM) mine on a palladium equivalent basis, with annual forecast production of more than
590,000 ounces of palladium, rhodium, platinum, and gold, plus more than 40 million pounds of nickel
and copper (Figure 6).
Construction at Shaft 2, which now is expected to be commissioned by 2027.
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Platreef's immense mineral endowment supports future expansions
The 2022 Feasibility Study considers Platreef's Phase 1 and Phase 2 development, including only one
third of the Indicated Resources above an US$80/tonne Net Smelter Return (NSR) cut-off. If the
remainder of the Indicated Resources were to be converted to reserves, it would provide an opportunity
to massively expand production.
As development of the project progresses, additional drilling from underground will be undertaken with
the goal of increasing the confidence of the current mineral resources, as well as to expand the resource
base. Additional studies will follow up on the previous work that envisaged further phased expansions
based on updated reserves.
Figure 2: World's largest precious metal deposits under development ranked by contained metal in
Measured & Indicated Resources.
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Source: Company filings, S&P Global Market Intelligence. Notes: Chart ranks the largest undeveloped
primary palladium, platinum, gold, silver and rhodium projects from the S&P Global Market Intelligence
database based on measured and indicated palladium equivalent resource. Palladium equivalent
calculation includes palladium, platinum, gold, silver and rhodium ounces and has been calculated using
spot price metal price assumptions (February 23, 2022) of US$1,095/oz platinum, US$2,480/oz
palladium, US$18,750/oz rhodium, US$1,909/oz gold and US$24.55/oz silver. Measured and Indicated
resources for Platreef correspond to palladium, platinum, gold and rhodium ounces at a 1 g/t cut-off
grade.
Tshifhiwa Netshirando, Platreef's Production Manager, is focused on equipping Shaft 1 for first
production within just over two years.
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Aerial view from February 2022 of current construction at the Platreef site, including Shaft 1 (right) and
progress at Shaft 2 (left).
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Platreef will positively transform mining and community development in Limpopo Province
Ivanhoe Mines' President, Marna Cloete, commented: "Ivanhoe Mines is excited to become a disruptive,
cornerstone participant in the future of South Africa's platinum-group-metals mining industry. We have
established a strong strategic foothold on the giant polymetallic Northern Limb of the renowned Bushveld
Complex. We look forward to sharing the benefits of this truly unique orebody with our partners and local
communities, as well as all the people of South Africa … Platreef represents an important, long-life
economic driver for the nation, and we have only just begun to tap into the potential of this amazing
discovery.
"We are pleased to be building the cutting-edge transformation in future underground platinum-group-
metals mining operations in South Africa. We are charting a new path in the empowerment of the local
people in Limpopo Province and in the training of women in the mining industry. We are focused on
creating a vibrant local economy that's not just going to be mining, as we are enabling entrepreneurs to
create and expand a plethora of new businesses.
Dr. Patricia Makhesha, Ivanhoe's Executive Vice President, Sustainability and Special Projects, added:
"The agreement with the Mogalakwena Local Municipality to recycle wastewater is an important
milestone in Platreef's development. Recycling locally treated water is a cost-effective and sustainable
approach to securing water for the Platreef Project."
Ivanhoe Mines indirectly owns 64% of the Platreef Project through its subsidiary, Ivanplats, and is
directing all mine development work. The South African beneficiaries of the approved broad-based,
black economic empowerment 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; ITC Platinum Development Ltd., an ITOCHU affiliate; and Japan Gas Corporation.
The Platreef 2022 Feasibility Study was independently prepared by OreWin Pty Ltd. of Adelaide,
Australia; Mine Technical Services of Reno, USA; SRK Consulting Inc. of Johannesburg, South Africa;
DRA Global of Johannesburg, South Africa; and Golder Associates Africa of Midrand, South Africa.
A National Instrument 43-101 technical report will be filed on SEDAR at
www.sedar.com
and on the
Ivanhoe Mines website at
www.ivanhoemines.com
within 45 days of the issuance of this news release.
Platreef's thick mineralization, which will be mined with highly-productive mechanized methods,