Ivanhoe Mines announces outstanding economic results of updated, independent Integrated Development Plan (2023 IDP) for world-leading Kamoa-Kakula Copper Complex
January 30, 2023
Ivanhoe Mines announces outstanding economic results of updated,
independent Integrated Development Plan (2023 IDP) for world-leading
Kamoa-Kakula Copper Complex
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Ivanhoe’s 26-year odyssey of discovery realizes a globally significant
copper complex essential for the energy transition
■
2023 IDP consists of a pre-feasibility study (PFS) for the Phase 3 and 4
expansions of Kamoa-Kakula, and a preliminary economic assessment
(PEA) life-of-mine extension case
■
Phase 3 expansion, to be completed in 2024, increases Kamoa-Kakula’s
annual copper production to a ten-year average of 620,000 tonnes of
copper, at cash costs (C1) of $1.22/lb.
■
Expansion to 19.2 Mtpa in PFS case yields after-tax NPV8% of $19.1 billion,
over a 33-year mine life
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$20.2 billion after-tax NPV8% in 42-year PEA life-of-mine extension case
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Kamoa-Kakula 500,000 tonne-per-annum copper smelter completion in late
2024; brings operating cost reductions and environmental benefits,
producing ultra-low carbon 99+% copper blister anodes
■
Kamoa-Kakula to rank as the 4th largest copper producer globally in 2025,
with lowest-quartile cash costs
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Mineral Reserves tonnage increased by 101% to 472 million tonnes
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Kamoa-Kakula generates powerful cash flow to fund expansions, with an
average annual EBITDA of over $3 billion for the first 10 years
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Phase 3 and 4 expansions deliver significant blessings to all Kamoa-
Kakula stakeholders, including host communities, 12,000+ employees and
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contractors, as well as the Democratic Republic of Congo as a major 20%
shareholder
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Ivanhoe Mines to host conference call on Tuesday, January 31, 2023
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Ivanhoe Mines provides 2023 cost guidance for Kamoa-Kakula
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines’ (TSX: IVN;
OTCQX: IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun announced
today that the company and its partners, Zijin Mining Group, Crystal River Global
Limited and the Democratic Republic of Congo (DRC), welcome the extremely
positive findings of an independent Integrated Development Plan (2023 IDP) for the
world-leading Kamoa-Kakula Copper Complex. The 2023 IDP consists of a Pre-
Feasibility Study (Kamoa-Kakula 2023 PFS) for the Phase 3 and Phase 4 expansions
of the Kamoa-Kakula Copper Complex over a 33-year mine life, as well as an
updated Preliminary Economic Assessment (Kamoa-Kakula 2023 PEA) that includes
a life-of-mine extension case to 42 years overall.
The Kamoa-Kakula 2023 PFS evaluates a staged increase in production capacity at
Kamoa-Kakula from the current nominal throughput rate of 7.6 million tonnes per
annum (Mtpa) up to a total of 19.2 Mtpa by 2030. First, the throughput of the Phase 1
and 2 concentrators is increased to 9.2 Mtpa by the imminent completion of the
debottlenecking program.
Phase 3 includes the ongoing construction of a new 5.0 Mtpa concentrator, located
at Kamoa, which is targeted to be completed in Q4 2024. As part of the Phase 3
expansion, a direct-to-blister (DBF) flash smelter is under construction to produce
approximately 500,000 tonnes of 99+% pure copper metal, and the replacement of
Turbine #5 at the Inga II hydroelectric power station is well underway. The turbine
replacement will supply an additional 178 megawatts (MW) of clean hydroelectric
power to the national grid and provide power for Phase 3.
Phase 4, planned for later in the decade, includes the construction of an additional
5.0 Mtpa concentrator in parallel to Phase 3, which will be fed by mines in the Kamoa
area, bringing overall production up to 19.2 Mtpa.
The Kamoa-Kakula 2023 PEA evaluates a further 9-year extension to mine life, from
four additional mines, maintaining production from the Phase 1 – 4 concentrators
until beyond 2060.
The Kamoa-Kakula 2023 PEA is preliminary and includes an economic analysis that
is based, in part, on Inferred Mineral Resources. Inferred Mineral Resources are
considered too speculative geologically for the application of economic
considerations that would allow them to be categorized as Mineral Reserves – and
there is no certainty that the results will be realized. Mineral Resources do not have
demonstrated economic viability and are not Mineral Reserves.
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The world-class economic results confirm Kamoa-Kakula’s position as
one of the world’s largest, ultra-green and lowest-cost producers, which
will be a world leader in the empowerment of women and the
development of Congolese youth for many decades to come
Watch a video encompassing the core elements of the 2023 IDP as well as ongoing
expansion activities at Kamoa-Kakula: https://vimeo.com/793832552/c6e4f1f11d
Figure 1: World’s projected top 20 copper mines in 2025, by key metrics.
Notes: Kamoa-Kakula production and grade are based on average paid copper production and average
copper feed grade during the first 10 years as detailed in the Kamoa-Kakula 2023 PFS. Kamoa-Kakula
resource is based on the contained copper in the Measured & Indicated category in the Kamoa-Kakula 2023
PFS. The ‘Copper Head Grade’ reflects the average reserve grade. 2025 Measured & Indicated resources
take into account 2023-2024 production figures (which have been subtracted from the starting 2023 M&I
resources balance). Measured & Indicated resources are inclusive of reserves and are on a 100% basis.
Source: Wood Mackenzie (based on public disclosure, the Kamoa-Kakula 2023 PFS has not been reviewed
by Wood Mackenzie).
Escondida
Grasberg
Collahuasi
Kamoa-Kakula
Polish Copper
Oyu Tolgoi
Kamoto
Kansanshi
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
0 200 400 600 800 1,000 1,200 1,400
Copper Head Grade (%)
Paid Copper Production (Kt)Source: Wood Mackenzie, 2023
Bubble size: M&I Resource
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Ivanhoe Mines’ Executive Co-Chairman, Robert Friedland commented: "In a world
where it is exceedingly rare for tier-one ore bodies to be discovered, developed and
mined ... Kamoa-Kakula stands out as a beacon of what is possible given the
exceptionally hard work of a ‘United Nations’ of highly dedicated people. This study
marks the culmination of a 26-year journey that began with the conviction of
visionary geologists and now has become one of the world's leading, lowest-carbon
emitting, long-life suppliers of vital copper metal, which humankind desperately
requires as we transition to a more sustainable future underpinned by renewable
energy.
"This monumental achievement would not have been possible without our leading
engineers, technicians and consultants, the invaluable contributions of our partners
at Zijin Mining and CITIC Metal, our international shareholders ... as well as the
progressive partnerships at Kamoa-Kakula with the Democratic Republic of Congo
government and our local communities.
"This integrated development plan reveals the true, long-life nature of the Kamoa-
Kakula Copper Complex, which will be producing 'green', high-grade copper metal
for the better part of this century. It also demonstrates the bright future and vast
potential for the Democratic Republic of Congo and its people, which is ready to
become a world leader in the responsible supply of vital electric metals required by
governments around the world to enact policies to combat climate change.
"Kamoa-Kakula is one of the world's largest, highest-grade copper complexes, and a
major economic engine that generates leading returns on capital and exceptional
free cash flow. This marks another milestone on a great journey, and we look
forward to the many successes to come with our partners and shareholders.
“Ivanhoe Mines is ready to take the next step in becoming the world’s next major,
diversified mining company … and Kamoa-Kakula will become the model for future
mines as we embark on the next generation of tier-one developments at our Platreef
and Kipushi projects.”
Kamoa-Kakula to build on outstanding achievements of Phase 1 and 2,
developing into a multi-generational major copper producer in
partnership with the DRC and local communities
Ivanhoe Mines’ President, Marna Cloete said: "When we set out to build the tier-one
Kamoa-Kakula Copper Complex, alongside our joint-venture partners at Zijin and the
Democratic Republic of Congo government, we were resolute in our commitment to
industry-leading standards in terms of resource efficiency, water and energy usage,
and minimizing emissions. We knew Kamoa-Kakula had the potential to become an
example of how modern mining must be done – in partnership with local
governments and communities, and with an unwavering focus on transparency and
environmental, social and governance best practices.
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"The Democratic Republic of Congo is blessed with exceptional hydropower
potential, world-class geology, and a young, vibrant population ready to enter the
workforce as the next generation of accomplished engineers, geologists and skilled
technicians. Kamoa-Kakula now has generated over 12,000 jobs from its operations
and construction activities, with over 95% of those positions filled by Congolese
nationals. We are endeavouring to continue this excellent track record of local
employment and training with the construction of the Kamoa Centre of Excellence.
The centre will create a sustainable and community-focused higher learning
environment, offering international degrees and diplomas in the heart of the Lualaba
province in the DRC.
"Meanwhile, the Kamoa-Kakula Sustainable Livelihoods program has succeeded in
nurturing local businesses and value chains around the mining complex, including
sustainable agriculture and farming, improved water security, and investments in
early childhood education and gender equality, thereby advancing our commitment
towards the United Nations’ Sustainable Development Goals.
"I would like to congratulate all the dedicated employees and contractors
responsible for these industry-leading initiatives, which have turned Kamoa-Kakula
into the operation we had all hoped for when we started this journey. Mining remains
a vital industry, and its role is only growing more important as we attempt to
decarbonize our economies and electrify the world. We must still mine, but when we
do, we must mine with a greater purpose."
Ivanhoe to host a conference call on the Kamoa-Kakula 2023 IDP
On January 31, 2023, Ivanhoe will host a conference call to discuss the findings of
the updated 2023 IDP for the Kamoa-Kakula Copper Complex, as well as guidance
for cash costs in 2023, and capital costs in 2023 and 2024 across the Kamoa-Kakula,
Platreef and Kipushi projects.
The call will include a video update from the Kamoa-Kakula Copper Complex, as well
as remarks from Ivanhoe's Co-Chairman Robert Friedland, President Marna Cloete,
and members of the company's management team. It also will feature a question-
and-answer session.
DATE: Tuesday, January 31, 2023
TIME: 10:30 am Eastern / 7:30 am Pacific / 3:30 pm London
LINK: https://app.webinar.net/Xxn3K9eK9Ap
A recording of the call, together with supporting presentation slides, will be made
available on Ivanhoe Mines’ website at www.ivanhoemines.com.
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The Kamoa-Kakula 2023 IDP encompasses two studies:
• Kamoa-Kakula 2023 PFS (Phase 3 and 4 expansion): a staged increase in
nameplate production up to a total of 19.2 Mtpa, over a 33-year mine life. The first
stage is the debottlenecking of the operational Phase 1 and Phase 2
concentrators from the current nameplate capacity of 7.6 Mtpa up to 9.2 Mtpa by
Q2 2023. The Phase 1 and 2 concentrators will process ore initially from the
Kakula Mine, which is being expanded to meet this capacity, and then supported
by the Kakula West Mine from 2029. This will be followed by the construction of
the 5.0 Mtpa Phase 3 concentrator, which is on target to be commissioned in Q4
2024. This concentrator will be fed with ore from the existing Kansoko Sud Mine,
as well as new mines under development known as Kamoa 1 and 2. Phase 3 is
planned to coincide with the commissioning of a DBF flash copper smelter
capable of producing 500,000 tonnes per annum of copper in the form of 99+%
anode or blister. In addition, the smelter will produce 650,000 to 800,000 tonnes
per annum of high-strength sulphuric acid for sale in the domestic DRC market.
The final stage is Phase 4, an additional 5.0 Mtpa concentrator which will take the
total processing capacity up to 19.2 Mtpa fed by an expansion of the Kamoa
mines. Kamoa and Kakula will supply a blend of copper concentrate for the
smelter, as the ore reserve grade tapers over time. The Kamoa-Kakula 2023 PFS
case yields an after-tax NPV8% of $19.1 billion at a long-term copper price of
$3.70/lb.
• Kamoa-Kakula 2023 PEA (Life-of-mine extension case): a nine-year mine life
extension of the Kamoa-Kakula Copper Complex, in addition to the Kamoa-
Kakula 2023 PFS. This case includes the addition of four new underground mines
in the Kamoa area (called Kamoa 3, 4, 5 and 6) to maintain the overall production
rate of up to 19.2 Mtpa. The Kamoa-Kakula 2023 PEA case yields an after-tax
NPV8% of $20.2 billion. The Kamoa-Kakula PEA is preliminary and includes an
economic analysis that is based, in part, on Inferred Mineral Resources. Inferred
Mineral Resources are considered too speculative geologically for the application
of economic considerations that would allow them to be categorized as Mineral
Reserves and there is no certainty that the results will be realized. Mineral
Resources do not have demonstrated economic viability and are not Mineral
Reserves.
The Kamoa-Kakula 2023 PFS and Kamoa-Kakula 2023 PEA were independently
prepared by OreWin Pty Ltd. of Adelaide, Australia; China Nerin Engineering Co.,
Ltd., of Jiangxi, China; DRA Global of Johannesburg, South Africa; Epoch
Resources of Johannesburg, South Africa; Golder Associates Africa of Midrand,
South Africa; Metso-Outotec Oyj of Helsinki, Finland; Paterson and Cooke of Cape
Town, South Africa; SRK Consulting Inc. of Johannesburg, South Africa; and MSA
Group of Johannesburg, South Africa
A National Instrument 43-101 technical report will be filed on SEDAR at
www.sedar.com and the Ivanhoe Mines website at www.ivanhoemines.com within 45
days of the issuance of this news release.
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Figure 2: Kamoa-Kakula 2023 IDP life-of-mine development plan by deposit
Figure by OreWin, 2023.
Phases 1 and 2 approaching full capacity with de-bottlenecking program
over 90% complete; delivering increased copper production and
operating cash flow to fund Phase 3 and 4 expansions
The Kamoa-Kakula Copper Complex’s Phase 1 concentrator began producing
copper in May 2021 and achieved commercial production ahead of schedule in July
2021. The Phase 2 concentrator, which doubled nameplate production capacity, was
also commissioned several months ahead of schedule in April 2022.
In late February 2022, the Company announced that Kamoa Copper approved a
debottlenecking plan to increase the combined design processing capacity of the
Phase 1 and Phase 2 concentrator plants by approximately 21%, from 7.6 Mtpa to 9.2
Mtpa. As of early January 2023, the debottlenecking program was over 90%
complete.
To meet the expanded plant capacity of Phase 1 and 2, the Kakula Mine and
associated material-handling capacity is undergoing an expansion which will enable
an increased mining rate of between 8 Mtpa and 9 Mtpa. Together with existing
stockpiled material at Kakula, this will provide the feed for the Phase 1 and Phase 2
debottlenecked concentrators at a throughput rate of 9.2 Mtpa. As of the end of
December 2022, Kakula’s surface ore stockpiles totalled approximately 3.01 million
tonnes at an estimated grade of 4.2% copper, containing over 126,000 tonnes of
copper. The long-term development plan for Kamoa-Kakula can be seen in Figure 2,
–
1.0
2.0
3.0
4.0
5.0
6.0
–
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
2053
2055
2057
2059
2061
2063
Grade (% Cu)
Milled (Mt)
Kakula Kakula Stockpiles Processed Kakula West
Kamoa Stockpiles Processed Kamoa 1 Kansoko Sud
Kamoa 2 PEA Milled Cu Grade
PEA only
Kamoa 3 - 6
Kamoa 2
Kansoko Sud
Kakula West
Kakula
Kakula
Stockpile
Kamoa
Stockpile
Phase 3
(Q4 2024)
Phase 4 (2030)
Direct-to-Blister Smelter
Commences (2024)
Kamoa 1
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as well as a plan showing all the deposits in the Kamoa-Kakula 2023 IDP shown in
Figure 3.
As the Kakula stockpiles near depletion, high-grade ore fed into the Phase 1 and
Phase 2 concentrators from Kakula Mine will be supplemented with ore from a new
underground mine at Kakula West, as shown in Figure 2.
Figure 3: Overview of deposits included within the Kamoa-Kakula 2023 PFS
(outlined in blue) and Kamoa-Kakula 2023 PEA (outlined in green)
Figure by OreWin, 2023.
Kamoa-Kakula produced 333,497 tonnes of copper in concentrate in 2022, achieving
the upper end of its original 2022 production guidance range of 290,000 to 340,000
tonnes. Kamoa-Kakula’s 2022 production achievement represents a year-over-year
increase of 215%. Kamoa-Kakula’s 2023 guidance range for production and cash
costs is provided below.
Kamoa Copper Managing Director, Riaan Vermeulen added: “This study
demonstrates why Kamoa-Kakula is the world’s fastest-growing copper mine, and
will surely be among the leading mining operations globally for years to come. The