Ivanhoe Mines secures long-term supply of treated bulk water for the Platreef platinum, palladium, nickel, copper and gold mine in South Africa Recycling of local, treated water is part of a sustainable approach to minimize Platreef’s environmental footprint
May 7, 2018
Ivanhoe Mines secures long-term supply of treated bulk water
for the Platreef platinum, palladium, nickel, copper
and gold mine in South Africa
Recycling of local, treated water is part of a sustainable approach
to minimize Platreef’s environmental footprint
MOKOPANE, SOUTH AFRICA — Robert Friedland, Executive Chairman of Ivanhoe Mines
(TSX: IVN; OTCQX: IVPAF), and Lars-Eric Johansson, Chief Executive Officer, announced today
that a new agreement will provide local, treated water to supply most of the bulk water needed
for the first phase of production at the Platreef platinum-group metals, nickel, copper and gold
mine now being constructed in South Africa.
Ivanhoe’s 64%-owned subsidiary, Ivanplats, signed a memorandum of agreement on May 3,
2018, with the Mogalakwena Local Municipality for the supply of a minimum of five million litres
of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi
Treatment Works.
Ivanplats expects to begin receiving a small quantity of processed wastewater this year after the
Masodi plant has been commissioned. Further treatment will be conducted at the Platreef
Mine’s on-site filtration plant to ensure compliance with Ivanplats’ quality standards. The initial
supply will be used in Platreef’s ongoing underground mine development, including drilling,
and surface infrastructure construction.
Mr. Friedland said the agreement is an important milestone in Platreef’s development.
“Our ability to re-use this assured supply of extensively upgraded wastewater that can be
produced by the modern Masodi plant from flows it receives from local households and offices
is a cost-effective and sustainable approach. Similar, industrial-quality water has long been
used in some mining operations.
“Masodi will provide most of the water we need to process our ore and, at the same time, help
to minimize Platreef’s environmental footprint. Our commitment to effectively manage
environmental impacts of our operations is central to Ivanhoe’s undertaking to build some of
the ‘greenest’ mines in the world.”
Dr. Patricia Makhesha, Ivanplats’ Managing Director, added: “We are on course to develop
Platreef into South Africa’s next great platinum-group metals mine, while ensuring that we do it
in a way that is environmentally responsible and resource efficient. Our water-supply
partnership with Mogalakwena is an important step toward our goal of achieving a balance of
economic prosperity, environmental stewardship and social responsibility.”
In July 2017, Ivanplats published its independent, definitive feasibility study for the first phase,
four-million-tonne-per-annum (Mtpa) development of the Platreef Mine, approximately eight
kilometres from Mokopane. Processing of ore at the mine is projected to begin in 2022.
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Ivanplats estimates that it will require approximately 7.5 million litres/day (Ml/day) of bulk water
during the first-phase of steady-state production. A water-balance model developed for the mine
calls for the bulk water for the first phase of production to consist of five Ml/day from the
Masodi treatment plant, with the balance provided from ground water from local, licenced
boreholes, and rainwater collected in storage ponds at the mine.
Photo: Agreement signing attended by (from left) Ivanplats Managing Director
Dr. Patricia Makhesha (standing); Ivanhoe Chief Financial Officer Marna Cloete (seated);
Municipal Technical Director William Nkuna; Acting Municipal Manager Marcus
Mthombeni; and Mogalakwena Mayor Andrina Matsemela.
Ivanplats to provide financial assistance to complete water treatment plant
Under terms of Ivanplats’ agreement with Mogalakwena, which is subject to certain suspensive
conditions, Ivanplats will provide financial assistance to the municipality for certified costs of
up to a maximum of R248 million (approximately US$19.6 million) to complete the Masodi
Treatment Works. Ivanplats will purchase treated wastewater at a reduced rate of R5 per
thousand litres for the first 10 Ml/day to offset a portion of the initial capital contributed.
The Masodi plant and related infrastructure have been designed with a capacity of 10 Ml/day,
with an option to be expanded by a further five Ml/day. Included in the agreed capital
contribution is an unencumbered, upfront payment of up to R37million (approximately US$2.9
million) to settle outstanding debts related to the construction of the Masodi Treatment Works
that will entitle Ivanplats to a right of first refusal for the purchase of all current and future
treated wastewater from the plant. Ivanplats and the municipality will endeavour to collaborate
on future water-supply and development projects, including other potential sources, to increase
the volumes of available water to more than five Ml/day.
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About the Platreef Project
The Platreef Project is a tier-one discovery by Ivanhoe Mines’ geologists on the Northern Limb
of South Africa’s Bushveld Igneous Complex, the world’s premier platinum-producing region.
The project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A 26%
interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic
empowerment (B-BBEE) partners, which include 20 local host communities with a total of
approximately 150,000 people, project employees and local entrepreneurs. In April 2018,
Ivanplats reconfirmed its Level 3 status in its fourth verification assessment on a B-BBEE
scorecard. A Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National
Corporation and Japan Gas Corporation, owns a 10% interest in Ivanplats, which it acquired in
two tranches for a total investment of US$290 million.
Ivanplats plans to develop the Platreef Mine as an underground mining operation in three
phases: 1) an initial annual rate of four Mtpa to establish an operating platform to support future
expansions; 2) a doubling of production to eight Mtpa; and 3) another expansion phase to a
steady-state 12 Mtpa. At a projected production rate of 12 Mtpa, Platreef would be the largest
platinum-group metals mine in the world, producing more than 1.2 million ounces of platinum-
group metals per annum.
Sinking of Platreef’s Shaft 1 reached a depth of 750 metres below surface on April 23, 2018.
Development has begun of the second of four planned shaft stations – the 750-metre-level
substation. Shaft 1 is expected to reach the top of the Flatreef Deposit, at a depth of
approximately 783 metres, in the third quarter of this year. Sinking of the shaft will continue to a
planned final depth of 980 metres.
Surface construction for Platreef’s Shaft 2 is progressing. Blasting and excavation of a box cut
to a depth of approximately 29 metres below surface is underway, and construction of a
concrete hitch for the headframe is expected to be completed by the end of this year.
Ivanhoe has appointed five leading mine-financing institutions as Initial Mandated Lead
Arrangers to arrange debt financing for the Platreef Mine’s development. They are: KfW IPEX-
Bank, a 100% subsidiary of the German promotional bank, KfW; Swedish Export Credit
Corporation; Export Development Canada; Nedbank Limited (acting through its Corporate and
Investment Banking division); and Societe Generale Corporate & Investment Banking.
Expressions of interest have been received for approximately US$900 million of the targeted
US$1 billion project financing.
Qualified person
The scientific and technical information in this news release has been reviewed and approved
by Stephen Torr, P.Geo., Ivanhoe Mines’ Vice President, Project Geology and Evaluation, a
Qualified Person under the terms of National Instrument 43-101 (NI 43-101). Mr. Torr has verified
the technical data disclosed in this news release.
Additional scientific and technical information regarding the Platreef Project is contained in the
Platreef 2017 Feasibility Study Technical Report dated September 4, 2017, filed on SEDAR at
www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com.
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About Ivanhoe Mines
Ivanhoe Mines is advancing its three principal projects in Southern Africa: 1) Mine development
at the Platreef platinum-palladium-nickel-copper-gold discovery on the Northern Limb of South
Africa’s Bushveld Complex; 2) mine development and exploration at the Kamoa-Kakula copper
discovery on the Central African Copperbelt in the Democratic Republic of Congo (DRC); and
3) upgrading at the historic, high-grade Kipushi zinc-copper-lead-germanium mine, also on the
DRC’s Copperbelt. For details, visit www.ivanhoemines.com.
Information contacts
Investors
Bill Trenaman +1.604.331.9834
Media
North America: Bob Williamson +1.604.512.4856
South Africa: Jeremy Michaels +27.82.772.1122
Website www.ivanhoemines.com
FORWARD-LOOKING STATEMENTS
Certain statements in this news release constitute “forward-looking statements” or “forward-looking information”
within the meaning of applicable securities laws, including without limitation, (i) statements regarding processing
of ore at the Platreef Mine is projected to commence in 2022; (ii) statements regarding Ivanplats estimates that
the Platreef Mine will require approximately 7.5 million litres per day (Ml/d) of bulk water during steady-state
production; (iii) statements regarding Ivanplats expects to begin receiving a small quantity of grey water from the
Masodi water treatment plant in 2018; (iv) statements regarding Ivanplats will provide financial assistance to the
municipality for certified costs of completing the Masodi water treatment plant, up to a maximum amount of R248
million; (v) statements regarding Ivanplats and the municipality will endeavour to collaborate in relation to future
water-supply and development projects to increase the treated-water volumes to more than five Ml/day; (vi)
statements regarding Ivanplats plans to develop the Platreef Mine as an underground mining operation in three
phases: 1) an initial annual rate of four Mtpa to establish an operating platform to support future expansions; 2) a
doubling of production to eight Mtpa; and 3) another expansion phase to a steady-state 12 Mtpa; (vii) statements
regarding at a projected production rate of 12 Mtpa, Platreef would be the largest platinum -group metals mine in
the world, producing more than 1.2 million ounces of platinum-group metals per annum; (viii) statements
regarding the sinking of Shaft 1 will continue to a planned final depth of 980 metres; and (ix) statements regarding
construction of a concrete hitch for the Shaft 2 headframe is expected to be completed by the end of this year .
Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual
results, performance or achievements of the project, the company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward- looking statements
or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”,
“intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar
terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved. These statements reflect the company’s current expectations regarding future events,
performance and results and speak only as of the date of this release.
Readers are cautioned that actual results may vary from those presented.
All such forward-looking information and statements are based on certain assumptions and analyses made by
Ivanhoe Mines’ management in light of their experience and perception of historical trends, current conditions and
expected future developments, as well as other factors management believe are appropriate in the
circumstances. These statements, however, are subject to a variety of risks and uncertainties and other factors
that could cause actual events or results to differ materially from those projected in the forward- looking
information or statements including, but not limited to, unexpected changes in laws, rules or regulations, or their
enforcement by applicable authorities; the failure of parties to contracts to perform as agreed; social or labour
unrest; changes in commodity prices; unexpected failure or inadequacy of infrastructure, industrial accidents or
machinery failure (including of shaft sinking equipment), or delays in the development of infrastructure, the failure
of exploration programs or other studies to deliver anticipated results or results that would justify and support
continued studies, development or operations, and the failure to obtain financing necessary to advance and
complete the development of the project. Other important factors that could cause actual results to differ from
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these forward-looking statements also include those described under the heading “Risk Factors” in the company’s
most recently filed MD&A as well as in the most recent Annual Information Form filed by Ivanhoe Mines. Readers
are cautioned not to place undue reliance on forward-looking information or statements. Certain of the factors and
assumptions used to develop the forward-looking information and statements, and certain of the risks that could
cause the actual results to differ materially are presented in the Platreef 2017 Feasibility Study Technical Report
dated September 4, 2017, available on SEDAR at www.sedar.com and on the Ivanhoe Mines website at
www.ivanhoemines.com.
Although the forward-looking statements contained in this news release are based upon what management of the
company believes are reasonable assumptions, the company cannot assure investors that actual results will be
consistent with these forward-looking statements. These forward-looking statements are made as of the date of
this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable
securities laws, the company does not assume any obligation to update or revise the forward- looking statements
contained herein to reflect events or circumstances occurring after the date of this news release.