Ivanhoe updates Kakula Copper Mine construction progress Underground development nearing initial high-grade mining zone and work commences on surface processing plant Kamoa-Kakula Project surpasses 14.5 million hours worked
June 17, 2019
Ivanhoe updates Kakula Copper Mine construction progress
Underground development nearing initial high-grade mining
zone and work commences on surface processing plant
Kamoa-Kakula Project surpasses 14.5 million hours worked
without a lost-time injury
Upgrading work at the Mwadingusha hydropower plant
progressing well, providing Kamoa-Kakula with clean
hydro-electricity from the national grid
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Robert Friedland and Yufeng “Miles”
Sun, Co-Chairmen of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), announced today
that excellent progress is being made in the construction of the Kakula Copper Mine –
the stage one, six-million-tonne-per-annum (6 Mtpa) operation – on the tier-one Kamoa-
Kakula Project in the Democratic Republic of Congo (DRC).
On April 25, 2019 Ivanhoe announced that China-based CITIC Metal agreed to invest an
additional C$612 million (US$459 million) in Ivanhoe by way of a private placement at
C$3.98 per share. Since that announcement, the pace of underground mine
development has accelerated and the first access drives are approaching Kakula’s
initial high-grade ore. In addition, Ivanhoe and its joint-venture partner Zijin Mining have
commenced earthworks for the surface processing plant and have issued tenders for
the long-lead mining and processing equipment. Initial copper concentrate production
from the Kakula Mine currently is scheduled for the third quarter of 2021.
CITIC Metal’s US$459 million investment will be its second major financing in less than
a year, bringing its total investment in Ivanhoe to approximately US$1 billion. The CITIC
Metal investment is expected to close no later than September 7, 2019. On May 15, 2019,
Zijin Mining exercised its anti-dilution rights, which will generate additional proceeds for
Ivanhoe of C$67 million (US$50 million), to be received at the same time as the CITIC
Metal funds.
The combined proceeds of more than C$679 million (US$509 million) from CITIC Metal
and Zijin Mining positions Ivanhoe to fully finance its share of capital costs required to
bring the Kakula Mine into commercial production. The initial, five-year, detailed mine
design now has been finalized and production scheduling is in progress. The full,
detailed mine design will be included in the independent definitive feasibility study that
is expected to be published early next year.
2
"With the initial mine development of Kakula soon to be fully financed, we now are
focused on rapidly advancing the construction of surface infrastructure and the
processing plant, to match the accelerating pace of development of the underground
mine workings and to transform Kakula into one of the world’s greatest copper mines.
The shallow, thick, high-grade nature of the orebody will allow us to ramp up production
quickly,” said Mr. Friedland.
“The significant progress to date has been the result of the collaborative efforts of many
international and DRC-based stakeholders. Now that development is well underway and
we have a clear line of sight to the first copper production, it is our goal to take as many
top-tier international, institutional mining investors to the mine site so that they can see
first-hand the scope and quality of development work being performed by the Kamoa-
Kakula team, many of whom are from the communities surrounding the project.
“These investors also will get to see the drill core from the new Kamoa North Bonanza
Zone – with multiple, thick intercepts that run greater than 15% copper – and gain an in-
depth appreciation as to why we are so excited about the potential of this extraordinary
discovery,” Mr. Friedland added.
Figure 1: Kamoa-Kakula mining licence, showing the Kakula Mine, the Kamoa
North Area, the Kamoa Far North Area, the planned mine at Kansoko,
and part of Ivanhoe’s 100%-owned Western Foreland exploration licences.
3
Underground development approaching Kakula’s initial high -grade mining
zone
Approximately 2,500 employees and contractors now are working at the Kamoa-Kakula
Project as Ivanhoe and its partners advance construction of the project’s initial mine at
the Kakula Deposit. Congolese nationals comprise more than 90% of the project’s
current workforce.
A total of 647 metres of underground development was completed last month,
approximately 100 metres more than achieved in April. Lower-grade development ore is
being stockpiled on surface near the site of the concentrator plant. This ore will be used
for plant commissioning. Mine access drives 1 and 2 (interconnected, parallel tunnels
that will provide access to ore zones) are approximately 200 metres from Kakula’s initial
high-grade mining area, and these priority drives are expected to intersect the higher-
grade ore in late July or early August this year.
Figure 2: The 13.3-kilometre-long Kakula Deposit. The initial production areas at
Kakula will be in the pink areas on the eastern side (on the right) of the deposit
that contain copper grades greater than 7% copper.
The underground development work at Kakula is being performed by mining crews
operating large-capacity, semi-autonomous mining equipment, such as jumbo drilling
rigs and 50-tonne trucks as shown in the pictures below.
4
Figures 3 and 4: Large-capacity, semi-autonomous mining equipment
in operation underground at the Kakula Mine.
5
The Kakula mine access is via twin declines on the northern side (which have been
completed) and a single decline on the south side of the deposit (under development).
One of the northern declines will be the mine’s primary access way, while the other will
be for the ore conveyor haulage system. The southern ventilation decline will serve as a
secondary access and will facilitate the acceleration of critical, early mine development.
From the bottom of the northern and southern declines, a pair of perimeter drifts will be
driven to the east and west extremities of the deposit and will serve as the primary
accesses to the production areas. These drifts also will be used as the primary intake
and exhaust ventilation circuits and will connect with the intake and exhaust ventilation
shafts. Underground access to the first raise bore ventilation shaft has been reached.
The pilot hole for the 177-metre raise bore has been completed, and reaming of the 5.5-
metre diameter ventilation shaft is expected to be completed next month.
The primary ore handling system will include perimeter conveyor drifts and load-out
points along the north side of the deposit. The perimeter conveyor drifts will terminate
at the main conveyor decline. Connection drifts between the north and south perimeter
drifts will provide access and ventilation to the planned mining areas. Approximately
99% of the deposit will be mined using the drift-and-fill method, which was chosen to
maximize the overall extraction of Kakula ore.
Figures 5 and 6: Plan view of the underground development on the northern side
of the Kakula ore body, with the pink shaded areas indicating development work
completed and approximate positions of the working faces.
6
The initial, five-year production-area detailed mine design has been finalized and
production scheduling is in progress. The full detailed mine design will be included in
the definitive feasibility study that is in progress. The backfill plant design is in progress
with the design criteria and plant flow diagrams. The tailings will flow through a series
of cyclones at the backfill plant, and approximately 55% of the tailings will be sent back
underground into the mined-out workings as paste backfill. The remaining 45% of the
tailings will be pumped to a small tailings storage facility that is being designed by a
team of leading international engineers to meet global best practices for safety.
The detailed design for the truck-tipping area, where underground ore will feed onto the
conveyor system for transportation to surface, and the conveyor system for the main
declines, has been completed and component manufacture is underway.
Three underground mining crews are working at Kakula. Once Ventilation Shaft 1 is
completed and fans have been installed, an additional three crews will be mobilized to
accelerate mine development. This is scheduled for October 2019.
7
Figure 7: First two high-capacity ventilation fans installed at Kakula’s northern
declines.
Figure 8: Kakula’s initial, five-year underground development plan, showing
completed development (pink) and the initial production blocks.
8
Figure 9: Projected copper grades in Kakula’s initial five-year mining plan,
showing the initial drift-and-fill mining area with copper grades between 6% and
11%.
Development of an additional access and ventilation decline on the southern side of the
Kakula orebody is progressing well and has advanced more than 200 metres. A surface
piling rig machine has been mobilized to prepare for the raise bore civil construction for
Ventilation Shaft 2.