Ivanplats arranging project-level financing of up to US$420 million to advance development of the world-scale Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa Non-binding term sheet signed with Orion Mine Finance for
February 16, 2021
Ivanplats arranging project-level financing of up to US$420 million
to advance development of the world-scale Platreef palladium,
platinum, rhodium, nickel, copper and gold project in South Africa
Non-binding term sheet signed with Orion Mine Finance for
US$300 million streaming facility
Societe Generale and Nedbank appointed as mandated lead
arrangers for a senior project debt facility of up to US$120 million
Detailed engineering underway on mine design, 770-ktpa
concentrator and associated infrastructure for Platreef’s phased
development plan, which is expected to be incorporated into an
updated feasibility study by the end of 2021
Platreef’s Shaft 1 changeover progressing well in preparation for
permanent hoisting by early 2022
MOKOPANE, SOUTH AFRICA – Ivanhoe Mines’ (TSX: IVN; OTCQX: IVPAF) Co-Chairs
Robert Friedland and Yufeng “Miles” Sun are pleased to announce that the company’s
South African subsidiary, Ivanplats, has signed a non-binding term sheet with Orion
Mine Finance, a leading international provider of production-linked stream financing to
base and precious metals mining companies, for a US$300 million gold, palladium and
platinum streaming facility.
Ivanplats also has appointed two prominent, international commercial banks – Societe
Generale and Nedbank – as mandated lead arrangers for a senior project debt facility of
up to US$120 million. Both the stream financing and project debt facility will be used to
advance the development of Ivanplats’ tier one Platreef palladium, platinum, rhodium,
nickel, copper and gold project in Limpopo province, South Africa, toward initial
production.
The appointment and proposed financings follow the November 30, 2020 issuance of
the outstanding findings of an independent Platreef Integrated Development Plan 2020
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(Platreef IDP20) for the Platreef Project, which consists of an updated feasibility study
(Platreef 2020 FS) and a preliminary economic assessment (Platreef 2020 PEA). The
initial capital cost for the phased development plan envisaged under the Platreef 2020
PEA, starting at a mining rate of 700,000 tonnes per annum (700 ktpa), is estimated at
US$390 million.
The US$300 million stream financing remains subject to completion of legal due
diligence and structuring, as well as negotiation and execution of definitive
documentation. The streaming facility is planned to be drawn down in four separate
tranches, as needed, in parallel with the engineering studies to upgrade the Platreef
2020 PEA to a feasibility study and the changeover of Platreef’s Shaft 1 to a production
shaft.
Detailed engineering is underway on the mine design, 770-ktpa concentrator and
associated infrastructure for the phased development plan, which is scheduled to be
incorporated into an updated feasibility study before the end of 2021. The Shaft 1
changeover is progressing well in preparation for permanent hoisting by early 2022.
Platreef’s budget for 2021 is US$59 million, which includes US$10 million for
commencement of headframe construction for Shaft 2. The first draw from the
streaming funds, which is expected to occur shortly after establishment of the facility,
is expected to fully cover Platreef’s 2021 budget.
The senior project debt facility of up to US$120 million is scheduled to be utilized only
after the streaming facility is fully drawn down. Definitive terms and conditions of the
debt facility are subject to the completion of the feasibility study for Platreef’s phased
development plan, completion of due diligence and structuring, as well as negotiation
and execution of definitive documentation. Terms and conditions of the debt facility will
be made available when finalized.
“This is very auspicious timing for the Platreef financing announcement as it coincides
with the celebration of Chinese New Year, which signifies the start of spring, and the
Year of the Golden Ox,” said Mr. Friedland. “The Ox is an animal that is symbolic of a
silent hard worker who strives for self-improvement and endeavours to get out of 2020’s
challenges. Tradition also says the Year of the Ox will bring prosperity and success in
business.”
We are excited to work with Orion, Societe Generale, Nedbank and our other long-term
investors to unlock Platreef’s world-scale potential. The production of key ‘green
metals’ needed to reduce greenhouse gas emissions is at a critical inflection point as
businesses are pressed to secure long-term supplies. We are confident that this
project-level funding will be the catalyst needed to launch Platreef to become a leading,
long-life supplier of palladium, platinum, rhodium, nickel, copper and gold.”
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“Platreef’s Shaft 1 has been sunk to its final depth and is within a few hundred metres
of the initial high-grade mining zone. The deposit has an enormous endowment of
palladium, platinum, rhodium, nickel, copper and gold in a thick, high-grade, flat-lying
underground orebody that is ideal for modern, bulk-scale, mechanized mining,” Mr.
Friedland continued.
The Platreef 2020 PEA is an alternate, phased development plan that fast-tracks Platreef
into production. The plan uses the project’s first shaft (Shaft 1) for initial hoisting and
mine development, with 825-ktpa total rock-hoisting capacity, of which 700 ktpa are
earmarked for ore hoisting and a further 125 kpta for development rock during the ore
extraction phase. The phased plan envisions building an initial concentrator with a
capacity of 770 ktpa for first concentrate production in mid-2024.
The recently-completed sinking of Shaft 1 creates the opportunity to access early, high-
grade tonnes in this scenario. While the 700-ktpa initial mine is being operated using
Shaft 1, there would be opportunities to refine the timing of subsequent phases of
expanded production, which is driven by the sinking of Shaft 2. Once completed, two
2.2-Mtpa concentrator modules would be commissioned, and the initial concentrator
would be ramped up to its full capacity of 770 ktpa – increasing the steady-state
production to 5.2 Mtpa.
The Platreef IDP20 reflects the first phase of development for the Platreef Mine. It is
designed to establish an operating platform to support potential future expansions up
to 12 Mtpa, as demonstrated in previous studies. This would position Platreef among
the largest platinum-group-metals producing mines in the world, producing in excess of
1.1 million ounces of palladium, platinum, rhodium and gold per year.
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.
Platreef operational update
The Shaft 1 changeover is progressing to plan and is on schedule for commencement
of rock hoisting early in 2022. All equipment for the shaft changeover has been
procured and is on site. The detailed engineering designs for the shaft changeover have
been completed, reviewed and approved. The changeover work within the shaft will be
conducted by Platreef’s experienced owners team.
The winder that was used to successfully sink Shaft 1 will be converted and re-
equipped to function as the permanent rock, personnel and material winder for the life
of mine. The shaft will be equipped with two 12.5-tonne skips (with hoisting capacity of
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825,000 tonnes per year) and an interchangeable cage to accommodate the movement
of personnel and materials up and down the shaft during the initial phase of mining.
The shaft will be equipped using rope guides for the main rock, personnel and materials
conveyances. The stage and winder ropes used during the sinking phase have been
removed, and the equipping stage, new permanent guide-ropes and the new permanent
hoisting ropes have been delivered to site. Further to this, an auxiliary winder will be
installed to mainly function as a man winder during the main rock-hoisting cycle.
The construction of the winder foundations is underway and will be completed in time
for the auxiliary winder installation and commissioning. The head gear, both winders,
equipping stage, conveyances and control systems will comply with the highest
industry safety standards, with proven and tested safety and redundancy systems in
place.
Newly-designed rock chutes will connect the conveyors feeding the concentrator plant
and the waste rock area, from where the rock will be converted to cemented back-fill
and also used for protection berms to contain storm water and reduce noise emissions.
The new ropes and the newly-designed and constructed equipping stage will be
installed in the shaft by specialist contractors. The equipping in the shaft barrel is
scheduled to commence at the end of March 2021 for completion by end of February
2022. Following the completion of the changeover work in the underground stations,
and establishment of the ore and waste passes, lateral underground mine development
will commence toward high-grade ore zones.
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Inoccent Nchabeleng (Rigger) operating the rope reeler to remove the stage and
winder ropes used during the sinking phase.
Murray Roberts, a South Africa-based engineering and mining contractor, removing the
rock chutes from the headframe as part of Shaft 1 changeover.
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Victor Skinner (Winder Technician) installing cables at Shaft 1 new winder house.
Qualified persons
In December 2020, Ivanhoe Mines filed a new National Instrument 43-101 (NI 43-101)
technical report titled “Platreef Integrated Development Plan 2020” with an effective date of
December 6, 2020 (Platreef IDP20).
The Platreef IDP20, which includes the Platreef 2020 FS and Platreef 2020 PEA, was
independently prepared by OreWin Pty Ltd. of Adelaide, Australia; Wood plc (formerly Amec
Foster Wheeler) of Vancouver, Canada; SRK Consulting Inc. of Johannesburg, South Africa;
Stantec Consulting International LLC of Phoenix, USA; DRA Global of Johannesburg, South
Africa; and Golder Associates Africa of Midrand, South Africa.
Other 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 NI 43-101. Mr. Torr is not considered
independent under NI 43-101 as he is the Vice President, Project Geology and Evaluation of
Ivanhoe Mines. Mr. Torr has verified the technical data disclosed in this news release.
Sample preparation, analyses and security
During Ivanhoe’s work programs, sample preparation and analyses were performed by
accredited independent laboratories. Sample preparation is accomplished by Set Point
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laboratories in Mokopane. Sample analyses have been accomplished by Set Point
Laboratories in Johannesburg, Lakefield Laboratory (now part of the SGS Group) in
Johannesburg, Ultra Trace Laboratory in Perth, Genalysis Laboratories in Perth and
Johannesburg, SGS Metallurgical Services in South Africa, Acme in Vancouver, and ALS
Chemex in Vancouver. Bureau Veritas Minerals Pty Ltd assumed control of Ultra Trace during
June 2007 and is responsible for assay results after that date.
Sample preparation and analytical procedures for samples that support Mineral Resource
estimation have followed similar protocols since 2001. The preparation and analytical
procedures are in line with industry-standard methods for platinum, palladium, gold, copper
and nickel deposits. Drill program included insertion of blank, duplicate, standard reference
material (SRM), and certified reference material (CRM) samples. The quality assurance and
quality control (QA/QC) program results do not indicate any problems with the analytical
protocols that would preclude use of the data in Mineral Resource estimation.
Sample security has been demonstrated by the fact that the samples were always attended or
locked in the on-site core facility in Mokopane.
Information on sample preparation, analyses and security is contained in the Platreef Project
NI 43-101 Technical Report titled “Platreef Integrated Development Plan 2020” with an
effective date of December 6, 2020, filed on SEDAR at www.sedar.com and on the Ivanhoe
Mines website at www.ivanhoemines.com.
About Ivanhoe Mines
Ivanhoe Mines is a Canadian mining company focused on advancing its three principal joint-
venture projects in Southern Africa: the development of major new, mechanized, underground
mines at the Kamoa-Kakula discoveries in the Democratic Republic of Congo (DRC) and at the
Platreef palladium-platinum-nickel-copper-rhodium-gold discovery in South Africa; and the
extensive redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-silver
mine, also in the DRC. Kamoa-Kakula and Kipushi will be powered by clean, renewable
hydroelectricity and will be among the world’s lowest greenhouse gas emitters per unit of metal
produced. Ivanhoe also is exploring for new copper discoveries on its wholly-owned Western
Foreland exploration licences in the DRC, near the Kamoa-Kakula Project.
Information contacts
Investors: Bill Trenaman +1.604.331.9834 / Media: Matthew Keevil +1.604.558.1034
Cautionary statement on forward-looking information
Certain statements in this news release constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws. Such statements involve known and
unknown risks, uncertainties and other factors, which may cause actual results, performance or
achievements of the company, the Platreef Project, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such forward-looking
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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 news release.
The forward-looking statements and forward-looking information in this news release include without
limitation, (i) statements regarding the establishment of the stream financing facility and that it remains
subject to legal due diligence and structuring, and negotiation and execution of definitive
documentation; (ii) statements regarding the establishment of the senior project debt facility, and its
term and conditions, and that it remains subject to completion of the feasibility study of Platreef’s
phased development plan, completion of legal due diligence and structuring, as well as negotiation and
execution of definitive documentation; (iii) statements regarding the timing of the first draw of the
streaming facility and that the senior project debt facility would only be utilized after the streaming
facility is fully drawn; (iv) statements regarding the Platreef budget for 2021 is US$59 million, which
includes US$10 million for commencement of the construction of the headframe to the collar of Shaft 2;
(v) statements regarding the Platreef IDP20 is designed to establish an operating platform to support
potential future expansions up to 12 Mtpa producing in excess of 1.1 million ounces of palladium,
platinum, rhodium and gold per year, as demonstrated in previous studies, which would position
Platreef among the largest platinum-group-metals producing mines in the world; (vi) statements that the
equipping of the shaft barrel is scheduled to commence at the end of March 2021 for scheduled
completion by the end of February 2022; (vii) the timing of commencement of lateral underground mine
development; and (viii) the timing of Shaft 1 changeover for the commencement of rock hoisting early in
2022.
In addition, all of the results of the Platreef IDP20, Platreef 2020 PEA and Platreef 2020 FS constitute
forward-looking statements and forward-looking information. The forward-looking statements include
metal price assumptions, cash flow forecasts, projected capital and operating costs, metal recoveries,
mine life and production rates, and the financial results of the Platreef 2020 PEA and FS. These include
estimates of internal rates of return after-tax of 20.0% (PEA) and 19.8% (FS) with payback periods of
8.4 years and 4.4 years respectively; net present values including a PEA NPV at an 8% discount rate of
US$1.6 billion and a FS NPV at an 8% discount rate of US$1.8 billion; future production forecasts and
projects, including average annual production of 512koz 3PE+Au in the PEA and 508koz 3PE+Au in
the FS; estimates of net total cash cost, net of copper and nickel by-product credits and including stay-
in-business (SIB) capital costs of US$460/oz. 3PE+Au in the PEA and US$442/oz. 3PE+Au in the FS;
mine life estimates, including a 30 year mine life in the PEA and a 30 year mine life in the FS; initial
capital costs of US$0.39 billion in the PEA and US$1.4 billion in the FS; average 3PE+Au grades of 4.4
g/t in the PEA and 4.4 g/t in the FS; cash flow forecasts; and estimates of 3PE+Au recoveries of 86.4%
in the PEA and 86.4% in the FS. 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