Kamoa-Kakula Copper mines 339,000 tonnes of ore grading 5.50% copper in February, including 107,000 tonnes grading 9.01% copper from the high-grade centre of the Kakula Mine, setting a new production record
March 1, 2021
Kamoa-Kakula Copper mines 339,000 tonnes of ore grading 5.50%
copper in February, including 107,000 tonnes grading 9.01% copper
from the high-grade centre of the Kakula Mine, setting a new
production record
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Volume of ore from underground mining now exceeding steady-state
monthly requirements of the Phase 1, 3.8-Mtpa concentrator
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Pre-production ore stockpiles now hold 2.16 million tonnes grading
4.44% copper, containing more than 95,000 tonnes of copper
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Major conveyor belt changeover to permanent configuration
completed in February, with underground ore now directly delivered
to the surface stockpile
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Overall progress of Kamoa-Kakula’s first phase, 3.8-Mtpa mining and
milling operation now 78% complete; initial commissioning underway
at the concentrator and first copper production on track for July 2021
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Phase 2 expansion to 7.6 Mtpa progressing well toward a Q3 2022
start-up
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Potential for sustained higher copper prices further improves
outstanding project economics
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines (TSX: IVN; OTCQX:
IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun are pleased to announce
that underground ore production at the Kamoa-Kakula Copper Project in the Democratic
Republic of Congo (DRC) has for the first time exceeded the steady-state requirements
of the Phase 1, 3.8-million-tonne-per-annum (Mtpa) concentrator plant. In February, the
project mined and stockpiled 339,000 tonnes of ore grading 5.50% copper from the
Kakula and Kansoko mines. The tonnage was 13% higher than January, while the
copper grade continued to trend higher.
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The new production record in February was achieved even with undertaking the
scheduled conveyor belt changeover to the permanent configuration at the Kakula
Mine, which limited underground ore haulage for one week.
The 339,000 tonnes mined in February include 47,300 tonnes grading 4.62% copper
from the Kansoko Mine, establishing a new monthly production record at Kansoko. The
total tonnage mined also includes 107,000 tonnes grading 9.01% copper from the high-
grade centre of the Kakula Mine.
The project’s pre-production surface stockpiles now contain approximately 2.16 million
tonnes of high-grade and medium-grade ore at an estimated blended average of 4.44%
copper. Contained copper in the stockpiles increased by approximately 19,000 tonnes
in February – a 19.2% increase over January’s production – to a cumulative total of
more than 95,000 tonnes (the current copper price is approximately US$9,100 a tonne).
Kamoa-Kakula is on track to have more than three million tonnes of high-grade and
medium-grade ore stockpiled on surface, holding more than 125,000 tonnes of
contained copper, prior to the planned start of processing in July 2021.
George Gilchrist, Ivanhoe Mines’ Vice President, Resources (left), and Franck
Twite, Kamoa Copper’s Senior Supervisor Geology (right), mapping an ultra-high-
grade ore zone at Kakula. The dark gray layers of chalcocite ore contain
approximately 10% copper based on results from nearby channel sample
profiles.
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Potential for sustained higher copper prices draws attention to the
project’s exceptional economics using long-term copper prices of
US$4.00/lb and US$4.50/lb
In September 2020, Ivanhoe published outstanding economic results of the independent
Integrated Development Plan 2020 (IDP20) for the Kamoa-Kakula Copper Project. The
IDP20 comprised three development scenarios: Kakula definitive feasibility study (DFS)
at a mining rate of 6 Mtpa; Kakula-Kansoko pre-feasibility study (PFS) at a mining rate
of 7.6 Mtpa, and Kamoa-Kakula preliminary economic assessment (PEA) at a mining
rate of 19 Mtpa. The base case, long-term copper price used in the IDP20 was US$3.10
per pound (lb), on a real basis.
Since the IDP20 was published, spot copper prices have surged to new nine-year highs
of more than US$4.30/lb. While this surge has not yet changed long-term copper price
assumptions, this warrants a closer look at the long-term copper price sensitivities
published at the time of the various development scenarios using long-term copper
prices of US$4.00/lb (US$8,818/ tonne) and US$4.50/lb (US$9,921/tonne), given the
potential now for sustained higher copper prices.
The Kakula 2020 FS highlights that a mining rate of 6 Mtpa yields an after-tax NPV8% of
US$5.5 billion and IRR of 77% at a long-term copper price of US$3.10/lb, rising to US$8.4
billion and IRR of 100% at a copper price of US$4.00/lb, and US$9.5 billion and 106.9% at
a copper price of US$4.50/lb.
The Kakula-Kansoko 2020 PFS highlights that a mining rate of 7.6 Mtpa yields an after-
tax NPV8% of US$6.6 billion and IRR of 69% at a long-term copper price of US$3.10/lb,
rising to US$10.5 billion and IRR of 93% at a copper price of US$4.00/lb, and US$12.0
billion and 99.8% at a copper price of US$4.50/lb.
The Kamoa-Kakula 2020 PEA highlights that a mining rate of 19 Mtpa yields an after-tax
NPV8% of US$11.1 billion and IRR of 56.2% at a long-term copper price of US$3.10/lb,
rising to US$18.1 billion and IRR of 79.9% at a copper price of US$4.00/lb, and US$20.9
billion and IRR of 89% at a copper price of US$4.50/lb.
“We’ve been publicly stating for the record confidence about higher copper prices in
real terms for a long time. The stars now are aligning for the start of production at
Kamoa-Kakula,” said Mr. Friedland. “We believe we’re only on the cusp of what will be a
structural, powerful and long-term commodity rally given supply limitations and
fundamental demand from global green initiatives.”
“The economics for pushing ahead with the Phase 3 and 4 expansions to bring the
project’s mining rate to 19 Mtpa are compelling,” Mr. Friedland added. “At this
expanded rate, Kamoa-Kakula will rank as the world’s second largest copper producer,
with peak annual copper production of more than 800,000 tonnes. Our team has only
scratched the surface on our massive, 100%-owned exploration licences in the
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adjoining Western Foreland region that shares virtually identical geology to Kamoa-
Kakula and is the focus of an expansive exploration campaign from this year onwards.”
Underground mine development remains well ahead of schedule, providing
the confidence to push forward with Kamoa-Kakula’s Phase 2 construction
February’s advancement of 2,798 metres brings total underground development to
approximately 35.5 kilometres – around 12.4 kilometres ahead of schedule. The monthly
underground development in February was comprised of 2,389 metres at the Kakula
Mine and 409 metres at the Kansoko Mine.
Drift-and-fill stoping operations are progressing well at the Kakula Mine, with
approximately 70% of January’s ore production coming from stoping operations and
the remainder coming from mine development activities. Drift-and-fill stoping is a
highly-productive mining method of extracting underground ore, where a single tunnel,
known as a stope, is extracted leaving an open void that is subsequently backfilled to
allow for the extraction of the neighbouring stope in sequence.
Mark Farren, Kamoa Copper’s CEO, commented: “An outstanding performance in
February under some challenging circumstances, given that we completed a major
conveyor belt changeover at Kakula. The changeover slowed underground development
and load-and-haul operations, as the underground tips could not be used for a week
and ore had to be trucked to surface. Despite the temporary conveyor-related
slowdown, we saw a strong mining performance with record tonnes and copper grade
delivered to surface stockpiles.”
“We continue to successfully mine the high-grade stoping areas in the center of the
Kakula Mine at selective cuts of approximately 10-metres high by 7.5-metres wide in a
single pass. This bulk mining method is enormously beneficial as it generates large-
volume, high-grade ore blocks that can be mined selectively,” Mr. Farren added.
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Jumbo drill in operation in a 10-metre-high by 7.5-metre-wide high-grade stoping
area in the central part of the Kakula Mine.
Mine geologist Micheline Kyenge showing the ultra-high-grade chalcocite ore in
the Kakula central area that is averaging more than 8% copper.
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Auto electrician Raul Mwenze – one of thousands of bright, young Congolese
who are helping transform Kamoa-Kakula into the world’s next great copper
mine.
Kansoko’s ore mined in February was approximately 47,300 tonnes at an average grade
of 4.62% copper. The tonnage was 82% higher than achieved in January and the
average copper grade was 7% higher. Kansoko now has introduced a third mining crew,
and is ramping up production. Kansoko will be an important part of the production mix
for the Phase 2 concentrator plant when it begins operations – currently planned for Q3
2022.
Phase 1 copper production from the Kakula Mine is scheduled to begin in July 2021.
Kakula is projected to be the world’s highest-grade major copper mine, with an initial
mining rate of 3.8 Mtpa at an estimated early average feed grade of more than 6.0%
copper, ramping up to 7.6 Mtpa in Q3 2022. Phases 1 and 2 combined are forecast to
produce up to approximately 400,000 tonnes of copper per year. Based on independent
benchmarking, the project’s phased expansion scenario to 19 Mtpa would position
Kamoa-Kakula as the world’s second largest copper mining complex, with peak annual
copper production of more than 800,000 tonnes.
A 2020 independent audit of Kamoa-Kakula's greenhouse gas intensity metrics
performed by Hatch Ltd. of Mississauga, Canada, confirmed that the project will be
among the world's lowest greenhouse gas emitters per unit of copper produced.
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The Kamoa-Kakula Copper Project is a joint venture between Ivanhoe Mines (39.6%),
Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%) and the Government of
the Democratic Republic of Congo (20%).
Mechanic Landry Moma Twite performing maintenance on a jumbo drill rig at the
Kakula North heavy equipment workshop.
Construction is advancing rapidly on the concentrator equipment workshop (left)
and storehouse (right).
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The bulk reclaim tip at the Kakula Mine is nearing completion.
February’s ore production was 13% higher than January at slightly higher
grades; pre-production surface ore stockpiles now total approximately 2.16
million tonnes grading 4.44% copper
Chart 1: Cumulative tonnes and grade of pre-production ore stockpiles at the
Kakula and Kansoko mines – May 2020 to February 2021.