IVN.TO · 2021-08-03 12:00:00

Kamoa-Kakula Phase 1 concentrator plant achieved commercial

Metallurgy & Processing

August 3, 2021

production on July 1, 2021

■

Copper production exceeded 500 tonnes per day

towards the end of July

■

Phase 1 concentrator copper recoveries averaged approximately 81%

during July as commissioning advances

■

Phase 2 concentrator expansion to 7.6 Mtpa more than 35% complete;

well on track to begin operations in Q3 2022

■

Mining crews set a new record for underground development in July,

at 3,876 metres, and deliver a record 414,000 tonnes of ore grading

5.16% copper, including 85,000 tonnes grading 7.70% copper from the

centre of the Kakula Mine

■

Surface ore stockpiles continue to grow; now hold 3.54 million tonnes

grading 4.77% copper, containing more than 168,000 tonnes of copper

■

Study work to accelerate Phase 3 mine and concentrator expansion

progressing

KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines (TSX: IVN; OTCQX:

IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun are pleased to announce

that Kamoa-Kakula’s Phase 1, 3.8 million-tonne-per-annum (Mtpa) concentrator plant

was deemed to have reached commercial production on July 1, 2021, after achieving a

milling rate in excess of 80% of design capacity and recoveries very close to 70% for a

continuous, seven-day period.

To date, approximately 500,000 tonnes of ore have been milled, including approximately

263,000 tonnes grading 5.7% copper in July. Copper production has steadily increased

since hot commissioning began at the end of May. Copper production exceeded 500

tonnes per day toward the end of July, nearing the Phase 1 steady-state design capacity

of approximately 550 tonnes per day, or 200,000 tonnes per year. During August the

focus of the commissioning team will shift from the front end crushing and milling

circuit to balancing and optimizing the flotation and regrind milling areas. This is

expected to further improve concentrate grade and recovery.

Copper recoveries have increased from an average of approximately 70% in June to

approximately 81% in July. During the last 10 days of July, the concentrator averaged

copper recoveries close to 82%, with operations progressively increasing toward the

Phase 1 steady-state design copper recoveries of approximately 86%.

To date, approximately 32,700 tonnes of copper concentrate have been loaded at the

mine site for delivery to either the Lualaba Copper Smelter near Kolwezi, or to

international markets.

A total of 414,000 tonnes grading 5.16% copper was mined in July and comprised

367,000 tonnes grading 5.29% copper from the Kakula Mine, including 85,000 tonnes

grading 7.70% copper from the mine’s high-grade centre, and 47,000 tonnes grading

4.13% copper from the Kansoko Mine.

The project’s pre-production surface stockpiles now contain approximately 3.54 million

tonnes of high-grade and medium-grade ore at an estimated, blended average of 4.77%

copper. Contained copper in the stockpiles at the end of July now totals more than

168,000 tonnes (the current copper price is approximately US$9,700 per tonne).

As the plant ramps up to full Phase 1 design capacity, and the mine toward Phase 2

production capacity, the surface stockpiles are expected to continue to build at a

reduced rate.

In July, Kamoa-Kakula’s mining crews set a new record for metres of underground

advancement, with 3,876 metres achieved, shattering the previous record of 3,625

metres in April. July’s advancement brings the total underground development to

approximately 52.8 kilometres – more than 18.1 kilometres ahead of schedule.

Watch a new video showcasing the ramp up of copper production at

Kamoa-Kakula and the production of blister copper at the local Lualaba

Copper Smelter: https://vimeo.com/582482767/8ff4db2c92

A convoy of transport trucks loaded with Kamoa Copper’s concentrate departing

the Kamoa-Kakula Mine on their way to the port of Durban, South Africa.

Pouring Kamoa Copper blister ingots, containing approximately 99% copper, at

the at the local Lualaba Copper Smelter.

Mark Farren, Kamoa Copper’s CEO, commented: “July marks another month of solid

performance by our mining and concentrator teams, as we continue to add to the

surface stockpiles even as Phase 1 copper production ramps up. We expect to maintain

these ore production levels over the upcoming quarters in preparation for the

commissioning of the Phase 2 concentrator plant, and the potential strategic

stockpiling for the Phase 3 expansion.

“Commissioning of the Phase 1 concentrator is progressing well. We now have milled

approximately 500,000 tonnes of ore and gradually have lifted recoveries from an

average of approximately 70% in June to approximately 81% in July, with the last 10

days of July averaging close to 82%. We also have seen steady improvement in the

production of copper over the last month, with daily production exceeding 500 tonnes

several times during July. Both recoveries and copper production are approaching

Phase 1 steady-state design parameters.”

“During August, the focus of the commissioning team will shift from the front-end

crushing and milling circuit to balancing and optimizing the flotation and regrind milling

areas. This is expected to further improve concentrate grade and recovery.”

Ivanhoe’s guidance for contained copper in concentrate expected to be produced by

Kamoa-Kakula in 2021 is 80,000 to 95,000 tonnes. The figures are on a 100%-project

basis and metal reported in concentrate is prior to refining losses or deductions

associated with smelter terms.

From August 2021 onwards, Kamoa Copper will change the monthly reporting cut-off

for concentrator operations from the final day of the month to the 20th day of the month,

in order to allow more time for analysis and reconciliations, which will result in

truncated monthly production statistics in next month’s news release.

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, average feed grade of more than 6.0% copper

over the first five years of operations and 5.9% copper over the initial 10 years of

operations. Phase 1 is expected to produce approximately 200,000 tonnes of copper per

year, while the Phase 2 expansion is forecast to increase production to approximately

400,000 tonnes of copper annually. The project is on track to complete the Phase 2

expansion in Q3 2022. 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.

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%). 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.

Pre-production ore stockpiles total 3.5 million tonnes grading 4.77% copper

Chart 1: Cumulative tonnes and grade of pre-production ore stockpiles at the

Kakula and Kansoko mines – May 2020 to July 2021.

Chart 2: Growth in contained copper in pre-production ore stockpiles at the

Kakula and Kansoko mines – May 2020 to July 2021.

Kakula’s main pre-production stockpiles at the northern declines. The blended

stockpiles currently contain approximately 1.78 million tonnes grading 5.03%

copper.

Drift-and-fill stoping operations are progressing well at the Kakula Mine, with the

majority of the 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. The backfill plant, which will mix

tailings from the processing plant with cement to produce paste backfill, will begin

pumping backfill to the underground operations in August.

1.78 million tonnes @ 5.03% copper

Kakula South ore stockpiles containing a combined 1.30 million tonnes grading

4.75% copper (consisting of 613,000 high-grade tonnes @ 6.19% copper and

682,000 medium-grade tonnes @ 3.45% copper).

Kansoko ore stockpiles containing a combined 470,000 tonnes grading 3.83%

copper (consisting of 133,000 high-grade tonnes @ 6.04% copper and 337,000

medium-grade tonnes @ 2.95% copper).

1.30 million tonnes @ 4.75% copper

470,000 tonnes @ 3.83% copper

Medium

Grade

High Grade

Medium

Grade

Technicians Harrison Simmanza (left) and Peter Chama with new Sandvik ore

haul trucks and scooptrams that will be used to accelerate underground mining

operations at the Kakula and Kansoko mines.

Rodrigue Uzan inside one of the two ball mills in the Phase 1 concentrator plant.

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