Mine development now underway on the 850-metre level at Ivanhoe’s Platreef platinum-group metals, nickel, copper and gold project in South Africa Shaft 1’s continuing advance has intersected 29 metres of high-grade mineralization from underground mine development,
December 18, 2018
Mine development now underway on the 850-metre level at Ivanhoe’s
Platreef platinum-group metals, nickel, copper and gold project
in South Africa
Shaft 1’s continuing advance has intersected 29 metres of high-grade
mineralization from underground mine development,
beginning at a depth of 780 metres
Platreef’s long-term processed wastewater agreement finalized
to supply most of the bulk water needed for the first phase of production
Platreef is positioned to become a major producer of palladium,
which recently became more valuable than gold
Platreef’s Indicated Mineral Resources contain an estimated 26.8 million
ounces of palladium, 25.6 million ounces of platinum, 4.5 million ounces
of gold, and 1.8 million ounces of rhodium (a combined 58.7 million
ounces of PGMs plus gold), plus 4.1 billion pounds of nickel
and 2.1 billion pounds of copper, at a cut-off grade of 1 gram per tonne
Platreef’s Inferred Mineral Resources contain an additional 43.0 million
ounces of palladium, 40.4 million ounces of platinum, 7.8 million ounces
of gold, and 3.1 million ounces of rhodium (a combined 94.3 million
ounces PGMs plus gold), plus 7.7 billion pounds of nickel and 4.1 billion
pounds of copper, also at a cut-off grade of 1 gram per tonne
At the base-case cut-off grade of 2 grams per tonne, Indicated Mineral
Resources contain an estimated 42.0 million ounces of PGMs plus gold,
plus 2.4 billion pounds of nickel and 1.2 billion pounds of copper,
with an additional 52.8 million ounces of PGMs plus gold, 3.4 billion
pounds of nickel and 1.8 billion pounds of copper in Inferred Resources
Platreef’s T1 and T2 high-grade mineralized zones interpreted
as much thicker versions of the high-grade mineralized reefs found
on the Western and Eastern limbs of South Africa’s Bushveld Complex
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MOKOPANE, SOUTH AFRICA – Ivanhoe Mines’ (TSX: IVN; OTCQX: IVPAF) Co-Chairmen
Robert Friedland and Yufeng “Miles” Sun, and Ivanplats’ Managing Director Dr. Patricia
Makhesha, announced today that Platreef’s Shaft 1 has reached a depth of 850 metres
below surface and development work has begun on the 850-metre station – the second
of three horizontal mining access stations planned for Shaft 1.
The first mining access station has been constructed at the 750-metre level, following
earlier development of a water-pumping station at the 450-metre level. The third mining
access station will be developed at a mine-working depth of 950 metres. Shaft 1 is
expected to reach its projected, final depth of approximately 980 metres below surface,
complete with all four of the stations, in early 2020.
The Platreef mining team delivered the first high-grade mineralization from underground
mine development to surface stockpiles for metallurgical sampling three months ago.
The high-grade mineralization intersected in Shaft 1 is contained within two mineralized
zones (T1 and T2) totalling 29 metres of the Turfspruit Cyclic Unit (TCU). A total of fifty
grab samples from individual 3.2-metre-blast stockpiles yielded an average grab sample
grade of 6.35 grams per tonne (g/t) platinum, palladium and rhodium plus gold
(3PE+Au), ranging up to 9.6 g/t 3PE+Au, as well as significant quantities of nickel and
copper.
The 29-metre mineralized intersection in Shaft 1 yielded approximately 3,500 tonnes of
ore that will be used for bulk-scale metallurgical test work. Based on the estimated
resource grade of the pilot hole for Shaft 1 (GT008), the 3,500 tonnes are expected to
contain more than 400 ounces of platinum-group metals (PGMs).
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; and Japan Gas
Corporation.
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Photo: Stockpiles of Flatreef ore from the sinking of Shaft 1, with Shaft 1 headframe
in the background.
Long-term wastewater agreement finalized to supply most of the bulk
water needed for the first phase of production at Platreef
Ivanplats, led by Dr. Makhesha, announced that it has finalized a long-term agreement
with the Mogalakwena Local Municipality for the supply of local, treated wastewater 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.
Ivanplats signed a memorandum of agreement earlier this year 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. Last week, the agreement was officially approved in a signing
ceremony in Mokopane.
Ivanplats expects to begin receiving a small quantity of processed wastewater early
next 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 and surface infrastructure construction.
Ivanplats estimates that it will require approximately 7.5 million litres per day (Ml/day) of
bulk water during the first-phase of steady-state production. A water-balance model
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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: Platreef’s long-term wastewater agreement finalized between Dr. Patricia
Makhesha, Ivanplats’ Managing Director (left), and Kenneth Maluleke,
Mogalakwena Acting Municipality Manager.
In July 2017, Ivanhoe issued an independent, definitive feasibility study (DFS) for
Platreef covering the first phase of production at an initial mining rate of four million
tonnes per annum (Mtpa). The DFS estimated that Platreef’s initial, average annual
production rate will be approximately 219,000 ounces of palladium, 214,000 ounces of
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platinum, 30,000 ounces of gold and 14,000 ounces of rhodium (combined 477,000
ounces of 3PE+Au), plus 21 million pounds of nickel and 13 million pounds of copper.
The Platreef DFS was based on the development of a large, mechanized, underground
mine with an initial, four Mtpa concentrator and associated infrastructure. Platreef
would rank at the bottom of the cash-cost curve, at an estimated US$351 per ounce of
3PE+Au produced, net of by-products and including sustaining capital costs, and
US$326 per ounce before sustaining capital costs.
The thick Flatreef orebody at the Platreef Project is ideal for bulk-scale, mechanized
mining. As underground development progresses, the mine plan calls for the addition
of large, mechanized mining equipment, such as 14- and 17-tonne load-haul-dump
machines and 50-tonne haul trucks to support the planned long-hole mining method.
The mineral resources used as the basis of the Platreef DFS were those amenable to
underground selective mining. Detailed information about assay methods and data
verification measures used to support the scientific and technical information is set out
in the Platreef 2017 Feasibility Study NI 43-101 Technical Report dated September 2017,
available under Technical Reports at www.ivanhoemines.com and on Ivanhoe Mines
SEDAR profile at www.sedar.com.
Key features of the 2016 Platreef Mineral Resource estimate include:
Indicated Mineral Resources contain an estimated 41.9 million ounces of
platinum, palladium, rhodium and gold with an additional 52.8 million ounces of
platinum, palladium, rhodium and gold in Inferred Resources (using a cut-off
grade of 2.0 g/t 3PE+Au).
Indicated Mineral Resources contain an estimated 2.44 billion pounds of nickel
and 1.23 billion pounds of copper, with an additional 3.44 billion pounds of nickel
and 1.78 billion pounds of copper in Inferred Mineral Resources (using a cut-off
grade of 2.0 g/t 3PE+Au).
Indicated Mineral Resources totalling 346 million tonnes, at an average grade of
3.77 g/t 3PE+Au, 0.32% nickel and 0.16% copper, at a cut-off grade of 2.0 g/t
3PE+Au.
Inferred Mineral Resources totalling an additional 506 million tonnes, at a grade
of 3.24 g/t 3PE+Au, 0.31% nickel and 0.16% copper, at a cut-off grade of 2.0 g/t
3PE+Au.
The 2016 Mineral Resource estimate was prepared by Ivanhoe Mines under the direction
of Dr. Harry Parker, RM SME, of Wood Group (formerly Amec Foster Wheeler E&C
Services Inc.). Dr. Parker and Timothy Kuhl RM SME, also of Wood Group, have
independently confirmed the Mineral Resource estimate and are the Qualified Persons
for the estimate, which has an effective date of April 22, 2016.
The platinum-to-palladium ratio at the Platreef Mine is approximately 1:1. Palladium and
rhodium are used as catalysts to control exhaust emissions in gasoline-fuelled
vehicles, while diesel vehicles mostly use platinum. Platinum also is used as the
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catalyst in zero-emission, hydrogen-powered, fuel-cell electric vehicles now being
developed by leading, global automakers including Honda, Toyota, Hyundai, BMW,
Mercedes-Benz and Hyundai.
A sustained palladium-supply deficit, coupled with robust demand from automakers,
has seen palladium prices increase by approximately 50% during the past four months,
making it more valuable than gold for the first time since 2002.
Chart: Palladium’s price increase since August 2018 (in blue) compared to gold
(in white).
Flatreef’s T1 and T2 mineralized zones are 29 metres thick at Shaft 1
intersection
The mineralized zones (reefs) at Ivanhoe’s Platreef Project are the thickest (Platreef’s
T2MZ averages 24.7 metres at a 1 g/t 3PE+Au cut-off) among the known reefs in South
Africa’s Bushveld Igneous Complex. Although substantially thicker on Ivanhoe’s
Platreef Project, Flatreef’s exceptional T1 and T2 reefs have been correlated with the
Bushveld Complex’s Bastard and Merensky reefs by Dr. Danie Grobler, Ivanplats’ Head
of Exploration and Geology, and other Ivanplats geologists (Grobler et al., published in
the international journal, Mineralium Deposita, 2018).
The Turfspruit Cyclic Unit (TCU), which hosts the majority of the Platreef’s selectively
mineable Mineral Resources, has two mineralized zones that are laterally continuous
across the Platreef Project. The T1 mineralized zone (T1MZ) occurs within cyclical
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magmatic units and feldspathic pyroxenite (ultramafic igneous rock) immediately below
the Main Zone. The T2 mineralized zone (T2MZ) is hosted within a mineralized, PGM-
enriched, very coarse-grained pegmatoidal pyroxenite distinct from the feldspathic
pyroxenite above it and bound by a top chromite stringer.
The T2MZ occurs at a stratigraphic position similar to the world-renowned Merensky
Reef. The T2MZ can be subdivided into an upper pegmatoidal orthopyroxenite, referred
to as the T2 Upper, and a lower, less continuous pegmatoidal harzburgite, referred to as
the T2 Lower. Recognition of the TCU and the pegmatoidal pyroxenite in 2012 was a key
interpretive breakthrough for the Platreef Project.
Shaft 1 intersected the TCU below the Main Zone of the Bushveld Complex in September
2018. The upper T1 mineralized reef was intersected at a depth of 780.11 metres below
the shaft bank (Figure 1). Shaft sinking proceeded to intersect the main T2 mineralized
reef at a depth of 798 metres, beneath the upper chromitite stringer. The T2
mineralization gradually decreases over a vertical interval of 11 metres to the footwall
norite contact at a depth of 809 metres. The total TCU width intersected within the shaft
is 28.9 metres.
Photo: Dr. Danie Grobler, Ivanplats’ Head of Exploration and Geology (left), Jan Mapeka,
Ivanplats Geologist (centre), and Gerick Mouton, Ivanplats’ Vice President
and Project Director (right), at the intersection of the T1 mineralized reef
in Shaft 1 at a depth of approximately 780 metres.
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Figure 1: Schematic section of the Platreef Mine, showing Flatreef’s T1 and T2 thick,
high-grade mineralized zones (red and dark orange), underground
development work completed to date in shafts 1 and 2 (white), and planned
development work (gray).