Platreef mine development work now focused on equipping recently-completed Shaft 1 for first production Updated Definitive Feasibility Study due this quarter; will include a Preliminary Economic Assessment on phased-development
July 23, 2020
Platreef mine development work now focused on equipping
recently-completed Shaft 1 for first production
Updated Definitive Feasibility Study due this quarter; will include
a Preliminary Economic Assessment on phased-development
production strategy
Strong palladium, platinum, gold and rhodium prices continue to
propel Platreef’s ‘metals-price basket’ higher
MOKOPANE, SOUTH AFRICA – Ivanhoe Mines’ (TSX: IVN; OTCQX: IVPAF) Co-Chairmen
Robert Friedland and Yufeng “Miles” Sun announced today that the company’s South
African subsidiary, Ivanplats, has completed construction of the 996-metre-level
station at the bottom of the project’s Shaft 1 – well ahead of the contractual
schedule.
Shaft 1 now is positioned to be equipped as Platreef’s initial production shaft, if
Ivanhoe chooses to proceed with phased development to expedite production at the
tier-one palladium-platinum-nickel-copper-rhodium-gold project on the Northern Limb
of South Africa’s Bushveld Complex.
“Given the flurry of recent transactions in precious metals markets, we are actively
exploring a number of options that can help us unlock Platreef's extraordinary value
for the benefit of all Ivanhoe stakeholders,” said Mr. Friedland. “After all, Platreef is
among this planet’s largest precious metals deposits.”
“Platreef now has a completed shaft within a few hundred metres of the initial high-
grade mining zone. We have a mining licence, we have water, and we have a team of
highly-skilled employees. The deposit has enormous quantities of palladium,
platinum, rhodium, nickel and copper; and it has more ounces of gold than many
leading gold mines,” Mr. Friedland added. “Given the current precious metals
environment, I am confident that the pending studies will showcase the exceptional
economics that one would expect from such a thick, high-grade and flat-lying
deposit.”
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Platreef’s current Indicated Mineral Resources are 346 million tonnes grading 3.77
grams per tonne (g/t) 3PE+gold (1.68 g/t platinum, 1.70 g/t palladium, 0.11 g/t rhodium,
0.28 g/t gold), 0.32% nickel and 0.16% copper at a 2.0 g/t 3PE+gold cut-off.
Platreef’s current 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 58.8 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 current Inferred Mineral Resources are 506 million tonnes at a grade of 3.24
g/t 3PE+gold (1.42 g/t platinum, 1.46 g/t palladium, 0.10 g/t rhodium, 0.26 g/t gold), 0.31%
nickel and 0.16% copper.
Platreef’s current 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.
Current prices for the metals contained in the Platreef Mineral Resources, in US dollars,
are approximately: palladium $2160/oz., platinum $910/oz., gold $1867/oz., rhodium
$8,900/oz., nickel $5.96/lb. and copper $2.96/lb.
Information on the Platreef Project’s geology and mineralization, including a full tabulation of
the Mineral Resource estimate at various cut-offs, is contained in the Platreef Project National
Instrument (NI) 43-101 Technical Report dated September 4, 2017, available on SEDAR at
www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com.
Platreef’s Mineral Resources are reported on a 100%-ownership basis and have an effective
date of April 22, 2016. The Qualified Persons for the Mineral Resource estimate are Dr. Harry
Parker, RM SME, and Mr Timothy Kuhl, RM SME. Mineral Resources are reported inclusive of
Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. Mineral Resources have been estimated using core drill data and conform
to the requirements of the CIM Definition Standards, 2014. The 2 g/t 3PE+gold cut-off is
considered the base case (3PE+Au = (platinum+ palladium + rhodium) + gold). Mineral
Resources are stated from a depth of approximately 500 metres to 1,350 metres below
surface. Indicated Mineral Resources are drilled on approximately 100 x 100-metre spacing;
Inferred Mineral Resources are drilled on 400 x 400-metre (locally to 400 x 200-metre and 200
x 200-metre) spacing.
Reasonable prospects for eventual economic extraction were determined using the following
assumptions. Assumed commodity prices for the Mineral Resource estimate are platinum:
$1,600/oz., palladium: $815/oz., gold: $1,300/oz., rhodium: $1,500/oz., copper: $3.00/lb and
nickel: $8.90/lb. It was assumed that payable metals would be 82% from smelter/refinery and
that mining costs (average $34.27/t) and process, G&A, and concentrate transport costs
(average $15.83/t of mill feed for a 4 Mtpa operation) would be covered. The processing
recoveries vary with block grade, but typically would be 80%–90% for platinum, palladium and
rhodium; 70-90% for gold, 60-90% for copper, and 65-75% for nickel.
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Updated DFS is due this quarter, which will include a PEA on the phased-
development production plan for the Platreef Project
Ivanhoe is updating the Platreef Project’s 2017 definitive feasibility study (DFS) to take into
account development schedule advancement since 2017 when the DFS was completed,
as well as updated costs and refreshed metal prices and foreign exchange assumptions.
Concurrently, Ivanhoe is finalizing a Preliminary Economic Assessment (PEA) for the
phased-development production plan for the Platreef Project. The plan targets significantly
lower initial capital, to accelerate first production by using Shaft 1 as the mine’s initial
production shaft, followed by expansions to the production rate as outlined in the 2017
DFS.
The re-evaluation is being done in parallel with the ongoing mine development work to
access the thick, high-grade, flat-lying Flatreef deposit that was discovered in 2010 and
outlined in the Platreef 2017 Feasibility Study.
The new auxiliary winder for the 7.25-metre diameter Shaft 1, which is scheduled to be
delivered to Platreef later this year, will be used to assist in equipping the shaft; and
thereafter for logistics, shaft examination and auxiliary functions. The auxiliary winder will
provide a second means of ingress and egress from the shaft after removal of the stage
winder. Shaft 1 is located approximately 350 metres away from a high-grade area of the
Flatreef orebody, planned for bulk-scale, mechanized mining.
The Platreef Project remains ‘Fall-of-Ground’ incident free since shaft-sinking operations
began in July 2016, which is a tribute to the excellent work by the Platreef Project team
and its South African sinking contractor, Moolmans. In June, 2020, the team achieved
South African shaft-sinking industry leader status in terms of safety performance.
Revenue per tonne of ore at the Platreef Project in South African Rand near all-
time highs
Significant increases in the price of palladium, rhodium, gold and nickel over the last three
years has resulted in the weighted price of the ‘basket’ of metals contained in the ore at the
Platreef palladium-platinum-rhodium-nickel-copper-gold project to rise to levels that are
significantly higher than when the 2017 DFS was completed. In addition, the South African
Rand has depreciated significantly against the US dollar in recent years, resulting in the
weighted price of Platreef’s ‘basket’ of metals in South African Rand trading near all-time
highs.
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Figure 1. Revenue per tonne of ore at the Platreef Project since 2016 (shown in
US dollars)
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Figure 2. Revenue per tonne of ore at the Platreef Project has risen significantly
since 2016 (shown in South African rand).
Source for figures 1 & 2: Bloomberg. Based on historical weekly commodity prices at the end of each week.
Notes for Figures 1 and 2:
1. Based on Platreef Mineral Reserves with an effective date of May 24, 2017.
2. Probable Mineral Reserve of 124.7 million tonnes at a grade of 1.95 grams per tonne (g/t) platinum, 2.01
g/t palladium, 0.30 g/t gold, 0.14 g/t rhodium, 0.34% nickel and 0.17% copper.
3. A declining NSR cut-off of $155 per tonne (t) to $80/t was used for the Mineral Reserve estimates.
4. The NSR cut-off is an elevated cut-off above the marginal economic cut-off.
5. Metal prices used in the Mineral Reserve estimate: US$1,600 per ounce (oz) platinum, US$815/oz
palladium, US$1,300/oz gold, US$1,500/oz rhodium, US$8.90 per pound (lb) nickel and US$3.00/lb
copper.
6. Tonnage and grade estimates include dilution and mining recovery allowances.
7. Applies life-of-mine average recoveries of 87.4% for platinum, 86.9% for palladium, 78.6% for gold,
80.5% for rhodium, 87.9% for copper and 71.9% for nickel.
8. Total cash cost includes mine site costs, plus realization costs such as treatment and refining charges,
royalties and transportation.
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On July 15, 2020, members of the Platreef team celebrated the completion of shaft
sinking and the 996-metre-level station development work in Shaft 1.
Rigger Lawrence Mokoena, a member of Platreef’s shaft-sinking team, with his
new jacket awarded in recognition of the team’s outstanding safety performance.
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Figure 3: 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).
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About the Platreef Project
The Platreef Project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A
26% interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic
empowerment (B-BBEE) partners, which include 20 local host communities with approximately
150,000 people, project employees and local entrepreneurs. A Japanese consortium of
ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation and Japan Gas
Corporation owns a 10% interest in Ivanplats, which it acquired in two tranches for a total
investment of $290 million.
Qualified Person
Disclosures of a scientific or technical nature in this news release have been reviewed and
approved by Stephen Torr, who is considered, by virtue of his education, experience and
professional association, 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. Mr. Torr has verified the technical data disclosed in this news release.
Ivanhoe has prepared a current, independent, NI 43-101-compliant technical report for the
Platreef Project, titled The Platreef 2017 Feasibility Study Technical Report dated September
4, 2017, prepared by DRA Global, OreWin Pty. Ltd., Amec Foster Wheeler, Stantec
Consulting, Murray & Roberts Cementation, SRK Consulting, Golder Associates, and Digby
Wells Environmental. This technical report include relevant information regarding the effective
dates and the assumptions, parameters and methods of the mineral resource estimates on the
Platreef Project cited in this news release, as well as information regarding data verification,
exploration procedures and other matters relevant to the scientific and technical disclosure
contained in this news release in respect of the Platreef Project.
About Ivanhoe Mines
Ivanhoe Mines is a Canadian mining company focused on advancing its three principal
projects in Southern Africa: the development of new mines at the Kamoa-Kakula copper
discoveries in the Democratic Republic of Congo (DRC) and 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. 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
Website www.ivanhoemines.com