Platreef successfully completes sinking of Shaft 1 to its final depth of approximately 1,000 metres below surface Mine development work now focused on equipping Shaft 1 as Platreef’s initial production shaft Project team achieves South African shaft-sinking industry leader
June 16, 2020
Platreef successfully completes sinking of Shaft 1
to its final depth of approximately 1,000 metres below surface
Mine development work now focused on equipping Shaft 1
as Platreef’s initial production shaft
Project team achieves South African shaft-sinking industry leader
status for safety performance
Updated Definitive Feasibility Study expected to be finalized
in Q3 2020; will include a scoping study on the phased
development production plan
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 successfully completed the sinking of Shaft 1 to a
final depth of 996 metres below surface, at the company’s palladium, platinum, nickel,
copper, gold and rhodium Platreef mining licence.
The Platreef Project, which contains the thick, high-grade, flat-lying, underground Flatreef
Deposit, is a Tier One discovery by Ivanhoe Mines' geologists on the Northern Limb of
South Africa's Bushveld Igneous Complex; the world's premier platinum producing region.
Underground mine development work now will focus on the construction of the 996-metre-
level station at the bottom of the shaft, with final completion forecasted by the end of July
2020, well ahead of the contractual schedule. The shaft can then be reconfigured and
equipped for rock, personnel and material hoisting.
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 has long been recognized as one of the world’s largest deposits of
high-grade platinum-group metals, (PGMs) nickel and copper. With the sinking of Shaft 1
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now complete, we are exploring near-term development pathways at Platreef that will allow
us to expedite production at the next world-class mine on the Northern Limb,” said Mr.
Friedland. “We are particularly pleased that the 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.”
The Platreef team has proudly achieved South African shaft-sinking industry leader status
in terms of safety performance.
Members of the Platreef team celebrate the completion of sinking Shaft 1 to a
final depth of 996 metres below surface. Shaft 1’s headframe is in the
background.
Updated DFS is nearing completion, which includes a scoping study 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,
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.
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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 pending study will assess phased development options at Platreef with substantially
lower upfront capital. The goal is to prioritize near-term production while safeguarding our
strong balance sheet. We are confident that the project will, in time, become one of the
world’s largest and lowest-cost primary producers of platinum-group metals and provide
long-lasting and meaningful benefits to all of our stakeholders, including the 20 local
communities − comprising approximately 150,000 local Mokopane area residents − that
are our equity partners," Mr. Friedland added.
Sifiso Mblangwe and his shaft-sinking teammates at a pre-shift safety meeting.
The team achieved a South African shaft-sinking industry leader status for its
safety performance.
Underground mining to incorporate highly-productive, mechanized methods
Planned mining methods will use highly-productive, mechanized methods, including long-
hole stoping and drift-and-fill mining. Each method will utilize cemented backfill for
maximum ore extraction. The ore will be hauled from the stopes to a series of internal ore
passes and fed to the primary ore silos adjacent to Shaft 2, where it will be crushed and
hoisted to surface.
Shaft 1 reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth
of 780.2 metres below surface in Q3 2018. The thickness of the mineralized orebody (T1
and T2 mineralized zones) at Shaft 1 is 29 metres, with grades of platinum-group metals
ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as
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well as significant quantities of nickel and copper. The 29-metre intersection yielded
approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of
platinum-group metals. The ore is stockpiled on surface and is being used for metallurgical
test work.
Platreef’s shaft-sinking team operating the six-boom jumbo to drill the final
round to a depth of 996 metres below surface. Underground development work
now will focus on the construction of the 996-metre-level station.
The development of the three primary mining access level stations has been completed
with only the 996 metre spillage clearing level remaining, which will be completed by end
July 2020. The three development stations will provide initial, underground access to the
high-grade orebody. Shaft 1 changeover detailed designs are being completed and will
enable Shaft 1 to be configured for permanent hoisting and dewatering.
The mining zones in the current Platreef Mine plan occur at depths ranging from
approximately 700 metres to 1,200 metres below surface. When completed, Shaft 2 is
expected to provide primary access to the mining zones; secondary access is expected to
be via Shaft 1. During mine production, both shafts also are expected to serve as
ventilation intakes. Three additional ventilation exhaust raises are planned to achieve
steady-state production.
Ivanplats received its Integrated Water Use Licence in January 2019, which is valid for 30
years and enables the Platreef Project to make use of water as planned in the 2017 DFS.
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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).
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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.
Figure 2. Revenue per tonne of ore at the Platreef Project since 2016 (shown in
US dollars)
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Figure 3. Revenue per tonne of ore at the Platreef Project has risen steadily 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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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. In Q2 2019,
Ivanplats reached Level 2 contributor status in its verification assessment on the B-BBEE
scorecard. 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.
Boilermaker, Aide Samuel Teffo (left), Millwright, Lerato Maake (centre), and
Rigger, Innocent Nchabeleng (right), display medals they received for their
excellent safety performance during the sinking of Shaft 1.
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,