The Kamoa-Kakula Copper Project – a joint venture between Ivanhoe Mines, Zjin Mining Group Co., Ltd. and the Government of the Democratic Republic of Congo — has been independently ranked as the world's largest, undeveloped, high-grade copper discovery by international mining consultant Wood Mackenzie. It is a very large, near-surface, stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt, approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of the provincial capital of Lubumbashi.

On September 11, 2017, Ivanhoe Mines announced assay results from another 43 holes as part of the ongoing 2017 drilling campaign at the company’s Tier One Kamoa-Kakula Copper Project, near the mining centre of Kolwezi in the Democratic Republic of Congo (DRC).

Exploration drilling at Kakula West, located on the western end of the currently defined high-grade, essentially flat-lying Kakula mineralized trend that now extends at least 12 kilometres, has confirmed a significant area of mineralization with characteristics and grades similar to the high-grade Kakula Mineral Resource area located to the east.

An area of two kilometres by one kilometre already has been drilled off at Kakula West on an approximate 300-metre grid pattern, while the drilling in the “saddle” area between Kakula West and Kakula is rapidly being in-filled in preparation for an updated resource estimate for the Kakula Discovery expected by the end of this year.

The Kakula Discovery continues to remain open along a westerly-southeasterly strike. Based on recent drilling results at Kakula, and given the impressive continuity of the high-grade mineralization seen to date, Ivanhoe’s geologists expect that by this October drilling will have expanded the delineated strike extent of the area encompassing Indicated and Inferred Mineral Resources by approximately 60%, and that the Kakula and Kakula West deposits will form a continuous mineral resource area.

Kakula West confirmed as significant new copper discovery and a potential new high-grade mining area

Exploration results at Kakula West confirm a significant, high-grade copper discovery. A total of 17,500 metres of drilling in 31 holes has been completed since the May 2017 resource update; assays have been received for 20 holes. Drilling results now have defined a high-grade mineralized zone with a width of at least 1.0 kilometre and a strike extent of more than 2.9 kilometres.

Results from drill holes in the saddle area between Kakula West and the Kakula resource area also have returned extremely significant values, confirming the continuity of the Kakula high-grade zone between the two areas. A complete list of assays for the new drill holes is contained in Table 1.

Significant new drilling intercepts at Kakula West and the saddle area include:

  • DD1160, drilled on northern side of Kakula West, intersected 8.69 metres (true width) of 4.23% copper at a 3.0% copper cut-off, beginning at a downhole depth of 580.00 metres; 11.59 metres (true width) of 3.85% copper at a 2.5% copper cut-off; 21.25 metres (true width) of 3.20% copper at a 2% copper cut-off; and 49.01 metres (true width) of 2.38% copper at a 1% copper cut-off.
  • DD1163, drilled in the saddle area between Kakula and Kakula West, intersected 5.28 metres (true width) of 9.54% copper at a 3.0% copper cut-off, beginning at a downhole depth of 724.40 metres; 5.28 metres (true width) of 9.54% copper at a 2.5% copper cut-off; 6.16 metres (true width) of 8.49% copper at a 2% copper cut-off; and 7.43 metres (true width) of 7.32% copper at a 1% copper cut-off.
  • DD1171, drilled at the currently defined south-western limit of Kakula West, intersected 26.05 metres (true width) of 4.37% copper at a 3.0% copper cut-off, beginning at a downhole depth of 469.50 metres; 26.05 metres (true width) of 4.37% copper at a 2.5% copper cut-off; 28.37 metres (true width) of 4.20% copper at a 2% copper cut-off; and 28.74 metres (true width) of 4.16% copper at a 1% copper cut-off.
  • DD1177, drilled in the centre of Kakula West, intersected 9.62 metres (true width) of 7.57% copper at a 3.0% copper cut-off, beginning at a downhole depth of 565.10 metres; 9.62 metres (true width) of 7.57% copper at a 2.5% copper cut-off; 10.24 metres (true width) of 7.26% copper at a 2% copper cut-off; and 13.00 metres (true width) of 6.00% copper at a 1% copper cut-off.
  • DD1180, drilled on the currently defined western limit of Kakula West, intersected 5.17 metres (true width) of 5.39% copper at a 3.0% copper cut-off, beginning at a downhole depth of 492.40 metres; 11.65 metres (true width) of 3.74% copper at a 2.5% copper cut-off; 15.56 metres (true width) of 3.34% copper at a 2% copper cut-off; and 16.07 metres (true width) of 3.27% copper at a 1% copper cut-off.

Drilling continuing to expand and upgrade the Kakula resource area

Exploration activities since the May 17, 2017, resource update have focused on extending the resources to the southeast and to the northwest, as well as in-fill drilling on the inferred and indicated resources areas ahead of the upcoming pre-feasibility study. A total of 26,700 metres in 44 holes have been completed in the Kakula resource area, of which assays for 23 holes now have been received.

Significant new drilling intercepts at the Kakula resource area include:

  • DD1167, an in-fill hole drilled in the northwest portion of Kakula, intersected 6.16 metres (true width) of 9.20% copper at a 3.0% copper cut-off, beginning at a downhole depth of 578.00 metres; 6.16 metres (true width) of 9.20% copper at a 2.5% copper cut-off; 9.48 metres (true width) of 6.77% copper at a 2% copper cut-off; and 12.27 metres (true width) of 5.54% copper at a 1% copper cut-off.
  • DD1182, drilled on the south-western limit of the Kakula resource area, intersected 3.75 metres (true width) of 6.36% copper at a 3.0% copper cut-off, beginning at a downhole depth of 235.48 metres; 7.47 metres (true width) of 4.56% copper at a 2.5% copper cut-off; 11.20 metres (true width) of 3.76% copper at a 2% copper cut-off; and 15.87 metres (true width) of 3.13% copper at a 1% copper cut-off.

Kamoa-Kakula Copper Project geology showing the Kakula resource area and Kakula West, which is open for significant expansion along trend to the west.

Kamoa-Kakula, among the world’s largest copper deposits by contained copper, also has the highest copper grades by a wide margin.

Drill-hole location plan for the Kakula resource area and Kakula West showing holes completed and in progress, and the Kakula box cut (at right), superimposed on 1% composite grade thickness contours.

Section along the axis of the Kakula Deposit on the section A-A’-A’’-B showing drilling completed to date and composites at a 3% copper cut-off.

Assay composites at 1.0% and 2.0% copper cut-offs.

Assay composites at 2.5% and 3.0% copper cut-offs.

Below are strip logs for five of the drill holes reported in September 2017: DD1163, on the eastern edge of Kakula West; DD1171, on the southwestern edge of Kakula West; DD1160, on the northern side of Kakula West; DD1167, on the northwest portion of the Kakula resource area; and DD1182, on the southwestern limit of the Kakula resource area.

The May 2017 Kakula Mineral Resource estimate is based on the results from approximately 61,400 metres of drilling in 121 holes. The May 2017 estimate includes drill holes completed by April 18, 2017 in the eastern section of the high-grade, chalcocite-rich Kakula trend; it does not include any holes drilled in the new Kakula West Discovery area. The October 2016 Kakula Mineral Resource estimate was based on results from approximately 24,000 metres of drilling in 65 holes.

The May 2017 Kakula Mineral Resource estimate was prepared by Ivanhoe Mines under the direction of Dr. Harry Parker and Gordon Seibel, both RM SME, of Amec Foster Wheeler, of Reno, Nevada, in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. Dr. Parker and Mr. Seibel are the Qualified Persons for the estimate, which has an effective date of May 16, 2017.

The May 2017 Kakula Mineral Resources, along with sensitivities at various cut-offs, are shown in the tables below.

Click here to view the full technical report titled: Kakula 2017 Resource Update, June 2017

Table 1. Indicated and Inferred Mineral Resources at a 1% copper cut-off grade, Kakula Deposit.

CategoryTonnage
(Mt)
Area
(km2)
Copper
(%)
True Thickness
(metres)
Contained Copper
(kTonnes)
Contained Copper
(billion lbs)
Indicated3499.83.2312.011,28124.9
Inferred593.02.266.41,3383.0

Notes:

  1. Ivanhoe's Mineral Resources Manager George Gilchrist, a Member of the Geology Society of South Africa and Professional Natural Scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions (SACNASP), estimated the Mineral Resources under the supervision of Dr. Harry Parker and Gordon Seibel, both RM SME, who are the Qualified Persons for the Mineral Resources. The effective date of the estimate is May 16, 2017. Mineral Resources are estimated using the CIM Definition Standards for Mineral Resources and Reserves (2014).
  2. For Kakula, Mineral Resources are reported using a total copper (TCu) cut-off grade of 1% TCu and an approximate minimum thickness of 3 metres. A 1% TCu cut-off is a natural cut-off grade on the Central African Copperbelt. There are reasonable prospects for eventual economic extraction under assumptions of a copper price of US$3.00/lb, employment of underground, mechanized, room-and-pillar and drift-and-fill mining methods, and that copper concentrates will be produced and sold to a smelter. Mining costs are assumed to be $38/t. Concentrator and General and Administrative (G&A) costs are assumed to be $19/t. Metallurgical recovery is assumed to be 77% at the 1% TCu cut-off and 88% at the average grade of the Mineral Resource. Ivanhoe is studying (preliminary economic assessment in progress) reducing mining costs using a convergence backfill method.
  3. Reported Mineral Resources contain no allowances for hanging wall or footwall contact boundary loss and dilution. No mining recovery has been applied.
  4. Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

Kakula Deposit Indicated Mineral Resources, Sensitivity Cases.

CategoryCut-off Grade(Cu%)Tonnes(millions)Area(Sq. km)Copper GradeTrue Thickness (metres)Contained Copper(kTonnes)Contained Copper(billion lbs)
Indicated7.0351.98.10%6.4m2,8736.3
Indicated6.0563.07.52%6.3m4,2009.3
Indicated5.0834.56.84%6.1m5,69412.6
Indicated4.01056.26.35%5.7m6,70014.8
Indicated3.01167.36.09%5.3m7,08615.6
Indicated2.51297.95.75%5.5m7,42816.4
Indicated2.02108.64.41%8.2m9,26720.4
Indicated1.52589.13.90%9.6m10,05022.2
Indicated1.03499.83.23%12.0m11,28124.9

Kakula Deposit Inferred Mineral Resources, Sensitivity Cases.

CategoryCut-off Grade(Cu%)Tonnes(millions)Area(Sq. km)Copper GradeTrue Thickness (metres)Contained Copper(ktonnes)Contained Copper(billion lbs)
Inferred5.030.25.22%4.0m163 0.4
Inferred4.080.74.83%4.1m409 0.9
Inferred3.0121.04.45%3.9m515 1.1
Inferred2.5141.24.18%3.8m5721.3
Inferred2.0271.53.19%5.7m862 1.9
Inferred1.5402.12.72%6.0m1,074 2.4
Inferred1.0593.02.26%6.4m1,338 3.0

Consolidated Mineral Resource Statement, Kamoa-Kakula Project – May 16, 2017, 1% copper cut-off over minimum thickness of approximately 3 metres.

DepositCategoryTonnes(millions)Area(Sq. km)Copper GradeTrue Thickness
(metres)
Contained Copper(kTonnes)Contained Copper(billion lbs)
KamoaIndicated75250.52.67%5.2m20,11044.3
Inferred18516.82.08%3.8m3,8408.5
KakulaIndicated3499.83.23%12.0m11,28124.9
Inferred593.02.26%6.4m1,3383.0
TotalKamoa ProjectIndicated110160.32.85%6.3m31,39169.2
Inferred24419.82.12%4.3m5,17811.5

Notes to Accompany Kamoa Project Mineral Resource Table:

  1. Ivanhoe's Mineral Resources Manager, George Gilchrist, Professional Natural Scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions (SACNASP), estimated the Mineral Resources under the supervision of Dr. Harry Parker and Gordon Seibel, both RM of Society of Mining, Metallurgy and Exploration (SME), who are the Qualified Persons for the Mineral Resource estimate. The effective date of the estimate is May 16, 2017. Mineral Resources are estimated using the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. Mineral Resources at Kamoa are inclusive of Mineral Reserves. No Mineral Reserves are currently reported at Kakula.
  2. Mineral Resources are estimated assuming underground mining methods, a copper price of US$3.30/lb (Kamoa) and US$3.00/lb (Kakula), a cut-off of 1% total copper, an approximate minimum thickness of 3 metres, and that concentrates will be produced and sent to a smelter.
  3. Tonnage and contained-copper tonnes are reported in metric units, contained-copper pounds are reported in imperial units and grades are reported as percentages.
  4. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal conten

Indicated and Inferred Mineral Resources, Kamoa-Kakula Project – May 16, 2017.

CategoryCut-off Grade(Cu%)Tonnes(millions)Area(Sq. km)Copper GradeContained Copper(kTonnes)Contained Copper(billion lbs)
Indicated3.035421.54.57%16,206 35.7
Indicated2.551231.84.01% 20,518 45.3
Indicated2.076043.03.44% 26,147 57.6
Indicated1.689951.03.19% 28,620 63.1
Indicated1.594452.93.11% 29,330 64.7
Indicated1.499654.43.02% 30,076 66.3
Indicated1.0110160.32.85% 31,391 69.2

CategoryCut-off Grade(Cu%)Tonnes(millions)Area(Sq. km)Copper GradeContained Copper(kTonnes)Contained Copper(billion lbs)
Inferred3.0322.73.82% 1,215 2.7
Inferred2.5665.33.25%2,142 4.8
Inferred2.01209.12.79% 3,332 7.3
Inferred1.616213.12.53% 4,109 9.1
Inferred1.517614.02.46% 4,314 9.5
Inferred1.419115.12.37% 4,540 10.0
Inferred1.024419.82.12% 5,178 11.5

Click here to view the Kakula 2016 Preliminary Economic Assessment, January 2017

Ivanhoe Mines and China's Zijin Mining Group sign landmark agreement to co-develop Kamoa

On December 8, 2015, Ivanhoe and Zijin Mining Group Co., Ltd. closed an agreement to co-develop Kamoa. Under terms of agreements signed in Xiamen, Zijin -- through its subsidiary, Gold Mountains (H.K.) International Mining Company Limited – bought a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding), an Ivanhoe subsidiary that presently owns 95% of the Kamoa Project, for an aggregate consideration of US$412 million (approximately C$506 million).

Key terms of Zijin’s investment

  • Ivanhoe received US$206 million of the US$412 million total purchase on December 8, 2015. The remaining US$206 million will be received in five equal installments that Zijin is scheduled to pay to Ivanhoe every 3.5 months from closing.
  • Ivanhoe has agreed to sell 1% of its share interest in Kamoa Holding to Crystal River for US$8.32 million – which Crystal River will pay through a non-interest-bearing, 10-year promissory note. Crystal River is a private company controlled by So Hon Chun.
  • Upon the successful arrangement or procurement of project financing by Zijin on terms approved by shareholders holding in the aggregate no less than 80.01% of the total issued and outstanding shares of Kamoa Holding, Zijin will have the right to acquire Crystal River’s 1% share interest (the 1% Option) in Kamoa Holding.
  • The relationship between Ivanhoe Mines, Zijin and Crystal River will be governed by a Shareholder, Governance and Option Agreement (SGOA). The SGOA provides, among other things, that all key decisions regarding the development and operation of the Kamoa-Kakula Copper Project will be made by Kamoa Holding’s Board of Directors.

Zijin also has pledged to use its best efforts to arrange project financing for Kamoa's first phase. Ivanhoe and Zijin are working in a mutually co-operative and constructive manner to complete the Kamoa transaction as soon as possible.

Click here to read the December 8 news release that details the co-development agreement.

Agreement signed to upgrade existing hydroelectric power plants

In March 2014, a financing agreement was signed between Ivanhoe and the DRC's national electricity company, La Société Nationale d'Electricité (SNEL). Ivanhoe is working with SNEL to upgrade two existing hydroelectric power plants – Mwadingusha and Koni – to recover up to 113 megawatts of capacity to be made available to the national power supply grid. SNEL will provide the Kamoa-Kakula Copper Project with up to 100 megawatts from the grid, which would be sufficient to operate the initial phase of the Kamoa mine.

A third hydroelectric power plant – Nzilo 1 – would follow under the same financing agreement. Nzilo 1 will have a capacity of approximately 108 megawatts upon completion, entitling Kamoa to receive an additional 100 megawatts from the grid. The upgraded technology planned to be applied will increase the original design capacity of these power plants by up to 10%.

A combined total of 200 megawatts from the grid would provide sufficient power for Kamoa's 300,000 tonnes per year smelter and the associated future mine expansions.

In August 2015, Ivanhoe Mines, Fio Corporation and Chemonics International joined forces to fight malaria in the Democratic Republic of Congo

In March 2015, Ivanhoe's exploration team received the 2015 PDAC Thayer Lindsley International Discovery Award for Kamoa

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