The Kamoa-Kakula Copper Project – a joint venture between Ivanhoe Mines, Zijin 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 in February 2018. Ivanhoe and Zijin also are exploring potential options to accelerate future production by building the Kakula and Kansoko mines concurrently as well as expansions to 18 Mtpa and beyond as exploration progresses at Kamoa-Kakula and on Ivanhoe's 100%-owned exploration licences in the Western Forelands area to the west of Kamoa-Kakula.

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 the end of 2017 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.

Results of the Kakula-Kamoa 2017 preliminary economic assessment (PEA) and Kamoa pre-feasibility study (PFS).

On November 28, 2017, Ivanhoe Mines announced positive findings of an expanded, independent PEA for the development of the Kakula Discovery at the Kamoa-Kakula Project.'

The three potential development scenarios examined include:

  1. Initial mine development scenario. The Kakula 2017 PEA evaluates the development of a six million-tonne-per-annum (Mtpa) underground mine and surface processing complex at the Kakula Deposit – a discovery announced in early 2016 – as the project’s first phase of development.
  2. Expanded, two-mine development scenario. The Kakula 2017 PEA also includes an option for an integrated, 12 Mtpa, two-stage development, beginning with initial production from the Kakula Mine, to be followed by a subsequent, separate underground mining operation at the nearby Kansoko Mine, along with the construction of a smelter.
  3. Kamoa 2017 pre-feasibility study (PFS). The Kamoa 2017 PFS evaluates the development of the Kansoko Mine as a stand-alone six Mtpa underground mine and surface processing complex that would be supplied with ore from the planned development of the Kansoko Sud and Kansoko Centrale areas of the Kamoa Deposit, which were discovered in 2008. The PFS refines the findings of the Kamoa March 2016 PFS, which envisaged a production rate of three Mtpa.

Summary of the PEA’s key results for an initial Kakula Mine

  1. Very-high-grade initial phase of production is projected to have a grade of 7.3% copper in year four and an average grade of 6.4% copper over the initial 10 years of operations, resulting in estimated average annual copper production of 284,000 tonnes.
  2. Annual copper production is estimated at 385,000 tonnes in year four.
  3. Initial capital cost, including contingency, is estimated at US$1.2 billion.
  4. Average total cash cost of US$1.14/lb of copper during the first 10 years.
  5. After-tax NPV, at an 8% discount rate, of US$4.2 billion.
  6. After-tax internal rate of return (IRR) of 36.2%, and a payback period of 3.1 years.
  7. Kakula is expected to produce a very-high-grade copper concentrate in excess of 50% copper, with extremely low arsenic levels.

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

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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