The Kipushi Project, in the DRC's province of Haut-Katanga and southeast of the company's Kamoa discovery, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of the provincial capital of Lubumbashi. Ivanhoe Mines acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the DRC's state-owned mining company, Gécamines.

The Kipushi Project is based on the high-grade, underground zinc-copper mine in the Central African Copperbelt, which mined approximately 60 million tonnes grading 11% zinc and 7% copper between 1924 and 1993. In addition to producing copper and zinc, the mine produced 12,673 tonnes of lead and approximately 278 tonnes of germanium between 1956 and 1978. The mine had been managed on a care and maintenance basis since 1993.

July 30, 2018: Ivanhoe Mines announces a new Mineral Resource estimate for the Kipushi Mine

On July 30, 2018, Ivanhoe announced a new Mineral Resource estimate for the Kipushi Mine that increased zinc-rich Measured and Indicated Resources by 16%, from 10.2 million tonnes to 11.8 million tonnes. The new estimate also increased Kipushi’s zinc grade from 34.89% to 35.34%. In addition, the mine’s Measured and Indicated copper-rich resources have increased by 40% from 1.6 million tonnes to 2.3 million tonnes, with a slight increase in the copper grade from 4.01% to 4.03%. The updated Mineral Resource will be used in the preparation of the Kipushi Definitive Feasibility Study (DFS), which will update and refine the findings of the Preliminary Feasibility Study issued in December 2017.

December 13, 2017: Ivanhoe announces an outstanding pre-feasibility study for the rebirth of the historic Kipushi zinc-copper-silver-germanium mine

The findings of an independent, pre-feasibility study (PFS) for the planned redevelopment of the company’s historic, high-grade, Kipushi zinc-copper-silver-germanium mine anticipates annual production of an average of 381,000 tonnes of zinc concentrate over an 11-year initial mine life at a total cash cost of approximately US$0.48 per pound of zinc.

The PFS focuses on the initial mining of Kipushi’s Big Zinc Zone, which has an estimated 10.2 million tonnes of Measured and Indicated Mineral Resources grading 34.9% zinc. The planned return to production would establish Kipushi as the world’s highest-grade major zinc mine. Its exceptional zinc grade is more than twice as high as the Measured and Indicated Mineral Resources of the world’s next-highest-grade zinc project, according to Wood Mackenzie, a leading, international industry research and consulting group.

Independent research by Wood Mackenzie concludes that the Kipushi Project could rank among the world’s largest zinc mines.

Click here to read the December 13, 2017 news release.

World’s top 20 zinc projects, by contained zinc

Source: Wood Mackenzie

Note: All tonnes and zinc grades of the above-mentioned projects (except for Kipushi) are based on public disclosure and have been compiled by Wood Mackenzie.

Given the significant, very-high-grade zinc resource at Kipushi, which is rich in potential by-product credits including copper, silver and germanium and the ongoing exploration campaign at Kipushi, Ivanhoe and the Gécamines technical team are continuing to investigate additional downstream processing options.

The Kipushi Project is operated by Kipushi Corporation (KICO),a joint venture between Ivanhoe Mines (68%) and Gécamines (32%), the DRC’s state-owned mining company.
Highlights of the PFS, based on a long-term zinc price of US$1.10/lb, include:

  • After-tax net present value (NPV) at an 8% real discount rate of US$683 million.
  • After-tax real internal rate of return (IRR) of 35.3%.
  • After-tax project payback period of 2.2 years.
  • Pre-production capital costs, including contingency, estimated at US$337 million.
  • Existing surface and underground infrastructure allows for significantly lower capital costs than comparable greenfield development projects.
  • Life-of-mine average planned zinc concentrate production of 381,000 dry tonnes per annum, with a concentrate grade of 59% zinc, is expected to rank Kipushi, once in production, among the world’s largest zinc mines (Figure 1).
  • Life-of-mine average cash cost of US$0.48/lb of zinc is expected to rank Kipushi, once in production, in the bottom quartile of the cash cost curve for zinc producers globally (Figure 11).

The PFS was prepared by OreWin Pty. Ltd., MSA Group (Pty.) Ltd., SRK Consulting, Murray & Roberts, Golder Associates and MDM Engineering, a subsidiary of Amec Foster Wheeler. The PFS was prepared in compliance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).

Details of Mineral Resource Estimates

The Mineral Resource used in the PFS has an effective date of January 23, 2016, and was estimated using The Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Best Practice Guidelines and is reported in accordance with the 2014 CIM Definition Standards established by the Canadian Institute of Mining, Metallurgy and Petroleum. The Mineral Resource is classified into the Measured, Indicated and Inferred categories as shown below for the predominantly zinc-rich bodies and in Table 2 for the predominantly copper-rich bodies.

The Mineral Resource estimate was based on the results of 84 holes drilled at Kipushi by Ivanhoe Mines and an additional 107 historical holes drilled by Gécamines. Ivanhoe completed its drilling program for the Mineral Resource estimate in October 2015. Mineral Resource estimates were completed below the 1,150-metre-level on the Big Zinc Zone, Southern Zinc Zone, Fault Zone and Série Récurrente Zone. The Mineral Resources were categorized either as zinc-rich resources or copper-rich resources, depending on the most abundant metal. The Big Zinc and Southern Zinc zones have been tabulated using zinc cut-offs and are shown in Table 1; the Fault Zone, the Fault Zone Splay and Série Récurrente Zone have been tabulated using copper cut-offs and are shown below. For the zinc-rich zones, the Mineral Resource is reported at a base-case cut-off grade of 7.0% zinc and the copper-rich zones at a base-case cut-off grade of 1.5% copper.

Table 1. Kipushi zinc-rich Mineral Resource at 7% zinc cut-off grade, effective date of June 14, 2018.

Zone

Category

Tonnes

Zn

Cu

Pb

Ag

Co

Ge

(Millions)

%

%

%

g/t

ppm

g/t

Big Zinc

Measured

3.65

39.87

0.65

0.35

18

18

56

Indicated

7.25

34.36

0.62

1.29

19

12

53

Inferred

0.98

35.32

1.18

0.09

8

15

62

Southern Zinc Zone

Indicated

0.88

24.52

2.97

1.95

75

6

188

Inferred

0.16

24.37

1.64

1.20

38

6

61

Total

Measured

3.65

39.87

0.65

0.35

18

18

56

Indicated

8.13

33.30

0.87

1.36

25

11

68

Measured & Indicated

11.78

35.34

0.80

1.05

23

13

64

Inferred

1.14

33.77

1.24

0.24

12

14

62

Contained Metal Quantities

Zone

Category

Tonnes

Zn Pounds

Cu Pounds

Pb Pounds

Ag Ounces

Co Pounds

Ge Ounces

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

Big Zinc

Measured

3.65

3210.6

52.3

27.8

2.06

0.14

6.60

Indicated

7.25

5489.0

98.7

206.6

4.48

0.19

12.43

Inferred

0.98

764.0

25.5

1.9

0.26

0.03

1.96

Southern Zinc Zone

Indicated

0.88

476.5

57.6

37.8

2.11

0.01

5.34

Inferred

0.16

86.7

5.8

4.3

0.20

0.00

0.32

Total

Measured

3.65

3210.6

52.3

27.8

2.06

0.14

6.60

Indicated

8.13

5965.5

156.4

244.4

6.59

0.20

17.77

Measured & Indicated

11.78

9176.0

208.6

272.2

8.65

0.34

24.36

Inferred

1.14

850.7

31.3

6.2

0.46

0.04

2.28

Notes:

  1. All tabulated data has been rounded and as a result minor computational errors may occur.
  2. Mineral Resources which are not Mineral Reserves have no demonstrated economic viability.
  3. The Mineral Resource is reported as the total in-situ Mineral Resource.
  4. Metal quantities are reported in multiples of Troy Ounces or Avoirdupois Pounds.
  5. The cut-off grade calculation was based on the following assumptions: zinc price of US$1.0/lb, mining cost of US$50/tonne, processing cost of US$10/tonne, G&A and holding cost of US$10/tonne, transport of 55% zinc concentrate at US$210/tonne, 90% zinc recovery and 85% payable zinc.

Table 2. Kipushi copper-rich Mineral Resource at 1.5% copper cut-off grade, effective date of June 14, 2018.

Zone

Category

Tonnes

Cu

Zn

Pb

Ag

Co

Ge

(Millions)

%

%

%

g/t

ppm

g/t

Fault Zone

Measured

0.14

2.74

1.52

0.04

16

77

21

Indicated

1.22

4.11

3.32

0.09

21

96

30

Inferred

0.20

3.11

2.58

0.07

18

43

23

Série Récurrenté

Indicated

0.93

4.14

2.43

0.02

23

50

4

Inferred

0.03

1.81

0.06

0.00

8

52

0.3

Offset Zone

Inferred

0.21

4.91

19.84

0.01

21

107

93

Total

Measured

0.14

2.74

1.52

0.04

16

77

21

Indicated

2.15

4.12

2.94

0.06

22

76

19

Measured & Indicated

2.29

4.03

2.85

0.06

21

76

19

Inferred

0.44

3.89

10.77

0.04

19

75

55

Contained Metal Quantities

Zone

Category

Tonnes

Cu Pounds

Zn Pounds

Pb Pounds

Ag Ounces

Co Pounds

Ge Ounces

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

(Millions)

Fault Zone

Measured

0.14

8.5

4.7

0.1

0.07

0.02

0.09

Indicated

1.22

110.8

89.7

2.5

0.82

0.26

1.19

Inferred

0.20

13.4

11.1

0.3

0.12

0.02

0.14

Série Récurrenté

Indicated

0.93

84.6

49.8

0.5

0.69

0.10

0.12

Inferred

0.03

1.3

0.04

0.0

0.01

0.00

0.00

Offset Zone

Inferred

0.21

23.2

93.7

0.1

0.14

0.05

0.64

Total

Measured

0.14

8.5

4.7

0.1

0.07

0.02

0.09

Indicated

2.15

195.4

139.4

3.0

1.51

0.36

1.31

Measured & Indicated

2.29

204.0

144.2

3.1

1.58

0.39

1.40

Inferred

0.44

37.9

104.9

0.4

0.27

0.07

0.78

Notes:

  1. All tabulated data has been rounded and as a result minor computational errors may occur.
  2. Mineral Resources which are not Mineral Reserves have no demonstrated economic viability.
  3. The Mineral Resource is reported as the total in-situ Mineral Resource.
  4. Metal quantities are reported in multiples of Troy Ounces or Avoirdupois Pounds.
  5. The cut-off grade calculation was based on the following assumptions: copper price of US$3.0/lb, mining cost of US$50/tonne, processing cost of US$10/tonne, G&A and holding cost of US$10/tonne, 80% copper recovery and 96% payable copper.

Exploration drilling conducted by Ivanhoe Mines in 2015 sucessfully confirmed that both the Big Zinc Zone and Fault Zone remain open at depth and to the south. Additional high-grade copper-zinc-germanium mineralization also was discovered in the Fault Zone and in the Fault Zone Splay in the immediate footwall of the Fault Zone.

Initial Mineral Reserve estimate for the Kipushi 2017 PFS

The Kipushi 2017 PFS Mineral Reserve has been estimated by Qualified Person Bernie Peters, Technical Director – Mining, OreWin Pty. Ltd., using the 2014 CIM Definition Standards. The Mineral Reserve is based on the January 2016 Mineral Resource. The effective date of the Mineral Reserve statement is December 5, 2017.

Kipushi 2017 PFS Mineral Reserve Statement


Category

Tonnage
(Mt)

Zinc
(%)

Zinc
(Contained kt)

Proven Mineral Reserve

3.10

35.41

1,098

Probable Mineral Reserve

5.48

30.29

1,660

Total Mineral Reserve

8.58

32.14

2,758

Notes:

  1. Effective date of the Mineral Reserves is 12 December 2017.
  2. Net Smelter Return (NSR) is used to define the Mineral Reserve cut-offs, therefore cut-off is denominated in US$/t. By definition the cut-off is the point at which the costs are equal to the NSR. An elevated cut-off grade of US$135/t NSR (14.03% Zn) was used to define the mining shapes. The marginal cut-off grade has been calculated to be US$51/t NSR (3.43% Zn).
  3. Mineral Reserves are based on a zinc price of US$1.01/b Zn and a treatment charge of US$200/t concentrate.
  4. Economic analysis to demonstrate the Kipushi 2017 PFS Mineral Reserve used a zinc price of US$1.10/lb Zn and a treatment charge of US$170/t concentrate.
  5. Only Measured Mineral Resources were used to report Proven Mineral Reserves and only Indicated Mineral Resources were used to report Probable Mineral Reserves.
  6. Mineral Reserves reported above were not additive to the Mineral Resources and are quoted on a 100% project basis.
  7. Totals may not match due to rounding.

Upgrading of existing underground infrastructure nearing completion

KICO has completed the refurbishment of a significant amount of underground infrastructure at the Kipushi Project, including a series of vertical mine shafts, with associated head frames, to various depths, as well as underground mine excavations. A series of crosscuts and ventilation infrastructure still are in working condition. The underground infrastructure also includes a series of pumps to manage the influx of water into the mine. A schematic layout of the existing development is shown below.

The main production shaft for the Kipushi Mine, Shaft 5 (labelled as P5 in the schematic section below), is eight metres in diameter and 1,240 metres deep, and has been upgraded and re-commissioned. The main personnel and material winder has been upgraded and modernized to meet global industry standards and safety criteria. The Shaft 5 rock-hoisting winder, which had an annual hoisting capacity of 1.8 million tonnes, also has been upgraded and is fully operational. The primary rock crusher was installed in the 1,150-metre level crusher chamber in May 2018.

Underground upgrading work is continuing on the rock load-out facilities at the bottom of Shaft 5 and the main haulage way on the 1,150-metre level, between the Big Zinc access decline and Shaft 5.

Schematic section of Kipushi Mine

MOU signed with leading mining contractor Byrnecut

Earlier this month, KICO signed a memorandum of understanding (MOU) with Byrnecut Offshore Proprietary Limited (Byrnecut), of Perth, Australia. The MOU relates to the potential engagement of Byrnecut to provide underground mining services at Kipushi, including cost estimation, contractor management, operational readiness and operational services.

The planned primary mining method for the Big Zinc Deposit in the PFS is sublevel long-hole, open stoping, with cemented backfill. The crown pillars are expected to be mined once adjacent stopes are backfilled using a pillar-retreat mining method. The Big Zinc Deposit is expected to be accessed via the existing decline and without any significant new development. The main levels are planned to be at 60-metre vertical intervals, with sublevels at 30-metre intervals.

On October 3, 2017: Ivanhoe announced highly encouraging results from the ongoing Know for Sure initiative sponsored by Ivanhoe and Zijin Mining to help control malaria in the DRC

Click here to read the full announcement

Projects

  • Platreef Project
  • Kamoa-Kakula Project
  • Kipushi Project
  • Photo Gallery
  • Qualified Persons

    Qualified Persons under National Instrument 43-101 have reviewed and approved all of the scientific and technical information contained in the Project sections on this website. Ivanhoe Mines has published independent NI 43-101 technical reports for each of the Kamoa-Kakula, Platreef and Kipushi projects, which are available on this website under Investors > Technical Reports and also at www.sedar.com. These technical reports include relevant information regarding the effective date and the assumptions, parameters and methods of the mineral resource estimates and economic studies for the Kamoa-Kakula, Platreef and Kipushi projects in these Project sections.

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