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 May 17, 2017, Ivanhoe Mines announced that the company had completed an independently verified, updated Mineral Resource estimate for the extremely-high-grade Kakula Discovery on the tier one Kamoa-Kakula Copper Project.

The new Mineral Resource estimate covers a strike length of approximately 7.7 kilometres along the evastern section of the Kakula Discovery. It boosts the tonnage of Kakula’s estimated Indicated Resources by 75% compared to the October 2016 resource estimate – which covered a strike length of 4.1 kilometres.

Kakula’s Indicated Mineral Resources increased by 50 million tonnes, to the current total of 116 million tonnes at 6.09% copper, at a 3% cut-off grade. This compares to 66 million tonnes at 6.59% copper estimated in October 2016, also at a 3% cut-off grade.

Kakula’s new estimated Inferred Mineral Resources are an additional 12 million tonnes at 4.45% copper, at a 3% cut-off.

Highlights include:

  • Indicated Mineral Resources total 349 million tonnes at a grade of 3.23% copper, containing 24.9 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Indicated Mineral Resources total 210 million tonnes at a 4.41% copper grade, containing 20.4 billion pounds of copper. At a higher cut-off of 3% copper, Indicated Mineral Resources total 116 million tonnes at a grade of 6.09% copper, containing 15.6 billion pounds of copper.
  • Inferred Mineral Resources total 59 million tonnes at a grade of 2.26% copper, containing 3.0 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Inferred Mineral Resources total 27 million tonnes at a 3.19% copper grade, containing 1.9 billion pounds of copper. At a higher cut-off of 3% copper, Inferred Mineral Resources total 12 million tonnes at a grade of 4.45% copper, containing 1.1 billion pounds of copper.
  • The average true thickness of the selective mineralized zone (SMZ) at a 1% cut-off is 12.0 metres in the Indicated Mineral Resources area and 6.4 metres in the Inferred Mineral Resources area. At a higher 3% cut-off, the average true thickness of the SMZ is 5.3 metres in the Indicated Mineral Resources area and 3.9 metres in the Inferred Mineral Resources area.

The Kakula Mineral Resources are defined within an area covering a total area of 12.8 square kilometres at a 1% copper cut-off. The total areal extent of Indicated Mineral Resources is 9.8 square kilometres at a 1% copper cut-off and the areal extent of the Inferred Mineral Resources is 3.0 square kilometres at a 1% cut-off. The average dip of the mineralized zone in the Indicated Resources area is 15 degrees, while the average dip is 18 degrees in the Inferred Mineral Resources area.

The Kakula Discovery remains open for significant expansion along trend to the west and the southeast, while the remainder of the southern parts of the Kamoa-Kakula mining licence area remains virtually untested (see figures 2 and 3). Twelve rigs now are drilling in the Kakula Discovery Area and more than 25,000 metres have been drilled at Kakula since the start of the year.

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 tables 1, 2 and 3.

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.

Table 2. 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

Table 3. 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 

Table 4. 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

Table 5. 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

Planned exploration drilling over the Kakula exploration area for Q1 2017 and Q2 to Q4 2017 showing current and future target areas and locations of recent significant intersections.

Kamoa-Kakula mining licence showing copper grade of Indicated and Inferred Resources at a 2% copper cut-off, untested areas and current target areas.

Section along the axis on the Kakula Deposit on the section A - A’- A” - B showing drilling completed to date and composites at a 3.0% copper cut-off.

Strip logs of holes DD1011 and 1017, showing typical, Kakula-style mineralization.

Click here to read the August 11, 2016 news release that details the Kakula Discovery Area.

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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