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.

September 6, 2017: Ivanhoe advances discussions to launch a new era of production at the historic Kipushi zinc-copper-silver-germanium mine

Key steps toward the start of a new era of mining at Kipushi

Excellent progress has been made by KICO in modernizing the Kipushi Mine’s underground infrastructure as part of preparations for the mine to resume commercial production. With the underground upgrading program nearing completion, KICO’s focus now will shift to modernizing and upgrading Kipushi’s surface infrastructure to handle and process Kipushi’s high-grade zinc and copper resources.

The current mine redevelopment plan, as outlined in the May 2016 independent, preliminary economic assessment (PEA), has a two-year construction period with quick ramp-up to a projected, steady-state, annual production of 530,000 tonnes of zinc concentrate.

A pre-feasibility study (PFS) is underway to refine the findings of the PEA, and to optimize the mine’s redevelopment schedule, life-of-mine operating costs and initial capital costs required to return the mine to production, taking into consideration the significant capital already invested to date on critical rehabilitation work. Ivanhoe expects to complete the PFS before the end of this year.

Restoration of production will make Kipushi the world’s highest-grade major zinc mine

The PFS will focus on the mining of Kipushi’s Big Zinc Deposit, which has an estimated 10.2 million tonnes of Measured and Indicated Mineral Resources grading 34.9% zinc. This exceptional grade is more than twice as high as the Measured and Indicated Mineral Resources of the world’s next-highest-grade, major zinc project, according to Wood Mackenzie, a leading, international industry research and consulting group.

In addition to the Big Zinc Deposit, Kipushi has several copper-rich zones that also contain silver, germanium and zinc. Measured and Indicated Mineral Resources contained in the copper-rich Série Récurrente Zone, Fault Zone, and Fault Zone Splay total 1.63 million tonnes at grades of 4.01% copper, 2.87% zinc and 22 g/t silver, at a 1.5% copper cut-off, containing 144 million pounds of copper. Inferred Mineral Resources in these zones total an additional 1.64 million tonnes at grades of 3.30% copper, 6.97% zinc and 19 g/t silver.

World’s 10 largest zinc mines, ranked by forecasted production by 2019.

Excellent progress made on mine rehabilitation work

The main production shaft for the Kipushi Mine, Shaft 5, 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, is being upgraded and is expected to be fully operational early next year.

Underground upgrading work is continuing on the crusher and 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. This work is expected to be completed before the end of the first quarter of 2018.

The planned primary mining method for the Big Zinc Deposit in the PEA and 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.

Optimized zinc processing methodology for the PFS

Based on recent, additional metallurgical test work and trade-off studies, Ivanhoe has revised the planned process-plant design for the PFS. The optimized plant utilizes dense media separation (DMS), followed by milling and a flotation recovery plant. The addition of milling and a flotation recovery plant improved the combination of concentrate grades and recoveries from what the recent metallurgical test work determined was achievable from a DMS plant only. DMS is a simple density-concentration technique that preliminary test work has shown yields positive results for the Kipushi material, which has a sufficient density differential between the waste rock (predominantly dolomite) and mineralization (sphalerite). Furthermore, the addition of a milling and flotation circuit to DMS is expected to improve the project economics as a result of higher concentrate grades.

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

Drilling program underway to expand and upgrade Inferred Resources

A 41-hole, 6,500-metre underground drilling program at Kipushi is nearing completion. The program includes six metallurgical holes and 35 resource drill holes in the Fault Zone, the Nord Riche and Southern Zinc zones to expand and upgrade Inferred Resources to Indicated Resources. Ivanhoe expects to issue an updated Mineral Resource estimate for Kipushi later this year once all the assays have been received from the drilling program.

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

Germanium is a strategic metal that is a key component of fibre-optic systems, infrared optics, high-efficiency solar cell applications, and light-emitting diodes. The current spot price of germanium is approximately US$1,650 a kilogram.

Initiation of cooperation agreement with the Congolese national railway

Ivanhoe has initiated a new cooperation agreement with SNCC to rehabilitate the inactive spur line that connects the Kipushi Mine to the Congolese national railway and to the overall north-south rail corridor that links the DRC Copperbelt to the seaport at Durban, South Africa.

May 2016 PEA findings support Kipushi’s highly attractive economics, particularly in the context of current zinc prices

(All monetary figures in this news release are US dollars (US$), unless otherwise stated.)

The independent PEA for the planned redevelopment of the Kipushi Mine was published in May 2016 and assumed a base case, long-term zinc price of $2,227 per tonne ($1.01 per pound). The report described the redevelopment of Kipushi as an underground mine producing an average of 530,000 tonnes of zinc concentrate annually over a 10-year mine life at a total cash cost, including copper by-product credits, of approximately $0.54 per pound of zinc.

PEA highlights included:

  • At a long-term zinc price of $2,227 per tonne ($1.01 per pound), after-tax net present value (NPV) at an 8% real discount rate is $533 million.
  • At a long-term zinc price of $2,227 per tonne, after-tax real internal rate of return (IRR) is 30.9%.
  • At a long-term zinc price of $2,227 per tonne, after-tax project payback period is 2.2 years.
  • Leveraging existing surface and underground infrastructure significantly lowers the redevelopment capital compared to a greenfield development project, as well as the time required to reinstate production.
  • Life-of-mine average cash cost of $0.54 per pound of zinc is expected to rank Kipushi, once in production, in the lower quartile of the cash-cost curve for zinc producers globally.

If the PEA assumed a long-term zinc price of $3,000 per tonne (or $1.36 per pound, which approximates the current spot price of zinc), the after-tax NPV8%would be $1.27 billion.

  • Similarly, based on the information in the PEA and assuming a long-term zinc price of $3,000 per tonne, after-tax IRR would be 53.3% and after-tax project payback period would be 1.1 years.
  • In addition, the PEA used a base-case zinc treatment charge of $200 per tonne, which is substantially higher than rates observed in the current zinc concentrate market.

After-tax NPV8% sensitivity to zinc prices and discount rates ($ millions).

Discount rate

Zinc price ($/tonne)

$2,000$2,227 $2,500$2,750$3,000
Undiscounted$719$1,076 $1,507$1,901$2,295
5%$436$696 $1,008$1,293$1,577
8%$315$533 $794$1,032$1,269
10%$249$444 $677$889$1,101
12%$193$368 $577$767$957

The PEA for Kipushi’s redevelopment was prepared by OreWin Pty. Ltd., of Adelaide, Australia, and the MSA Group (Pty.) Ltd., of Johannesburg, South Africa, in compliance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).

January 27, 2016: Ivanhoe Mines reports Independent Mineral Resource estimate for Kipushi

Highlights of this initial estimate, prepared by the MSA Group, of Johannesburg, South Africa, in compliance with CIM definition standards, are:

  • Measured and Indicated Mineral Resources in the Big Zinc Zone of 10.2 million tonnes at grades of 34.89% zinc, 0.65% copper, 19 grams per tonne (g/t) silver and 51 g/t germanium, at a 7% zinc cut-off, containing an estimated 7.8 billion pounds of zinc.
  • The zinc grade of Kipushi’s Measured and Indicated Mineral Resources in the Big Zinc Zone is more than twice as high as the world’s next-highest-grade zinc project, independently ranked by Wood Mackenzie, an international industry research and consulting group, based on contained zinc.
  • Zinc-rich Inferred Mineral Resources total an additional 1.9 million tonnes at grades of 28.24% zinc, 1.18% copper, 10 g/t silver and 53 g/t germanium. The Inferred Mineral Resources are contained partially in the Big Zinc Zone and partially in the Southern Zinc Zone.
  • Kipushi’s copper-rich Measured and Indicated Mineral Resources contained in the adjacent Fault Zone, Fault Zone Splay and Série Récurrente Zone total an additional 1.63 million tonnes at grades of 4.01% copper, 2.87% zinc and 22 g/t silver, at a 1.5% copper cut-off, containing 144 million pounds of copper.Copper-rich Inferred Mineral Resources in these zones total an additional 1.64 million tonnes at grades of 3.30% copper, 6.97% zinc and 19 g/t silver.
  • Ivanhoe’s exploration program has demonstrated that zinc and copper mineralization of the Kipushi system remains open laterally and at depth. Results recently received from hole KPU081, drilled on section line 6S, confirm high-grade copper-zinc mineralization at depth. KPU081 intersected 60.5 metres (21.7 metres true thickness) grading 2.6% copper, 36.2% zinc, 19 g/t silver and 204 g/t germanium to a depth of 1,763 metres. Included in this interval was an intersection from 580.9 metres to 591.3 metres (3.8 metres true thickness) grading 56.3% zinc, 0.5% copper, 12 g/t silver and 397 g/t germanium.

Click here to view Kipushi Project - Mineral Resource Estimate NI 43-101 Technical Report, January 2016

Table 1: Kipushi Zinc-Rich Mineral Resource at 7% Zn Cut-Off Grade, 23 January 2016

Zone

Category

Tonnes

Zn

Cu

Pb

Ag

Co

Ge

(Millions)

%

%

%

g/t

ppm

g/t

Big Zinc

Measured

3.59

38.39

0.67

0.36

18

17

54

Indicated

6.60

32.99

0.63

1.29

20

14

50

Inferred

0.98

36.96

0.79

0.14

7

16

62

Southern Zinc Zone

Indicated

0.00

-

-

-

-

-

-

Inferred

0.89

18.70

1.61

1.70

13

15

43

Total

Measured

3.59

38.39

0.67

0.36

18

17

54

Indicated

6.60

32.99

0.63

1.29

20

14

50

Measured & Indicated

10.18

34.89

0.65

0.96

19

15

51

Inferred

1.87

28.24

1.18

0.88

10

15

53

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

3.59

3035.8

53.1

28.7

2.08

0.13

6.18

Indicated

6.60

4797.4

91.9

187.7

4.15

0.20

10.54

Inferred

0.98

797.2

17.1

3.0

0.23

0.03

1.96

Southern Zinc Zone

Indicated

0.00

0.0

0.0

0.0

0.00

0.00

0.00

Inferred

0.89

368.6

31.8

33.5

0.38

0.03

1.23

Total

Measured

3.59

3035.8

53.1

28.7

2.08

0.13

6.18

Indicated

6.60

4797.4

91.9

187.7

4.15

0.20

10.54

Measured & Indicated

10.18

7833.3

144.9

216.4

6.22

0.33

16.71

Inferred

1.87

1168.7

49.6

36.8

0.61

0.06

3.21

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 1.02 USD/lb, mining cost of 50 USD/tonne, processing cost of 10 USD/tonne, G&A and holding cost of 10 USD/tonne, transport of 55% Zn concentrate at 375 USD/tonne, 90% zinc recovery and 85% payable zinc.

For additional resource tables click here to read the Kipushi Project - Preliminary Economic Assessment NI 43-101 Technical Report, May 2016

Main underground pumping station re-established at 1,210-metre level

In December 2015, Ivanhoe achieved a major milestone in its upgrading of Kipushi’s underground infrastructure when the water level in Shaft 5 was pumped below the mine’s main pumping station situated at 1,210 metres underground.

The dewatering program, implemented by Ivanhoe in late 2011, has been successful and the water levels are now being maintained below Kipushi’s main pumping station on the 1,210-metre level. Three new, high-capacity Grifo pumps have been purchased and will be installed at the main pumping station alongside the five existing high-capacity Sulzer pumps that are being refurbished. The expected cost of the upgrade and refurbishment of the main pumping station is expected to be approximately US$3.8 million. The new Grifo pumps are expected to be commissioned in the third quarter of this year and, in conjunction with the refurbished Sulzer pumps, will provide sufficient pumping capacity to keep the entire mine dewatered with a 100% pumping redundancy.

In November 23, Ivanhoe Mines and Fio Corporation expand innovative initiative to combat malaria in the Democratic Republic of Congo. Public and private collaboration is advancing the DRC’s fight against malaria with automated reading of diagnostic tests

Click here to read the full announcement

Subscribe to our Email List