Kipushi Project

Kipushi employees fine-tuning a new, underground mining vehicle in preparation for the resumption of operations at the historic, high-grade zinc and copper mine.

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.

The main pump undergoing testing at Kipushi's 1,200-metre-level.

September 12, 2022: Ivanhoe and Gécamines host ceremony commemorating the start of construction activities at the historic Kipushi Mine

Kipushi Corporation SA recently hosted a breaking-ground ceremony to commemorate the start of construction of the processing plant at the historic Kipushi mine. In addition, Ivanhoe signed a memorandum of understanding (MOU) with the provincial government of Haut-Katanga to study options for upgrading the DRC-Zambia border crossing in the town of Kipushi for commercial imports and exports.

The ground-breaking ceremony was attended by His Excellency Jean-Michel Sama Lukonde, Prime Minister of the Democratic Republic of the Congo, Her Excellency Adèle Kayinda Mahina, Minister of State and Minister of Portfolio, Her Excellency Antoinette N’Samba Kalambayi, Minister of Mines, members of the provincial government of the Haut-Katanga Province and other national, provincial and local dignitaries, in addition to representatives from Ivanhoe, Gécamines and the town of Kipushi.

Watch a short video of the breaking-ground ceremony:

March 4,2022: Ivanhoe Mines files a new NI 43-101 technical report for the ultra-high-grade Kipushi Mine in the DRC

Ivanhoe Mines filed a new National Instrument 43-101 (NI 43-101) technical report covering the planned resumption of commercial production at the Kipushi Mine in the Democratic Republic of Congo.

The updated NI 43-101 technical report includes an independent feasibility study (Kipushi 2022 Feasibility Study) for the redevelopment of the Kipushi Mine and the mining of Kipushi’s zinc-rich Big Zinc and Southern Zinc zones, with an estimated 11.8 million tonnes of Measured and Indicated Mineral Resources grading 35.3% zinc.

Download the technical Report:

 Ivanhoe Mines files a new NI 43-101 technical report for the ultra-high-grade Kipushi Mine in the DRC

February 14, 2022: Ivanhoe Mines and Gécamines sign new agreement to return the ultra-high-grade Kipushi Mine in the DRC to production

The new agreement sets out the commercial terms that will form the basis of a new Kipushi joint-venture agreement establishing a robust framework for the mutually beneficial operation of the Kipushi Mine for years to come and is subject to execution of definitive documentation. Kipushi will be the world's highest-grade major zinc mine, with average grade of 36.4% zinc over the first five years of production.

Watch a new video showcasing Kipushi’s planned transformation into the world's highest-grade major zinc mine:

Kipushi 2022 Feasibility Study from Ivanhoe Mines on Vimeo.

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, 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.

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.

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

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.

Schematic section of Kipushi Mine

The Kipushi Project in the DRC positively impacts thousands of people through community efforts. Watch the video below to learn more about the community initiatives.