July 31, 2017: Ivanhoe Mines releases positive results of an independent definitive feasibility study for the planned first phase of its Platreef platinum-group elements, nickel, copper and gold mine in South Africa
The Platreef Project, which contains the Flatreef Deposit, is a Tier One discovery by Ivanhoe Mines’ geologists on the Northern Limb of South Africa’s Bushveld Igneous Complex, the world’s premier platinum producing region.
Ivanhoe Mines plans to develop the Platreef Mine in three phases: 1) An initial rate of four Mtpa to establish an operating platform to support future expansions; 2) a doubling of production to eight Mtpa; and 3) expansion to a steady-state 12 Mtpa.
The independent Platreef DFS covers the first phase of development that would include construction of a state-of-the-art underground mine, concentrator and other associated infrastructure to support initial concentrate production by early 2022. As Phase 1 is being developed and commissioned, there would be opportunities to refine the timing and scope of subsequent phases of expanded production.
“The completion of the definitive feasibility study for the first phase of production is another key milestone in Ivanhoe’s planned transformation of the Platreef Discovery into one of the pre-eminent South African producers of platinum-group metals,” said Mr. Friedland.
“Platreef is a massive, high-grade, long-life and Tier One deposit that will produce a suite of vital metals, many of which are essential to sustain our urbanizing planet. The nickel and copper by-products are essential in the electric car revolution and the platinum and palladium are equally vital for hydrogen fuel cell technology and catalytic converters to clean the air.”
“We now have a clear and defined path forward to initial production and subsequent phases of development. We are confident that the Platreef Project will benefit all of our stakeholders, including the 20 local communities that are our equity partners, for generations to come,” Mr. Friedland added.
Mr. Friedland said the results reported in the new study demonstrate Platreef’s robust economics, which first were highlighted in the March 2014 preliminary economic assessment and further reinforced by the January 2015 pre-feasibility study.
“Now this definitive study has confirmed the technical viability of what is projected to be the world’s lowest-cost, and in time expected to be the largest, single primary producer of platinum-group metals.
Key features of the Platreef DFS include:
- Indicated Mineral Resources contain an estimated 41.9 million ounces of platinum, palladium, rhodium and gold with an additional 52.8 million ounces of platinum, palladium, rhodium and gold in Inferred Resources.
- Enhanced Mineral Reserve containing 17.6 million ounces of platinum, palladium, rhodium and gold – an increase of 13% – following stope optimization and mine sequencing work.
- Development of a large, safe, mechanized, underground mine with an initial four Mtpa concentrator and associated infrastructure.
- Planned initial average annual production rate of 476,000 ounces (oz.) of platinum, palladium, rhodium and gold (3PE+Au), plus 21 million pounds of nickel and 13 million pounds of copper.
- Estimated pre-production capital requirement of approximately US$1.5 billion, at a ZAR:USD exchange rate of 13 to 1.
- Platreef would rank at the bottom of the cash-cost curve, at an estimated US$351 per ounce of 3PE+Au produced, net of by-products and including sustaining capital costs, and US$326 per ounce before sustaining capital costs.
- After-tax Net Present Value (NPV) of US$916 million, at an 8% discount rate.
- After-tax Internal Rate of Return (IRR) of 14.2%. The actual return to project equity owners is expected to be higher as a result of the significant amount of project financing which is being raised.
Ivanhoe Mines indirectly owns 64% of the Platreef Project through its subsidiary, Ivanplats, and is directing all mine development work. The South African beneficiaries of the approved broad-based, black economic empowerment structure have a 26% stake in the Platreef Project. The remaining 10% is owned by a Japanese consortium of ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation.
The Platreef DFS was prepared for Ivanhoe Mines by principal consultant DRA Global, with economic analysis led by OreWin, and specialized sub-consultants including Amec Foster Wheeler, Stantec Consulting, Murray & Roberts Cementation, SRK Consulting, Golder Associates and Digby Wells Environmental. The full technical report will be filed on SEDAR at www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com within 45 days of the issuance of this news release.
Table 1.0: Platreef DFS results.
|Item||Units||Total / Average Life of Mine|
|Mined and processed|
|Key financial results|
Life of mine
Mine-site cash cost
Total cash cost after credits
All-in cash cost after credits
Site operating costs
Project payback period
US$ per ounce 3PE+Au
US$ per ounce 3PE+Au
US$ per ounce 3PE+Au
US$ per tonne milled
- The economic analysis is based on Probable Mineral Reserves only.
- 3PE+Au = platinum, palladium, rhodium and gold.
- Metal prices used in the Mineral Reserve estimate are as follows: US$1,600/oz platinum, US$815/oz palladium, US$1,300/oz gold, US$1,500/oz rhodium, US$8.90/lb nickel and US$3.00/lb copper.
- A declining Net Smelter Return (NSR) cut-off of US$155/tonne–$80/tonne was used in the Mineral Reserve estimate.
- Metal price assumptions used for the DFS economic analysis are as follows: US$1,250/oz platinum, US$825/oz palladium, US$1,300/oz gold, US$1,000/oz rhodium, US$7.60/lb nickel and US$3.00/lb copper.
- All-in cash costs include sustaining capital costs.