Ivanhoe Mines announces a 50% increase in Indicated Mineral Resources, at a 3% cut-off grade, at the ultra-high-grade Kakula Copper Discovery in D.R. Congo. Kakula now contains Indicated Mineral Resources of 174 million
February 26, 2018
Ivanhoe Mines announces a 50% increase in Indicated Mineral Resources, at a 3% cut-off grade, at the ultra-high-grade Kakula Copper Discovery in D.R. Congo.
Kakula now contains Indicated Mineral Resources of 174 million tonnes at 5.62% copper, plus additional Inferred Mineral Resources of 9 million tonnes at 3.66% copper, at a 3% cut-off.
At a 1% cut-off, Kakula’s Indicated Mineral Resources have increased by 58%, now totalling 585 million tonnes at 2.92% copper.
Kakula’s strike length now extends to 13.3 kilometres and remains open for significant expansion.
New Mineral Resource estimate establishes the Kamoa-Kakula Project as the world’s fourth-largest copper discovery. Project’s copper grades are the highest, by a wide margin, of the world’s top 10 copper deposits.
Average true thickness of Kakula’s selective mineralized zone is 10.1 metres in the Indicated Mineral Resources area, at a 1% cut-off.
Kakula’s new estimate boosts combined Kamoa-Kakula Indicated Mineral Resources to 1.03 billion tonnes at 3.17% copper, containing approximately 72 billion pounds of copper, plus an additional 183 million tonnes of Inferred Mineral Resources at 2.31% copper, at a 1.5% cut-off.
Consultation between industry participants and government set to begin to review the DRC 2002 Mining Code.
Geophysical surveys underway to help identify new exploration targets on the highly prospective Kamoa-Kakula mining licence.
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Robert Friedland, Executive
Chairman of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), and Lars-Eric Johansson, Chief Executive Officer, announced today that the company has completed an independently verified, updated Mineral Resource estimate for the ultra-high-grade Kakula Discovery on the Kamoa-Kakula Copper Project, near the mining centre of Kolwezi in the Democratic Republic of Congo.
The tier-one Kamoa-Kakula Project is a joint venture between Ivanhoe Mines, Zijin Mining and the government of the Democratic Republic of Congo (DRC).
The updated Kakula Mineral Resource estimate, prepared under the direction of independent consultant Amec Foster Wheeler, covers a mineralized strike length of 13.3 kilometres. For the first time, the updated estimate incorporates Mineral Resources contained in the Kakula West Discovery area and the saddle area between the main Kakula Discovery area and Kakula West (see Figure 1).
The new estimate boosts the total tonnage of Kakula’s Indicated Mineral Resources by 50%, at a 3% copper cut-off, compared to the previous Kakula resource estimate issued in May 2017 that covered a strike length of 7.7 kilometres.
Kakula’s new Indicated Mineral Resources at a 3% cut-off grade have increased by 58 million tonnes and currently total 174 million tonnes at a grade of 5.62% copper. This compares to the May 2017 estimate of 116 million tonnes at 6.09% copper, at the same cut-off grade. Estimated Inferred Mineral Resources now total an additional nine million tonnes at a grade of 3.66% copper, at a 3% cut-off.
At a 1% copper cut-off, Kakula’s Indicated Mineral Resources have increased by 58%, to now total 585 million tonnes at 2.92% copper.
The Kakula high-grade mineralized trend remains open in multiple directions. Mr. Friedland said Ivanhoe expects that ongoing in-fill and step-out drilling will yield significant expansions and further upgrades to the current resources.
“Kakula is the most remarkable mineral discovery we have seen during our 35-plus years in the exploration industry. The new, independently-verified resource estimate now places Kamoa-Kakula ahead of Indonesia’s renowned Grasberg Deposit as the world’s fourth-largest copper discovery on the planet in terms of contained copper. And it still is growing.
“The exceptionally high copper grades, thicknesses and continuity of the mineralization at Kakula distinguish this discovery from anything else in the Central African Copperbelt,” Mr. Friedland added.
“Based on the findings of the independent preliminary economic assessment completed in November of last year, the resources we’ve discovered should allow us to build a world-scale, highly-mechanized, underground copper mine with an initial capital cost expected to be far lower than other operations of this size.
“With this initial Mineral Resource estimate at Kakula West, we can begin to evaluate technical and infrastructure options to expeditiously develop the zones of thick, high- grade, bottom-loaded chalcocite in this latest discovery area.”
Mr. Friedland said that a development scenario using a mining rate of six million tonnes a year and a copper cut-off grade of 3% indicates that Kakula already has enough Indicated Mineral Resources to mine at an average grade of between 5.5% and 6% copper for approximately 30 years.
“If we lower the copper cut-off grade to 1%, which is higher than the mining grades at most of the world’s major copper mines, we could be mining almost 3% copper at Kakula for approximately 100 years,” Mr. Friedland said.
“Importantly, the western trend of Kakula’s high-grade mineralized core appears to be open to the southwest, suggesting that potential extensions of the Kakula West Discovery could remain within the Kamoa-Kakula mining licence for a considerable distance. The ongoing gravity and geophysical seismic surveys will provide our geological team with additional data to better assess the direction and extent of Kakula’s high-grade mineralized zone.
“The unparalleled strength and continuity of the Kakula mineralized trend also bodes well for the potential for exploration success on Ivanhoe’s 100%-owned Western Foreland licences, to the west of Kamoa-Kakula. Given the accumulation of in-depth, proprietary geological insights gained by Ivanhoe's geological team into the features controlling the high-grade copper mineralization during almost two decades of exploring in the region, we are highly confident of further exploration successes in 2018 and beyond.”
The Kakula Discovery is approximately 10 kilometres southwest of Kamoa’s initial Kansoko Mine development (see figures 1 & 2). Ivanhoe and Zijin have been conducting an aggressive drilling program totalling more than 181,500 metres at the Kakula Discovery since April 2016. The program is expected to continue through 2018.
The February 23, 2018 Kakula Mineral Resource estimate was prepared by George Gilchrist, Ivanhoe Mines’ Mineral Resources Manager, under the direction of Dr. Harry Parker and Gordon Seibel, both RM SME, of Amec Foster Wheeler, of Reno, Nevada, and is reported 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. A 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.
Highlights include:
- Indicated Mineral Resources total 585 million tonnes at a grade of 2.92% copper,
containing 37.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut- off, Indicated Mineral Resources total 330 million tonnes at a 4.07% copper grade, containing 29.6 billion pounds of copper. At a higher cut-off of 3% copper, Indicated Mineral Resources total 174 million tonnes at a grade of 5.62% copper, containing 21.5 billion pounds of copper.
- Inferred Mineral Resources total 113 million tonnes at a grade of 1.90% copper,
containing 4.7 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut- off, Inferred Mineral Resources total 44 million tonnes at a 2.59% copper grade, containing 2.5 billion pounds of copper. At a higher cut-off of 3% copper, Inferred Mineral Resources total 9 million tonnes at a grade of 3.66% copper, containing 0.7 billion pounds of copper.
- The average true thickness of the selective mineralized zone (SMZ) at a 1% copper
cut-off is 10.1 metres in the Indicated Mineral Resources area and 6.7 metres in the Inferred Mineral Resources area. At a higher 3% copper cut-off, the average true thickness of the SMZ is 4.7 metres in the Indicated Mineral Resources area and 3.3 metres in the Inferred Mineral Resources area.
The Kakula Mineral Resources are defined within a total area of 24.9 square kilometres at a 1% copper cut-off. At the same cut-off grade, the areal extent of Indicated Mineral Resources is 19.4 square kilometres and the areal extent of the Inferred Mineral Resources is 5.5 square kilometres. Figure 6 shows the expansion of Kakula’s Indicated and Inferred Mineral Resources since May 2017.
The Kakula Discovery remains open for significant expansion in multiple directions, while the remainder of the southern parts of the Kamoa-Kakula mining licence area is virtually untested (see figures 2 and 3). Drilling by nine rigs is continuing at Kakula; more than 25,000 metres have been drilled since the beginning of this year.
DRC Mining Code update
Ivanhoe Mines recently has had constructive discussions in Kinshasa, the capital of the DRC, regarding the review of the DRC 2002 Mining Code. In conjunction with other international mining companies operating in the DRC, progress has been made toward understanding the key issues of concern to both the government and industry participants.
Ivanhoe Mines has received specific assurance that a detailed consultation process will commence in the near future with the goal of reaching a collaborative, sustainable, and stable long-term fiscal and regulatory framework that provides the foundation for the continued development of the mineral resources sector, and helps create a brighter future for all the citizens of the DRC. The organization of all major mining companies operating in the DRC, announced at the 2018 Cape Town Mining Indaba, will represent the industry during the upcoming consultation period.
Figure 1. Kamoa-Kakula mining licence, showing the Kamoa, Kakula and Kakula West Mineral Resource areas.
Figure 2. Kamoa, Kakula and Kakula West Indicated and Inferred Mineral Resource areas, with existing power and rail infrastructure.
The February 2018 Kakula Mineral Resource estimate is based on results from approximately 151,000 metres of drilling in 271 holes completed by December 31, 2017.
Indicated Resources are classified when the drill-hole spacing approximates a 400- metre grid, while Inferred Resources are classified when the drill-hole spacing approximates an 800-metre grid.
The February 2018 Kakula Mineral Resources, along with sensitivities at various cut- offs, are shown in tables 1, 2 and 3.
Table 1. Indicated and Inferred Mineral Resources at a 1% copper cut-off grade, Kakula Deposit.
| Category | Tonnage (Mt) | Area (km2) | Copper (%) | Vertical Thickness (metres) | Contained Copper (kTonnes) | Contained Copper (billion lbs) |
|---|---|---|---|---|---|---|
| Indicated | 585 | 19.4 | 2.92 | 10.8 | 17,100 | 37.7 |
| Inferred | 113 | 5.5 | 1.90 | 7.3 | 2,150 | 4.7 |
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 Registered Members of the Society for Mining, Metallurgy and Exploration (RM SME), who are the Qualified Persons for the Mineral Resource estimate. The effective date of the estimate is February 23, 2018. 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 3.0 metres. There are reasonable prospects for eventual economic extraction under assumptions of a copper price of US$3.00/lb, employment of underground, mechanized, roomand-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 $42/t. Concentrator and general and administrative (G&A) costs are assumed to be $18/t. Metallurgical recovery is assumed to average 85%. 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. Approximate drill hole spacings are 800 metres for Inferred Mineral Resources and 400 metres for Indicated Mineral resources.
5. 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.
| Category | Cut- off Grade (Cu%) | Tonnes (millions) | Area (Sq. km) | Copper Grade | True Thickness (metres) | Contained Copper (kTonnes) | Contained Copper (billion lbs) |
|---|---|---|---|---|---|---|---|
| Indicated | 7.0 | 41 | 2.2 | 8.07% | 6.3 | 3,290 | 7.3 |
| Indicated | 6.0 | 67 | 3.6 | 7.46% | 6.2 | 4,970 | 11.0 |
| Indicated | 5.0 | 98 | 5.7 | 6.82% | 5.7 | 6,690 | 14.7 |
| Indicated | 4.0 | 140 | 9.0 | 6.13% | 5.1 | 8,560 | 18.9 |
| Indicated | 3.0 | 174 | 12.3 | 5.62% | 4.7 | 9,750 | 21.5 |
| Indicated | 2.5 | 208 | 14.4 | 5.14% | 4.8 | 10,700 | 23.5 |
| Indicated | 2.0 | 330 | 16.6 | 4.07% | 6.6 | 13,400 | 29.6 |
| Indicated | 1.5 | 420 | 18.0 | 3.55% | 7.8 | 14,900 | 32.9 |
| Indicated | 1.0 | 585 | 19.4 | 2.92% | 10.1 | 17,100 | 37.7 |
The footnotes to Table 1 also apply to Table 2.
Table 3. Kakula Deposit Inferred Mineral Resources, Sensitivity Cases.
| Category | Cut- off Grade (Cu%) | Tonnes (millions) | Area (Sq. km) | Copper Grade | True Thickness (metres) | Contained Copper (ktonnes) | Contained Copper (billion lbs) |
|---|---|---|---|---|---|---|---|
| Inferred | 4.0 | 2 | 0.2 | 4.17% | 3.3 | 98 | 0.2 |
| Inferred | 3.0 | 9 | 0.8 | 3.66% | 3.3 | 325 | 0.7 |
| Inferred | 2.5 | 17 | 1.7 | 3.20% | 3.2 | 549 | 1.2 |
| Inferred | 2.0 | 44 | 3.2 | 2.59% | 4.3 | 1,140 | 2.5 |
| Inferred | 1.5 | 69 | 4.5 | 2.26% | 5.0 | 1,560 | 3.4 |
| Inferred | 1.0 | 113 | 5.5 | 1.90% | 6.7 | 2,150 | 4.7 |
The footnotes to Table 1 also apply to Table 3.
High-grade Kakula Discovery presents transformational opportunities for Kamoa-Kakula development
Mineralization at Kakula is substantively thicker and higher grade than mineralization found elsewhere on the Kamoa mining licence. It also is consistently bottom-loaded and will support the construction of SMZ composites at cut-offs of up to at least 3% copper. The lateral consistency of mineralization at these higher cut-offs presents significant opportunities for mine planning, with large areas of the resource having average grades in excess of 6% when using the SMZ at a cut-off of 3% copper.
The Kakula resource model was constructed using a series of nested grade shells at 1%, 2% and 3% cut-offs. A minimum thickness of 3.0 metres was applied to the 3% grade shell and the outer shells were nested above and below this central shell. The resultant model allows the flexibility to show distribution of grades and thicknesses across the various grade shells and highlights Kakula’s outstanding, high-grade potential.
Figures 3 and 4 show the lateral distribution of grades across the 3% copper shell and the base-case, 1% copper shell, respectively. Figure 5 shows the thickness of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off.
Now that a Mineral Resource estimate has been independently verified for the Kakula West Discovery, Ivanhoe and Zijin can explore options to accelerate future mine production by bringing high-grade mineralization from Kakula West into the Kakula mine plan.
Additional exploration success could have a significant influence on the size, value and timing of the overall development plan; as such, the Kamoa-Kakula development plans will be reassessed and amended as the project moves forward to reflect ongoing exploration results.
Kakula decline development work progressing on schedule to provide access to the high-grade copper resources
Underground development work on the twin declines at the Kakula Copper Discovery is progressing according to plan. Both declines have been advanced more than 200 metres, approximately 10% of the projected total distance.
The Kakula box cut was successfully completed on October 26, 2017, and the first blast for the twin declines at Kakula took place on November 16, 2017. The Kakula decline development work is being undertaken by JMMC, a DRC subsidiary of JCHX Mining Management of Beijing, China. Depending on ground conditions, the 3,600-metre decline development contract is scheduled for completion around the end of this year.
Initial mine development is planned to begin at the Kakula Deposit in a flat, near-surface zone along the deposit’s axis that, at a 3% cut-off, is between 7.1 metres and 11.7 metres thick, with copper grades of between 8.11% and 10.35%. Based on the findings of the independent preliminary economic assessment completed in November of last year, Kakula’s copper grade is projected to average 6.4% over the first 10 years of production.
Aerial view of the Kakula box cut, showing portals for the twin declines, and related surface facilities.
Kakula geologists (from left) Alain Kyatenga and Maria Mwenya, and mining engineer Sylver Nzam, logging core at the core shed.
Members of Kakula’s geology team with Guy Muswil, Head of Sustainability with the Kamoa-Kakula Copper Project (centre), and Pierre Olombe, DRC Transport Manager (right), examine new drill core from Kakula West.
Figure 3. Kakula and Kakula West discovery areas showing grades of Indicated and Inferred Mineral Resource blocks at a 3% copper cut-off.
Figure 4. Kakula and Kakula West discovery areas showing grade of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off.
The Indicated and Inferred Mineral Resource perimeters indicate a confidence classification. Cut-off criteria are applied within the perimeters to state Mineral Resources.