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.



Limpopo Premier Stanley Chupu Mathabatha (centre) cutting a ceremonial ribbon, alongside members of the Platreef shaft-sinking team, to signify the completion of the 850-metre top-cut station development.

November 30, 2020: Ivanhoe Mines announces powerful results of the updated feasibility study (FS) for the world-scale Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa


Moolmans shaft-sinking miners Mario Matusse (left), Bennette Katjeipe (centre), and Julius Mbeteni (right), arrive on surface after completing a shift developing Platreef’s 950-metre-level station.

MOKOPANE, SOUTH AFRICA – Ivanhoe Mines’ (TSX: IVN; OTCQX:IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun announced today that the company’s South African subsidiary, Ivanplats, and its partners welcome the outstanding positive findings of anindependent Platreef Integrated Development Plan 2020 (Platreef IDP20) for the tier one Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa, whichconsists of an updated feasibility study (Platreef 2020 FS) and a preliminary economic assessment (Platreef 2020 PEA).

The Platreef 2020 FS builds on the excellent results of the FS announced in July 2017 and is based on an unchanged Mineral Reserve, project designs for mining, and plant and infrastructure as in the Platreef 2017 FS; except with an increased production rate from 4.0 Mtpa to 4.4 Mtpa, in two modules of 2.2 Mtpa. The 2020 FS includes an updated production schedule based on the current project status, costs and economic assumptions. The schedule for the 2020 FS is driven by the sinking of the project’s second, larger shaft (Shaft 2), where early works have commenced. The 2020 FS envisions Shaft 2 equipped for hoisting in 2025, allowing for first concentrate production in the latter half of the year. The initial capital cost for the Platreef 2020 FS is estimated at US$1.4 billion.

The Platreef IDP20 also includes the Platreef 2020 PEA, which is an alternate, phased development plan that fast-tracks Platreef into production. The plan uses the project’s first shaft (Shaft 1) for initial hoisting and mine development, with 825,000 tonnes of annual total rock hoisting capacity, of which 125,000 tonnes is allocated for development rock. The alternate plan envisions building an initial concentrator with a capacity of 770 thousand-tonnes-per-annum (ktpa), and could produce first concentrate in mid-2024.

The recently-completed sinking of Shaft 1 has created the opportunity to access early, high-grade tonnes in this scenario. While the 700-ktpa initial mine is being operated using Shaft 1, there would be opportunities to refine the timing of subsequent phases of expanded production, which is driven by the sinking of Shaft 2. Once completed, two 2.2 Mtpa concentrator modules would be commissioned, and the initial concentrator would be ramped up to its full capacity of 770 ktpa; increasing the steady-state production to 5.2 Mtpa. The initial capital cost for 700 ktpa under the Platreef 2020 PEA is estimated at US$390 million – substantially lower than the Platreef 2020 FS that requires Shaft 2 for first production.

Detailed engineering has commenced on the mine design, 770-ktpa concentrator and associated infrastructure for the phased development plan, which will be incorporated into an updated feasibility study in 2021. The Shaft 1 changeover will take place simultaneously in preparation for permanent hoisting by early 2022. The budget for 2021 is US$59 million, which includes US$10 million for commencement of the construction of the headframe to the collar of Shaft 2.

The Platreef IDP20 reflects the first phase of development for the Platreef Mine. It is designed to establish an operating platform to support potential future expansions to 12 Mtpa and beyond, as demonstrated in previous studies, which would position Platreef among the largest platinum-group metals producing mines in the world, producing in excess of 1.1 million ounces of palladium, platinum, rhodium and gold per year.

A new Platreef NI 43-101 Technical Report was filed on Sedar and the company's website on December 10, 2020.

Development scenarios at Platreef

  • Platreef 2020 FS, an update of the 2017 FS: Evaluates the development of a 4.4 Mtpa underground mine with two concentrators built in modules of 2.2 Mtpa. This updates the 2017 FS by taking into account development schedule advancement since 2017, as well as updated costs, metal prices and foreign exchange assumptions; in addition to increased throughput from 4.0 Mtpa to 4.4 Mtpa to utilize the full processing capacity of the two concentrators.

  • Platreef 2020 PEA (Phased Development Plan): An alternative scenario evaluating the phased development of an initial 700-ktpa underground mine using the existing Shaft 1 and a new concentrator with a capacity of up to 770 ktpa, targeting high-grade mining areas with significantly lower capital costs. After first production is achieved, Shaft 2 sinking commences, to coincide with the construction of two additional 2.2 Mtpa concentrator modules, and the ramp up of the initial concentrator to its full capacity of 770 ktpa, increasing the steady production to 5.2 Mtpa. Shaft 2 development may be brought forward to accelerate this expansion.

May 7, 2018: Ivanhoe Mines secures long-term supply of treated bulk water for the Platreef Mine

On May 7, 2018, Ivanhoe announced the signing of an agreement to provide local, treated bulk water for the first phase of production at Platreef. The agreement is for the supply of a minimum of five million litres of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi treatment plant. Ivanplats expects to begin receiving a small quantity of treated water this year, which will be used in Platreef’s ongoing underground mine development and surface infrastructure construction.

Under terms of the agreement, which is subject to certain suspensive conditions, Ivanplats will provide financial assistance to the municipality for certified costs of up to a maximum of R248 million (approximately US$19.6 million) to complete the Masodi treatment plant. Ivanplats will purchase the treated wastewater at a reduced rate of R5 per thousand litres for the first 10Ml/day to offset a portion of the initial capital contributed.

October 8, 2018: Shaft 1 reaches the top of Platreef’s “Flatreef” Deposit at 780 metres below surface

On October 8, 2018, Ivanhoe announced that Platreef's Shaft 1 had reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth of 780.2 metres below surface.

The achievement by the Ivanplats shaft-sinking team is the first time that the Platreef – a strongly mineralized, polymetallic belt that extends northward from the town of Mokopane for more than 30 kilometres – has been intercepted by underground mining activity. Ivanplats’ Flatreef Deposit, with a strike length of six kilometres, lies within a flat to gently dipping portion of the Platreef mineralized belt at relatively shallow depths of approximately 700 to 1,200 metres below surface.

The Platreef mining team has delivered the first ore from the underground mine development to a surface stockpile for metallurgical sampling. The estimated thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 26 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 26-metre intersection will yield approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals (PGMs).

The 7.25-metre-diameter Shaft 1 will be used for initial access to the Flatreef Deposit and early underground development. The mining zones in the current mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below surface.

Shaft 2 early-works surface construction advancing to box-cut development

Early-works surface construction for Shaft 2 began in May 2017 with initial curtain grouting around the box cut. Excavation of a surface box cut to a depth of approximately 29 metres began in early 2018. Further work includes the construction of the concrete hitch for the 103-metre-tall concrete headgear (headframe) that will house the shaft’s permanent hoisting facilities and support the shaft collar. The early-works construction is expected to be completed early in 2019.

Shaft 2 will have an internal diameter of 10 metres and the capacity to hoist six million tonnes per year. The headgear design for the six-million-tonne-per-year permanent hoisting facility has been completed by South Africa-based Murray & Roberts Cementation.

Development work focused on initial production rate of four million tonnes per annum

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 plans to develop the Platreef Mine in three phases: 1) An initial rate of four million tonnes per annum (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.

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 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. All figures in the DFS are on a 100%-project basis unless otherwise stated. As Phase 1 is being developed and commissioned, there would be opportunities to refine the timing and scope of subsequent phases of expanded production.

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.

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.cshcy.cn within 45 days of the issuance of this news release.

Platreef DFS results.

ItemUnitsTotal / Average Life of Mine
Mined and processed
Mineral Reserves
Platinum
Palladium
Gold
Rhodium
3PE+Au
Copper
Nickel

Million tonnes
g/t
g/t
g/t
g/t
g/t
%
%

125
1.95
2.01
0.30
0.14
4.40
0.17
0.34
Key financial results
Life of mine
Pre-production capital
Peak funding
Mine-site cash cost
Total cash cost after credits
All-in cash cost after credits
Site operating costs
After-tax NPV8%
After-tax IRR
Project payback period

Years
US$ million
US$ million
US$ per ounce 3PE+Au
US$ per ounce 3PE+Au
US$ per ounce 3PE+Au
US$ per tonne milled
US$ million
%
years

32
1,544
1,485
399
326
351
48.79
916
14.2
5.3
  1. The economic analysis is based on Probable Mineral Reserves only.
  2. 3PE+Au = platinum, palladium, rhodium and gold.
  3. 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.
  4. A declining Net Smelter Return (NSR) cut-off of US$155/tonne–$80/tonne was used in the Mineral Reserve estimate.
  5. 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.
  6. All-in cash costs include sustaining capital costs.

 

Mine development work focused on resources in Flatreef underground discovery

The Flatreef Deposit, with a strike length of six kilometres, predominantly lies within a flat to gently dipping portion of the Platreef mineralized belt at relatively shallow depths of approximately 700 to 1,100 metres below surface.

The Flatreef Deposit is characterized by its very large vertical thicknesses of high-grade mineralization and the platinum-to-palladium ratio of approximately 1:1, which is significantly higher than other PGMs discoveries on the Northern Limb of the Bushveld. The grade shells used to constrain mineralization in the Flatreef Indicated Resource area have average true thicknesses of approximately 24 metres at a 2 g/t 2PE+Au (platinum-palladium-gold) cut-off grade.

On May 11, 2016, Ivanhoe Mines announced a substantial increase in Indicated and Inferred Mineral Resources at the Platreef Project. The updated estimate is for Mineral Resources amenable to underground mining methods within Platreef's Flatreef Deposit. It is the first update of the overall resource estimate to be issued in more than three years. The new estimate includes the Turfspruit Cyclic Unit (TCU), which hosts the majority of the Flatreef Mineral Resources, and also two additional underground zones of mineralization – the Footwall (FW) and the Bikkuri (BIK) – that occur in close proximity to the TCU.

Indicated Mineral Resources now contain an estimated 42.0 million ounces of PGMs plus gold – a gain of 45% – with an additional 52.8 million ounces in Inferred Resources, at the base case cut-off grade of 2 grams/tonne. At a cut-off grade of 1 gram/tonne, Indicated Mineral Resources now contain an estimated 58.8 million ounces of PGMs plus gold, and an additional 94.3 million ounces in Inferred Resources.

The updated Mineral Resource estimate was prepared by Ivanhoe Mines under the direction of Dr. Harry Parker, RM SME of Amec Foster Wheeler E&C Services Inc (Amec Foster Wheeler). Dr. Parker and Mr. Timothy Kuhl RM SME, also of Amec Foster Wheeler, have independently confirmed the Mineral Resource estimate and are the Qualified Persons for the estimate, which has an effective date of April 22, 2016.

Click here to view Platreef Project - 2016 Resource Technical Report, June 2016

Platreef Mineral Resource - all mineralized zones (2.0 g/t base case).

Indicated Mineral Resources - Tonnage and Grades
Cut-off Grade (3PE+Au)MtPt (g/t)Pd (g/t)Au (g/t)Rh (g/t)3PE+Au (g/t)Cu (%)Ni (%)
3.0 g/t2042.112.110.340.144.70.180.35
2.0 g/t3461.681.700.280.113.770.160.32
1.0 g/t7161.111.160.190.082.550.130.26
Indicated Mineral Resources - Contained Metal
Cut-off Grade (3PE+Au) Pt (Moz)Pd (Moz)Au (Moz)Rh (Moz)3PE+Au (Moz)Cu (Mlbs)Ni (Mlbs)
3.0 g/t 13.8613.862.230.9230.868001 597
2.0 g/t 18.6618.943.121.2341.951 2262 438
1.0 g/t 25.6326.814.491.8258.752 0764 108
Inferred Mineral Resources - Tonnage and Grades
Cut-off Grade (3PE+Au)MtPt (g/t)Pd (g/t)Au (g/t)Rh (g/t)3PE+Au (g/t)Cu (%)Ni (%)
3.0 g/t2251.911.930.320.134.290.170.35
2.0 g/t5061.421.460.260.103.240.160.31
1.0 g/t14310.880.940.170.072.050.130.25
Inferred Mineral Resources - Contained Metal
Cut-off Grade (3PE+Au) Pt (Moz)Pd (Moz)Au (Moz)Rh (Moz)3PE+Au (Moz)Cu (Mlbs)Ni (Mlbs)
3.0 g/t 13.7813.962.330.9431.018651, 736
2.0 g/t 23.1723.784.261.5652.771,7753, 440
1.0 g/t 40.3843.017.813.0694.274,1297,759
  1. Mineral Resources have an effective date of April 22, 2016. The Qualified Persons for the estimate are Dr. Harry Parker, RM SME, and Timothy Kuhl, RM SME, who are employees of Amec Foster Wheeler E&C Services Inc. and independent of Ivanhoe. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  2. The 2 g/t 3PE+Au cut-off is considered the base case estimate and is highlighted. The rows are not additive.
  3. Mineral Resources are reported on a 100% basis. Mineral Resources are stated from approximately -200 m to 650 m elevation (from 500 m to 1,350 m depth). Indicated Mineral Resources are drilled on approximately 100 x 100 m spacing (locally 150 m spacing); Inferred Mineral Resources are drilled on 400 x 400 m (locally to 400 x 200 m and 200 x 200 m) spacing.
  4. Mineral Resources have been estimated on an externally undiluted basis and without consideration for mining recovery. Dilution and mining recoveries will vary with the geometry (dip, thickness, faulting and or irregularities in contacts) of the mineralization and the eventual mining method used.
  5. Reasonable prospects for eventual economic extraction were determined using the following assumptions. Assumed commodity prices are Pt: $1,600/oz, Pd: $815/oz, Au: $1,300/oz, Rh: $1,500/oz, Cu: $3.00/lb and Ni: $8.90/lb. It has been assumed that payable metals would be 82% from a smelter/refinery and that mining costs (average $34.27/t) and process, G&A, and concentrate transport costs (average $15.83/t of mill feed for a 4 Mtpa operation) would be covered. The processing recoveries vary with block grade but typically would be 80%-90% for Pt, Pd and Rh; 70-90% for Au, 60-90% for Cu, and 65-75% for Ni.
  6. 3PE+Au = Pt + Pd + Rh + Au.
  7. Totals may not sum due to rounding.

Platreef’s Indicated Resources shown in green; Inferred Resources in blue; areas of resource expansion indicated with diagonal lines; exploration target areas in beige. Additional detail on the exploration target areas is shown in Figure 2.

Exploration targets provide upside in adjoining areas

Potential for additional UMT-TCU mineralization within targets for further exploration

Exploration potential exists immediately outside the area of Inferred Mineral Resources that has not been explored by Ivanhoe. Amec Foster Wheeler has defined four targets for further exploration (exploration targets) in areas that are contiguous with the current Mineral Resource areas that are shown below.

Target 1 could contain 150 to 250 million tonnes grading 1.2 to 1.9 g/t Pt, 1.2 to 1.9 g/t Pd, 0.19 to 0.32 g/t Au, 0.08 to 0.14 g/t Rh, (2.6 to 4.3 g/t 3PE+Au), 0.11 to 0.19% Cu and 0.23 to 0.38% Ni over an area of 4.1 km2. The tonnage and grades are based on intersections of 2.0 g/t 3PE+Au mineralization in drill holes located adjacent to the target.

Target 2 could contain 50 to 90 million tonnes grading 1.3 to 2.1 g/t Pt, 1.4 to 2.3 g/t Pd, 0.19 to 0.31 g/t Au, 0.11 to 0.18 g/t Rh, (2.9 to 4.9 g/t 3PE+Au), 0.11 to 0.19% Cu and 0.23 to 0.39% Ni over an area of 3.9 km2. The tonnage and grades are based on intersections of 2.0 g/t 3PE+Au mineralization in drill holes located adjacent to the target.

Target 3 could contain 5 to 10 million tonnes grading 1.3 to 2.2 g/t Pt, 1.1 to 1.9 g/t Pd, 0.20 to 0.34 g/t Au, 0.10 to 0.17 g/t Rh, ( 2.7 to 4.6 g/t 3PE+Au), 0.11 to 0.18% Cu and 0.23 to 0.38% Ni over an area of 0.5 km2. The tonnage and grades are based on intersections of 2.0 g/t 3PE+Au mineralization in drill holes located adjacent to the target.

Target 4 could contain 40 to 60 million tonnes grading 1.3 to 2.2 g/t Pt, 1.5 to 2.5 g/t Pd, 0.18 to 0.30 g/t Au, 0.12 to 0.20 g/t Rh, (3.1 to 5.2 g/t 3PE+Au), 0.10 to 0.17% Cu and 0.22 to 0.36% Ni over an area of 1.5 km2. The tonnage and grades are based on intersections of 2.0 g/t 3PE+Au mineralization in drill holes located adjacent to the target.

The potential quantity and grade of these exploration targets is conceptual in nature. There has been insufficient exploration and/or study to define these exploration targets as Mineral Resources. It is uncertain if additional exploration will result in these exploration targets being delineated as a Mineral Resource.

In addition, there are approximately 48 km2 of unexplored ground beyond these exploration target areas on the property under which the prospective stratigraphy is projected to lie. It is not possible to estimate a range of tonnages and grades for this ground with current information. There is excellent potential for mineralization to significantly increase with further step-out drilling to the southwest.

Mineralization at the Platreef Project is open to expansion to the south and west, beyond the area of the current Mineral Resources. Indicated Resources are shown in green and Inferred Resources are shown in blue.

Ivanhoe Mines’ exploration geologists receive the 2016 Colin Spence Award for excellence in global mineral exploration for the Flatreef Discovery of platinum-group metals in South Africa