AVZ minerals

Negotiations are ongoing with government agencies – Gécamines, Ivanhoe Mines partner at Kipushi and Société Nationale des Chemins de Fer du Congo, the DRC’s national railway company – and potential project financiers to advance agreements to launch commercial production at Kipushi.

“Since acquiring our 68% interest in the Kipushi project in 2011, our team has worked with Gécamines to achieve our shared objective of resuming commercial production,” comments executive chairman of Ivanhoe Mines, Robert Friedland.

“In parallel with ongoing mine upgrading work and completion of the definitive feasibility study, we are evaluating a number of proposals we have received to fund the remaining infrastructure construction,” he adds.

Planned resumption of production

The Kipushi mine is owned by Kipushi Corporation (KICO), a joint venture between Ivanhoe Mines (68%) and Gécamines (32%).

The planned restoration of production at Kipushi is based on initial mining that will be focused on the Big Zinc Deposit.

Before Kipushi was idled in 1993, Gécamines discovered the Big Zinc Deposit at a depth of approximately 1,250 m below surface and adjacent to the producing Fault Zone.

No mining ever has been conducted on the Big Zinc’s mineral resources. Ivanhoe Mines’ drilling has upgraded and expanded the Big Zinc Deposit’s Measured and Indicated Mineral Resources to an estimated 10.2 Mt grading 34.9% zinc, 0.65% copper, 19 grams/tonne (g/t) silver and 51 g/t germanium, at a 7% zinc cut-off – containing an estimated 7.8 billion pounds of zinc.

During a span of 69 years, Kipushi produced a total of 6.6 Mt of zinc and 4 Mt of copper from 60 Mt of ore grading 11% zinc and approximately 7% copper.

It also produced 278 t of germanium and 12,673 t of lead between 1956 and 1978.

There is no formal record of the production of precious metals as the concentrate was shipped to Belgium and the recovery of precious metals remained undisclosed during the colonial era.

However, drilling by Ivanhoe Mines has encountered significant silver values within Kipushi’s current deposits that are rich in zinc and copper.

Most of Kipushi’s historical production was from the Fault Zone, a steeply-dipping ore body rich in copper and zinc that initially was mined as an open pit.

The Fault Zone extends to a depth of at least 1,800 m below surface, along the intersection of a fault in carbonaceous dolomites.

New era of mining at Kipushi

Excellent progress has been made by KICO in modernising the Kipushi mine’s underground infrastructure as part of preparations for the mine to resume commercial production.

With the underground upgrading programme nearing completion, KICO’s focus now will shift to modernising 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 December 2017 independent, pre-feasibility study, has a construction period of less than two years, with a life-of-mine average annual production rate of 225,000 t of zinc and cash costs of US$0.48/lb of zinc over an 11-year initial mine life.

The 2017 PFS estimated that Kipushi would have an after-tax NPV of $683 million and 35% IRR, based on long-term zinc price of $1.10/lb, with pre-production capital of $337 million.

At the current zinc price of approximately $1.40/lb, the PFS estimated that Kipushi would have an after-tax NPV of $1.2 billion and IRR of 51%.

A definitive feasibility study (DFS) is underway to further refine and optimize the project’s economics, taking into consideration the significant capital already invested to date on critical rehabilitation work. Ivanhoe Mines expects to complete the DFS later this year.

“Since the PFS was issued six months ago, we have continued to make important strides toward completion of the underground infrastructure upgrading programme,” notes Ivanhoe Mines CEO, Lars-Eric Johansson.

“Our goal is to establish Kipushi as one of the world’s major zinc mines,” he adds.