Ivanhoe
Ivanplats

Having just reached a depth of 750 m below surface at Ivanplats’ 64% owned Platreef Shaft 1 project, the company is only 33 m away from intersecting reef – which will average a massive 20 m in width.

Before shaft sinking continues, the next step is to commence with lateral development of the first mine access station - which is now is underway.

The 750 m station on Shaft 1 will provide initial, underground access to the high-grade orebody, enabling mine development to proceed during the construction of Shaft 2, which will become the mine’s main production shaft.

Sinking of Shaft 1 will resume after the 750 m station is completed. The shaft is expected to intersect the upper contact of the Flatreef deposit (T1 mineralised zone) at an approximate shaft depth of 783 m.

The grade for the T1 mineralised zone at this location is 4.83 g/t 3PE (platinum, palladium and rhodium) plus gold, 0.33% nickel and 0.15% copper over a vertical thickness of 12 m.

A well-developed chromitite stringer, marking the stratigraphic contact between the T1 and T2 mineralised zones, is expected to be intersected at a shaft depth of 792.1 m. This will be followed by the T2 mineralised zone, which grades 4.14 g/t 3PE+gold, 0.35% nickel and 0.18% copper over a vertical thickness of 11.26 m (at a 2 g/t 3PE+gold grade cut-off).

“Soon we will be able to show our stakeholders and investors Flatreef’s remarkably thick, high-grade mineralised zones that will allow us to be at the forefront of safe, underground bulk mining,” says Ivanhoe Mine’s executive chairman Robert Friedland.

Status update

The mining zones in the current Platreef mine plan occur at depths ranging from approximately 700 m to 1 200 ms below surface. The station also will allow access for the first raise-bore shaft that will provide ventilation to the underground workings during the mine’s ramp-up phase.

The first of the mine’s planned fleet of mechanised, mobile, underground mining equipment – a small, 5.5 t load-haul-dump machine (LHD) – has arrived on site and will be used for off-shaft station development work on the 750-, 850- and 950 m levels. People from Platreef’s surrounding host communities are being trained as operators of the LHD.

The LHD will be the first piece of mechanised, mobile equipment to be used underground on the northern limb of South Africa’s famous Bushveld Complex. The thick, flat-lying ore body at the Platreef project is ideal for bulk-scale, mechanised mining. As underground development progresses, the mine plan calls for the addition of significantly larger mechanized mining equipment, such as 14- and 17-tonne LHDs and 50-tonne haul trucks.

As shaft sinking advances, two additional shaft stations will be developed at mine-working depths of 850 m and 950 m. Shaft 1 is expected to reach its projected, final depth of 980 m below surface in 2019.

“Our focus is to keep advancing the Platreef project along its critical path. Our continued development of shafts 1 and 2 will provide access to the high-grade ore body and help to ensure that the project is able to meet the expected start-up of the first phase of the underground mine and concentrator.”

The Platreef project team and its South African sinking contractor, Aveng Mining, achieved a record monthly shaft-sinking rate of 54 m in March. The project also has attained 160 days without a lost-time injury, a notable achievement given the safety challenges that shaft-sinking operations encounter. Ivanhoe remains committed to its workplace objective of an environment that causes zero harm to employees, contractors, sub-contractors and consultants.

“We believe that the unique characteristics of our Flatreef discovery offer us the opportunity for a highly-mechanised and safe working environment for a new generation of skilled and trained South African workers.”

Approximately 40% of Platreef’s shaft-sinking team now is comprised of employees from local communities who had no previous mining experience. New employees receive intensive, on-site training for underground mining and complete a workplace-safety induction programme.

Platreef a significant new source for the world’s electric-vehicle revolution

In July 2017, Ivanhoe issued an independent, definitive feasibility study (DFS) for Platreef that covers the first phase of production at an initial mining rate of 4 Mtpa. The DFS estimated that Platreef’s initial, average annual production rate will be 476 000 oz of platinum, palladium, rhodium and gold, plus 21 million pounds of nickel and 13 million pounds of copper.

“Many investors don’t realise that, in addition to Platreef being projected to become one of Africa's largest producers of platinum-group metals, the mine also is expected to be a significant producer of nickel and copper — two metals that are fundamental components for the electric-vehicle revolution,” says Mr. Friedland.

“Nickel is trading at three-year highs, due in part to the increased demand for metals needed for electric-vehicle batteries. There is a growing market realisation that the new era of electric vehicles will be a disruptive, long-term force that will have a material impact on certain key metals — such as nickel, copper and cobalt — as early as 2020.”

Ivanhoe is working with potential concentrate-processing partners to study ways to incorporate an upgrading step to produce battery-grade nickel sulphate.

Construction of Shaft 2 surface box cut underway

The first two surface blasts for Shaft 2’s box cut were successfully completed earlier this month; four additional blasts are planned. The blasting will enable the excavation of the box cut to a depth of approximately 29 m below surface and the construction of the concrete hitch (foundation) for the 103 m tall concrete headgear (headframe) that will house the shaft’s permanent hoisting facilities and support the shaft collar. Excavation of the box cut is expected to be completed by the end of the year.

Shaft 2, to be located approximately 100 m north-east of Shaft 1, will have an internal diameter of 10 m,will be lined with concrete and sunk to a planned, final depth of more than 1 104 m below surface. It will be equipped with two 40 t rock-hoisting skips with a capacity to hoist a total of 6 Mtpa of ore – the single largest hoisting capacity at any mine in Africa. Headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts Cementation.

Project financing and strategic discussions progressing

During 2017, Ivanhoe announced the appointment of five leading financial institutions to arrange project financing for the development of the Platreef project. The five Initial Mandated Lead Arrangers (IMLAs) will make best efforts to arrange a total debt financing of up to US$1 billion for the development of Platreef’s first-phase, for 4 Mtpa mine.

Preliminary expressions of interest have been received for approximately $900 million of the targeted $1 billion financing. Negotiation of a term sheet is ongoing. In addition, preliminary discussions have begun with leading financial institutions around the financing of the black economic empowerment partners’ contribution to the development capital.

The IMLAs appointed Export Development Canada to direct the technical, environmental and social due diligence phase of the project. Chlumsky, Armbrust & Meyer and IBIS ESG South Africa Consulting were appointed as independent technical consultant and independent social and environmental consultant, respectively.

Continuing strategic discussions concerning Ivanhoe Mines and its projects are ongoing with several significant mining companies and investors across the Americas, Europe, Asia and elsewhere. Several investors that have expressed interest have no material limit on their provision of capital. There can be no assurance that the company will pursue any transaction or that a transaction, if pursued, will be completed.