Study confirms massive potential of Ivanhoe’s Kakula Mine

September 9, 2020

An independent definitive feasibility study (DFS) for the development of the Kakula Copper Mine in the Democratic Republic of Congo (DRC) found that the asset could become the second largest copper complex in the world, according to a press release issued by Canada’s Ivanhoe Mines.

The Kakula Mine is the first underground mine planned at the Kamoa-Kakula concession, is forecast to generate 6 Mt/a (6.6 million stpy) of ore at an average feed grade of 6.6 percent copper over the first five years of operation, the study shows.

The DFS is an independent verification from nine top engineering firms and incorporates the advancement of development and construction activities to date. “The DFS has once again confirmed the outstanding economics of the first phase Kakula Mine. As well, the expanded PEA shows the excellent potential to develop the project to a much larger scale and with a significantly larger production capacity,” the company said in a release.

Economics for all three studies modelled on a 100 percent-equity basis.

The Kakula Mine, which is expected to begin producing copper in less than a year, along with the Kansoko, Kakula West and Kamoa North projects could produce 800 kt/a (880,000 stpy) at full production.

“The definitive feasibility study also confirms what we’ve been telling investors for the past year and a half, and showcasing monthly in our progress galleries – the Kakula Mine is being rapidly built, it is ahead of schedule, and is on budget. The estimated remaining initial capital costs for the phased development at Kamoa-Kakula is US$0.7 billion, of which an estimated US$0.65 billion is to complete the 6-Mt/a (6.6 million stpy) mine at Kakula,” said Ivanhoe’s co-chair person Robert Friedland. “Our proportionate share of the remaining initial capital costs is approximately 50 person, with subsequent expansions funded by cash flows.

“Most importantly, the Kakula Mine has been designed to produce the world's most environmentally-responsible copper, which is crucial for today’s new generation of environmentally- and socially-focused investors,” said Friedland.

Kamoa-Kakula is a strategic partnership between Ivanhoe Mines (39.6 percent), Zijin Mining Group (39.6 percent), Crystal River Global Limited (0.8 percent) and the DRC government (20 percent). Ivanhoe will advance in stages until having four producing mines with a combined 19 million-tonne per year output rate.

Ivanhoe is exploring for new copper discoveries on its wholly-owned Western Foreland exploration licenses, adjacent to the Kamoa-Kakula mining license.

Friedland also said that Kamoa-Kakula recently retained Hatch Ltd., of Mississauga, Canada, a leading, international environmental consulting firm, to independently audit the greenhouse gas intensity metrics for the copper that will be produced at Kamoa-Kakula, demonstrating the company’s pledge to be a leader in environmentally-responsible copper mining.

“Kakula is projected to have an average grade of 6.6 percent copper over the initial five years of operation ? a grade that is an order of magnitude higher than the majority of the world’s other major copper mines. In addition, approximately one half of the mine’s tailings will be mixed with cement and pumped back underground to fill mined-out voids, resulting in a surface tailings containment facility that is tiny compared to other major mines,” said Friedland. “Massive, high-grade deposits like we have found at Kamoa-Kakula ? which have the potential to produce large quantities of copper for multiple generations ? are very long-term plays. Conventional discounted cash flow analysis does not appropriately appraise the long-term option value inherent in tier one assets like Kamoa-Kakula. As history has shown, such large-scale assets that produce for decades − through multiple commodity cycles − tend to generate profound value through phased expansions and exploration over their mine lives.



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