AMN - DRC: Kakula copper PFS extremely positive: Friedland

An independent pre-feasibility study (PFS) for the development of the Kakula copper mine in the DRC has produced “extremely positive findings”. The findings were announced in a keynote address by Ivanhoe Mines co-chairman Robert Friedland during this month's 25th annual Investing in African Mining Indaba in Cape Town.

They have been welcomed by Ivanhoe Mines and its Chinese partners Zijin Mining Group and Crystal River Global Limited along with an updated, expanded preliminary economic assessment (PEA) for the overall development plan of the Kamoa and Kakula copper discoveries at the Kamoa-Kakula Project on the Central African Copperbelt.

“It has been a remarkable 25 years since my first keynote presentation at the very first Mining Indaba, in this beautiful city of Cape Town, South Africa,” he said.

"In that inaugural speech in 1994, we shared with delegates how African Minerals, the founding, corporate trailblazer for Ivanhoe Mines, was focused on its quest for major discoveries in and around Southern Africa’s legendary mineral fields. "Now, after more than a quarter of a century of exceptional field work by our team of visionary and tenacious exploration geologists, we are about to make the ‘Great Leap Forward’ from one of the modern world’s top mine finders to one of the world’s leading producers of copper – as well as palladium, platinum, zinc, nickel, gold, silver and rhodium from the other two major mining projects that Ivanhoe is developing in southern Africa."

The PFS outlines a stage one, 6 million-tonne-per-annum operation at Kakula, with estimated development capital of US$1.1 billion, yielding an after-tax NPV8% of US$5.4 billion and an IRR of 47% over a 25-year mine life

The Kakula mine’s first stage will average 6.8% copper over the first five years, with mine-site cash costs of US$0.43/lb copper.

The updated independent PEA for an expanded Kakula-Kamoa annual production rate of 18 million tonnes, supplied initially by a 6 million tonnes/annum mine at Kakula, followed by two 6 million tonne mines at Kansoko and Kakula West, and a world-scale direct-to-blister smelter.

The PEA envisions the staged mine expansions and smelter will be funded from internal cash flows and yields an after-tax NPV8% of US$10.0 billion and an IRR of 41%

Once the expanded PEA annual production rate of 18 million tonnes is achieved, Kamoa-Kakula is projected to become the world’s second-largest copper mine, with peak annual production of more than 700,000 tonnes of copper

Robert Friedland said: “To all of our African brothers and sisters, you now can clearly see the fruits of the incredibly intensive efforts by our people over the past two decades, while overcoming countless challenges, to initially discover, then extensively expand, the Kamoa and Kakula resource base with a massive drilling and engineering effort.

“The Kamoa-Kakula Project now stands as the ‘Beacon that Shines Light’ on the fundamental importance of stable and transparent legal and fiscal frameworks. Looking back on the last 25 years, we reiterate the obvious fact that mining is a very long-term business that requires stability to attract capital. Future generations of young Congolese people will massively benefit from the establishment of a stable and predictable fiscal environment to attract foreign investment.”

Robert Friedland said: “Today, together with our strategic shareholder CITIC Metal, our co-chairman Yufeng ‘Miles’ Sun, our Chinese joint-venture partner Zijin Mining, and the newly elected DRC government, led by His Excellency Félix Antoine Tshisekedi Tshilombo, we are proud to share with the world these outstanding, independently-prepared, engineering studies conducted over the past two years.

“These studies clearly prove our long-standing conviction that Kamoa-Kakula is firmly on track to become one of the absolute greatest copper mining complexes in the world, helping to restore Katanga’s rightful position as the world’s largest copper producing region. This would not have happened without the extraordinary efforts of the Ivanhoe discovery team and our investment of more than US$800 million in exploration and development.

“We now look forward to working with the new government of the DRC and the Congolese people to develop Kamoa-Kakula to its full potential, generating widely shared economic benefits that will help to uplift local communities, and provide skills training to help ensure that young Congolese can qualify for the thousands of meaningful direct and indirect jobs that will be created.”

He said: “The new PFS and PEA, independently prepared by six of the world’s top engineering firms, reinforces the fact that Kamoa-Kakula is unquestionably the world’s best undeveloped copper discovery.

“Kamoa-Kakula is unique as it combines ultra-high copper grades in thick, shallow and flat-lying ore bodies - allowing for large-scale, highly-productive, mechanised underground mining operations. Kakula is projected to have an average grade of 6.8% copper over the initial five years of operations, and 6.4% copper over the first 10 years - grades that are orders of magnitude higher than the majority of the world’s other major copper mines.

“This mine is getting built. And, most importantly, it is being built to international best practices that will be a showcase for responsible mine development.”

www.ivanhoemines.com