Name of the Project
Kamoa-Kakula Copper Complex.

Location
The Kolwezi district of Lualaba province, in the Democratic Republic of Congo (DRC).

Project Owner/s
Kamoa Copper – a joint venture (JV) between base and precious metals developer Ivanhoe Mines, with 39.6% ownership; Zijin Mining Group, with 39.6% ownership; Crystal River Global, with 0.8% ownership; and the DRC government, with 20% ownership.

Project Description
Ivanhoe Mines has announced outstanding economic results in an independent integrated development plan for the tier-one Kamoa-Kakula copper project.

The Kamoa-Kakula Integrated Development Plan 2020 comprises three development scenarios: the Kakula definitive feasibility study (DFS), the Kakula-Kansoko prefeasibility study (PFS) and the Kamoa-Kakula preliminary economic assessment (PEA).

Kakula
The Kakula DFS proposes the development of a Stage 1, six-million-tonne-a-year underground mine and surface processing complex at the Kakula deposit, with a capacity of 7.6-million tonnes a year built in two modules of 3.8-million tonnes a year. For this option, 110-million tonnes will be mined at an average grade of 5.22% copper producing 8.5-million tonnes of high-grade copper concentrate and containing about 10.8-billion pounds of copper.

Kakula-Kansoko
The Kakula-Kansoko 2020 PFS evaluates the development of mining activities at the Kansoko deposit in addition to the Kakula mine, initially at a rate of 1.6-million tonnes a year, to supply the concentrator at Kakula, eventually ramping up to six-million tonnes a year as the reserves at Kakula are depleted.

Kamoa-Kakula
The Kamoa-Kakula 2020 PEA assessed an additional development option of mining several deposits on the Kamoa-Kakula project as an integrated, 19.2-million-tonne-a-year mining, processing and smelting complex, built in multiple stages.

At the end of January 2023, Ivanhoe announced the positive findings of an independent integrated development plan (2023 IDP) for the project. The 2023 IDP consists of a PFS (Kamoa-Kakula 2023 PFS) for the Phase 3 and Phase 4 expansions of the complex over a 33-year life-of-mine (LoM), as well as an updated PEA (Kamoa-Kakula 2023 PEA) that includes an LoM extension case to 42 years overall.

Kamoa-Kakula 2023 PFS – Phase 3 and 4 expansion, involves a staged increase in nameplate production of up to 19.2-million tonnes a year over a 33-year LoM.

The first stage is the debottlenecking of the operational Phase 1 and Phase 2 concentrators from the current nameplate capacity of 7.6-million tonnes a year to 9.2-million tonnes a year by the second quarter of 2023.

The Phase 1 and 2 concentrators will process ore initially from the Kakula mine, which is being expanded to meet this capacity, and then supported by the Kakula West mine from 2029.

This will be followed by the construction of the five-million-tonne-a-year Phase 3 concentrator. This concentrator will be fed with ore from the existing Kansoko Sud mine, and the Kamoa 1 and 2 mines under development.

Phase 3 is planned to coincide with the commissioning of a direct-to-blister flash copper smelter capable of producing 500 000 t/y of copper in the form of 99+% anode or blister. In addition, the smelter will produce 650 000 t/y to 800 000 t/y of high-strength sulphuric acid for sale in the domestic DRC market.

The final stage is Phase 4, an additional five-million-tonne-a-year concentrator, which will take the total processing capacity to 19.2-million tonnes a year, fed by an expansion of the Kamoa mines.

Kamoa and Kakula will supply a blend of copper concentrate for the smelter as the ore reserve grade tapers over time.

Kamoa-Kakula 2023 PEA – LoM extension case, proposes a nine-year LoM extension of the Kamoa-Kakula Copper Complex, in addition to the Kamoa-Kakula 2023 PFS.

This case includes the addition of four new underground mines in the Kamoa area – Kamoa 3, 4, 5 and 6 – to maintain the overall production rate of up to 19.2-million tonnes a year.

The Kamoa-Kakula PEA is preliminary and includes an economic analysis that is based, in part, on inferred mineral resources.

These resources are considered too speculative geologically for the application of economic considerations that would allow for their being categorised as mineral reserves and there is no certainty that the results will be realised.

Potential Job Creation
Kamoa-Kakula has generated more than 12 000 jobs from its operations and construction activities, with more than 95% of those positions filled by Congolese nationals.

At the end of November 2023, about 2 000 construction workers were at the smelter site, with the number expected to peak at 3 000 in December 2023.

Net Present Value/Internal Rate of Return
The Kakula DFS yields an after-tax net present value (NPV), at an 8% discount rate, of $5.5-billion and an internal rate of return (IRR) of 77% over a 21-year LoM, with a payback of 2.3 years.

The Kakula-Kansoko PFS yields an after-tax NPV, at an 8% discount rate, of $6.6-billion and an IRR of 69% over a 37-year LoM, with a payback of 2.5 years.

The Kamoa-Kakula 2020 PEA yields a potential after-tax NPV, at an 8% discount rate, of $11.1-billion and an IRR of 56% over a mine life of more than 40 years, with a payback of 3.6 years.

The Kamoa-Kakula 2023 PFS case yields an after-tax NPV, at an 8% discount rate, of $19.1-billion at a long-term copper price of $3.70/lb.

The Kamoa-Kakula 2023 PEA case yields an after-tax NPV, at an 8% discount rate, of $20.2-billion.

Capital Expenditure
The Kakula DFS estimates peak funding at $775-million, remaining initial capital costs at $646-million and expansion capital costs at $594-million.

The Kakula-Kansoko 2020 PFS estimates peak funding at $848-million, remaining initial capital costs at $695-million and expansion capital costs at $750-million.

The Kamoa-Kakula 2020 PEA estimates peak funding at $784-million, remaining initial capital costs at $715-million and expansion capital costs at $4.46-billion.

The Kamoa-Kakula 2023 PFS estimates the remaining capital cost for the total Phase 3 expansion at $3-billion, including the mine, concentrator, smelter, infrastructure and investment in off-site hydropower infrastructure.

Planned Start/End Date
The initial production of copper concentrate at the Kakula mine processing plant began on May 25, 2021, with commercial production achieved on July 1, 2021.

The Phase 2 concentrator started commercial production in April 2022, four months ahead of schedule.

The Phase 3 concentrator is on schedule to be commissioned in the fourth quarter of 2024.

Latest Developments
The construction of the direct-to-blister flash smelter is 56% complete and on target for commissioning in the fourth quarter of 2024.

Progress to date for the smelter includes all major foundations for the equipment and buildings having been completed, while most of the structural steel and equipment have been ordered and are now being manufactured.

The first orders of structural steel and mechanical equipment have been delivered to site.

About 726 truckloads of steel and equipment out of an estimated total of 5 400 have been delivered.

Ivanplats has also reported that the main mechanical and electrical construction contractors have been appointed and mobilisation thereof is under way.

Mechanical assembly of the direct-to-blister flash furnace, electric slag-cleaning furnace and gas cleaning system has also started.

The on-site smelter is being built adjacent to the existing Phase 1 and Phase 2 concentrator plants.

The smelter will incorporate modern technology supplied by industrial machinery company Metso Outotec and will meet global financial resource provider International Finance Corporation’s emissions standards.

In addition to construction works at the mine, Kamoa-Kakula’s Phase 3 expansion also includes the refurbishment of turbine No 5 at the Inga II hydroelectric power station, which is situated about 1 400 km away, but through which the mine intends to procure lower-emissions electricity.

A JV with DRC’s State-owned power company will result in turbine No 5 producing 178 MW of renewable hydropower, which – together with the upgrading of the Mwadingusha hydropower plant and its 78 MW contribution – will provide the Kamoa-Kakula copper complex and associated smelter with sustainable electricity for future expansions.

The supply of an additional 178 MW of clean hydroelectric power to DRC’s national grid is enough to meet the power requirements of the Phase 3 concentrator and the flash smelter.

Study work is also progressing to upgrade the transmission capacity of the existing grid infrastructure between the Inga II hydropower facility and the Kamoa site.

Under the Kamoa-Kakula 2023 integrated development plan, the smelter is projected to accommodate about 80% of Kamoa-Kakula’s total concentrate production.

The project will also continue to toll-treat concentrates under a ten-year agreement with the Lualaba Copper Smelter (LCS), located about 50 km from Kamoa-Kakula, near the town of Kolwezi.

Deliveries to LCS are expected to account for about 150 000 t/y of copper concentrate, and as a by-product, the smelter will also produce between 650 000 t/y to 800 000 t/y of high-strength sulphuric acid.

The on-site smelter will offer “transformative financial benefits” for the Kamoa-Kakula copper complex, Ivanhoe has reported, most notably a material reduction in logistics costs and, to a lesser extent, reduced concentrate treatment charges and local taxes.

Meanwhile, Ivanhoe has made a high-grade copper discovery to the west of the Kamoa-Kakula Copper Complex.

The discovery was made on JV licences recently acquired in the Western Foreland, with the discovery having been named Kitoko, which means “beautiful” or “gift” in the local languages. Kitoko is about 25 km west of the ultrahigh-grade Kakula mine and 5 km south and south-east of the Makoko deposit.

The Kitoko discovery confirms the presence of a high-grade copper mineralisation system between 1 000 m and 1 140 m below the surface.

Kitoko fine-grained copper mineralisation is hosted in near flat-lying siltstone of the lower Grand Conglomerate, like that observed at the tier-one Kamoa, Kakula, Makoko and Kiala deposits. Like these deposits, the Kitoko mineralisation is bottom-loaded, with the highest copper grades occurring at the base of the mineralised zone.

Mineralisation occurs at the Kakula orebody. The lower section of the mineralised zone features occurrences of high-grade chalcocite and bornite copper sulphide minerals, with chalcopyrite copper sulphide mineralisation more prevalent towards the top.

The currently defined mineralised zone is trending south-west over 1.9 km of strike, with a dip extent of between 600 m and mineralisation remains open in all directions.

Some of Kikoto’s intersections include 3.37 m of copper grading 3.54% from a downhole depth of 1 077 m; 6.43 m of copper grading 4.92% from a downhole depth of 1 071 m; 4.18 m of copper grading 3.6% copper from a downhole depth of 1 065 m; and 6.79 m of copper grading 3.35% from a downhole depth of 1 089 m.

The new package of licences increases Ivanhoe’s highly prospective Western Foreland land position by 10%, to 2 654 km².

Under the terms of the JV that covers the 247 km² of newly acquired licences, Ivanhoe has an initial interest of 10%, with an earn-in right to increase its ownership by funding ongoing exploration activities.

Ivanhoe expects to make further exploration spending commitments in 2024 to increase its interest to 60%. By the end of 2023, Ivanhoe expects to have completed more than 166 000 m of diamond drilling on these sites.

Key Contracts, Suppliers and Consultants
Kakula DFS/ Kakula-Kansoko PFS/ Kamoa-Kakula PEA: OreWin (overall report preparation, mining, logistics, power and economic analysis); China Nerin Engineering (smelter design and basic engineering contract for the smelter); DRA Global (mine surface infrastructure and metallurgical processing); Epoch Resources (tailings storage facility design); Golder Associates (hydrology models and recommendations); KGHM Cuprum R&D Centre (technical adviser on certain mining methods and geotechnical); Outotec Oyj (smelter technology); Paterson and Cooke (paste backfill plant design and surface/underground paste distribution system); SRK Consulting (mine geotechnical recommendations); Stantec Consulting International (mining and mineral reserves); Wood (mineral resources estimation); Kamoa Copper and SNEL, together with Stucky SA (engineering, procurement and construction management – Turbine 5); Voith Hydro (contractor Turbine 5); and Metso Outotec (direct blister furnace).

Kamoa-Kakula 2023 PFS/Kamoa-Kakula 2023 PEA: OreWin; China Nerin Engineering; DRA Global; Epoch Resources; Golder Associates Africa; Metso-Outotec Oyj; Paterson and Cooke; SRK Consulting; and MSA Group.

Epiroc (Minetruck MT65 S haulers, the world’s highest payload underground truck in the field, as well as Scooptram ST18 S loaders, Boomer 282 face drilling rigs and Simba E70 S production drilling rigs).

Contact Details for Project Information
Ivanhoe Mines, tel +1604 688 6630 (North America), tel +27 11 088 4300 (South Africa) or email info@ivanhoemines.com.