Ivanhoe Mines Reaches Development Milestone at Platreef Underground Project, South Africa

Published: July 18, 2016 |

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Ivanhoe Mines begins permanent sinking work on Shaft 1 at the Platreef platinum-group metals, nickel, copper and gold mine in South Africa.

Shaft 1, which will have an internal diameter of 7.25 meters, will provide initial access for early underground development at the Flatreef Deposit and will be utilized to fast-track production during the first phase of the project.

Following the successful commissioning and licensing of the required equipment, the permanent sinking phase started at a planned, initial rate of 1.8 meters per day. This is planned to double the current depth of Shaft 1 from 54 meters to 107 meters below surface — the point at which the main sinking phase will begin. Ivanhoe expects that the subsequent main sinking phase will advance at an average rate of 2.7 meters a day until it reaches the planned, final depth at 1,025 meters below surface in 2018.

“This is an important milestone in the building of a major, new underground mine at Platreef and we are extremely proud of our employees and contractors for the safe and efficient job they have done in transitioning Shaft 1 from the pre-sinking phase to the permanent-sinking phase,” said Robert Friedland, executive chairman of Ivanhoe Mines.

The shaft sinking contract, held by Aveng Mining of South Africa, will include the development of two main stations at below-surface depths of 450 meters and 750 meters. Shaft 1 is expected to reach the Flatreef Deposit, at a depth of 777 meters, during the third quarter of 2017.

The selected mining areas proposed in Platreef’s current pre-feasibility study mine plan occur at depths ranging from approximately 700 meters to 1,200 meters below the surface.

The Platreef Project is a tier one discovery by Ivanhoe Mines’ geologists on the Northern Limb of South Africa’s Bushveld Igneous Complex, the world’s premier platinum producing region.

Ivanhoe Mines owns 64 percent of the Platreef Project through its subsidiary, Ivanplats, and is directing all mine development work. The South African beneficiaries of the approved broad-based, black economic empowerment structure have a 26 percent stake in the Platreef Project and the remaining 10 percent is owned by a Japanese consortium of ITOCHU Corporation; ITC Platinum Development Ltd., an ITOCHU affiliate; Japan Oil, Gas and Metals National Corporation; and JGC Corporation.

Shaft 1, including initial lateral underground development work, will be funded from dedicated funds remaining in Ivanhoe’s treasury from the US$280 million received in 2011 for the sale of an 8 percent interest in the Platreef Project to the ITOCHU-led Japanese consortium.

Early works for the 10 meter diameter Shaft 2, the main production shaft with the capacity to hoist six million tonnes per year, are planned to begin next year. The headgear design has been completed by South Africa-based Murray & Roberts Cementation.

Work is now complete on the internal electricity substation, which will have a capacity of five million volt-amperes. Construction is underway of the power transmission lines from the main lines of Eskom, the South African public electricity utility, which will be used for shaft sinking. Back-up generators also have been installed to ensure continuous sinking operations in the event of power interruptions.

The new power transmission lines also will provide electric power to an adjacent community near the Platreef Project, which currently has no supply of electricity.

Other on-site work includes the construction of the permanent road intersection leading to the Platreef Project from the N11 national highway, which will assist with management of safe access to the mine.

Ivanplats plans to develop the Platreef Mine in three phases: an initial annual rate of four million tonnes per annum (Mtpa) to establish an operating platform to support future expansions; followed by a doubling of production to eight Mtpa; and then a third expansion phase to a steady-state 12 Mtpa. At a projected production rate of 12 Mtpa, Platreef would be among the largest platinum-group metals mines in the world.

Good progress is being made in advancing the feasibility study for Platreef’s first-phase production scenario toward completion. The study, which began in August 2015, is being managed by principal consultant DRA Global, with specialized sub-consultants including Stantec Consulting, Murray & Roberts Cementation, SRK, Golder Associates and Digby Wells Environmental.

Ivanplats completed a pre-feasibility study (PFS) in January 2015 that covered the first phase of development that includes construction of a state-of-the-art underground mine, concentrator and other associated infrastructure to support initial concentrate production.

The development scenarios describe a staged approach structured to provide opportunities to expand the operation based on demand, smelting and refining capacity and capital availability. As the first phase of development is placed into production, there is expected to be an opportunity to modify and optimize the subsequent phases, allowing for changes to the timing of capacity expansions to suit market conditions.

The Platreef Project reached a total of 5,903,038 million hours in terms of the Mines Health and Safety Act and the Occupational Health and Safety Act by the end of June 2016. A total of 1,266,480 Lost Time Injury-Free (LTI) hours worked have been achieved since the previous LTI in October 2015. The Platreef Project continues to strive toward its workplace objective of an environment that causes zero harm to any employees, contractors, sub-contractors and consultants.

About Ivanhoe Mines
Ivanhoe Mines is advancing and developing its three principal projects: the Kamoa Copper Discovery in a previously unknown extension of the Central African Copperbelt in the Democratic Republic of the Congo (DRC); the Platreef Discovery of platinum, palladium, nickel, copper, gold and rhodium on the Northern Limb of the Bushveld Complex in South Africa; and the historic, high-grade Kipushi zinc-copper mine, also on the Copperbelt in the DRC.

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