THE MINING EXECUTIVE MAGAZINE JANUARY/FEBRUARY 2020 EDITION

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TheMINING EXECUTIVEMagazine FEBRUARY 2020The Kamoa-Kakula ProjectThe Kamoa-Kakula Project is approximately 25 kilometres west of the mining centre of Kolwezi in the DRC. Everything about this project isgoing to be so big so much that stage one of the operations is being pegged at 6Mta with an estimated capital development cost of US$ 1.1Billion. The project is projected to have an after-tax yield NPV (8%) of US$5.4 Billion and an Internal Rate of Return of 47% over the entire25 Life of Mine (LOM). The Kakula project is expected to produce very high-grade copper concentrate in excess of 57% Copper with very lowarsenic levels. Mining will be undertaken in 6m high panels utilizing 60 tonne trucks and conveyed to the surface for stockpiling and processing.55% of the tailings will be pumped back into the mine for backfilling.Kukula Deposit in comparison to Manhattan (picture: Ivanhoe Mines)On March 22, 2019, Ivanhoe filed an updatedNI 43-101 technical report for the Projectcovering the independent pre-feasibilitystudies (PFS) for the development of theKakula and Kansoko copper mines, and anupdated, expanded preliminary economicassessment for the overall integrateddevelopment plan for the project. Highlightsof the PFS, based on a consensus, long-termcopper price of $3.10/lb included some veryhigh-grade, stage-one production which isprojected to have a grade of 7.1% copper inthe second year of production and an averagegrade of 6.4% copper over the initial 10 yearsof operations, resulting in estimated averageannualized copper production of291,000 tonnes. Initial capital cost, includingcontingency, estimated at $1.3 billion with anaverage total cash cost of $1.11/lb of copperduring the first 10 years, inclusive of royalties.The after-tax NPV was pegged at an 8%discount rate, of $5.4 billion and an after-taxinternal rate of return (IRR) of 46.9% and apayback period of 2.6 years. Kakula isexpected to produce a very high-grade copperconcentrate in excess of 55% copper, withextremely low arsenic levels.On July 29, 2019, Ivanhoe announced assaysfrom 19 new drill holes at the latest highgradediscovery at the project─ the Kamoa North Bonanza Zone. Multiple,thick drill intercepts of more than 10% copperwere recorded at the new discovery, including13.80% over 15.50 metres in the centraldiscovery area. Work immediately gotunderway to prepare an initial mineralresource estimate for the Bonanza Zone, aswell as geotechnical, hydrogeological andmetallurgical test work needed for mineplanning.MINING GLOBAL DECISIONS IN YOUR PALMSwww.theminingexecutive.com42
TheMINING EXECUTIVEMagazine FEBRUARY 2020Kakula's underground development and production five-year plan showing more than five kilometres of developmentwork completed to date (purple with access from the northern declines and yellow with access from the southern decline).More than five kilometres of underground development was completed in the first nine months of 2019 as the project tracks towards first productionin Q3 2021. The development of the project has made considerable progress with the first of multiple, planned mining areas, the underground accessdrives intersecting the mine's initial high-grade ore (+3% copper) in late August, then intersected an even higher grade zone (approximately 6%copper) in late October as the drives advance towards mining zones of +8% copper in the center of the deposit. The processing plant and othersurface infrastructure build up is also advancing rapidly. The joint venture has issued purchase orders for the long-lead mining and processingequipment. Initial copper concentrate production from the Kakula Mine currently is scheduled for the third quarter of 2021.Access tunnels measure sixmetres by six metres, allowingaccess for large-capacity LHDloaders and 50-tonne haulagetrucks.MINING GLOBAL DECISIONS IN YOUR PALMSwww.theminingexecutive.com43
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THE MINING EXECUTIVE MAGAZINE JANUARY/FEBRUARY 2020 EDITION

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