Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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NEWS-LEADING DEVELOPMENTS 6 E&MJ • MARCH 2019 www.e-mj.com mates. Realizing value through Barrick's proposal for Newmont's shareholders hinges entirely on a new management team that lacks global operating experi- ence and is only two months into its own transformational integration." Ivanhoe Planning 3 Mines at Kakula-Kamoa Property Ivanhoe Mines has announced results of a prefeasibility study of an initial 6-million- metric-ton-per-year (mt/y) underground mine on its Kakula-Kamoa copper prop- erties at the western end of the Central African Copper Belt in Democratic Repub- lic of Congo (DRC). At the same time, the company has announced an updated pre- liminary economic assessment (PEA) of an expanded Kakula-Kamoa mine production rate of 18 million mt/y, with sequential de- velopment of two additional 6-million-mt/y mines and a world-scale direct-to-blister smelter that would have capacity to pro- cess 1 million mt/y of concentrates. Peak production from three mines and the smelter is forecast at 700,000 mt/y of copper. The initial 6-million-mt/y Kakula mine benefits from an ultra-high average feed grade of 6.8% copper over the first five years of operations and 5.5% copper over a 25-year mine life. Capital costs to devel- op the mine are estimated at $1.1 billion, with a project payback period of 2.6 years. Development of the initial Kakula mine would be followed by development of the 6-million-mt/y Kansoko mine and then by a third 6-million-mt/y mine at Kakula West. As resources at Kakula and Kansoko are mined, production would begin at sev- eral mines in the Kamoa North area of the property to maintain 18 million mt/y of mine production over a 37-year mine life. Each of the three mines would be a separate underground mine, with a shared processing facility and surface infrastructure at Kakula. The Kakula concentrator would be constructed in a phased approach, with two 3-million-mt/y modules to be constructed as the mining operations ramp-up to full production of 6 million mt/y. The Kakula-Kamoa copper deposits are unique in that they have ultra-high grades in thick, shallow, flat-lying orebodies, al- lowing for large-scale, mechanized under- ground mining operations. Approximately 99% of the Kakula deposit will be mined using drift-and-fill with paste backfill. The Kakula mine will be accessed via twin declines on the north side of the de- posit, which have been completed, and a single decline on the south side of the de- posit. One of the north declines will serve as the primary mine access, while the oth- er will include a conveyor haulage system. The south decline will serve as a secondary operational ingress/egress and will facili- tate critical early mine development. From the bottom of the north and south declines, perimeter drifts will be driven to the east and west extremities of the deposit and will serve as primary accesses to the production areas. These drifts also will be used as the primary intake and exhaust ven- tilation circuits and will connect to a series of intake and exhaust ventilation shafts. The primary ore handling system will include perimeter conveyor drifts and load-out points along the north side of the deposit. These drifts will terminate at the main conveyor decline. Connection drifts between the north and south perimeter drifts will provide access and ventilation to the planned mining areas. Regarding these new Kakula-Kmoa stud- ies, Ivanhoe President and CEO Lars-Eric Johansson said, "The 18-million-mt/y de- velopment scenario clearly shows the eco- nomic potential for a phased development plan for Kamoa-Kakula to become one of the largest copper mines in existence. "However, as evidenced by our re- markable discovery hole drilled at Kamoa North announced last week (January 30) — the thickest high-grade intersection yet at Kamoa-Kakula returning 13.05% copper over 22.3 m starting at a depth of only 190 m below surface — we are confident that there are more high-grade copper discoveries to be made in the area, and the ultimate scale of operations at Kamoa-Kakula can be much larger. "We see no geological limitation to the goal of eventually producing 1 million mt/y of copper." The Kakula prefeasibility study and Kakula-Kamoa PEA were independently prepared by Amec Foster Wheeler E&C Services; DRA Global; KGHM Cuprum R&D Centre, Wroclaw, Poland; OreWin; Stantec Consulting International; and SRK Consulting. 3 Junior Explorers Team Up With Producers Junior exploration companies Red Met- al Ltd., Mirasol Resources, and Reunion Gold have teamed up with OZ Minerals, Newcrest International, and Barrick Gold, respectively, to form exploration allianc- es on the junior companies' exploration projects. The Red Metal-OZ agreement covers six projects in Australia. The Mira- sol-Newcrest agreement is focused on Mirasol's Gorbea gold projects in northern Chile. The Reunion-Barrick agreement covers Reunion projects on the Guiana Shield in northern South America. Red Metal and OZ have signed an op- tion and joint-venture agreement aimed at fast-tracking the search for discoveries on Red Metal's base-metals exploration portfolio. The agreement provides OZ with a two-year option to fund a series of mu- tually agreed, proof-of-concept work pro- grams on six Red Metal early-stage proj- ects: the Yarrie copper-gold/copper-cobalt and Nullarbor copper-gold/copper-nickel projects in Western Australia, and the Gulf copper-gold and Three Ways, Lawn Hill, and Mount Skipper zinc-lead-silver projects in Queensland. OZ has committed to spending a combined total of A$8.05 million on the projects over a two-year period. After completion of the minimum expenditure commitment on a project, OZ will have the option to trigger formation of a joint venture over that project whereby it can earn 51% by spending a designated earn- in amount on exploration within a desig- nated earn-in period. Red Metal will manage the exploration to the end of the earn-in period. Once OZ Minerals has earned 51% of a particular project, Red Metal can elect to contribute pro-rata to future explora- tion and development costs and retain a 49% interest or elect not to contribute and be diluted to a 30% interest at com- pletion of a positive decision to mine. Mirasol and Newcrest have signed a binding letter agreement that provides Newcrest with an option to farm into Mirasol's Gorbea high-sulphidation epith- ermal gold projects. The agreement cov- ers a package of projects totaling 26,684 ha, including the Atlas gold-silver and the Titan gold-copper-lead projects. Newcrest may acquire up to 75% of the Gorbea projects in multiple stages by completing a series of exploration and de- velopment milestones and making staged option payments to Mirasol. Newcrest (Continued on p. 20)

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