Ivanhoe Mines has reported a positive, independent, preliminary economic assessment (PEA) of its Platreef project on the Northern Limb of South Africa’s Bushveld Complex. The PEA considers development of a large, mechanized, underground mine. Base case production is planned at 785,000 oz/y of platinum, palladium, rhodium and gold (3PE+Au) from 8 million mt/y of mine production.
Cash costs of production are estimated at $341/oz of 3PE+Au, net of byproducts. Pre-production capital is estimated at approximately $1.7 billion, including $381 million in contingencies. A pre-feasibility study (PFS) is under way, with completion targeted for the second half of 2014.
The Platreef PEA considers a range of development scenarios, depending on demand, smelting and refining capacity, and capital availability. The project’s Flatreef deposit occurs predominantly within a flat to gently dipping portion of the Platreef mineralized belt at relatively shallow depths of approximately 700 to 1,100 m below surface. The deposit is characterized by large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1. The grade shells used to constrain an indicated resource have average true thicknesses of approximately 24 m.
The indicated mineral resource grade of the Flatreef deposit is 4.1 g/mt 3PE+Au, 0.34% nickel, and 0.17% copper at an equivalent 2 g/mt cutoff. The nickel and copper grades are higher than at other South African pgm mines and contribute to the positive economics of the Platreef project.
Indicated mineral resources stand at 214 million mt, containing an estimated 28.5 million oz of 3PE+Au, 1.6 billion lb of nickel, and 0.8 billion lb of copper. Inferred mineral resources are estimated at 415 million mt grading 3.5 g/mt 3PE+Au, 0.33% nickel, and 0.16% copper, containing an estimated additional 47.2 million oz of 3PE+Au, 3 billion lb of nickel, and 1.5 billion lb of copper.
The mining methods considered in the PEA are long-hole stoping and drift-and-fill extraction, followed by cemented paste, cemented rock fill or waste rock backfill. Mine plans have been developed for a total project life of 36 years, including a six-year pre-production period prior to the mill startup.
Site preparation is under way for the sinking of an 800-m-deep exploration shaft to obtain a bulk sample for metallurgical test work. Ivanhoe will begin the design and engineering of the main production shaft during the second quarter of 2014, enabling the company to start shaft development works in the first quarter of 2014.
Ivanhoe Mines holds an indirect 90% interest in the Platreef project. An Itochu-led Japanese consortium holds the remaining 10% interest.
In accordance with South African law, Ivanhoe Mines has proposed transferring a 26% interest in the Platreef project to BBBEE SPV, a broad-based, black economic empowerment partner. Ivanhoe is discussing the required finalization of the BBBEE structure with South Africa Department of Mineral Resources, with a goal of securing the Platreef mining right by the end of May. Upon receipt of the mining right, Ivanhoe will own 64% of the Platreef project, BBBEE SPV will own 26%, and the Japanese consortium will own 10%.
