Members of one of Kamoa-Kakula’s first-rate mining crews at the Kakula copper mine’s northern declines. Development at the high-grade underground mines at Kakula and Kansoko continues to proceed exceptionally well. Kakula’s underground development is 4.7 kilometers (km) ahead of schedule, with more than 15.4 km now complete.

Ivanhoe Mines reported in mid-May that development of the Kakula mine, the first of multiple planned mining areas at the Kamoa-Kakula project in the Democratic Republic of Congo (DRC), is making excellent progress.

The first underground access drives intersected Kakula’s initial high-grade ore zone (+8% copper) in April. Ivanhoe and its joint-venture partner Zijin Mining are rapidly advancing construction of the 3.8-million-metric-ton-per-year (mt/y) processing plant and other surface infrastructure. Initial copper concentrate production is scheduled for the third quarter of 2021.

In parallel with construction of the Kakula copper mine, an independent Kakula definitive feasibility study (DFS) and an updated Integrated Development Plan for the entire Kamoa-Kakula mining complex also remain on schedule for completion in the third quarter of 2020. The Kakula DFS will provide a high level of accuracy for the project economics for Kakula’s initial phase of mine development, as most construction contracts and orders for significant capital items have been placed at fixed prices. The Integrated Development Plan will include details on the planned expansion phases for the entire Kamoa-Kakula mining complex.

In early March, Ivanhoe in conjunction with its joint-venture partners implemented strict quarantine and lockdown procedures to ensure the well-being of its employees and mitigate the impact of COVID-19 on its operations. The Kamoa-Kakula mine site has been locked down, and all key personnel are on site. As a result, mine development at Kamoa-Kakula has continued uninterrupted.

Also in early March, following guidelines outlined by the World Health Organization, the company appointed a task team with overall responsibility for COVID-19 response planning. Ivanhoe’s response team is led by Dr. Nicolette Du Plessis, a specialist in Pediatric Infectious Diseases and a professor at the University of Pretoria, and includes specialist doctors, paramedics, and nurses, as well as counsel from several external, world-leading epidemiologists.

Ivanhoe is in a strong financial position with cash and cash equivalents of $603 million at the end of March 2020 and no significant debt.

In April, Ivanhoe announced cost-reduction initiatives to generate cash savings of up to $75 million through 2021, including reducing discretionary spending at the company’s projects, lowering general and administrative costs, voluntary salary reduction for senior management, and deferral of certain exploration activities. The savings will be directed towards developing the Kakula mine to commercial production on schedule and on budget.

Underground development at the Kakula copper mine continues to advance ahead of schedule, with more than 14.4 kilometers (km) of underground development completed, 4.4 km ahead of plan. The pace of development is expected to continue to accelerate as additional mining crews are mobilized.

In April, crews at Kakula began mining ore in areas with a grade of greater than 8% copper. This ore is being stockpiled on a dedicated high-grade surface stockpile, which was forecast to contain 105,000 mt grading 5.95% copper by the end of May. Kakula’s medium-grade ore stockpile is forecast to contain an additional 250,000 mt at 3.01% copper. The high-grade stockpile is projected to significantly expand in the coming months as the majority of Kakula’s underground development will be in mining zones grading +5% copper.

On February 5, 2020, an updated, independently verified indicated mineral resource increased the combined Kamoa-Kakula project indicated mineral resource to 423 million mt grading 4.68% copper at a 3% cutoff. At a 1% cutoff, the combined indicated mineral resource stands at 1.4 billion mt grading 2.7%.

The initial indicated mineral resource estimate for the Kamoa North Bonanza Zone includes 1.5 million mt grading 10.7% copper at a 5% cut-off. Drilling in the first quarter of 2020 continued to target additional resources in the vicinity of the ultra-high-grade Bonanza Zone and the Far North Zone. Given the shallow depth, remarkable thickness, and massive copper sulphide mineralization discovered within the Kamoa North Bonanza Zone, Kamoa-Kakula’s engineers are evaluating potential opportunities to accelerate development of this discovery.

The Ivanhoe announcement, dated May 13, 2020, includes additional information about ongoing Kamoa-Kakula development, as well as updates on the status of the company’s Platreef mine development project in South Africa and its work to restart production at the historic Kipushi zinc-copper-lead-germanium mine in the DRC.