Kipushi Corporation, a joint venture (JV) between TSX-listed Ivanhoe Mines and Democratic Republic of Congo (DRC) State-owning mining company Gécamines, has entered into an offtake agreement and a $250-million financing term sheet with diversified miner Glencore.

This will assist Ivanhoe and Gécamines in their endeavour to return the historic Kipushi zinc/copper/lead/germanium mine to production. Current plans are for the mine to produce its first concentrate in the third quarter of 2024.

The offtake is for all of Kipushi's zinc concentrates, estimated to be between 400 000 t/y and 600 000 t/y, over a five-year term.

The $250-million financing facility will be split into two tranches and drawn down quarterly, subject to conditions precedent.

Ivanhoe reports that activities to date at Kipushi have been funded by way of a shareholder loan from Kipushi Holding, which totalled $661-million as at March 31, and that the remaining initial capital cost for the Kipushi project in 2023 and 2024 is $380-million.

“The offtake and financing milestones are critical deliverables that allow us to return Kipushi to production by the third quarter of next year. Most importantly, these agreements reflect the strength of our partnership with Gécamines and our commitment to the people of the Kipushi community and the DRC.

"Kipushi soon will join Kamoa-Kakula as another tier-one production asset in our portfolio, and mark the next step as we execute our plan to emerge as the world's newest diversified major mining company,” comments Ivanhoe president Marna Cloete.

Ivanhoe co-chairperson Robert Friedland adds that, when Ivanhoe acquired its interest in Kipushi about 12 years ago, the mine had been flooded and was in a dilapidated state.

"We commend the efforts of the employees of Kipushi Corporation who restored this crown jewel of the DRC. We are proud to see new, state-of-the-art mining equipment, operated by our Congolese employees, underground for the first time in three decades as we begin to open up the Big Zinc deposit, one of the richest mineral endowments anywhere on earth.

"Zinc is the fourth most consumed metal in the world, and its supporting role in the energy transition is greatly overlooked as the backbone of clean energy alternatives, including wind turbines and solar panels,” he points out.

Gécamines chairperson Guy-Robert Lukama Nkunzi says the State-owned company is also excited to see the historic mine return to production.

"This is an important moment for Gécamines, as well as for the local community and the people of the DRC. A significant amount of work has got us to this point, which marks another major milestone in this innovative partnership that we have formed and comes with the potential to unlock significant value for the country.

"The Kipushi project, by its unprecedented nature, can form a catalyst for Gécamines to become an important actor in the project’s value chain and for the development of transport infrastructure,” adds.

CONSTRUCTION UPDATE
Ivanhoe reports that underground mining activities are advancing ahead of schedule, in preparation for stoping of the ultra-high-grade Big Zinc deposit to commence in January 2024.

Early works activities were completed ahead of schedule in the third quarter of 2022. This comprised the refurbishment and supporting of key mining excavations, as well as blasting of the truck-tip turning bays and truck passing bays on the mine’s 1 150 m level.

Explosive storage bays, an underground workshop and a machinery assembly bay were also completed ahead of underground mine development, which started in the fourth quarter of 2022.

In the first quarter of this year, an underground mining contractor was appointed and started the mobilisation of its mining equipment to site. The majority of the primary mining fleet was sourced from Epiroc in Sweden, and includes six drill rigs, six scooptrams (LHDs) and 13 haul trucks, as well as additional secondary support equipment. The first batch of mobile mining equipment has been delivered to site.

The bulk of the primary and secondary fleet will be delivered by June, with the remainder arriving later in the year as underground development ramps up ahead of the commencement of stoping in early 2024.

Underground development is currently taking place to establish access to the Big Zinc orebody. A total of 682 m of horizontal development was completed in the first quarter of this year – over 30% more than planned.

Perimeter, access and ventilation drives are now under development at several locations between the 1 220 m and 1 335 m levels, while decline development continues parallel to the Big Zinc deposit.

The decline is currently at 1 340 m below surface.

The underground operation is fully mechanised, cost-effective and designed to enable a quick ramp-up to a steady state of 800 000 t/y, says Ivanhoe.