TSX-listed Ivanhoe Mines’ subsidiary Ivanplats and its partners have welcomed the positive and significant results from two independent technical studies completed on the Phase 2 and Phase 3 expansions of the Tier 1 Platreef platinum, palladium, rhodium, nickel, gold and copper mine in South Africa.

The two completed independent studies cover the three-phase development of the mine.

This includes an updated feasibility study on the Phase 2 processing capacity expansion to 4.1-million tonnes a year, followed by a preliminary economic assessment (PEA) covering a new Phase 3 processing capacity expansion to 10.7-million tonnes a year.

The company expresses that the excellent results from both studies reinforce the industry-leading margins of the multi-generational Platreef mine.

The estimated life-of-mine (LoM) total cash cost for the Phase 2 expansion, as set out in the feasibility study, is $599/oz of platinum, palladium, rhodium and gold (3PE+Au), net of nickel and copper by-product credits.

LoM total cash costs fall to $511/oz of 3PE+Au in the PEA for the Phase 3 expansion. This compares with a near-multiyear low basket spot price of $1 205/oz of 3PE+Au, as at February 17.

The company says this ranks Platreef as the lowest-cost primary platinum group metals (PGM) producer globally.

Compared with other Southern African and North American primary PGM producers, Platreef’s low cash costs are predominantly owing to its unique, thick orebody, says Ivanhoe.

The company says the Platreef orebody will be mined using safe, mechanised and highly productive bulk mining methods, achieving superior economies of scale.

In addition, the Platreef orebody has high grades of nickel and copper as payable by-products.

The feasibility study outlines Phase 1 production from the fourth quarter of this year, followed by the Phase 2 expansion two years later, in the fourth quarter of 2027.

Phase 2 delivers, as outlined in the feasibility study, a near five-fold increase in platinum, palladium, nickel, rhodium and gold production to over 460 000 oz of 3PE+Au, plus about 9 000 t of nickel and 6 000 t of copper.

The company notes that the feasibility study generates a net present value (NPV) of $1.4-billion and an internal rate of return (IRR) of 20%, at consensus long-term metal prices.

The PEA, meanwhile, considers the Phase 3 expansion once the major Shaft #2 is available for hoisting in 2029.

This expansion further doubles the annualized 3PE+Au production to over one-million ounces of 3PE+Au, plus about 22 000 t of nickel and 13 000 t of copper.

The PEA is expected to rank Platreef as one of the world’s largest primary PGM producers on a platinum-equivalent basis.

The PEA generates an NPV of $3.2-billion and an IRR of 25%, at consensus long-term metal prices.

“The results of these studies mark the culmination of three decades of tireless efforts by thousands of our people to discover, then delineate, and finally build a world-class polymetallic mining complex that will have a life span of many human generations.

“With over 38-million ounces of precious metal on a gold-equivalent basis, Platreef is one of the largest precious metals projects under development on our planet. The project also contains one of the largest nickel-sulphide systems in the world.

“To be clear . . . there is more contained nickel in sulphide form at Platreef than there is remaining in Canada’s entire Sudbury basin. Beyond this globally significant resource base, Platreef has vast potential over coming generations to grow its endowment even further . . . since we last drilled the discovery from surface ten years ago,” says Ivanhoe co-chairperson Robert Friedland.

He notes that achieving first production at the mine later this year will mark the next step of growth in Ivanhoe’s journey to become the world's next major diversified mining company.

“At Platreef, we intend to build on the exceptional momentum we have achieved in the Democratic Republic of Congo, at the Kamoa-Kakula Copper Complex and the ultrahigh-grade Kipushi zinc/copper/silver mine.

“We will leverage this knowledge and experience to build another, great industry-leading Tier 1 asset, while delivering sustained benefits across our communities, our employees and our stakeholders alike,” says Ivanhoe president Marna Cloete.

“We could not achieve this without the support of our partners, including our industry-leading broad-based black empowerment trust, representing over 150 000 community members, and of course our Japanese shareholders – including Itochu; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation of Tokyo, Japan – whose forward-thinking investment made possible one of the largest exploration campaigns ever conducted in South Africa,” she adds.