Name and Location
Ivanplats Platreef project – platinum-group elements, nickel, copper and gold mine, Limpopo, South Africa.

Client
Ivanhoe Mines owns 64% of the Platreef project through its subsidiary, Ivanplats, and is managing all project development work. The South African beneficiaries of the approved broad-based black economic-empowerment (BBBEE) structure have a 26% stake in the project and the remaining 10% is owned by a Japanese consortium of ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; ITC Platinum Development, an ITOCHU affiliate; and Japan Gas Corporation.

Ivanplats is the top-ranked platinum-sector mining company in terms of compliance with the country’s black economic-empowerment laws. The company achieved Level 3 status in its first verification assessment on the BBBEE scorecard.

Project Description
The Platreef project is a Tier 1 discovery, which contains the underground Flatreef deposit, located on the northern limb of South Africa’s Bushveld Igneous Complex, the world’s premier platinum-producing region. Ivanplats has declared an initial probable mineral reserve of 15.51-million ounces of platinum, palladium, rhodium and gold (3PE+Au). The mineral reserve is expected to support a 31-year mine life at steady-state production of four-million tonnes a year.

An independent preliminary economic assessment (PEA), which was completed in March 2014, proposed the development of the mine in three phases. The Platreef prefeasibility study (PFS), which was completed in January 2015, validated the results of Phase 1 of the independent PEA that outlined a phased approach to Platreef's long-term development.

Key features of Phase 1 include:

• the development of a large, mechanised, underground mine, with an initial four-million-tonne-a-year concentrator and associated infrastructure; and
• a planned initial average yearly production rate of 433 000 oz of 3PE+Au, and 19-million pounds of nickel and 12-million pounds of copper a year.

Platreef will rank at the bottom of the cash-cost curve, at an estimated $322/oz of 3PE+Au, net of by-products.

The second phase will double production to eight-million tonnes a year.

The third phase involves the expansion of the mine to a steady state of 12-million tonnes a year, placing it among the largest platinum group metals mines in the world.

Mining zones in the current Platreef mine plan occur at depths ranging from about 700 m to 1 200 m below surface.

Access to the mine will be through two vertical shafts. Shaft 1 is currently under development and will be used for initial access and early underground development. Shaft 1 will have an internal diameter of 7.25 m and is projected to reach a total depth of 975 m in 2018. Additional dedicated ventilation shafts will be provided to support mine development. Shaft 2 will comprise the main personnel, material and ore-handling system.

Highly productive mechanised methods will be used for mining, including long-hole stoping and drift-and-fill mining. The ore will be hauled from the mechanised stopes to the bottom of Shaft 2, where it will be crushed and hoisted to surface.

Shaft 2 will have a finished internal diameter of 10 m and will be equipped to hoist up to six-million tonnes a year.

Net Present Value/Internal Rate of Return
Phase 1 has an after-tax net present value, at an 8% discount rate, of $972-million and an after-tax internal rate of return of 13%.

Value
The estimated preproduction capital requirement for Phase 1 is about $1.2-billion, including $114-million in contingencies.

Duration
According to the previously released PEA, Phase 1 is expected to be completed by 2019.

Phase 2 is expected to be completed by 2024 and Phase 3 by 2028.

Latest Developments
Ivanhoe Mines is confident that its Platreef mine, which is expected to produce 12-million tonnes a year, will be the largest platinum group metals (PGMs) mine in the world “by a massive margin”.

Ivanhoe mine executive chairperson and founder Robert Friedland has confirmed that the mine will start operations in 2019 and will be continuously expanded in a series of stages until it is the largest platinum/palladium mine globally.

Friedland has said the mine will be a state-of-the-art, modern mine, expected to last for the next 100 years, and that it will make the most of new automation technology, with the No 2 shaft becoming the largest mining shaft in South Africa.

Friedland has also revealed that the community around the mine has been widely consulted, with 150 000 members becoming equity shareholders, and an estimated 74% of employees coming from surrounding communities.

Further, a new water pipeline from the Goshielo dam will supply the mine with water, while Eskom will supply bulk power.

Key Contracts and Suppliers
DRA Projects (PFS, FS, mining, concentrator and infrastructure); Orewin (National Instrument 43-101 technical report); Aveng Mining (Shaft 1 sinking contractor); M&R Cementation (design and engineering for shafts infrastructure); Stantec Consulting (mine planning); Golders Associates (water studies and backfill); Digby Wells Environmental (social- and environmental-impact studies); SRK (geotechnical), Mintek (metallurgical testwork), Murray & Roberts Cementation (design and engineering of Shaft 2), FLSmidth (winding equipment).

On Budget and on Time?
Phase 1 is under development and will establish an operating platform to support the start of production, which is expected by 2019.

Contact Details for Project Information
Ivanplats VP and executive head: capital projects Gerick Mouton, tel +27 11 088 4300 or email gerickm@ivanplats.com.
DRA Projects, tel +27 11 202 8600 or email info@DRAglobal.com.
Orewin, tel +61 8 8210 5600 or email orewin@orewin.com.
Aveng Mining, tel +27 10 207 7000, fax +27 10 207 7202 or email info@avengmining.com.
M&R Cementation, tel +27 11 201 5000 or email info.cementation@murrob.com.