Name and Location
Platreef platinum group metals/copper/nickel/gold project, Limpopo, South Africa.



Client
The project is 64%-owned by Ivanhoe Mines and 10%-owned by a Japanese consortium of Itochu Corporation; ITC Platinum, an Itochu affiliate; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation. The Japanese consortium's 10% interest in the Platreef project was acquired in two tranches for $290-million.

Ivanhoe recently implemented its proposed broad-based, black economic-empowerment structure, which includes communities, employees and entrepreneurs, who together own 26% of the Platreef project. The company will begin the roll-out of its social and labour plan, which includes the identification and implementation of local economic development projects.

Project Description
The Platreef project involves the development and construction of a highly mechanised underground mine to access the underground Flatreef discovery at Ivanhoe’s Platreef project, on the northern limb of the Bushveld Igneous Complex, near Mokopane, in Limpopo. The company is sinking a bulk-sample shaft to obtain mineralised bulk samples for further studies. Ivanhoe has started the sinking of Shaft No 1 to obtain a mineralised bulk sample to complete the development assessment of the Flatreef.

The Flatreef mineral resource, with a strike length of 6 km, predominantly lies within a flat to gently-dipping portion of the Platreef mineralised belt at relatively shallow depths of about 700 m to 1 100 m below surface.

A preliminary economic assessment (PEA) recommends a phased approach to the development of a large, mechanised, underground mine.

Ivanhoe's plan for the project entails three phases of potential development for an underground mine and the concentrator processing facility:
• Phase 1 – a four-million-tonne-a-year mine and concentrator.
• Phase 2 – an eight-million-tonne-a-year mine and concentrator (base case).
• Phase 3 – a 12-million-tonne-a-year mine and concentrator.

Opportunities also exist for additional phases of development beyond 12-million tonnes a year, subject to further study.

The base case for the Platreef PEA analysis is the eight-million-tonne-a-year mine and concentrator production scenario.

The base case is targeting 785 000 oz/y of platinum, palladium, rhodium and gold production.

The development phases will be implemented depending on market demand, smelting and refining capacity and capital availability. It could even consider an expansion beyond the third phase, subject to further study.

Net Present Value/Internal Rate of Return
The project has an estimated base-case after-tax net present value of $1.6-billion at an 8% discount rate and and internal rate of return of 14.3%.

Value
The base case scenario is targeting an estimated preproduction capital requirement of about $1.7-billion, including $381-million in contingencies.

Duration
Phase 1, which will establish an operating platform to support the start of production at a nominal plant capacity of four-million tonnes a year is expected by 2020. Phase 2, which includes a ramp-up to a plant capacity of eight-million tonnes a year, is expected by 2024. Phase 3, to a steady-state plant capacity of 12-million tonnes a year, is expected by 2028.

Latest Developments
The development of the latest major new underground, mechanised platinum mine, near Mokopane, in Limpopo, has been marred by a “small group” of people instigating animosity towards the emerging operation, says TSX-listed Ivanhoe Mines founder Robert Friedland.

However, Friedland has vowed it will not “be held hostage” by “known troublemakers” bent on disrupting the construction of its Platreef project to advance their own “self-serving agendas”.

The latest incident near the $1.7-billion project, which started preparations earlier this month following the activation of a mining right by the Department of Mineral Resources, ended in communities’ confrontation with police.

In November, Ivanhoe resumed site work preparations for the three-phase development, with the construction of the initial production shaft of the planned underground mine the focal point of the first phase of development.

However, Ivanhoe claims “known trouble-makers” instigated community members to gather at an access roadway with “false claims” that the company would be recruiting workers for construction at the site.

“The incident ended after the South African Police Services' public order unit dispersed the illegal gathering,” the company said in a statement, noting that about 100 people were on the site at the time.

“The company will not be held hostage by a small group of self-serving agitators whose agenda and conduct is contrary to the majority interests of the area communities that will benefit from the jobs and socioeconomic development that will flow from the development of [the project],” it said.

Ivanhoe is confident that the “overwhelming majority” of people in the host communities support the Platreef project, particularly after concluding a broad-based black economic-empowerment deal that benefited 20 host communities.

Through a trust, the targeted 150 000-resident communities holds a 20% stake in the project and willreceive a yearly fixed contribution of R11-million while the mine is being developed.

Key Contracts and Suppliers
Aveng Mining (primary sinking contractor); DRA, in consultation with Stantec, SRK, Geo Tail, Golder Associates and Digby Wells (PFS); Murray & Roberts Cementation (design and engineering of Shaft No 2); FLSmidth (early engineering works for the winding equipment); Whittle Consulting (an enterprise optimisation study for each phase of the project) and Mintek (metallurgical testwork).

On Budget and on Time?
The Platreef project is on target for initial underground development in 2018 and concentrator start-up in the fourth quarter of 2019.



Contact Details for Project Information
Ivanhoe Mines VP communications & public affairs Jeremy Michaels, tel +27 11 088 4300 or email jeremy.michaels@ivanplats.com.
Ivanhoe Mines VP and project director Gerick Mouton, tel +27 11 088 4300 or email gerickm@ivanplats.com.
Aveng Mining, tel +27 11 821 1800.
DRA, tel  +27 11 202 8600 or email info@DRAglobal.com.
SRK, tel +27 11 441 1111, fax +27 11 880 8086 or email johannesburg@srk.co.za.
Geo Tail, tel +27 12 348 1051, fax +27 86 686 9023 or email ejc@geotail.co.za
Golder Associates, Elize Herselman, tel +27 21 912 1060, fax +27 86 582 1561 or email eherselman@golder.co.za
Digby Wells, tel +27 11 789 9495, fax +27 11 789 9498 or email info@digbywells.co.za.
Murray & Roberts Cementation, tel +27 11 201 5000, fax +27 11 201 5500 or email info.cementation@murrob.com
Mintek, tel +27 11 709 4111 or fax +27 11 793 2413.
FLSmidth, tel +1 801 871 7000, fax +1 801 871 7001 or email info.slc@flsmidth.com.
Whittle Consulting, tel +61 3 9898 1755 or email info@whittleconsulting.com.au.