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
Ivanhoe has employed more than 650 men and women at its flagship Platreef project, with residents of Mokopane holding more than 500  jobs, representing 78% of the total workforce.

About 200 of the total workforce are Ivanplats employees, about 80% of whom are from the Mokopane area. Among the nine external contractors that presently provide the balance of the workforce at Platreef, the current proportion of workers drawn from the local area ranges between 70% and 100%.

"The resumption of work is enabling Ivanplats and our contractors to fulfil our commitment to create jobs and give priority to local residents when recruiting to fill available positions. We are making a meaningful contribution to the relief of the area's acute level of unemployment and we appreciate the interest that has been expressed by supportive residents of our neighbouring communities, who see themselves as beneficiaries and partners in our broad-based black-economic empowerment structure that has been designed to help advance the realisation of their aspirations,” says CEO Lars-Eric Johansson.

Ivanhoe Mines has noted that the main priority at the mine site is to complete excavating the boxcut to establish access to build the large concrete surface collar for Shaft No 1, which will be the initial production shaft in the first phase of Platreef's development. The collar will also serve as a base that will anchor the headframe structure and house the ventilation opening.

Shaft No 1, with an internal diameter of 7.25 m and a yearly hoisting capacity of 2.5-million tonnes, is expected to reach a total depth of 975 m in 2018. In 2017, it will be used to collect a mineralised bulk sample for metallurgical testing from the 800 m level of the Platreef project's Flatreef deposit.

Work on the shaft and related mining-plant components is being conducted within the 20 ha, fenced construction compound designed to enhance worksite safety, reduce visual impact on residential areas and contribute to the effectiveness of environmental management programmes.

Meanwhile, upgrading work on the stage and hoist winders for the sinking phase of Shaft No 1 has been completed and steel manufacture for the sinking stage and headgear has started. Design and engineering work is proceeding on the main components for Shaft No 2. The 10-m-diameter main production shaft will be capable of hoisting six-million tonnes a year and will also be fitted with a 150-person equipment cage.

Ivanhoe expected to receive the results of a prefeasibility study (PFS) in December, which would expand on the Phase 1 development scenario outlined in the PEA published in March 2014.

The company has also contracted Whittle Consulting, of Melbourne, Australia, to conduct an optimisation study using the Platreef PFS production schedules, revenues and costs as a base. The Whittle study's main focus will be on increasing cash flow using enhanced mine-scheduling techniques, stope cut-off optimisation and matching hoisting and milling capacities through the planned, subsequent expansion phases. The study's recommendations are intended to provide guidance for the feasibility study, which is scheduled to start in the second quarter of 2015.

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.