Production from Kipushi's ultra-high-grade Big Zinc deposit targeted for late 2024, marking one hundred years since the mine first opened
Unveiling the ceremonial plaque. (Credit: Ivanhoe Mines/Newsfile Corp)
Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) President Marna Cloete is pleased to announce that Kipushi Corporation SA (KICO), a joint venture between Ivanhoe and DRC state-owned mining company Gécamines, recently hosted a breaking-ground ceremony to commemorate the start of construction of the processing plant at the historic Kipushi zinc-copper-germanium-silver mine. In addition, Ivanhoe signed a memorandum of understanding (MOU) with the provincial government of Haut-Katanga to study options for upgrading the DRC-Zambia border crossing in the town of Kipushi for commercial imports and exports.
The ground-breaking ceremony was attended by His Excellency Jean-Michel Sama Lukonde, Prime Minister of the Democratic Republic of the Congo, Her Excellency Adèle Kayinda Mahina, Minister of State and Minister of Portfolio, Her Excellency Antoinette N’Samba Kalambayi, Minister of Mines, members of the provincial government of the Haut-Katanga Province and other national, provincial and local dignitaries, in addition to representatives from Ivanhoe, Gécamines and the town of Kipushi.
The delegation was presented with the development plan for returning the Kipushi mine to production by late 2024 – one hundred years since it was first opened and 30 years since it was placed on care and maintenance.
The ceremony follows the outstanding results of the Kipushi 2022 Feasibility Study, announced in February 2022, as well as the agreement signed between Ivanhoe Mines and Gécamines to bring the Kipushi mine back into production.
The Kipushi 2022 Feasibility Study evaluates the development of an 800,000-tonne-per-annum concentrator and underground mine, producing on average of 240,000 tonnes per annum of zinc contained in concentrate over a 14-year life of mine. The successful commencement of commercial production would establish Kipushi as the world’s highest-grade major zinc mine, with an average head grade of 36.4% zinc over the first five years of production.
Existing, rehabilitated surface and underground infrastructure allow for significantly lower capital costs than comparable development projects. The estimated pre-production capital cost, including contingency, is $382 million. This infrastructure also allows for a relatively short construction timeline of two years, with the principal development activities being the construction of a conventional concentrator facility and supporting infrastructure, together with the restart of mining activities underground.
At a zinc price of $1.40 per pound, the after-tax net present value (NPV) at an 8% real discount rate is $1.4 billion, with an after-tax real internal rate of return (IRR) of 54%. The current spot zinc price is $1.46 per pound.
Life-of-mine average C1 cash costs of $0.65 per pound of zinc are expected to rank Kipushi, once in production, in the second quartile of the cash cost curve for zinc producers globally.
Ordering of long-lead equipment is underway and early construction activities have commenced. Financing and offtake discussions, including a pre-payment facility of $250 million, are well advanced with several interested parties.
Source: Company Press Release