Ivanhoe Mines executive chairman Robert Friedland and CEO Lars-Eric Johansson announced that upgrading work at the Mwadingusha hydropower plant in the Democratic Republic of Congo (DRC) has almost tripled the plant’s interim power output from 11MW to 32MW.

This represents 45% of the plant’s designed capacity. Three of Mwadingusha’s six generators now have been modernized; the remaining three generators are due to be upgraded and fully operational by the end of 2019 – restoring the plant to its installed output capacity of approximately 71 MW of power.

The work at Mwadingusha, part of a program to eventually overhaul and boost output from three hydropower plants, is being conducted by engineering firm Stucky, of Lausanne, Switzerland, under the direction of Ivanhoe Mines and its joint-venture partner, Zijin Mining Group, in conjunction with the DRC’s state-owned power company, La Société Nationale d’Electricité (SNEL). Once fully reconditioned, the three plants will have installed capacity of approximately 200 MW of electricity for the national grid, which is expected to be more than sufficient for the Kamoa-Kakula Copper Project.

Mr. Friedland said a long-term, sustainable supply of electricity is essential to Ivanhoe’s vision to develop Kamoa-Kakula in an environmentally and socially responsible manner.

“The upgrading program underway at Mwadingusha is a significant private-public partnership venture between SNEL, Ivanhoe and Zijin, which is vital to secure sustainable, clean electricity for the Congolese people and for the development of a Tier One copper mine at Kamoa-Kakula,” Mr. Friedland added.

“Hydropower, with its virtues of being clean and renewable, is the best energy solution to support our development priorities as we continue to look for ways to reduce our impact on the environment and produce the copper the world requires.”

Mwadingusha is the first of three hydropower plants that Ivanhoe and Zijin plan to upgrade.

Upgrading of the other two existing hydroelectric power plants – Koni and Nzilo 1 – is expected to begin once Mwadingusha’s upgrading is completed.

The Mwadingusha and Koni plants are in cascade, with Koni directly downstream from Mwadingusha on the Lufira River at the mouth of Lake Tshangalele, north of Likasi and approximately 250 kilometres northeast of the Kamoa Mine development site.

The Nzilo 1 plant is on the Lualaba River, downstream of Nzilo Lake and north of the city of Kolwezi, approximately 40 kilometres from Kamoa.

Mr. Johansson said that the Kakula Mine development site, approximately 10 kilometres south of Kamoa’s initial Kansoko Mine site, began receiving power from the national grid last month.

Kakula’s development is being fast-tracked, with a pre-feasibility study in progress. The Kakula box cut was successfully completed in October 2017 and the first blast for the twin declines at Kakula took place in November 2017.

The Kakula Copper Deposit is a gently-dipping blanket of thick, chalcocite-rich copper mineralization. Initial mine development is planned to begin in the flat, near-surface zone, which at a 3% cut-off is between 7.1 metres and 11.7 metres thick, with copper grades of between 8.24% and 10.35% along the deposit’s axis.

Based on the results from an independent National Instrument 43-101 preliminary economic assessment (PEA) released in November 2017, Kakula’s ultra-high copper grade is expected to average 6.4% over the first 10 years of production.

An updated Mineral Resource estimate for Kakula, being prepared based on drilling completed to the end of December 2017, is expected to result in a significant upgrade and expansion of the Kakula Mineral Resources.

Results from drill holes completed to the end of December 2017 will form the basis of the new estimate that will encompass the entire strike length of the Kakula Discovery, which now extends beyond 12 kilometres. This represents an increase of approximately 60% in the strike length that will be used to calculate the new resource estimate, compared to the 7.7-kilometre strike length covered by Kakula’s current resource estimate.

The new resource estimate will enable Ivanhoe and Zijin to assess early and expanded production scenarios by incorporating resources from Kakula West and Kansoko to support the main Kakula development plan that was detailed in the November 2017 Kakula preliminary economic assessment.

About the Kamoa-Kakula Project

The Kamoa-Kakula Project is a very large, stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt, located approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi. The Kamoa Copper Deposit was discovered by Ivanhoe Mines (then named Ivanhoe Nickel & Platinum) in 2008, followed by the discovery of the Kakula Deposit in early 2016.

In August 2012, the DRC government granted mining licences to Ivanhoe Mines for the Kamoa-Kakula Project that cover a total of 397 square kilometres. The licences are valid for 30 years and can be renewed at 15-year intervals.

The current Mineral Resource estimate for the Kamoa-Kakula Copper Deposit has an effective date of November 27, 2017, and was prepared by George Gilchrist, Ivanhoe

Mines’ Mineral Resources Manager, under the direction of Dr. Harry Parker and Gordon Seibel, of Amec Foster Wheeler. The combined Kamoa-Kakula Indicated Resources total approximately 1.1 billion tonnes grading 2.78% copper, containing 67.9 billion pounds of copper, plus another 261 million tonnes of Inferred Resources at 1.94% copper, containing 11.2 billion pounds of copper, at a 1.0% copper cut-off grade. Details of the current Mineral Resource estimate are contained in Ivanhoe Mines’ November 28, 2017, news release.

Ivanhoe Mines and Zijin Mining each hold an indirect 39.6% interest in the Kamoa-Kakula Project, Crystal River Global Limited holds an indirect 0.8% interest and the DRC government holds a direct 20% interest.