SOUTH AFRICA - Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF) Co-Chairs Robert Friedland and Yufeng 'Miles' Sun announced today that the company's South African subsidiary, Ivanplats, and its partners welcome the outstanding positive findings of anindependent Platreef Integrated Development Plan 2020 (Platreef IDP20) for the tier one Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa, whichconsists of an updated feasibility study (Platreef 2020 FS) and a preliminary economic assessment (Platreef 2020 PEA).
The Platreef 2020 FS builds on the excellent results of the FS announced in July 2017 and is based on an unchanged Mineral Reserve, project designs for mining, and plant and infrastructure as in the Platreef 2017 FS; except with an increased production rate from 4.0 Mtpa to 4.4 Mtpa, in two modules of 2.2 Mtpa.
The 2020 FS includes an updated production schedule based on the current project status, costs and economic assumptions. The schedule for the 2020 FS is driven by the sinking of the project's second, larger shaft (Shaft 2), where early works have commenced. The 2020 FS envisions Shaft 2 equipped for hoisting in 2025, allowing for first concentrate production in the latter half of the year. The initial capital cost for the Platreef 2020 FS is estimated at US$1.4 billion.
The Platreef IDP20 also includes the Platreef 2020 PEA, which is an alternate, phased development plan that fast-tracks Platreef into production. The plan uses the project's first shaft (Shaft 1) for initial hoisting and mine development, with 825,000 tonnes of annual total rock hoisting capacity, of which 125,000 tonnes is allocated for development rock. The alternate plan envisions building an initial concentrator with a capacity of 770 thousand-tonnes-per-annum (ktpa), and could produce first concentrate in mid-2024.
The recently-completed sinking of Shaft 1 has created the opportunity to access early, high-grade tonnes in this scenario. While the 700-ktpa initial mine is being operated using Shaft 1, there would be opportunities to refine the timing of subsequent phases of expanded production, which is driven by the sinking of Shaft 2. Once completed, two 2.2 Mtpa concentrator modules would be commissioned, and the initial concentrator would be ramped up to its full capacity of 770 ktpa; increasing the steady-state production to 5.2 Mtpa. The initial capital cost for 700 ktpa under the Platreef 2020 PEA is estimated at US$390 million - substantially lower than the Platreef 2020 FS that requires Shaft 2 for first production.
Detailed engineering has commenced on the mine design, 770-ktpa concentrator and associated infrastructure for the phased development plan, which will be incorporated into an updated feasibility study in 2021. The Shaft 1 changeover will take place simultaneously in preparation for permanent hoisting by early 2022. The budget for 2021 is US$59 million, which includes US$10 million for commencement of the construction of the headframe to the collar of Shaft 2.
The Platreef IDP20 reflects the first phase of development for the Platreef Mine. It is designed to establish an operating platform to support potential future expansions to 12 Mtpa and beyond, as demonstrated in previous studies, which would position Platreef among the largest platinum-group metals producing mines in the world, producing in excess of 1.1 million ounces of palladium, platinum, rhodium and gold per year.
Updated FS re-affirms the outstanding economics of Platreef at 4.4-Mtpa production rate, while the PEA demonstrates optionality to bring Platreef into production faster by using Shaft 1, with significantly lower initial capital cost
Mr. Friedland commented: 'These powerful, independent economic results mark an important step in our vision of building and operating the world's next great precious metals mine, together with our local community and Japanese partners. We're now 25 years into discovering and developing the Platreef discovery, which has an unparalleled endowment of palladium, platinum, rhodium and gold; as well as large quantities of nickel and copper. And it still has tremendous potential to significantly expand the resource base, including a plethora of new exploration opportunities, many of which are near-surface.
'We have a mining licence, we have water, we have an orebody that is as thick as an eight-storey building, and we have a team of highly-skilled employees. We also have a 'basket' of precious metals contained in the ore at Platreef that have risen in recent years to levels in excess of US$2,100 an ounce for platinum-group metals and gold.
'The thick and flat-lying nature of the high-grade mineralization of Platreef's Flatreef deposit will accommodate the use of mechanized and state-of-the-art, automated mining techniques; allowing us to efficiently and safely bring material to surface to produce precious metals vital to a proliferation of modern technologies.
'PGMs have a very bright future in clean energy, including hydrogen fuel cells, while nickel and copper are clearly vital metals for global decarbonization initiatives and worldwide electrification. We're living in an era of unprecedented change, with the world breeding mega-cities prodigiously. One result is increasingly toxic air, with a whole suite of health effects from heart attacks to stroke, asthma and dementia. If you want clean air, and if you want to stop burning coal and hydrocarbons, the world immediately needs vastly more copper, nickel, and platinum-group metals.'
Palladium and rhodium have been two of the best performing metals in recent years, currently trading at approximately US$2,400 an ounce and $16,100 an ounce respectively, as stricter air-quality rules boost demand for the metals used in vehicle pollution-control devices. Platreef has an estimated 18.9 million ounces of palladium in current Indicated Mineral Resources, and an additional 23.8 million ounces in current Inferred Mineral Resources, at a 2.0 g/t 3PE+Au cut-off. Platreef has an estimated 1.2 million ounces of rhodium in current Indicated Mineral Resources, and an additional 1.6 million ounces in current Inferred Mineral Resources, at a 2.0 g/t 3PE+Au cut-off.
'The feasibility study demonstrates once again the incredible efficiency that can be achieved at Platreef when Shaft 2, one of the largest shafts in Africa, is completed. It confirms without a shadow of a doubt, that not only is Platreef one of the largest, richest precious metals deposits on the planet, but it also will be one of the lowest-cost operations and feature exceptional returns on capital,' Mr. Friedland added.
'Now that Shaft 1 is complete, the phased development plan shows that there is an exciting alternate path to develop this great deposit, with much lower upfront capital requirements, to establish a strategic production foothold on the emerging Northern Limb of South Africa's prolific Bushveld Complex. In turn, this can be leveraged to unlock Platreef's tier one, long-life mineral potential.'
Marna Cloete, Ivanhoe's President and CFO, commented: 'The Northern Limb is the future of South Africa's platinum-group-metals mining industry. Platreef will have the distinct advantage of having a highly mechanized, underground mining operation with a small environmental footprint. Approximately 60% of the mine's tailings will be sent back underground to fill mined-out voids, and the remainder will be treated using sustainable, dry-stack technology, conferring additional significant environmental, safety and economic advantages. On behalf of our stakeholders, international shareholders and progressive end users of our metals, we are pleased to be leading the positive transformation in the way future underground platinum-group-metals mining operations in South Africa will be conducted.'
Dr. Patricia Makhesha, Ivanhoe's Executive Vice President, Sustainability and Special Projects, stated: 'We are very proud to share 25 years of exploration and development achievements at Platreef with our local communities and stakeholders. These stakeholders, including more than 150,000 local Mokopane area residents, see international investment and responsible development of natural resources as key to unlocking critical opportunities for widespread, long-term prosperity.'
'We believe world-scale projects like Platreef will be integral as South Africa plans its economic future around the green-energy transition and materials that will fuel a growing, global clean-technology supply chain. We're excited to create sustainable, long-term transformative opportunities for our stakeholders, which include employment, procurement and development opportunities,' Dr. Makhesha added.
About Ivanhoe Mines
Ivanhoe Mines is a Canadian mining company focused on advancing its three principal joint-venture projects in Southern Africa: the development of major new, mechanized, underground mines at the Kamoa-Kakula discoveries in the Democratic Republic of Congo (DRC) and at the Platreef palladium-platinum-nickel-copper-rhodium-gold discovery in South Africa and the extensive redevelopment and upgrading of the historic Kipushi zinc-copper-germanium-silver mine, also in the DRC. Kamoa-Kakula and Kipushi will be powered by clean, renewable hydroelectricity and will be among the world's lowest greenhouse gas emittersper unit of metal produced. Ivanhoe also is exploring for new copper discoveries on its wholly-owned Western Foreland exploration licences in the DRC, near the Kamoa-Kakula Project.
Contact:
Bill Trenaman
Tel: +1.604.331.9834
Cautionary statement on forward-looking information
Certain statements in this news release constitute 'forward-looking statements' or 'forward-looking information' within the meaning of applicable securities laws. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of the company, the Platreef Project, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as 'may', 'would', 'could', 'will', 'intend', 'expect', 'believe', 'plan', 'anticipate', 'estimate', 'scheduled', 'forecast', 'predict' and other similar terminology, or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. These statements reflect the company's current expectations regarding future events, performance and results, and speak only as of the date of this news release.
The forward-looking statements and forward-looking information in this news release include without limitation, (i) statements regarding the Platreef budget for 2021 is US$59 million, which includes US$10 million for commencement of the construction of the headframe to the collar of Shaft 2; (ii) statements regarding the Platreef IDP20 is designed to establish an operating platform to support potential future expansions up to 12 Mtpa producing in excess of 1.1 million ounces of palladium, platinum, rhodium and gold per year, as demonstrated in previous studies, which would position Platreef among the largest platinum-group-metals producing mines in the world; (iii) statements regarding the feasibility study confirms without a shadow of a doubt, that not only is Platreef one of the largest, richest precious metals deposits on the planet, but it also will be one of the lowest-cost operations and feature exceptional returns on capital; (iv) statements regarding in parallel with the changeover of Shaft 1 for permanent hoisting, detailed engineering will take place in 2021 on the mine design, 770-ktpa concentrator and associated infrastructure design and amendments to the water use licence, waste licence and environmental impact assessment required for the phased development plan will be tabled; (v) statements regarding following the completion of the changeover, off-shaft development would take place in early 2022 with the initial aim of establishing a ventilation raise, allowing for the development of underground infrastructure from 2023; (vi) statements regarding local economic development projects at Platreef will contribute to community water source development with the Mogalakwena Municipality boreholes program, educational program in partnership with Department of Education and significant contribution funding for sanitation infrastructure at the municipality and (vii) statements regarding the installation and commissioning of the Shaft 1 kibble winder control unit upgrade expected by end of the first quarter of 2021, and the anticipated completion of equipping Shaft 1 for hoisting in the first quarter of 2022.
In addition, all of the results of the Platreef IDP20, Platreef 2020 PEA and Platreef 2020 FS constitute forward-looking statements and forward-looking information. The forward-looking statements include metal price assumptions, cash flow forecasts, projected capital and operating costs, metal recoveries, mine life and production rates, and the financial results of the Platreef 2020 PEA and FS. These include estimates of internal rates of return after-tax of 20.0% (PEA) and 19.8% (FS) with payback periods of 8.4 years and 4.4 years respectively; net present values including a PEA NPV at an 8% discount rate of US$1.6 billion and a FS NPV at an 8% discount rate of US$1.8 billion; future production forecasts and projects, including average annual production of 512koz 3PE+Au in the PEA and 508koz 3PE+Au in the FS; estimates of net total cash cost, net of copper and nickel by-product credits and including stay-in-business (SIB) capital costs of US$460/oz. 3PE+Au in the PEA and US$442/oz. 3PE+Au in the FS; mine life estimates, including a 30 year mine life in the PEA and a 30 year mine life in the FS; initial capital costs of US$0.39 billion in the PEA and US$1.4 billion in the FS; average 3PE+Au grades of 4.4 g/t in the PEA and 4.4 g/t in the FS; cash flow forecasts; estimates of 3PE+Au recoveries of 86.4% in the PEA and 86.4% in the FS. Readers are cautioned that actual results may vary from those presented.
All such forward-looking information and statements are based on certain assumptions and analyses made by Ivanhoe Mines' management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believe are appropriate in the circumstances. These statements, however, are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information or statements including, but not limited to, unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts to perform as agreed; social or labour unrest; changes in commodity prices; unexpected failure or inadequacy of infrastructure, industrial accidents or machinery failure (including of shaft sinking equipment), or delays in the development of infrastructure, and the failure of exploration programs or other studies to deliver anticipated results or results that would justify and support continued studies, development or operations. Other important factors that could cause actual results to differ from these forward-looking statements also include those described under the heading 'Risk Factors' in the company's most recently filed MD&A as well as in the most recent Annual Information Form filed by Ivanhoe Mines. Readers are cautioned not to place undue reliance on forward-looking information or statements. Certain of the factors and assumptions used to develop the forward-looking information and statements, and certain of the risks that could cause the actual results to differ materially are presented in the 'Platreef 2020 Feasibility Study', available on SEDAR at www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com.
This news release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources and Mineral Reserves is inherently uncertain and involves subjective judgments about many relevant factors. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on, among other things: (i) fluctuations in platinum, palladium, gold, rhodium, copper, nickel or other mineral prices; (ii) results of drilling; (iii) results of metallurgical testing and other studies; (iv) changes to proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates and (vi) the possible failure to receive required permits, approvals and licences.
Although the forward-looking statements contained in this news release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.
TURQUOISE HILL RESOURCES LTD. 
