| | • | On August 11, 2016, Ivanhoe Mines announced what could prove to be Africa's most significant copper discovery at Kakula, on the Kamoa Copper Project, in the Democratic Republic of Congo (DRC). The massive, flat-lying, shallow, chalcocite-rich core of the Kakula Discovery zone now has been expanded to more than three kilometres in length - and still remains open in both directions. |
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| | • | Based on the game-changing drill results received to date, Ivanhoe believes that Kakula's copper discovery is substantially richer, thicker and more consistent than other known mineralization elsewhere on the Kamoa Project. The primary objective of the current drilling program at Kakula, which is using seven rigs, is to expand the thick, flat-lying, bottom-loaded zone of very high-grade, stratabound copper mineralization at the southern part of the discovery area that has the potential to be amenable to bulk, mechanized mining and to have a significant, positive impact on the Kamoa Project's future development plans. |
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| | • | Ivanhoe expects to receive an initial, independent Mineral Resource estimate for the Kakula Discovery around the end of Q3 2016. Upon receipt of the resource estimate, the Kamoa technical team plans to begin work on a preliminary economic assessment for Kakula. |
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| | • | Underground mine development at Kamoa's planned initial mining area at Kansoko Sud is progressing ahead of plan and within budgeted costs. The twin declines, incorporating both a service and a conveyor tunnel, each have advanced more than 130 metres since the first excavation blast was conducted in May of this year. Development of the underground mine is designed to reach the high-grade copper mineralization at the Kansoko Sud deposit during the first quarter of 2017. |
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| | • | Initial metallurgical test results received in July 2016 from a sample of drill core from exploration drilling in the Kakula Discovery zone achieved copper recoveries of 86% and produced a copper concentrate with an extremely high grade of 53% copper. The results also indicate that material from Kamoa's Kakula and Kansoko zones could be processed through the same concentrator plant, which would yield significant operational and economic efficiencies. |
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| | • | Earlier metallurgical testwork indicated that the Kamoa concentrates contain extremely low arsenic levels, by world standards - approximately 0.02%. Given this critical competitive marketing advantage, Kamoa's concentrates are expected to attract a significant premium from copper-concentrate traders for use in blending with concentrates from other mines. The Kamoa concentrates will help to enable the other concentrates to meet the limit of 0.5% arsenic imposed by Chinese smelters to meet China's new environmental restrictions. |
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| | • | Constructive and cordial negotiations are continuing between Ivanhoe Mines, its Kamoa joint-venture partner Zijin Mining Group Co., Ltd. and senior DRC government officials to complete the transfer to the DRC government of an additional 15% interest in the Kamoa Project, on terms to be negotiated. Ivanhoe expects a mutually beneficial agreement to be achieved in the near future that will provide long-lasting, positive benefits to the DRC government and the Congolese people. |
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| | • | On July 8, 2016, Ivanhoe received the second installment of $41.2 million owing from a Zijin Mining subsidiary as part of a strategic co-development agreement under which Zijin acquired 49.5% of Ivanhoe's majority stake in the Kamoa copper discovery. Zijin agreed to pay $412 million for a 49.5% interest in Ivanhoe subsidiary Kamoa Holding Limited that presently owns 95% of the Kamoa Project. |
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| | • | Also in the DRC, on May 2, 2016, Ivanhoe Mines announced a positive preliminary economic assessment (PEA) for the redevelopment of the Kipushi zinc-copper-germanium-lead-silver mine. The PEA plan covers the redevelopment of Kipushi as an underground mine, producing an annual average of 530,000 tonnes of zinc concentrate over a 10-year mine life at a total cash cost, including copper by-product credits, of approximately $0.54 per pound of zinc. Successful planned restoration of production would make Kipushi the world's highest grade, major zinc mine. A pre-feasibility study is underway that will further refine the optimal development scenario for the existing underground mine. |
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| | • | On May 11, 2016, Ivanhoe Mines announced a 58% increase in Indicated Mineral Resources tonnage and a 21% increase in the Inferred Mineral Resources tonnage at its Platreef platinum-group metals (PGM), nickel, copper and gold project in South Africa. The new resource estimate is further confirmation of Ivanhoe's belief that the deposit will be a model for safe, mechanized, underground platinum mining in South Africa. |
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| | • | Platreef's Indicated Resources now contain an estimated 42.0 million ounces of PGM plus gold, with an additional 52.8 million ounces in Inferred Resources, at the base-case cut-off grade of 2.0 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold. |
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| | • | At a lower cut-off grade of 1.0 g/t 3PE+gold, Platreef's Indicated Resources now contain an estimated 58.8 million ounces of PGM plus gold, with an additional 94.3 million ounces in Inferred Resources. |
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| | • | Platreef's Shaft 1, which entered its permanent sinking phase last month, now has reached a depth of more than 70 metres below surface and is expected to reach the Flatreef Deposit at a depth of 777 metres below surface during the third quarter of 2017. Shaft 1 will provide early development access into the deposit and will be utilized to fast track production during the first phase of the project. Ivanhoe expects to start Shaft 2 early works in 2017, including civil work for the box cut and hitch foundation. |
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| | • | Ivanhoe has made good progress on advancing the feasibility study for the first phase of development at Platreef. The study, which began in August 2015 and is being managed by DRA Global, is expected to be completed in early 2017. |
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| | • | Ivanhoe Mines' three projects achieved a combined 10.87 million hours of lost-time-injury-free (LTIF) work by the end of the second quarter of 2016. Ivanhoe had recorded 1.27 million LTIF hours at Platreef, 4.42 million hours at Kipushi and 5.18 million hours at Kamoa to the end of Q2 2016. |