Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) has updated the resource estimate for its massive Kamoa-Kakula project in the Democratic Republic of Congo (DRC).
Kamoa-Kakula - among the world's largest copper deposits - contains 1.4 billion indicated tonnes grading 2.74% copper for 83.7 billion lb. copper and another 339 million inferred tonnes grading 1.68% copper for 12.5 billion lb. copper at a 1% cut-off grade.
The majority of the company's additional resources in its Feb. 5 estimate come from the Kamoa deposit's high-grade Bonanza and Far North Zones. (The updated resource covers about 600 metres of strike length in the deeper western portions of the Bonanza Zone and 1,500 metres of strike length in the shallower eastern portions of the Bonanza Zone.)
Indicated resources for Kamoa now stand at 760 million tonnes grading 2.73% copper for 45.8 billion lb. contained copper and inferred resources of 235 million tonnes grading 1.70% copper for 8.8 billion lb. contained copper at a 1% cut-off grade.
"This includes the first contribution from the Kamoa North Bonanza Zone of 1.5 million tonnes grading 10.7% copper - slightly larger than the 1 million tonnes we were expecting for the high-grade core," Andrew Mikitchook, a mining analyst at BMO stated in a research note. "The Kamoa North Bonanza grades are clearly compelling to add to the front of the mine life as they are higher than the 6.4% copper grades at the front of the Kakula prefeasibility study mine plan."
Kakula, which will be a 3.8 million tonne-per-year mining operation is scheduled to produce first concentrate in the third quarter of 2021.
"We would expect Ivanhoe to consider sinking a ramp to access the shallow Kamoa North Bonanza zone to provide flexibility to be able to deliver high-grade mineralization early in the mine schedule," Mikitchook noted. "While this would likely not represent a significant capital cost, consideration would have to be given to ensure it does not impact the underground development schedule at Kakula."
Indicated resources at Kakula, at the same 1% cut-off grade, are 627 million tonnes grading 2.74% copper for 37.9 billion lb. contained copper and inferred resources of 104 million tonnes grading 1.61% copper for 3.7 billion lb. contained copper.
The Kamoa-Kakula project is a joint venture between Ivanhoe (39.6%), Zijin Mining Group (39.6%), Crystal River Global (0.8%) and the DRC government (20%).
Ivanhoe geologists discovered Kamoa - a near-surface, flat-lying stratiform copper deposit on its 400-sq.-km mining licence - in 2008.
The company is working on a definitive feasibility study on the project that should be completed later this year.
Mikitchook has a target price on Ivanhoe of $9.00 per share.
At press time in Toronto, Ivanhoe was trading at $3.62 per share within a 52-week trading range of $2.90 and $4.54. The company has a $4.3-billion market capitalization.