Ivanhoe hopes to repeat success at Kamoa-Kakula on Western Foreland licences

Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) expects to start producing copper concentrates in July from its Kamoa-Kakula underground mines in the Democratic Republic of the Congo and is confident it can find more deposits like them on its Western Foreland licences, which are adjacent and to the west of its Kamoa-Kakula discoveries.

"This whole area holds massive potential and we started quietly picking up licences over the last two years," George Gilchrist, Ivanhoe's vice president resources, said in a telephone interview from Johannesburg. "Now that we've got them all in place, we're starting to move into these areas and approach them the same way we did with Kamoa and Kakula."

The Western Foreland project spans 2,550 sq. km, of which 1,711 sq. km were added to the land package in 2019, and is made up of 17 licences that are more than six times larger than its Kamoa-Kakula mining licences.

"We have focused on picking up the shallower ground and the ground we think is most prospective from the controls we've seen," Gilchrist said. "There are other licence holders in the areas we're in, but there's no one that has exposure to the controls and how the geology works, so we know which areas are the most prospective."

Ivanhoe's initial work program will encompass 40,000 metres of combined aircore and diamond drilling, airborne and ground-based geophysics, and soil sampling. Much of the exploration will target the new permits that the company has acquired and for which it received environmental certification last year.

The exploration will build on work completed in 2020, which included stream-sediment sampling, soil geochemical sampling, as well as outcrop and stream mapping on the new tenements. The company collected a total of 411 stream-sediment samples and 958 soil samples, and notes that Ivanhoe's geologists first identified the prospectivity of the Kamoa-Kakula area in the mid-2000s using the same tools and techniques.

The exploration program - which is also being led by the same team of geologists that found the Kakula, Kakula West, and the Kamoa North Bonanza Zone on the Kamoa-Kakula joint-venture mining licence - will kick off once the rains let up in April.

The US$16 million budget can be expanded, Gilchrist said if the program generates interesting leads. "That's just the base budget, but if we discover something or choose to accelerate, we can take a new budget to the board."

At a drill site on Ivanhoe Mines' Western Foreland licences in the DRC. Left: Geologist Nestor Kambaj; Right: Geology Technician Patrick Ndala. Credit: Ivanhoe Mines

The primary exploration target in the Western Foreland area is Kamoa-Kakula-style sedimentary copper mineralization that occurs at the base of the lower Nguba "Grand Conglomerate" - particularly where the lower Nguba sits in direct contact with the underlying Upper Roan sandstones.

The new permits, especially those south of its Makoko Sud discovery (20 km west of Kakula), are in an area that has seen little modern exploration. Infrastructure is also lacking, and the company needs to build a bridge over a river and put in a road. Gilchrist noted that having a remote and underexplored area along strike from one of the world's largest copper deposits is thrilling.

"With this wide open land package, we understand the controls, the geology, we know how to identify the prospective zones in the geophysics and which ones work and which ones don't work," he said. "Normally it takes a long time to figure it out, but the team hasn't changed and we've been able to move into this area with this knowledge base and it's been very exciting."

The geologist, who has worked for Ivanhoe Mines for the last seven years across its portfolio of platinum group element, zinc and copper projects, was heavily involved in the discovery, delineation and modelling of Kakula and his understanding of that deposit has helped him model and target further exploration.

He noted that when you look in detail at the big systems in the copper belts, what you find is that each of the areas will hold a series of deposits with broad characteristics.

"If you look at the Zambian copper belt," he said, it has a specific system - it's very broad, extensive and quite folded. In the DRC, the systems get complicated structurally, but become higher grade, smaller and less continuous."

Kamoa and Kakula and all of Ivanhoe's exploration licences, are in the same domain, he continued. "They're all at the same prospective horizon, and when you get into these broad belts, it's very unlikely that you get one deposit and that's it. They work on such a large scale that if we picked up one deposit in a new domain, there are very likely to be more."

Gilchrist used Canada's greenstone belts as an example. "If you find one deposit you don't say, 'Okay that's it.' If you have a greenstone belt all around you, you're pretty sure that it will repeat itself in another area."

In the DRC, he said, Ivanhoe has "a whole open zone - a whole domain that hasn't been explored before. We've discovered Kamoa and Kakula and then Makoko, and we're seeing a clustering of deposits within this domain. So the controls are there, the evidence of fluid moving into the rocks is there, and we're confident we can find the zone where it's really concentrated."

Core from Western Foreland licences. Credit: Ivanhoe Mines.

Ivanhoe made its third discovery, Makoko, 20 km from Kakula, in September 2017. The discovery hole, DD004, returned 3.94 metres (true width) grading 5.46% copper starting from 306 metres downhole. Other holes were equally high-grade, with DD010 intersecting 3.21 metres (true width) of 6.78% copper, starting from 441 metres; and DD017 cutting 3.19 metres (true width) of 6.49% copper starting from 471.7 metres.

Drilling has defined a flat-lying, near-surface stratiform copper deposit and the majority of drilling has intersected the copper-rich zone at between 400 metres and 800 metres below surface.

Drilling last year at Makoko Sud also intercepted significant copper mineralization over an additional 7.5 km of strike. The company managed to complete 16 holes to the west of the Makoko Sud discovery area. Highlights included DMKK-DD117, a 3.6 km step-out hole from previous Makoko Sud drilling, which returned 6.01 metres (true width) of 3.38% copper from 260 metres downhole and DMKK-DD118, a 1.6 km step-out from previous Makoko Sud drilling, which intersected 4.19 metres (true width) grading 3.01% copper. DMKK-DD123, a 7.5 km step-out from Makoko Sud, cut 3.33 metres (true width) of 1.44% copper.

According to Ivanhoe, the drilling at Makoko West is "extremely significant for the exploration potential of the new exploration permits as it demonstrates that both the target stratigraphy extends westward and that the copper mineralizing system on the western edge of the basin is laterally extensive."

For his part, Gilchrist said it's been "so rewarding" to study these deposits.

"As a team we've worked really hard in understanding the geology. One of the reasons I joined Ivanhoe was because it wasn't an exploration company that was just trying to make a big noise about some ground, it was really intent on understanding why the deposit was forming, what those controls were, and could follow up to find another deposit. ... You come up with an idea about what's controlling the grade, then you go out and drill it and test it to see whether the idea is right. Ivanhoe found the Kakula West deposit with just the second hole."

As for working in the heart of the African Copperbelt, it doesn't get much better than that, said Gilchrist.

"There's no infrastructure in some of these areas, people haven't gone in there, and it looks like it's been extremely untouched and has such high potential," he said. "When you speak to geologists outside the company they are amazed that this kind of environment is still available. It's incredibly prospective."

Ivanhoe Mines' VP Resources, George Gilchrist. Credit: Ivanhoe Mines.