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Ivanhoe Reports Assay Results from Ongoing Drilling Campaign on Tier One Kamoa Copper Project

Robert Friedland, Executive Chairman of Ivanhoe Mines, and Lars-Eric Johansson, Chief Executive Officer, today announced assay results from an additional eight holes of the ongoing 2016 drilling campaign at the Kakula Discovery on the company's Tier One Kamoa Copper Project, near the mining centre of Kolwezi in the Democratic Republic of Congo (DRC).

"Earlier discoveries already have established Kamoa as the world's largest, undeveloped, high-grade copper discovery," said Mr. Friedland.

"Now, our latest drilling results indicate that Kakula, in the southern portion of the Kamoa Project, could prove to be Africa's most significant copper discovery."

The Kamoa Project became a joint venture between Ivanhoe Mines and Zijin Mining in December 2015.

"In 2003, Ivanhoe's geologists started our initial exploration program at Kamoa, which at the time was nothing more than an unknown grass-roots prospect generated by our geological team and covered with a thin layer of Kalahari sand, sitting in a previously unrecognized district within the Central African Copperbelt," said Mr. Friedland.

"We made our initial significant discovery at Kamoa in 2008. The quest, which by 2013 showed that Kamoa is the world's largest, undeveloped, high-grade copper discovery, took more than 12 years of dogged exploration, dedicated geological and geotechnical expertise and a total investment of several hundred million dollars."

Mr. Friedland added: "Our perseverance and eventual success in unlocking Kamoa's world-scale potential was recognized by the Prospectors & Developers Association of Canada in March 2015 with the presentation of the prestigious Thayer Lindsley International Discovery Award to key members of the Ivanhoe Mines exploration team.

"However, given the remarkable exploration success we have had to date at the Kakula Discovery, as it has been progressively revealed during the past year, we believe that this new copper discovery is substantially richer, thicker and more consistent than other mineralization that we have found elsewhere on the Kamoa Project. The results speak volumes: The Kakula Discovery is a complete game changer in our planning for the development of the Kamoa Project."

The DRC government holds a 5%, non-dilutable interest in the Kamoa Project, which was transferred to the government in 2012 in accordance with the DRC Mining Code. Ivanhoe also has offered to transfer an additional 15% interest to the DRC government on terms to be negotiated.

Mr. Johansson said constructive and cordial negotiations between Ivanhoe Mines, Zijin Mining and senior DRC government officials are continuing on this matter and 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.

Development of initial mine at Kamoa progressing ahead of plan

Mr. Johansson also noted that 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 occurred 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.

The planned Kansoko Sud initial mining footprint contains high-grade intercepts of up to 7.04% copper and a potential mining thickness of more than 15 metres. The mineralized horizon is expected to be intersected by the declines at approximately 150 metres vertically below surface, where initial mining operations will commence. Byrnecut Underground Congo SARL is the contractor for the development of the declines.

Independent Mineral Resource estimate for the Kakula Discovery expected around the end of Q3 2016

The primary objective of the current drilling program at Kakula is to confirm and expand a thick, flat-lying, bottom-loaded zone of very high-grade, stratabound copper mineralization at the southern part of the Kakula Discovery area (see Figure 1) that has the potential to be amenable to bulk, mechanized mining and have a significant, positive impact on the Kamoa Project's future development plans. Ivanhoe expects to have an initial independent Mineral Resource estimate prepared for the Kakula Discovery around the end of Q3 2016.

Highlights of the latest drill results, which confirm the exceptional grades and shallow, flat-lying geometry of the Kakula mineralized zone, include:

  • DD1005 intersected 7.36 metres (true width) of 8.11% copper at a 2.5% copper cut-off, 10.13 metres (true width) of 6.52% copper at a 2% copper cut-off and 20.71 metres (true width) of 3.85% copper at a 1% copper cut-off.
  • DD1011 intersected 6.78 metres (true width) of 7.52% copper at a 2.5% copper cut-off, 11.01 metres (true width) of 5.47% copper at a 2% copper cut-off and 15.20 metres (true width) of 4.40% copper at a 1% copper cut-off.
  • DD1012 intersected 7.63 metres (true width) of 7.90% copper at a 2.5% copper cut-off, 13.76 metres (true width) of 5.36% copper at a 2% copper cut-off and 25.17 metres (true width) of 3.59% copper at a 1% copper cut-off.
  • DD1017 intersected 10.31 metres (true width) of 6.92% copper at a 2.5% copper cut-off, 10.31 metres (true width) of 6.92% copper at a 2% copper cut-off and 12.35 metres (true width) of 6.04% copper at a 1% copper cut-off.

Figure 1. Kamoa Project map shows the planned initial mining area at Kansoko Sud and the nearby Kakula exploration and discovery area:

Holes DD1011 and DD1017 are of particular importance, representing substantial step outs to the southeast and northwest, respectively (see Figure 2 legend and plan). Both holes intersected significant, bottom-loaded, Kakula-style mineralization and have expanded the high-grade core area of the Kakula target to at least two kilometres in length.

A full listing of additional drilling results is contained in Table 1, while hole locations are shown in Figure 2.

Figure 2. Kakula Discovery Area. Drill-hole location plan for the Kakula Area shows holes completed and in progress, superimposed on 1% composite grade thickness contours:

New drilling leads to a substantial expansion of the Kakula Discovery

In addition to the eight new holes for which assays were received, as shown in Table 1, Ivanhoe has completed an additional 28 holes in the Kakula Discovery area that are being processed and for which final assays are pending. Holes pending results include both infill and expansion drilling. The list of holes completed is shown in Table 2 and hole locations are shown in Figure 2.

Expansion drilling along the axis of this central high-grade core continues to intersect characteristic, bottom-loaded, chalcocite (nearly 80% copper by weight) mineralization associated with the basal siltstone layer. Significant step-out holes have been drilled in both directions along the axis and holes pending results are mentioned below. Ivanhoe cautions that the reporting of this visual mineralization does not confirm the extension of the high-grade zone; however, the presence of a similar style of mineralization as seen in other holes with high-grade assays is considered significant.

Drill hole DD1041 (assays pending) intersected a zone of well-mineralized diamictite between 611 metres and 617.153 metres below surface, before intersecting a zone of chalcocite-rich siltstone between 617.13 metres and 620.15 metres below surface (see Figure 3, below). This hole is located 550 metres southeast of the known high-grade zone at Kakula (southeast of hole DD1011).

Figure 3. Massive chalcocite mineralization at a depth of 619 metres in hole DD1041:

Hole DD1045 (assays pending) was drilled 550 metres northwest of DD1017 (10.31 metres of 6.92% copper at a 2.5% copper cut-off) and 420 metres south of DD930 (3.0 metres of 4.2% copper, at a 2.5% copper cut-off). DD1045 intersected a highly mineralized Kakula siltstone from 509.35 to 515.76 metres downhole, before passing through mineralized, clast-rich diamictite, then entering the footwall Mwashia sandstone at 518.09 metres downhole. The highest copper grades at Kakula typically are associated with the siltstone unit above the top of the Mwashia sandstone contact.

The combination of step-out holes DD1041 and DD1045 potentially extends the footprint of the well-mineralized Kakula Discovery zone to more than 3.1 kilometres in length.

Figure 4. Intense chalcocite mineralization in siltstone layer at a depth of 511.6 metres in hole DD1045:

Game-changing drill results lead to an expansion of the Kakula drilling program

As a result of the ongoing success of the Kakula program and the extension along trend of the central, well-mineralized, chalcocite-rich core to the northwest and southeast at relatively shallow depths, the Kakula drilling program has been expanded by an additional 9,000 metres, to a total of 34,000 metres of exploration drilling. As the full extent of the discovery becomes apparent, further expansions to the program will be accelerated. To help advance the ongoing exploration and delineation of the Kakula deposit, the Kamoa technical team is proceeding with the engineering and preparation of tender documents for the construction of a box cut at Kakula to accommodate decline ramps that will provide underground access to the deposit.

"To date, the deposit has grown with virtually every step-out hole we have drilled," said Louis Watum, Kamoa Copper's General Manager. "In a country known for its high-grade copper deposits, Kakula is quickly establishing itself as the exceptional discovery."

The 60-square-kilometre Kakula exploration area is approximately 10 kilometres southwest of the Kamoa Project's planned initial mining area at Kansoko Sud now being developed.

Kakula-style mineralization - consistently bottom-loaded and chalcocite dominant

The recent results support findings that mineralization at Kakula is consistently bottom-loaded, with grades increasing downhole toward the contact between the host Grand Conglomerate and the underlying Mwashia sandstone. The highest copper grades are associated with a siltstone/sandstone unit occurring within the Grand Conglomerate, located approximately one metre above the top of the Mwashia sandstone unit (see figures 10-13 for cross-sections across the Kakula Discovery area).

Mineralization displays vertical mineral zonation from chalcopyrite to bornite to chalcocite, with the highest grades associated with the siltstone unit consistently characterized by chalcocite-dominant mineralization (see Figure 5 for three schematic strip logs showing typical, Kakula-style mineralization).

"Kakula's combination of thick intersections of very high-grade copper mineralization and the bottom-loading of the grade profile allows for the testing of a number of potential mining scenarios at different cut-offs," said Mr. Johansson.

Figure 5. Strip logs of holes DD1011, 1017 and 997, showing typical, Kakula-style mineralization:

The consistent nature of Kakula mineralization supports the creation of selective, mineralized zones at cut-offs up to 2.5% and 3.0% copper. The recent assay results are shown at various cut-offs in Table 1, while the accumulations of copper and thicknesses of mineralized intercepts at 1%, 2.5% and 3.0% cut-offs are shown in figures 7, 8 and 9.

In parallel with the Kamoa 2016 pre-feasibility study, an alternative mining method - controlled-convergence room-and-pillar mining, developed by Poland-based KGHM - was investigated for its suitability for use on the Kamoa Kansoko deposits. The method has been successfully implemented by KGHM at its copper mining operations in Poland for the past 20 years. Given the thick, mineralized widths encountered to date in the Kakula drilling program, controlled-convergence room-and-pillar mining also will be investigated for its suitability for use at Kakula.

Figure 6. A 17-tonne loader in operation at an approximate six-metre-high, underground room-and-pillar potash mine in Canada (for illustration purposes only). Kamoa's Kansoko Sud and Kakula deposits are expected to use similar underground mining methods and equipment:

Figure 7. Recent assay results at a 1% copper cut-off:

Figure 8. Recent assay results at a 2.5% copper cut-off:

Figure 9. Recent assay results at a 3% copper cut-off:

Figure 10. Cross-section A-A' of Kakula Discovery area, showing true thicknesses of drill intercepts at a 2.5% copper cut-off:

Figure 11. Cross-section A-A' of Kakula Discovery area, showing true thicknesses of drill intercepts at a 3.0% copper cut-off:

Figure 12. Cross-section B-B' of Kakula Discovery area, showing true thicknesses of drill intercepts at a 2.5% copper cut-off:

Figure 13. Cross-section B-B' of Kakula Discovery area, showing true thicknesses of drill intercepts at a 3.0% copper cut-off:

Table 1. Assay composites from newly released Kakula drill holes at various copper cut-offs:

Table 2. Collars of completed drill holes:

Kamoa Copper Project description

The Kamoa Copper Project, a joint venture between Ivanhoe Mines and Zijin Mining Group Co., Ltd., is a very large, stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt, approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi. The Kamoa mining licence covers approximately 400 square kilometres.

In 2015, Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited, the company that presently owns 95% of the Kamoa Project on an indirect basis, to Zijin Mining for an aggregate cash consideration of US$412 million. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River Global Limited for US$8.32 million, which Crystal River will pay through a non-interest-bearing, 10-year promissory note.

Kamoa is the world's largest, undeveloped, high-grade copper deposit. On February 23, 2016, an updated Mineral Resource estimate was issued for the Kamoa Project, with an effective date of May 5, 2014. Kamoa's Indicated Mineral Resources presently total 752 million tonnes grading 2.67% copper and containing 44.3 billion pounds of copper at a 1% copper cut-off grade and minimum thickness of three metres. In addition to the Indicated Resources, the updated estimate included Inferred Mineral Resources of 185 million tonnes grading 2.08% copper and containing 8.5 billion pounds of copper, also at a 1.0% copper cut-off grade and a minimum thickness of three metres.

Qualified Person and Quality Control and Assurance

The scientific and technical information in this release has been reviewed and approved by Stephen Torr, P.Geo., Ivanhoe Mines' Vice President, Project Geology and Evaluation, and a Qualified Person under the terms of National Instrument 43-101. Mr. Torr has verified the technical data disclosed in this news release.

Ivanhoe Mines maintains a comprehensive chain of custody and QA-QC program on assays from its Kamoa Project. Half-sawn core is processed at Kamoa's on-site preparation laboratory and prepared samples then are shipped by secure courier to Bureau Veritas Minerals (BVM) Laboratories in Australia, an ISO17025-accredited facility. Copper assays are determined at BVM by mixed-acid digestion with ICP finish. Industry-standard certified reference materials and blanks are inserted into the sample stream prior to dispatch to BVM. For detailed information about assay methods and data verification measures used to support the scientific and technical information, please refer to the current technical report on the Kamoa Copper Project on the SEDAR profile of Ivanhoe Mines at

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