A 1,200-m conveyor transports crushed medium-to-low-grade ore and mineralized waste from
underground development to the P5 shaft for hoisting to surface.

The offtake term sheet contains standard, international commercial terms, including payables and treatment charges based on the zinc industry’s annual benchmark. The concentrate produced by Kipushi is expected to contain approximately 55% zinc and low levels of impurities. “The off-take and financing milestones are critical deliverables that allow us to return Kipushi to production by the third quarter of next year,” Ivanhoe Mines’ President Marna Cloete said.

The Kipushi underground mine will be the world’s highest-grade major zinc operation, with an average grade of approximately 36% zinc over the first five years of production. “We will also endeavor, with our partner Gécamines, to continue exploring Kipushi, including copper-rich and silver-rich zones,” Cloete said.

“In partnership with Gécamines, we are closing in on a monumental achievement to return the great Kipushi mine to production,” Ivanhoe Mines’ Executive Co-Chair Robert Friedland said. “When Ivanhoe Mines acquired its interest in Kipushi almost 12 years ago, the mine was flooded and in a dilapidated state. We commend the efforts of the Kipushi employees, who restored this crown jewel of the DRC. We are proud to see new, state-of-the-art mining equipment, operated by our Congolese employees, underground for the first time in three decades as we begin to open up the Big Zinc deposit, one of the richest mineral endowments anywhere on earth.

Activities to date at Kipushi have been funded by way of a shareholder loan from Kipushi Holding, which totaled $661 million. The remaining initial capital cost for the Kipushi project in 2023 and 2024 is $380 million, in line with Ivanhoe’s guidance. The company is also evaluating an interim bank financing facility of up to $80 million. Underground mining activities are advancing ahead of schedule, in preparation for stoping of the ultra-high-grade Big Zinc deposit, to commence in January 2024. In preparation for the start of underground development, early works activities were completed ahead of schedule in Q3 2022. This comprised the refurbishment and supporting of key mining excavations, as well as blasting of the truck-tip turning bays and truck passing bays on the mine’s 1,150-meter (m) level.

In Q1 2023, the underground mining contractor was appointed and commenced the mobilization of its mining equipment to site. The majority of the primary mining fleet is from Epiroc of Stockholm, Sweden, which include six drill rigs, six scooptrams (LHDs) and 13 haul trucks, as well as additional secondary support equipment. Delivery to site of the first batch of mobile mining equipment has taken place. Mining equipment is lowered to Kipushi’s 1,150-m level via the P5 shaft. The bulk of the primary and secondary fleet will be delivered by June, with the remainder arriving later in the year as underground development ramps up ahead of the commencement of stoping in early 2024.

Underground development is currently taking place to establish access to the Big Zinc orebody. A total of 682 m of horizontal development was completed in the first quarter of 2023, over 30% more than planned. Perimeter, access and ventilation drives are now under development at several locations between the 1,220-m and 1,335-m levels, while decline development continues parallel to the Big Zinc deposit. The decline is currently at 1,340 m below surface.

The development rate during Q1 2023 averaged 227 m per month. The rate is expected to increase to 300 m per month by the end of Q2 2023 and reach more than 400 m per month by the end of Q4 2023. Stoping of the ultra-high-grade Big Zinc orebody has been accelerated to commence ahead of schedule, in January 2024. The mining method of the Big Zinc deposit will be transverse sublevel open stoping in a primary and secondary sequence, filled with cemented aggregate fill to maximize the extraction. The underground operation is fully mechanized, cost-effective and designed to enable a quick ramp-up to a steady state of 800,000 mt of ore per annum. processes.