David Broughton at Flatreef core shed in South Africa. Mr. Broughton is given credit for what some say is the largest high-grade copper deposit, primary copper deposit, that is, in the known world. -- Thom Calandra photo
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JOHANNESBURG -- Ivanhoe Mines (TSX:IVN) this week began what looks like a two-year strategy to fortify deposit estimates and tune technical criteria for its Platreef/Flatreef platinum group metals properties in South Africa's Limpopo Province.
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A bulk mining permit is in the works, one of perhaps 16 applications, according to Ivanhoe / Ivanplats managers. Ivanhoe Mines Ltd. (IVN in Canada) is approximately halfway through spending $300 million of Japanese money dedicated to the project, which shows 24-meter thick lengths of platinum group metal mineralization.
At 3 grams per metric ton cutoff, the so-called Flatreef holds indicated resources of an estimated 22 million ounces of platinum, palladium, gold and rhodium. This is known as a 4E equivalent sum. South Africa produces more than two-thirds the world's platinum. The term 4E refers to the sum of platinum, palladium, rhodium and gold. Various corporate and metallurgical texts further define 4E as "determined by a fire assay method (typically by a lead collection procedure)."
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Fire assays "typically under-measure the actual total platinum, palladium, rhodium and gold content," according to available literature on the subject. Ivanhoe executives say the platinum project likely would produce byproduct credits of nickel and copper, provide cooler working temperatures and safer underground conditions, and also would operate at lower costs than any large-scale platinum-group metal mine.
Increased production of hydrogen-cell cars during this decade could strain platinum supplies. So could further labor protests that are exposing South Africa's notorious harsh platinum mining conditions.
Platinum's price was erratic this first trading week of September for commodities markets. The metal has been trading between $1,300 an ounce and $1,400 an ounce since August. Shares of Ivanhoe Mines in Toronto appeared to run contrary to what was a mostly losing week for platinum, gold, silver and copper prospectors and late-stage mine developers. IVN shares rose as high as $2.31 Canadian this week after touching a 10-month low of about $1.29 in early August.
Investors next week also might see assays from five drill holes at Ivanhoe's Gabon gold property. These would be the first for the Gabon property, which is described briefly in Ivanhoe's SEDAR filings in Canada. VP of Exploration David Broughton says the assays have been processed at lab. He offered no further comment.
TCR will report more next week on the Platreef/Flatreef in South Africa's Bushveld Complex. This is my fourth visit to the area and second, possibly third, to Ivanhoe's stake there. My first visit, in 2003, featured a sprawling and ramshackle village above what is now a mineral property destined for underground mining.
"We don't have to relocate any people," Gerick Mouton told a group of mostly African and Canadian visitors who viewed a planned site for the first bulk sampling shafts. Mr. Mouton is Ivanhoe's project director and a vice president. He said most hiring for the projected platinum mine will occur in Limpopo Province, one of the nation's poorest regions yet one of dramatic landscapes and natural beauty.
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When I first saw the Flatreef property, at the northern limb of the Bushveld mineral complex, most things had different names except the company's founder and largest shareholder, Robert. M. Friedland. The company, for instance, was called African Minerals, then Ivanhoe Nickel & Platinum, then Ivanplats and now Ivanhoe Mines. The village in 2003 was known as Potgietersrus. It is now called Mokopane.
The Platreef around Ivanhoe Mines and in its literature is often called the Flatreef, to distinguish it from other platinum deposits whose one-meter-thin bands of mineral curve 60 degrees toward the center of the earth. The Ivanhoe operation in South Africa, DRC and Gabon employs much of the technical and executive talent of the original Ivanhoe Mines, founded by Mr. Friedland in Mongolia.
The newly renamed Ivanhoe Mines is building an Ivanplats office complex and facilities at Mokopane, across the road from its present core shed and original headquarters. Ivanplats will remain the name of the platinum operation within the Ivanhoe Mines Ltd. franchise.
Also coming next week in TCR: a survey of two-thirds-owned Kipushi zinc mine in DRC Congo, a functional property once labeled the King Leopold Mine in the Belgian days; and Ivanhoe's 100 percent owned (before government negotiations) Kamoa copper deposit in the Congo. (DRC photos attached; more next week. All photos -- Thom Calandra)
- Thom Calandra
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Disclaimer: Thom paid his international air fares and his hotel expenses for this week's Ivanhoe Mines survey of three properties in Africa. The tour was the first of three that are planned by the company in September. This one had as many as 30 attendees from banks, research houses, hedge funds, mutual funds, company executives, directors, accounting firms and insurers. It also had longtime shareholders. We here at home have owned Ivanplats, now Ivanhoe Mines, since 2003, when it was private. I have been adding regularly to our holdings in the open market since its public debut in October 2012. I purchased more shares this week as indicated to TCR family, or subscribers.
