Robert Friedland and Yufeng ‘Miles’ Sun, Co-Chairmen of TSX-listed Ivanhoe Mines, have announced that the company’s South African subsidiary, Ivanplats, is fast-tracking a feasibility study on a smaller-scale, early-stage development plan using Shaft 1 as a production shaft at its Platreef palladium, platinum, nickel, copper, gold and rhodium mining licence. The Platreef project is located on the Northern Limb of the Bushveld Complex in South Africa’s Limpopo Province.
Spot prices of palladium and rhodium – two key metals contained in the Platreef ore – have soared in recent months, propelling Platreef’s ‘metals-price basket’ to a new, all-time high.
Testing the ventilation at the 750-metre-level station of Shaft 1 (photo: Ivanhoe).
An independent feasibility study is underway to review Ivanhoe’s planned smaller-scale, early-stage, lower-capital-cost production plan. Ivanhoe’s plan would accelerate the mine’s first production by using Shaft 1 as the mine’s initial production shaft, followed by expansions to the production rate outlined in the project’s 2017 definitive feasibility study. Ivanhoe’s smaller-scale mine design is also optimised to target the highest-grade areas of the mineral resource in close vicinity to Shaft 1.
Platreef’s Shaft 1 is currently at a depth of 957 m below surface. It is scheduled to be completed to a final depth of approximately 1 000 m by the end of July 2020. Work on Shaft 1’s 950-metre-level station – the shaft’s third and final station – is expected to be completed in March this year.
At a 2,0 g/t 3PE+gold cut-off, Platreef has an estimated 26,8 Moz of palladium in current indicated mineral resources and an additional 43,0 Moz in current inferred mineral resources; and an estimated 1,8 Moz of rhodium in current indicated mineral resources and an additional 3,1 Moz in current inferred mineral resources. The rhodium in the Platreef ore is strongly correlated with both palladium and platinum.
Rhodium is a rare platinum-group metal that is chemically stable at high temperatures, resistant to corrosion and mainly used with palladium and platinum in the production of automobile catalytic converters that curb harmful emissions. Approximately 80 % of the world's rhodium supply comes from mines in South Africa, and global production of rhodium is only approximately one million ounces annually.
The price of rhodium has surged 32 % already this month (January), attaining a price of more than US$8 200 an ounce – the highest price since it hit more than US$10 000 an ounce in 2008.
In addition to the surge in the price of rhodium and palladium, recent increases in the price of nickel, copper and gold have resulted in the weighted price of the ‘basket’ of metals contained in the ore at Platreef to rise to a new, multi-year high.
Since 2007, Ivanhoe has focused its exploration and development activities at Platreef on defining and advancing the underground Flatreef deposit, which is amenable to highly mechanised, underground mining methods. Flatreef, with a strike length of 6,5 km, lies predominantly within a flat-to gently-dipping portion of the Platreef mineralised belt at relatively shallow depths of approximately 500 m to 1 350 m below surface. It is characterised by its very large vertical thicknesses of high-grade mineralisation.