Members of the Platreef sinking team in Shaft 1, which now is at a depth of 300 m and continuing to a final
depth of 980 m. Shaft 1 will provide access into the Flatreef Deposit during the development of Shaft 2, the
project’s main production shaft.

The early-works program includes excavation of a surface box cut to a depth of approximately 29 m below surface and construction of the concrete foundation for the 103-m-tall concrete headframe that will house the shaft’s permanent hoisting facilities.

Ivanhoe expects the early-works construction to take approximately 12 months to complete. Cost of the work is estimated at R70 million ($5.5 million). Shaft 2 will be located about 100 m northeast of the Platreef project’s Shaft 1, where sinking has been underway since July 2016. Shaft 1 has an internal diameter of 7.25 m and will be used for underground development of the Flatreef deposit and ultimately will become the primary ventilation intake shaft during the project’s 4-million-mt/y initial production phase.

Shaft 2, with an internal diameter of 10 m, will be sunk to a final depth of more than 1,100 m below surface. It will be equipped with two 40-mt rock-hoisting skips capable of hoisting a total of 6 million mt/y of ore, which will be the single largest hoisting capacity at any mine in Africa. The headframe for Shaft 2 was designed by South Africa-based Murray & Roberts Cementation.

The Flatreef mining areas occur at depths ranging from about 700 to 1,200 m below the surface. Mining will be based on low-cost, mechanized methods, including long-hole stoping and drift and fill mining. Mined-out areas will be backfilled with a mixture of tailings from the processing plant and cement.

Ore will be hauled from stopes to a series of ore passes that will connect to a main haulage level leading to a primary rock crusher near Shaft 2, from where it will be hoisted to the surface for processing. Ivanhoe plans to develop the Platreef mine in three phases: 1) an initial mining rate of 4 million mt/y to establish an operating platform to support future expansions; 2) a doubling of production to 8 million mt/y; and 3) a final expansion to a steady-state production rate of 12 million mt/y. At 12 million mt/y, Platreef will be the largest platinum-group-metals mine in the world, producing more than 1.2 million oz/y of platinum-group metals in concentrates.

Minority owners of the Platreef project are a broad-based, black economic empowerment structure that has a 26% stake in the project and a consortium of Japanese companies that holds the remaining 10%.