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Ivanhoe secures finance for South African mining project

Canadian mining company Ivanhoe Mines’ South African subsidiary has secured project financing of up to USD 420 million to advance its Platreef project.

The Limpopo, South Africa-based palladium, platinum, rhodium, nickel, copper and gold project has an estimated capital cost of USD 390 million for its initial phased development plan.

Ivanhoe Mining’s subsidiary, Ivanplats, has signed a non-binding term sheet for a USD 300 million streaming facility with Orion Mine Finance, which provides financing to base and precious metals mining companies. Ivanhoe Mines owns a 64% stake in Platreef via Ivanplats, and it is directing all mine development work.

The South African beneficiaries of broad-based black economic empowerment, a government policy designed to drive economic transformation and the participation of black individuals in the South African economy, hold a 26% interest in the project, while the remaining 10% is owned by a Japanese consortium comprising ITOCHU CorporationJapan OilGas and Metals National CorporationITC Platinum Development, an affiliate of ITOCHU, and Japan Gas Corporation.

Ivanhoe’s streaming facility, which will be drawn down in four separate tranches, is subject to the completion of legal due diligence procedures and structuring, as well as the negotiation and execution of conclusive documentation.

Société Générale and Nedbank acted as mandated lead arrangers for a senior project debt facility totalling a maximum of USD 120 million. The debt facility will only be drawn down when the streaming facility has been fully utilised.

The stream financing and debt facility will be used to drive the development of Ivanplats’ Platreef project to initial production.

“The production of key ‘green metals’ needed to reduce greenhouse gas emissions is at a critical inflection point as businesses are pressed to secure long-term supplies. We are confident that this project-level funding will be the catalyst needed to launch Platreef to become a leading, long-life supplier of palladium, platinum, rhodium, nickel, copper and gold” said Ivanhoe co-chair Robert Friedland in a statement.

Friedland added: “Platreef’s Shaft 1 has been sunk to its final depth and is within a few hundred metres of the initial high-grade mining zone. The deposit has an enormous endowment of palladium, platinum, rhodium, nickel, copper and gold in a thick, high-grade, flat-lying underground orebody that is ideal for modern, bulk-scale, mechanised mining.”

Platreef’s 2020 preliminary economic assessment is an alternate and phased development plan, which aims to fast-track it into production. Meanwhile, Platreef’s independent Platreef Integrated Development Plan 2020, designed to launch an operating platform to aid future expansions, “would position Platreef among the largest platinum-group-metals producing mines in the world, producing in excess of 1.1 million ounces of palladium, platinum, rhodium and gold per year” stated Ivanhoe Mines in a press release on 16 February.

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