Ivanhoe Mines secures $300m in stream financing for Platreef

Ivanhoe Mines (TSX: IVN)(OTCQX: IVPAF) said on Wednesday it had secure $300 million in stream financing for its platinum group and gold Platreef mine in the South African province of Limpopo.

The Canadian miner said its subsidiary, Ivanplats, closed a $200 million gold stream financing agreement with Orion Mine Finance and Nomad Royalty Company, as well as a $100 million palladium and platinum streaming facility for Platreef.

Ivanhoe said the proceeds will be used to advance the first phase of Platreef’s mine development, which is expected to begin commercial production in 2024.

As part of the gold deal, Ivanplats will deliver a total of 80% of contained gold in concentrate until 350,000 ounces have been delivered, at which point the stream is reduced to 64% of contained gold in concentrate for the remaining life of the facility (until 685,280 ounces of gold have been delivered).

Under the platinum agreement, Orion Mine Finance will receive a total of 4.2% of contained palladium and platinum in concentrate until 350,000 ounces have been delivered, after which the stream falls to 2.4% for the remaining life of the facility, or the delivery of 485,115 ounces of palladium and platinum.

The definitive feasibility study for Platreef’s phased development plan, which will provide updated production forecasts for the initial mine and subsequent expansion, is nearing completion, the company said, with release expected in the first quarter of 2022.

Ivanplats has also signed documents relating to offtake arrangements for 100% of Platreef’s Phase 1 platinum-group metals (PGMs) concentrate production, which is expected to exceed 40,000 t/y containing six payable metals – palladium, rhodium, platinum, nickel, copper and gold.

The offtake arrangements are with Northam Platinum and Heron Metals, in a joint venture in which commodity trader Trafigura has a majority shareholding.

A three-phase project

Ivanhoe is developing the multi-billion dollar platinum project in three scalable phases. “The phased development approach has worked extremely well at Kamoa-Kakula and we consider it to be the optimal strategy to accelerate our growth and diversification across commodities,” the company’s president, Marna Cloete, said in the statement. 

The company said it sees the first-phase, 700,000-tonne-per-annum operation as its “starter mine”, one that will establish a strategic production foothold on South Africa’s Bushveld PGM Complex, and support potential future expansions. 

“Future expansions to 12 million tonnes per annum and beyond, as demonstrated in previous studies, would position Platreef among the world’s largest and lowest-cost nickel and PGM mines, producing more than 24,000 tonnes of nickel and 1.1 million ounces of palladium, rhodium, platinum, and gold per year,” Ivanhoe said.

The Canadian miner indirectly owns 64% of the Platreef project through Ivanplats, and is directing all mine development work. 

The operation will trial emissions-free machines during its initial development phase, during which it will produce palladium, rhodium, platinum, nickel, copper and gold.