Ivanhoe Notches Third Major DRC Copper Project

Ivanhoe Mines (TSX:IVN) has added a new project to its portfolio, formally announcing on Monday (October 1) that drilling at its Western Foreland exploration licenses in the Democratic Republic of the Congo (DRC) had yielded a new copper discovery.

Within the 700-square km Western Foreland licenses, the Makoko copper discovery lies to the west of the advanced-stage Kamoa-Kakula project, and is 100-percent owned by Ivanhoe.

The company said that the discovery was “the first of multiple high-potential target areas” to be tested, and that an initial resource estimate was expected by the the end of 2018.

Ivanhoe Mines co-chairman and founder Robert Friedland said the Makoko discovery validated the company’s exploration model for the region.

“This model reflects the accumulation of in-depth, proprietary geological insights gained by Ivanhoe’s exploration team during nearly two decades of exploring in the region,” he said.

“Given the early drilling success at Makoko, we are highly confident that we have the secret blueprint for additional exploration successes in the Western Foreland area in 2019 and beyond.”

He said that the Makoko would benefit from its proximity to the Kamoa-Kakula project, which he said has “already has been independently established as the world’s fourth-largest copper project and still is growing. It has copper grades that are the highest, by a wide margin, of the world’s top 10 copper deposits.”

Friedland was not the only one voicing high expectations for the discovery. In a note, analysts at Raymond James said that Makoko was not just similar to its neighbour, but showed characteristics “identical to (Ivanhoe Mines’) Kamoa-Kakula discoveries nearby.”

According to Ivanhoe’s release, more than 50 drill holes have been completed so far, with the discovery hole, DD004 intersecting 3.94 metres (true width) of 5.46 percent copper, at a 2.0 percent copper cut-off, and 3.94 metres (true width) of 5.46 percent copper at a 1.0 percent copper cut-off, from a downhole depth of 306 metres.

Drilling has been underway at the Western Foreland licenses since mid-2017.

Friedland dismissed investor fears in sinking money into the DRC, which is steadfast in locking in a new mining code that could see copper slapped with a ‘strategic substances’ label, attracting a 10 percent royalty on top of an already increased tax demand on extractive industries.

“While some investors are focused on short-term issues such as the DRC Mining Code revisions and the upcoming presidential election, Ivanhoe’s philosophy is to think big and think long term,” he declared.

“The government of the Democratic Republic of Congo has encouraged investors to continue their exploration efforts in the DRC. Ivanhoe’s team is the determined and absolute global leader in exploration technology and success. Our talented and dedicated employees will continue to help the Congolese people unlock the full potential of their country’s mineral endowment.”

Friedland may well be receiving courage from the new largest shareholder of Ivanhoe, China’s CITIC (HKEX:0267), which recently closed its C$723 million ‘strategic investment’ in the company.

Earlier this year, FMS Thomson Reuters base metals analyst Karen Norton told the Investing News Network (INN) that “China’s need for copper and the country’s relatively long-standing working relationship with the DRC should help the company to navigate changes to the latter country’s changes mining code.”

On the TSX, Ivanhoe was trading up 9.09 percent as of midday PST on Monday at an even C$3.

Image courtesy of Ivanhoe Mines.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.