The US$7-million expansion, to be funded by cash flow, will see annual production capacity rise to 35,000 from 25,000 tonnes of copper cathode, effective September 2000.
The S&K (Sabetaung & Kyisintang) open-pit mine began producing copper in November 1998, using solvent-extraction electrowinning. So far, the average cash cost of production is US27 cents per lb. copper.
S&K is part of the larger Monywa copper project, which is equally owned by Ivanhoe (formerly Indochina Goldfields) and state-owned Mining Enterprise No. 1.
Reserves at Monywa are contained in four neighbouring deposits: Sabetaung, which has 45,493 tonnes grading 0.5% copper; Sabetaung South, 8,883 tonnes at 0.44%; Kyisintaung, 171,936 tonnes at 0.37%; and Letpadaung, 905,000 tonnes at 0.4%.
When the partners begin exploiting the Letpadaung deposit, production at Monywa could soar to 125,000 tonnes of copper cathode annually.
Meanwhile in Kazakstan, Ivanhoe has renegotiated the terms of its 1996 acquisition of the huge but metallurgically problematic Bakyrchik gold deposit. The amendment eliminates a required US$30-million payment due to the Kazakstani government and instead returns a 30% stake in the project to the government. Ivanhoe will keep 70%.
Ivanhoe says that the amended agreement “creates a more favourable framework” for a third party to assist in developing the project, which has been closed since January 1998. By dodging the US$30-million payment, Ivanhoe retains a healthy cash balance of US$51.4 million.
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