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March 14, 2022, 7:12 a.m. EDT

Ivanhoe Mines Secures Options to Power Its Tier-one Platreef Palladium, Rhodium, Nickel, Platinum, Copper and Gold Mine in South Africa with Solar and LNG-Generated Electricity

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Sandton, South Africa, Mar 14, 2022 (Newsfile Corp via COMTEX) -- Ivanhoe announces strategic equity investment in Renergen, a South African emerging energy and helium producer

Ivanhoe acquires exclusive right to negotiate an offtake agreement for electricity generated from Renergen's gas and solar hybrid-power facility

Sandton, South Africa--(Newsfile Corp. - March 14, 2022) - Ivanhoe Mines (otcqx:IVPAF) /zigman2/quotes/207656050/delayed CA:IVN +4.34% Executive Co-Chair Robert Friedland announced today that the company has secured options to use electricity generated from renewable, green, solar power together with liquefied natural gas (LNG) to power its Tier-One Platreef palladium, rhodium, nickel, platinum, copper and gold project in South Africa.

Construction of Ivanhoe's first solar power plant at the Platreef Mine is set to begin next month. The initial 5-megawatt (MW) plant is expected to begin supplying clean, solar-generated electricity to the mine in early 2023.

"We have committed to our stakeholders that we will explore every avenue available to minimize the environmental impact of producing metals that are critical to the electrification of the global economy," said Mr. Friedland. "Powering our massive Platreef Mine with reliable electricity generated by 'green power' options, such as solar and natural gas, offers a 24-hour-a-day alternative to the coal-fired national electrical grid and dramatically reduces Platreef's carbon emissions. A power plant running on natural gas generates approximately 50% fewer carbon dioxide emissions than one burning coal."

"Having a reliable source of clean, renewable electricity from a solar-power plant at the Platreef Mine is an important step in our journey toward net-zero carbon emissions," Mr. Friedland added.

In 2021, South Africa's government officially raised the licencing threshold for embedded generation projects from 1 MW to 100 MW, clearing the way for miners to start generating their own electricity.

Design and engineering of the initial 5-MW solar plant at the Platreef Mine is complete and construction is set to commence next month, with commissioning expected in early 2023. The solar-generated power from this initial plant will be used for mine development and construction activities, as well as for charging Platreef's battery-powered underground mining fleet, further reducing carbon dioxide emissions.

Construction is progressing rapidly at the Platreef Mine and initial production is expected from the first phase of operations in Q3 2024. Ivanhoe expects the Platreef Mine to require approximately 30 MW of installed electrical power for its Phase 1 operations, and approximately 100 MW for its Phase 2 operations at full production.

Ivanhoe Mines indirectly owns 64% of the Platreef Project through its subsidiary, Ivanplats, and is directing all mine development work. The South African beneficiaries of the approved broad-based, black economic empowerment structure have a 26% stake in the Platreef Project. The remaining 10% is owned by a Japanese consortium of ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; ITC Platinum Development Ltd., an ITOCHU affiliate; and Japan Gas Corporation.

Strategic investment in Renergen Limited gives Ivanhoe the exclusive right to negotiate an electricity offtake agreement

In addition to moving forward on constructing its first solar-power facility at the Platreef Mine, Ivanplats has acquired the exclusive right to negotiate an offtake agreement with South Africa-based Renergen Limited for electricity generated from Renergen's gas and solar hybrid-power facility to be constructed at the Virginia Gas Project located in South Africa's Witwatersrand Basin, approximately 600 kilometres south west of the Platreef Mine.

Ivanhoe is confident that the electricity generated from Renergen's gas and solar hybrid-power facility could be combined with Ivanhoe's solar power facilities to provide Platreef with an uninterruptible power supply to meet the mine's base-load requirements.

Renergen is an emerging producer of helium, energy and liquefied natural gas (LNG) with near-term production and sales of compressed natural gas (CNG) and helium from its Virginia Gas Project that comprises exploration and production rights of 187,000 hectares (1,870 square kilometres) of gas fields across Welkom, Virginia, and Theunissen, in the Free State, South Africa.

Ivanhoe has made an initial equity investment in Renergen of approximately US$13 million, which gives Ivanhoe an approximate 4.35% interest in Renergen's issued and outstanding shares. Ivanhoe also has the right to nominate one director to Renergen's board of directors, and is entitled to customary anti-dilution rights. Renergen is listed on the JSE and A2X exchanges under the ticker REN and on the ASX under the ticker RLT.

Under the terms of the initial investment, Ivanhoe has the option to subscribe for up to 25% of the total issued and outstanding Renergen shares following the assessment period, at a 10% discount to the 30-day VWAP, in consideration for cash or shares in Ivanhoe. Further to this second subscription, Ivanhoe will have the option to subscribe for up to 55% of the total issued and outstanding shares, at a 10% discount to the 30-day VWAP, to provide the equity funding for Phase 2 at the Virginia Gas Project.

Ivanhoe Mines and Renergen senior officials sign the agreement for Ivanhoe's initial equity investment in Renergen. Front row (L-R): David King (Chairman, Renergen), Marna Cloete (President, Ivanhoe Mines), Stefano Marani (CEO, Renergen); Back row (L-R): Nick Mitchell (COO, Renergen), David van Heerden (CFO, Ivanhoe Mines).

To view an enhanced version of this graphic, please visit:

The Virginia Gas Project's natural gas formation is a result of a freak cosmological event approximately two billion years ago that saw the largest known asteroid ever to hit the planet plough into South Africa's Witwatersrand geological complex, near the town of Vredefort.

The impact of the giant asteroid created the largest known crater on earth (the Vredefort Crater), roughly 330 kilometres in diameter. The impact essentially created a seal, capping ultra-rich underground deposits of uranium and thorium in place, allowing the minerals to undergo natural radioactive decay to produce alpha particles, which become helium.

The impact of the asteroid also established the ideal conditions for early bacteria to congregate. Much like how chlorophyll in plants feed off radioactive energy from the sun, these early bacteria evolved to feed off the radioactivity from the uranium to metabolize carbon in the rocks into methane. Thus, the alpha particles serve not only the purpose of creating high helium concentrations, but also providing the energy required to allow bacteria to live deep underground, which is why this gas reserve has been classified as renewable by the Petroleum Agency of South Africa.

While the methane produced from the Virginia Gas Project is not zero-carbon, it is believed to be regenerated by these bacteria, which explains the exceedingly long lifespan of the wells, most of which were drilled several decades ago and have shown no signs of decreasing in flow.

The Virginia Gas Project also contains one of the richest helium concentrations recorded globally, with readings of up to 12%. Helium is in high demand for use in a range of technologies, including advanced rockets and spacecraft, semiconductors, fibre-optic cables, computer chips, welding, industrial leak detection, cryogenics, nuclear power plants, laboratory equipment and MRI machines.

Aerial view of Renergen's Phase 1 compressed natural gas and helium production facility at the Virginia Gas Project, which is set for commissioning in May 2022.

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Sept. 30, 2022 4:00p
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