Ivanhoe Mines Issues Third Quarter 2024 Financial Results, and Review of Construction and Exploration Activities
Ivanhoe Mines reports Q3 2024 profit of $108 million and Adjusted EBITDA of $160 million. The Kamoa-Kakula Copper Complex achieved record production of 116,313 tonnes of copper in Q3, with year-to-date production of 303,328 tonnes. Revenue reached $828 million with EBITDA of $470 million. Cost metrics show C1 cash cost of $1.69/lb and cost of sales at $1.80/lb. The Phase 3 concentrator has achieved steady state production, while Africa's largest copper smelter project remains on schedule for completion this year. 2024 production guidance was revised to 425,000-450,000 tonnes of copper.
Ivanhoe Mines riporta un profitto per il terzo trimestre 2024 di 108 milioni di dollari e un EBITDA rettificato di 160 milioni di dollari. Il Kamoa-Kakula Copper Complex ha raggiunto una produzione record di 116.313 tonnellate di rame nel terzo trimestre, con una produzione totale da inizio anno di 303.328 tonnellate. I ricavi hanno raggiunto 828 milioni di dollari con un EBITDA di 470 milioni di dollari. Le metriche di costo mostrano un costo di cassa C1 di 1,69 dollari/lb e un costo di vendita di 1,80 dollari/lb. Il concentratore della Fase 3 ha raggiunto una produzione stabile, mentre il progetto della più grande fonderia di rame dell'Africa rimane nei tempi previsti per il completamento quest'anno. La guida alla produzione per il 2024 è stata rivista a 425.000-450.000 tonnellate di rame.
Ivanhoe Mines reporta una ganancia de 108 millones de dólares para el tercer trimestre de 2024 y un EBITDA ajustado de 160 millones de dólares. El Kamoa-Kakula Copper Complex alcanzó una producción récord de 116,313 toneladas de cobre en el tercer trimestre, con una producción acumulada en el año de 303,328 toneladas. Los ingresos llegaron a 828 millones de dólares con un EBITDA de 470 millones de dólares. Las métricas de costo muestran un costo de efectivo C1 de 1.69 dólares/lb y un costo de ventas de 1.80 dólares/lb. El concentrador de la Fase 3 ha alcanzado una producción estable, mientras que el proyecto de fundición de cobre más grande de África sigue según lo programado para completarse este año. La guía de producción para 2024 se ha revisado a 425,000-450,000 toneladas de cobre.
아이반호 광산은 2024년 3분기에 1억 8백만 달러의 이익과 1억 6천만 달러의 조정 EBITDA를 보고했습니다. 카모아-카쿨라 구리 복합 단지는 3분기에 116,313톤의 구리 생산의 기록을 세웠으며, 연간 총 생산량은 303,328톤에 달합니다. 수익은 8억 2천8백만 달러에 이르고, EBITDA는 4억 7천만 달러입니다. 비용 지표는 C1 현금 비용이 1.69달러/lb이고, 판매 비용이 1.80달러/lb로 나타났습니다. 3단계 농축기가 안정적인 생산 상태에 도달했으며, 아프리카 최대 구리 제련소 프로젝트도 올해 완료를 목표로 일정을 잘 준수하고 있습니다. 2024년 생산 전망은 425,000-450,000톤의 구리로 수정되었습니다.
Ivanhoe Mines annonce un bénéfice de 108 millions de dollars pour le troisième trimestre 2024 et un EBITDA ajusté de 160 millions de dollars. Le Kamoa-Kakula Copper Complex a atteint une production record de 116.313 tonnes de cuivre au troisième trimestre, avec une production cumulative de 303.328 tonnes depuis le début de l'année. Les revenus ont atteint 828 millions de dollars avec un EBITDA de 470 millions de dollars. Les indicateurs de coût montrent un coût de trésorerie C1 de 1,69 dollar/lb et un coût de vente de 1,80 dollar/lb. Le concentrateur de la phase 3 a atteint une production stable, tandis que le plus grand projet de fonderie de cuivre d'Afrique reste dans les délais pour une réalisation cette année. Les prévisions de production pour 2024 ont été révisées à 425.000-450.000 tonnes de cuivre.
Ivanhoe Mines meldet für das 3. Quartal 2024 einen Gewinn von 108 Millionen US-Dollar und ein bereinigtes EBITDA von 160 Millionen US-Dollar. Der Kamoa-Kakula Copper Complex erreichte im 3. Quartal eine Rekordproduktion von 116.313 Tonnen Kupfer, mit einer Produktion von 303.328 Tonnen im bisherigen Jahresverlauf. Der Umsatz betrug 828 Millionen US-Dollar, das EBITDA lag bei 470 Millionen US-Dollar. Die Kostenkennzahlen zeigen einen C1-Barpreis von 1,69 US-Dollar/lb und die Produktionskosten von 1,80 US-Dollar/lb. Der Konzentrator der Phase 3 hat einen stabilen Produktionsbetrieb erreicht, während das größte Kupferschmelzprojekt Afrikas im Zeitplan für die Fertigstellung in diesem Jahr bleibt. Die Produktionsprognose für 2024 wurde auf 425.000-450.000 Tonnen Kupfer überarbeitet.
- Record quarterly copper production of 116,313 tonnes in Q3 2024
- Record quarterly revenue of $828 million and EBITDA of $470 million
- Phase 3 concentrator exceeding nameplate capacity by 30%
- Copper smelter project on track for completion in 2024
- Increased C1 cash costs to $1.69/lb from $1.46/lb in Q3 2023
- Cost of sales increased to $1.80/lb from $1.34/lb in Q3 2023
- Downward revision of 2024 production guidance
- Adjusted EBITDA decreased to $160M from $203M in Q2 2024
Ivanhoe Mines announces a quarterly profit of
Ivanhoe Mines reports Adjusted EBITDA of
Kamoa-Kakula produced a record 116,313 tonnes of copper in Q3 2024 and 303,328 tonnes of copper year-to-date
Kamoa-Kakula Copper Complex sold a record 103,106 tonnes of payable copper in Q3 2024 and recognized record quarterly revenue of
Kamoa-Kakula's quarterly cost of sales total
Kamoa-Kakula's year-to-date C1 cash cost of
Africa's largest and greenest smelter project on schedule for construction completion this year, to materially drive improvement in margins
Phase 3 concentrator achieves steady state production rate after quarter end, with milling rates regularly exceeding nameplate capacity
Kipushi produced 17,817 tonnes of zinc in concentrate during ramp-up in Q3 2024 and export of concentrates commenced
Johannesburg, South Africa--(Newsfile Corp. - October 30, 2024) - Ivanhoe Mines' (TSX: IVN) (OTCQX: IVPAF) President Marna Cloete and Chief Financial Officer David van Heerden are pleased to present the company's financial results for the three and nine months ended September 30, 2024. Ivanhoe Mines is a leading Canadian mining company developing and operating its four principal mining and exploration projects in Southern Africa: expanding production at the world-class Kamoa-Kakula Copper Complex in the Democratic Republic of Congo (DRC); ramping up the ultra-high-grade Kipushi zinc-copper-lead-germanium mine in the DRC; building the tier-one Platreef palladium, rhodium, nickel, platinum, copper and gold development project in South Africa; as well as exploring and advancing the expansive exploration licenses of Ivanhoe's Western Forelands project, which hosts the Makoko, Kitoko, and Kiala copper discoveries near Kamoa-Kakula. All figures are in U.S. dollars unless otherwise stated.
Watch an October 2024 video highlighting Ivanhoe Mines' financial results, as well as construction and exploration activities: https://vimeo.com/1024391679/4a60c76ad7?ts=0&share=copy
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Founder and Co-Chairman Robert Friedland commented:
"Kamoa-Kakula has reached a major milestone with the ramp-up of the Phase 3 expansion. Phase 3 provides steady-state milling capacity of 600,000 tonnes of copper per annum. We have reached the top tier of the world's most significant copper complexes, which at every phase were delivered ahead of schedule ... a true rarity in our industry.
"Africa's largest and greenest copper smelter is nearing construction completion this year. The smelter will reduce cash costs and improve profitability. With capital expenditures largely behind us at Kamoa-Kakula, we look forward to a period of strong profit and free cash flow, even as we continue to advance further copper growth initiatives on the joint venture.
"We expect 2025 to be a banner year as we deliver these significant production milestones, as well as advance our industry-leading exploration efforts in the Western Forelands, which continue to deliver some of the world's most significant, tier-one copper discoveries."
FINANCIAL HIGHLIGHTS
- Ivanhoe Mines recorded a profit of
$108 million for Q3 2024 compared with a profit of$108 million for Q3 2023. Ivanhoe Mines' normalized profit for Q3 2024 was$112 million , compared with a normalized profit of$95 million for Q3 2023.
- Kamoa-Kakula sold 103,106 tonnes of payable copper during Q3 2024, recognizing revenue of
$828 million , an operating profit of$392 million , and quarterly EBITDA of$470 million . Concentrate produced from Phase 3 is being toll-treated into blister copper at the Lualaba Copper Smelter (LCS) to maximize profitability until the on-site smelter is completed. As such, total inventory, including in the on-site warehouse and at LCS, increased to approximately 16,000 tonnes of copper in concentrate at the end of the quarter.
- Kamoa-Kakula's cost of sales per pound (lb.) of payable copper sold was
$1.80 /lb. for Q3 2024 compared with$1.53 /lb. and$1.34 /lb. in Q2 2024 and Q3 2023, respectively. Over the first nine months of 2024, cost of sales per pound (lb.) of payable copper sold was$1.62 /lb.
- Cash cost (C1) per pound of payable copper produced in Q3 2024 totaled
$1.69 /lb., compared with$1.52 /lb. and$1.46 /lb. achieved in Q2 2024 and Q3 2023, respectively. Cash cost (C1) per pound of payable copper produced for the nine months ended September 30, 2024, was$1.60 /lb., in line with the mid-point of guidance.
- Cash cost was impacted by the ramp-up of the Phase 3 expansion, including the drawing of lower-grade surface stockpiles to supplement the ramp-up process, and the optimization of the concentrator circuit towards nameplate recoveries of approximately
86% . The ramp-up of the Phase 3 concentrator to steady state was achieved early in the fourth quarter. - Ivanhoe Mines' Adjusted EBITDA was
$160 million for Q3 2024, compared with$203 million for Q2 2024 and$152 million for the same period in 2023, which includes an attributable share of EBITDA from Kamoa-Kakula.
- Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of
$180 million on hand as at September 30, 2024, and expects that at current copper prices, cash flow generated from Kamoa-Kakula's operations, as well as project-level financing facilities, will be sufficient to fund the remaining capital cost requirements for the Phase 3 expansion. Major capital cost requirements are expected to be reduced from the fourth quarter following completion of Kamoa-Kakula's direct-to-blister smelter, with construction on track to be complete by year-end, and smelter ramp-up expected from Q1 2025.
OPERATIONAL HIGHLIGHTS
- Record quarterly production of 116,313 tonnes of copper in concentrate was achieved at Kamoa-Kakula for Q3 2024, compared with 86,203 tonnes in Q1 2024 and 100,812 tonnes in Q2 2024. Over the first nine months of 2024, Kamoa-Kakula produced a total of 303,328 tonnes of copper in concentrate.
- Kamoa-Kakula's 2024 production guidance has been revised to between 425,000 - 450,000 tonnes of copper due to the impact of power intermittency experienced, particularly in the first half of the year.
- Kamoa-Kakula's Phase 1 and 2 concentrators milled approximately 2.2 million tonnes of ore during the third quarter at an average feed grade of
4.9% copper. Copper flotation recoveries for the quarter averaged86.6% .
- Following the commissioning of the Phase 3 concentrator's fine-grinding mills in September, sustained improvements in processing throughput and recovery rates were achieved. During the third week of October, the concentrator milled a record 19,198 tonnes over 24 hours, equivalent to an annualized processing rate of over 6.5 million tonnes per annum, which is
30% higher than the nameplate capacity. In addition, in late September, over 24 hours, the copper recovery rate of the concentrator averaged87% , exceeding the nameplate recovery rate of86% .
- Kamoa-Kakula's 500,000-tonne-per-annum on-site, direct-to-blister copper smelter is advancing on schedule with construction completion expected by the end of 2024, and heat-up to commence in Q1 2025.
- During the quarter, DRA Global of Johannesburg, South Africa, and Zijin Engineering of Fujian Province, China were appointed as engineering, procurement, and construction management (EPCM) contractors to execute "Project 95" at Kamoa-Kakula. A capital cost of approximately
$200 million is estimated for concentrator modifications. Increased recovery to95% is expected to boost average annualized copper production by up to 30,000 tonnes from the Phase 1 and 2 concentrators from Q1 2026.
- The Kipushi concentrator ramp-up continued during the third quarter, producing 17,817 tonnes of zinc in concentrate. Nameplate concentrator milling rate is expected to be achieved in Q1 2025. Export of concentrates commenced at the end of Q3 2024.
- Kipushi concentrator recovery rates regularly reached over
90% during the quarter. In addition, after quarter end, over 24 hours the Kipushi concentrator milled 2,108 tonnes, producing 1,357 tonnes of zinc concentrate at a concentrate grade of52% contained zinc. This is equivalent to an annualized zinc production of approximately 220,000 tonnes of zinc, after accounting for availability.
- Kipushi's 2024 production guidance was revised to between 50,000 - 70,000 tonnes of zinc in concentrate based on the ramp-up schedule, from 100,000 - 140,000 tonnes previously.
- Basic engineering has already commenced on de-bottlenecking initiatives of the Kipushi concentrator, to target a
20% increase in processing capacity to 960,000 tonnes of ore per annum. The de-bottlenecking program is expected to be complete in Q3 2025, based on the availability of long-lead order equipment.
- Kipushi will be the lowest greenhouse gas emitter per tonne of zinc produced. On a Scope 1 and 2 basis (reported from ore to mine gate), Kipushi's greenhouse gas (GHG) emissions intensity for 2025 is expected to be 0.019 equivalent tonnes of carbon dioxide per tonne of contained zinc produced (t CO2-e / t Zn). This comfortably ranks Kipushi at the bottom of the Scope 1 and 2 GHG emissions curve, according to independent industry experts Skarn Associates.
- Construction of Platreef's Phase 1 concentrator was completed on schedule early in the third quarter. Cold commissioning commenced, with water being fed through the concentrator. The concentrator will be placed on care and maintenance until H2 2025, as Shaft #1 prioritizes the hoisting of waste from the development required to bring forward the start of Phase 2.
- Reaming of the 5.1-meter diameter Shaft #3 from the 950-meter level was recently completed and equipping has commenced. Shaft #3 is expected to commence hoisting from Q1 2026 with a capacity of approximately 4 million tonnes per annum.
- Work continues on the updated feasibility study to accelerate Platreef's Phase 2, as well as the preliminary economic assessment of the new Phase 3 expansion. Both studies are expected to be published in Q1 2025.
- Ivanhoe continues its expansive copper exploration program on its Western Foreland licenses adjacent to Kamoa-Kakula. Diamond drilling during the third quarter of 2024 focused on Makoko West, Kitoko, Sakanama, and Lubudi. Nine drill rigs were in operation across the Western Foreland at quarter end, completing over 23,409 metres of diamond-core drilling, bringing the total to over 63,000 metres completed year-to-date, out of a total 70,000 metres planned.
- Positive results from drilling around Makoko and Makoko West led to the addition of three new, adjacent exploration licences, totaling 336 km2, to the Western Foreland package in Q3 2024. Two new rigs were also deployed to the newly acquired licence area after quarter-end.
David Kapembwa, Smelter Foreman, Kamoa Copper, inspecting pressure of cooling water lines during pressure testing at the on-site direct-to-blister copper smelter.
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Conference call for investors on Wednesday, October 30, 2024
Ivanhoe Mines will hold an investor conference call to discuss the results at 10:30 a.m. Eastern time / 7:30 a.m. Pacific time on October 30, 2024. The conference call will conclude with a question-and-answer (Q&A) session. Media are invited to attend on a listen-only basis.
To view the webcast use the link: https://edge.media-server.com/mmc/p/cza3bouw
Analysts are invited to join by phone for the Q&A using the following link: https://register.vevent.com/register/BI13b58175fedd463caf90c57c7402aa05
An audio webcast recording of the conference call, together with supporting presentation slides, will be available on Ivanhoe Mines' website at www.ivanhoemines.com.
After issuance, the condensed consolidated interim financial statements and Management's Discussion and Analysis will be available at www.ivanhoemines.com and www.sedarplus.ca.
Read Ivanhoe's Third Quarter 2024 Sustainability Review:
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For the third quarter, the group achieved an industry-leading combined Lost Time Injury Frequency Rate (LTIFR) of 0.50 and a Total Recordable Injury Frequency Rate (TRIFR) of 1.11 per 1,000,000 hours worked. Regrettably, there was one fatality in the group during the quarter, which occurred at Kamoa-Kakula.
For more information on each project's health and safety performance, as well as more information on the various sustainability initiatives underway across the group, read Ivanhoe's Q3 2024 Sustainability Review:
https://www.ivanhoemines.com/investors/document-library/#sustainability
Principal projects and review of activities
1. Kamoa-Kakula Copper Complex
Democratic Republic of Congo
The Kamoa-Kakula Copper Complex is operated as the Kamoa Holding joint venture between Ivanhoe Mines and Zijin Mining. The project is approximately 25 kilometres southwest of the town of Kolwezi and about 270 kilometres west of Lubumbashi. Kamoa-Kakula's Phase 1 concentrator began producing copper in May 2021. The Phase 2 concentrator, completed in April 2022, doubled nameplate production capacity to 400,000 tonnes of copper per annum. A debottlenecking program, completed 10 months later in February 2023, further increased copper production capacity to 450,000 tonnes per annum. The Phase 3 concentrator completed in June 2024 expands annual production capacity up to approximately 600,000 tonnes of copper, ranking the Kamoa-Kakula Copper Complex as the world's third-largest copper mining operation by international mining consultant Wood Mackenzie.
Ivanhoe sold a
Kamoa-Kakula summary of operating and financial data
| Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | |||||||||||||||
| Ore tonnes milled (000's tonnes) | 3,266(1 | ) | 2,381(1 | ) | 2,061 | 2,133 | 2,236 | ||||||||||||
| Copper ore grade processed (%) | ) | ) | |||||||||||||||||
| Copper recovery (%) | ) | ) | |||||||||||||||||
| Copper in concentrate produced (tonnes) | 116,313 | 100,812 | 86,203 | 92,215 | 103,947 | ||||||||||||||
| Payable copper sold (tonnes)(2) | 103,106 | 95,900 | 85,155 | 90,967 | 96,509 | ||||||||||||||
| Cost of sales per pound ($ per lb.) | 1.80 | 1.53 | 1.50 | 1.50 | 1.34 | ||||||||||||||
| Cash cost (C1) ($ per lb.) | 1.69 | 1.52 | 1.57 | 1.53 | 1.46 | ||||||||||||||
| Realized copper price ($ per lb.) | 4.16 | 4.34 | 3.82 | 3.71 | 3.84 | ||||||||||||||
| | |||||||||||||||||||
| Sales revenue before remeasurement ($'000) | 836,871 | 813,817 | 612,496 | 625,983 | 681,821 | ||||||||||||||
| Remeasurement of contract receivables ($'000) | (8,983 | ) | 3,256 | 5,824 | (8,365 | ) | 13,014 | ||||||||||||
| Sales revenue after remeasurement ($'000) | 827,888 | 817,073 | 618,320 | 617,618 | 694,835 | ||||||||||||||
| | |||||||||||||||||||
| EBITDA ($'000) | 469,735 | 547,257 | 364,893 | 343,899 | 423,211 | ||||||||||||||
| EBITDA margin (% of sales revenue) | |||||||||||||||||||
(1) Blended figures across the Phase 1, 2, and 3 concentrators, following the commencement of the Phase 3 concentrator in June 2024. Excluding Phase 3, the Phase 1 and 2 concentrators milled 2.21 million tonnes of ore at an average feed grade of (2) Payable copper sold is net of the payability factor of circa | |||||||||||||||||||
C1 cash cost per pound of payable copper produced can be further broken down as follows:
| Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | ||
| Mining | ($ per lb.) | 0.62 | 0.45 | 0.44 | 0.38 | 0.41 |
| Processing | ($ per lb.) | 0.26 | 0.21 | 0.23 | 0.24 | 0.20 |
| Logistics charges | ($ per lb.) | 0.42 | 0.48 | 0.50 | 0.50 | 0.46 |
| TC, RC, smelter charges | ($ per lb.) | 0.26 | 0.25 | 0.25 | 0.26 | 0.25 |
| General & Administrative | ($ per lb.) | 0.13 | 0.13 | 0.15 | 0.15 | 0.14 |
| Cash cost (C1) per pound of payable copper produced | ($ per lb.) | 1.69 | 1.52 | 1.57 | 1.53 | 1.46 |
| Cash cost (C1) is prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines but are not measures recognized under IFRS Accounting Standards. In calculating the C1 cash cost, the costs are measured on the same basis as the company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash cost is used by management to evaluate operating performance and include all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to the final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered, finished metal. C1 cash cost excludes royalties, production taxes, and non-routine charges as they are not direct production costs. All figures are on a | ||||||
Kamoa-Kakula's Phase 1, 2, and 3 concentrators produced a record 116,313 tonnes of copper in concentrate in Q3 2024
Kamoa-Kakula produced 116,313 tonnes of copper in concentrate in the third quarter of 2024, including 94,214 tonnes of copper from the Phase 1 and 2 concentrators and 22,099 tonnes of copper from the Phase 3 concentrator. Over the first nine months of 2024, Kamoa-Kakula produced a total of 303,328 tonnes of copper in concentrate.
Kamoa-Kakula's Phase 1 and 2 concentrators milled approximately 2.2 million tonnes of ore during the third quarter at an average feed grade of
Following the commissioning of the Phase 3 concentrator's fine-grinding mills in September, sustained improvements in processing throughput and recovery rates were achieved. During the third week of October, the concentrator milled a record 19,198 tonnes over a 24-hour period, which is equivalent to an annualized processing rate of over 6.5 million tonnes per annum, after accounting for availability. This achievement is
Annual production guidance for Kamoa-Kakula has been revised to between 425,000 and 450,000 tonnes of copper in concentrate for 2024, compared with the original 2024 guidance of between 440,000 and 490,000 tonnes. 2024 cash cost (C1) guidance for Kamoa-Kakula remains unchanged.
The revised guidance reflects production loss due to intermittent grid power, in particular prior to the installation of additional on-site generator capacity, as well as imported power that now supports Kamoa-Kakula's operations. Approximately 36,000 tonnes of copper production are estimated to have been lost due to intermittent power over the first nine months of 2024, including 20,500 tonnes in the first quarter. Guidance also considers the ramp-up rate of the newly constructed Phase 3 concentrator, which reached steady-state production after quarter-end.
Kamoa Copper continues to work closely with the DRC's state-owned power company, La Société Nationale d'Electricité (SNEL), to deliver solutions for the identified causes of instability experienced across the southern DRC's grid infrastructure since late 2022. The project work, which is budgeted up to
The project consists of grid infrastructure upgrades, such as an increase in grid capacity between the Inga II dam and Kolwezi, a new harmonic filter at the Inga Converter Station, as well as a new static compensator at the Kolwezi Converter Substation. In addition, various smaller initiatives have been identified to strengthen the transmission capability and improve the long-term stability of the southern grid. This includes the restringing of powerlines in the southern grid and repairs to the direct current (DC) infrastructure. In addition to this, Ivanhoe Mines Energy DRC is working with SNEL to put in place maintenance contracts to maintain key generation capacity and transmission infrastructure.
Engineers and Project Managers from Ray Group of Kinshasa, DRC; and Gruner Stucky AG of Basel, Switzerland; with Lucien Shimuna, Project Manager of Ivanhoe Mines Energy DRC, discussing plans at the Kolwezi Converter Substation site where a new static compensator (STATCOM) is under construction.
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The STATCOM (foreground) is under construction at the Kolwezi Substation and is one of the initiatives underway designed to improve the stability of grid-supplied power to Kamoa-Kakula.
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Imported power during the quarter increased to 65 megawatts (MW), negotiations are underway to increase imported power to over 100 MW; 205 MW onsite back up power targeted by year-end
In the third quarter, grid-supplied power to Kamoa-Kakula continued to be supplemented with imported power via the Zambian interconnector. In July, secured imported power increased to 65 MW, with 10 MW sourced from generation capacity in Zambia and 55 MW sourced from Mozambique via the Southern Africa Power Pool network. Negotiations are well advanced to increase imported power to over 100 MW by year-end, increasing to 200 MW in the medium to long term.
Kamoa Copper's engineering team continues to expand its on-site backup generation capacity to ensure sufficient redundancy for the current Phase 1, 2, and 3 operations.
The total installed on-site, backup power generation capacity is currently 145 MW, following the delivery and commissioning of an additional 72 MW of generators during the quarter and a further 10 MW in October. The on-site backup power capacity is sufficient to power Kamoa-Kakula's Phase 1 and 2 concentrators at full capacity in the event of intermittent power. Kamoa's project team remains on schedule to install a further 60 MW of on-site backup power generation capacity by year-end.
Figure 1. Kamoa-Kakula's power demand profile versus the projected phased rollout of on-site, back-up generation capacity and imported grid power, supplementing existing domestically-sourced power from SNEL (MW).
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Refurbishment of Turbine #5 at Inga II approximately
Refurbishment works of Turbine #5 at the Inga II hydroelectric facility are approximately
Ramp-up of the Phase 3 concentrator to steady-state completed early in fourth quarter; commissioning of underground infrastructure in the Kamoa 1 mine to improve mining costs
First ore to Kamoa-Kakula's Phase 3 concentrator was achieved on May 26, 2024, up to two quarters ahead of the originally announced schedule, with first concentrate reported on June 10, 2024. The new 5-million-tonne-per-annum (Mtpa) Phase 3 concentrator is located adjacent to the Kamoa 1 and 2 underground mines, approximately 10 kilometres north of the Phase 1 and 2 concentrators located above the Kakula underground mine. Ramp-up to steady-state production of the Phase 3 concentrator was completed early in the fourth quarter.
The Phase 3 concentrator is
Construction of underground infrastructure at the Kamoa 1, Kamoa 2 and the Kansoko mines continued during the quarter and into the fourth quarter. Construction of the Kamoa 1 underground-to-surface ore conveyor system, similar in design to Kakula, and first truck tip are nearing completion and are expected to be commissioned imminently. Until this ore handling system is operational, ore from underground will continue to be hauled to surface by truck. Mining costs are expected to improve once the truck tip and conveyor are commissioned as notable efficiencies will be gained from this new infrastructure. A second truck-tip is under construction and is expected to be commissioned at the end of Q2 2025.
Looking down the decline of the Kamoa 1 box cut, showing the underground-to-surface ore conveyor system that feeds the Phase 3 concentrator (top right of picture). Approximately
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Concurrently, underground development at Kamoa 1 and 2 continues to focus on opening-up access to ore reserves well in advance of the mine plan. Kamoa-Kakula's mining engineering team are targeting to have completed enough underground development for 18 months of accessible mining reserves by the end of 2025. This provides the mine with flexibility to achieve a consistent head grade from the higher- and lower-grade mining areas. A similar strategy has also been employed at the Kakula underground mine.
During the third quarter, approximately
As of September 30, 2024, a total of 4.57 million tonnes of ore at an average grade of
Sale of copper concentrates produced by the Phase 3 concentrator commenced early in the third quarter. Concentrate produced from Phase 3 is being toll-treated into blister copper at the Lualaba Copper Smelter (LCS) to maximize profitability until the on-site smelter is completed. As such, total inventory, including in the on-site warehouse and at LCS, increased to approximately 16,000 tonnes of copper in concentrate at the end of the quarter. LCS is located approximately 50 kilometres from Kamoa-Kakula, near the town of Kolwezi.
It is expected that from early in Q1 2025, 20,000 to 30,000 tonnes of copper in concentrate produced by the Phase 3 concentrator will start to be stockpiled on-site in anticipation of the heat-up and ramp-up of the on-site smelter from Q1 2025. Once fully ramped-up the smelter is expected to maintain approximately 17,000 tonnes of copper within the circuit.
Direct-to-blister copper smelter project is
Kamoa-Kakula is building Africa's largest smelter, which will have a capacity of 500,000 tonnes of >
The smelter project is
Recruitment of the 970-personnel operating team is nearing completion, with management and technical training well underway. 250 of the newly recruited workforce have been temporarily deployed to similar copper smelters in China and Zambia to gain operational experience, ahead of commencing smelter commissioning activities at Kamoa-Kakula in the coming months.
The smelter will have a processing capacity of approximately 1.2 Mtpa of dry concentrate feed and is designed to run on a blend of concentrate produced from the Kakula (Phase 1 and 2) and Kamoa (Phase 3 and future Phase 4) concentrators. Where possible, Kamoa-Kakula will continue to toll-treat concentrates domestically, with surplus concentrates smelted at LCS.
As a by-product, the smelter will also produce 600,000 to 700,000 tonnes per year of high-strength sulphuric acid, depending on the sulphur content of the feed concentrate. There is a strong demand for sulphuric acid in the DRC, as it is used to leach copper from oxide ores through the SX-EW (solvent extraction and electrowinning) process. Offtake contracts for the high-strength sulphuric acid produced by the smelter are well-advanced with purchasers local to the Kolwezi area.
The on-site smelter will offer transformative financial benefits for the Kamoa-Kakula Copper Complex, most significantly a material reduction in logistics costs, and to a lesser extent reduced concentrate treatment charges and local taxes, as well as revenue from acid sales. Logistics costs accounted for approximately
Kamoa-Kakula's on-site copper smelter is on schedule for construction completion by year end.
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Project 95 to unlock up to 30,000 tonnes per annum of additional copper growth from Phase 1 and 2 concentrators from 2026
Project 95 aims to improve copper recovery rates of the Phase 1 and 2 concentrators from
The modifications to the existing Phase 1 and 2 concentrators consist of a new coarse-fine cyclone bank, flash flotation cells, coarse rougher tailings tank, additional feed tanks to the rougher scavenger and cleaner scavenger flotation cells, and new cleaner flotation cells. In addition, a new fine-regrind milling plant adjacent to the Phase 1 and Phase 2 concentrator plants will be constructed, with high-intensity grinding (HIG) mills, rougher tailings cyclones, and slime thickeners.
Infrastructure site plan of Phase 1 and 2 concentrators, showing new Project 95 equipment to be installed in red.
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Following the completion of Project 95, the copper grade of the tailings stream from the Phase 1 and 2 concentrators will be significantly reduced from approximately
Delivery of Project 95 underway, with completion targeted for Q1 2026
During the quarter, DRA Global of Johannesburg, South Africa and Zijin Engineering of Fujian Province, China were appointed as engineering, procurement and construction management (EPCM) contractors to execute Project 95. DRA Global was the EPCM contractor that delivered ahead-of-schedule the Phase 1, 2 and 3 concentrators at Kamoa-Kakula.
The construction of Project 95 is expected to take approximately 18 months with completion targeted during the first quarter of 2026. Engineering design and procurement of long-lead order equipment items are well underway. Geotechnical engineering has also commenced on Cell 2.
The estimated capital cost for the modifications to the Phase 1 and 2 concentrator plants is approximately
Project 95's incremental operating costs are estimated to be approximately
2025 Integrated Development Plan to include future growth initiatives such as Project 95, Phase 3 debottlenecking, and Phase 4 expansion
Following the last Integrated Development Plan, released on January 30, 2023, Kamoa's engineering team is working on an updated 2025 Integrated Development Plan (2025 IDP). The 2025 IDP will include initiatives targeting increased processing recoveries and processing throughput from the Phase 1, 2, and 3 concentrators, as well as a new Phase 4 expansion.
Kamoa's engineering team is targeting to increase recovery rates of the Phase 1 and 2 concentrators and the Phase 3 concentrator, from the current nameplate rates of
The Phase 4 expansion involves doubling the size of the milling and flotation circuit adjacent to Phase 3. Like the Phase 2 expansion with Phase 1, the front-end crushing circuit installed for Phase 3 has already been oversized to accommodate Phase 4.
Phase 4 will be fed by ramping up new mining areas on the Kamoa-Kakula complex, timing of which is under study for the 2025 IDP.
COPPER PRODUCTION AND CASH COST GUIDANCE FOR 2024
| Kamoa-Kakula 2024 Guidance | ||
| Previous guidance | 440,000 to 490,000 | Contained copper in concentrate (tonnes) |
| Revised guidance | 425,000 to 450,000 | Contained copper in concentrate (tonnes) |
| Unchanged cash cost (C1) | 1.50 to 1.70 | $ per pound |
Revised full-year production guidance reflects production lost due to intermittent grid power, in particular prior to the installation of additional on-site generator capacity and agreements to import power to support power consumption from the DRC grid. Approximately, 36,000 tonnes of copper production are estimated to have been lost due to intermittent power over the first nine months of 2024, including 20,500 tonnes in the first quarter. Guidance also considers the commissioning of the Phase 3 concentrator, which reached steady-state early in the fourth quarter.
Guidance figures are on a
The Kamoa-Kakula joint venture produced a total of 116,313 tonnes of copper in concentrate for the three months ended September 30, 2024, and 303,328 tonnes of copper for the nine months ended September 30, 2024.
Cash cost (C1) per pound of payable copper produced amounted to
Cash cost guidance is based on assumptions including feed grades of processed copper ore, the ramp-up of the Phase 3 concentrator, reliability of DRC grid power supply, the availability and cost of alternative sources of electricity supply, and prevailing logistics rates among other variables.
Cash cost guidance is impacted by the timing of the ramp-up to steady-state of Kamoa-Kakula's Phase 3 concentrator. Copper in concentrate produced by the Phase 3 concentrator is expected to have a higher cash cost, compared with that of the Phase 1 and Phase 2 concentrators. This is primarily due to the lower copper grade of the stockpiles feeding the Phase 3 concentrator, compared with the higher-grade ore from the Kakula Mine that feeds the Phase 1 and Phase 2 concentrators.
Cash cost (C1) is a non-GAAP measure used by management to evaluate operating performance and includes all direct mining, processing, stockpile rehandling charges, and general and administrative costs. Smelter charges and freight deductions on sales to the final port of destination (typically China), which are recognized as a component of sales revenues, are added to cash cost (C1) to arrive at an approximate cost of delivered finished metal. For historical comparatives, see the non-GAAP Financial Performance Measures section of this press release.
Construction workers from contractor DGC Africa, inside the smelter's furnace, which is being lined with magnesia-chrome refractory bricks before it is sealed, ready for commissioning in the coming months.
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2. Kipushi Project
Democratic Republic of Congo
The historic Kipushi zinc-copper-germanium-silver mine in the DRC is adjacent to the town of Kipushi, approximately 30 kilometres southwest of Lubumbashi on the Central African Copperbelt. Kipushi is approximately 250 kilometres southeast of the Kamoa-Kakula Copper Complex and less than one kilometre from the Zambian border. Ivanhoe acquired its
For over 69 years up until 1993 when the mine was placed on care and maintenance, the Kipushi Mine produced a total of 6.6 million tonnes of zinc and 4.0 million tonnes of copper from 60 million tonnes of ore grading
Since acquiring its interest in Kipushi in 2011, Ivanhoe's drilling campaigns have upgraded and expanded the mine's zinc-rich Big Zinc and Southern Zinc orebodies to a Measured and Indicated Mineral Resource of 11.78 million tonnes grading
Kipushi's high-grade zinc concentrate assays include significant quantities of germanium and gallium. Germanium is a strategic metal used today in electronic devices, flat-panel display screens, light-emitting diodes, night vision devices, optical fibre, optical lens systems, and solar power arrays. Gallium is a strategic metal used today to manufacture compound semiconductor wafers used in integrated circuits, and optoelectronic devices such as laser diodes, light-emitting diodes, photodetectors, and solar cells.
Kipushi concentrator continues ramp-up during the third quarter, producing 17,817 tonnes of zinc in concentrate
Construction of the new 800,000-tonne-per-annum concentrator facility was completed months ahead of schedule on May 31, 2024, following the first feed of ore. The concentrator process consists of dense media separation (DMS) and a milling and flotation circuit. Design recoveries are targeted to be
Commissioning of the Kipushi concentrator commenced in early May, with first feed of ore from the surface ROM stockpiles fed through the ball mill during the evening of May 31, 2024. Following first concentrate production on June 14, 2024, ramp-up of Kipushi's concentrator continued during the third quarter. Kipushi's concentrator milled approximately 88,000 tonnes of ore during the third quarter at an average feed grade of
Ramp up of Kipushi's concentrator has been slower than anticipated as a result of three principal factors: first, ore mined and stockpiled from the top of the Big Zinc orebody has a relatively high iron content, which was negatively impacting concentrator recoveries prior to reagent adjustments; second, ore feed into the DMS circuit contains a higher-than-expected proportion of fine material ("fines"), which is limiting throughput; and third, the increase in power requirement, from 5 MW used during construction to 18 MW for operations, has exposed transmission bottlenecks in the local grid infrastructure.
Figure 2. World's top 10 zinc mines estimated for 2025, by paid zinc production per annum ('000 tonnes) with head grade (% zinc).
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Source: Wood Mackenzie, 2024, Ivanhoe Mines. Production and grade assumptions for Kipushi are the first five-year average as stated in the 2022 Feasibility Study.
During the latter part of September and into October, the Kipushi concentrator regularly operated close to its nameplate throughput of over 80 tonnes per hour (800,000 tonnes per annum). Over a 24-hour period after quarter-end, the Kipushi concentrator milled 2,108 tonnes of ore, producing 1,357 tonnes of zinc concentrate at a concentrate grade of
While the Kipushi concentrator's metallurgical recoveries improved to over
The Kipushi concentrator's nameplate milling rate is expected to be achieved in Q1 2025. As a result, the full-year production guidance range for Kipushi has been reduced from 100,000 - 140,000 tonnes of zinc in concentrate, to 50,000 - 70,000 tonnes of zinc in concentrate.
Engineering and procurement of long-lead order equipment items are well underway for the Kipushi debottlenecking program. The debottlenecking of the Kipushi concentrator is targeting a
Run-of-mine stockpiles to support ramp-up to steady-state production, with underground development advancing ahead of schedule
As of September 30, 2024, a total of 360,000 tonnes of ore at an average grade of
Underground development continues to progress ahead of schedule. Year to date, over 3,000 metres of underground development have been completed, approximately 100 metres ahead of schedule.
Kipushi's mine surveying crew, led by Tshibamba-Lole Flory, flying a drone into a mined-out stope of the ultra-high grade Big Zinc orebody to measure the excavation.
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Aerial view of the Kipushi concentrator, with the P5 Shaft in the background. At quarter end, there were 360,000 tonnes of ore at an average grade of
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Greenhouse Gas emissions assessment confirms that Kipushi will be lowest carbon emitter per unit of zinc production in the world
Kipushi will be the lowest greenhouse gas emitter per tonne of zinc produced. On a Scope 1 and 2 basis (reported from ore to mine gate), Kipushi's greenhouse gas (GHG) emissions intensity for 2025 is expected to be 0.019 equivalent tonnes of carbon dioxide per tonne of contained zinc produced (t CO2-e / t Zn). This comfortably ranks Kipushi near the bottom of the Scope 1 and 2 GHG emissions curve, as shown in Figure 3.
This is partially due to the ultra-high-grade Big Zinc orebody, which has an average head grade of over
The low carbon emissions intensity is also a function of the DRC grid being among the world's cleanest, with
Figure 3. 2023 Scope 1 & 2 zinc GHG emissions intensity curve, highlighting Kipushi and the top 10 largest zinc mining operations in 2023.
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Notes: Kipushi and industry peer Scope 1 and 2 GHG emissions data are estimates by Skarn Associates. Estimates include all direct and indirect emissions to produce contained zinc from ore to mine gate. The horizontal width of each bar represents the quantity of each operation's 2023 zinc production in '000 tonnes. 2025 Kipushi production is estimated to be 278,000 tonnes of payable zinc in concentrate, based on the 2022 feasibility study. 2025 zinc production is not forward guidance. It is estimated that operations will emit a total of 5,047 equivalent tonnes of CO2, thereby producing 0.019 equivalent tonnes of CO2 per tonne of zinc produced. Chart sources: Skarn Associates, Ivanhoe Mines.
ZINC PRODUCTION AND CASH COST GUIDANCE FOR 2024
| Kipushi 2024 Guidance | ||
| | ||
| Previous guidance | 100,000 to 140,000 | Contained zinc in concentrate (tonnes) |
| Revised guidance | 50,000 to 70,000 | Contained zinc in concentrate (tonnes) |
Revised full year production guidance reflects production lost due to slower than expected ramp-up of the Kipushi concentrator, due to metallurgical challenges and intermittent grid power.
Guidance figures are on a
3. Platreef Project
South Africa
The Platreef Project is owned by Ivanplats (Pty) Ltd. (Ivanplats), which is
The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper, and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province - approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane in South Africa.
On the Northern Limb, platinum-group metals mineralization is primarily hosted within the Platreef, a mineralized sequence traced for more than 30 kilometres along strike. Ivanhoe's Platreef Project, within the Platreef's southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum's Mogalakwena group of mining operations and properties.
Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods.
Cold commissioning of the Phase 1 concentrator completed early in Q3; first ore scheduled for H2 2025 while underground development prioritizes waste development to accelerate the start of Phase 2
Construction of Platreef's Phase 1 concentrator was completed on schedule early in the third quarter. Cold commissioning started in July, with water being fed through the concentrator. The concentrator will be kept on care and maintenance until H2 2025, as Shaft #1 prioritizes the hoisting of waste development required to bring forward the start of Phase 2.
The Platreef Phase 1 concentrator in the foreground, with the headframes of Shaft #1 and #2 in the background. First concentrate from the Phase 1 concentrator is expected in the second half of 2025, while underground development prioritizes development to accelerate Phase 2.
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Phindile Thathi, Shift Supervisor at Ivanplats, overseeing the raiseboring of a ventilation shaft between the 950-metre level and 750-metre level.
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Updated feasibility study for optimized Platreef Phase 2 and PEA for new Phase 3 expected in Q1 2025, ranking Platreef as one of the world's largest PGM producers
In 2023, Ivanhoe's engineering team completed an internal optimization study of the phased expansion of the Platreef Project. Current underground development and operations are dependent on the initial 1-Mtpa Shaft #1 until the 10-metre-diameter, 8-Mtpa Shaft #2 is commissioned. The study concluded that accelerating the startup of Phase 2 will create significant project value.
Following the completion of the optimization study, DRA Global of Johannesburg, South Africa, were appointed to update the Platreef 2022 Feasibility Study for the optimized and accelerated Phase 2 expansion. Study work is nearing completion, with results expected to be released in the first quarter of 2025.
In parallel with the release of the updated Phase 2 feasibility study, Ivanhoe also commissioned a preliminary economic assessment (PEA) for an additional expansion, Phase 3, taking the total Platreef processing capacity up to approximately 10 Mtpa. The new Phase 3 expansion is expected to consist of two additional 3.3-Mtpa concentrator modules, to be located adjacent to the Phase 1 and 2 concentrators. Phase 3 is anticipated to rank Platreef as one of the world's largest and lowest-cost platinum-group metal, nickel, copper and gold producers. The 10-Mtpa concentrator capacity of the Phase 3 expansion will be 12.5 times greater than that of Phase 1 and 2.5 times greater than the processing capacity of the optimized Phase 2 expansion. The results of the Phase 3 PEA will be released at the same time as the updated feasibility study for Phase 2.
Reaming of Shaft #3 from 950 metres recently completed; Phase 2 expansion based on additional hoisting capacity from Shaft #3
The Phase 2 expansion will be accelerated by re-purposing ventilation Shaft #3 for hoisting. Shaft #3 will generate additional hoisting capacity of approximately 4 Mtpa, bringing the total hoisting capacity to approximately 5 Mtpa.
The reaming of Shaft #3, to a diameter of 5.1-metre down, has recently been completed. Reaming is the process of boring, or excavating, a vertical shaft from the bottom up and it is the quickest and safest method of constructing a shaft. Once equipped, Shaft #3 is expected to be ready for hoisting in the first quarter of 2026, well ahead of the completion of the much larger Shaft #2.
The internal study concluded that equipping Shaft #3 for hoisting de-risks Phase 1 underground operations ahead of the completion of Shaft #2 and accelerates the underground development for Phase 2. In addition, the Phase 2 concentrator would have an increased processing capacity of 3.3 Mtpa, up from 2.2 Mtpa as per the first module of Phase 2 defined in the Platreef 2022 Feasibility Study. Therefore, the Phase 1 and Phase 2 concentrators will have a total combined processing capacity of approximately 4 Mtpa, with ore fed by Shaft #1 and Shaft #3.
Additional underground ventilation will now be provided by two new 5.1-metre-diameter shafts, named Shaft #4 and Shaft #5. Drilling of the pilot hole for Shaft #4 is complete, with reaming expected to start imminently. Civil construction of Shaft #4's substation building and ventilation fans are advancing well. Geotechnical drilling has commenced on the proposed Shaft #5 site.
Platreef's Shaft #2 head gear (centre) with the base and structural steel of Shaft #3's Rock Winder in the foreground.
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The installation of the 1,124 tonnes of internal structural steel inside Shaft #2's head frame continued during the quarter, as well as the installation of the Sinking Winders and related infrastructure. Reaming of Shaft #2 to an initial diameter of 3.1 metres is progressing well with approximately 100 metres remaining and completion expected in the coming weeks. Expansion of the shaft to its final diameter of 10 metres will commence in late 2025. The completion of Shaft #2 will increase the total hoisting capacity for ore and waste development, across all three shafts to over 12 Mtpa.
Construction of Platreef's first 5-MW solar power facility is expected to be complete by year-end. The power generated by the plant will support development activities and operations, together with other renewable energy sources that are expected to be introduced over time.
Construction of Platreef's first solar plant is expected to be complete by year-end.
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4. Western Forelands Exploration Project
Democratic Republic of Congo
Ivanhoe's DRC exploration group is targeting Kamoa-Kakula-style copper mineralization on its Western Forelands exploration licences. More recent discoveries at Makoko, Makoko West, Kiala and Kitoko, confirm the effectiveness of these models and the understanding of controls on this highly valuable and unique style of mineralization.
Diamond drilling during the third quarter of 2024 was focused on Makoko West, Kitoko, Sakanama and Lubudi. Nine contractor rigs were in operation across the Western Foreland at quarter end, having completed a total of 25,509 metres of diamond core over 34 drill holes. Ivanhoe is well on track to complete the stated total of 70,200 metres of diamond drilling for the year, with over 63,000 metres of diamond drilling complete through the first nine months of 2024. Reverse Circulation (RC) drilling through the Kalahari sand cover at Kamili has progressed well during the quarter, with a total of 343 holes completed totaling 6,719 metres of drilling.
Drilling at Makoko West (southwest of the original Makoko mineral resource, as announced on November 13, 2023) continued in the third quarter with a total of 12,487 metres were drilled across 18 completed holes. Positive results from the ongoing drilling around the Makoko area, and more recently the highly prospective "Makoko West" target, led to the acquisition of three adjacent exploration licences, covering an area of 336 km2.
Exploration activities on the newly acquired licences commenced at the beginning of the fourth quarter. A new drilling contractor has been appointed and two rigs have been mobilized for a 32,000-metre drilling program. This is in addition to the nine drill rigs currently deployed across the Western Forelands, of which six are focused on Makoko, Makoko West and Kitoko.
Fabrice Kalwila, Rig Operator, Titan Drilling preparing newly drilled core for logging at Kitoko.
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Drilling activity at Kitoko continues to test the extent of the system, and to understand the controls on mineralization. A total of 5,965 metres were drilled during the quarter across 8 holes.
With the third quarter falling within the middle of the dry season, access to the more remote areas of the Western Forelands land package greatly improved. Therefore, targets such as Sakanama and Lubudi on the outer edges of the licence package were drilled during the quarter, with a total of 4,794 metres drilled across six holes.
Stratigraphic drilling continued in the Lubudi region to the south of Makoko during the quarter with four wide-spaced diamond drillholes totalling 2,263 metres completed.
A proof-of-concept passive seismic program commenced at Kitoko in the third quarter, testing the technology's ability to image key Katangan geological horizons below thick Kalahari sand which blankets prospective geological formations. Learnings from this program will be applied elsewhere on the Western Foreland and on Ivanhoe's Angolan Project where thick Kalahari sands are also present.
Planning is underway for another major drill campaign across the Western Forelands in 2025, details of which will be released before year-end.
5. The Mokopane Feeder Exploration Project
South Africa
Three new
A gravity-high anomaly based on wide-spaced historical Council for Geoscience data was interpreted to represent a primary feeder zone to the Rustenburg Layered Suite of the Northern Limb of the Bushveld Complex. The working hypothesis for this large gravity anomaly (the Mokopane Feeder) is that it represents a significant thickening of the Rustenburg Layered Suite, particularly of the denser Lower Zone units associated with regional scale crustal faults, with significant potential for nickel, copper and platinum-group metals mineralization.
Detailed high-resolution fixed-wing airborne magnetic and Falcon airborne gravity gradiometer geophysical surveys were completed in 2023 to map the subsurface petrophysical characteristics of the anomaly.
The collection, interpretation and review process of all geological and geophysical data was completed earlier in the year. The geological understanding of the anomaly continues to evolve, with three targets identified for drilling.
Diamond drilling contractor, Geosearch, has been appointed and is expected to soon commence drilling following the completion of the stakeholder engagement and heritage survey. Drilling is expected to continue until the second quarter 2025. Downhole geophysics will be conducted concurrently with drilling.
SELECTED QUARTERLY FINANCIAL INFORMATION
The following table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any prior financial reporting period. Revenue from commercial production at the Kipushi Mine will commence in Q4 2024. All revenue from production at Kamoa-Kakula is recognized within the Kamoa Holding joint venture. Ivanhoe did not declare or pay any dividend or distribution in any financial reporting period.
| Three months ended | ||||||||||||
| September | June | March | December | |||||||||
| 2024 | 2024 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| | ||||||||||||
| Share of profit from joint venture | 83,507 | 89,616 | 45,165 | 49,272 | ||||||||
| Finance income | 60,164 | 62,873 | 62,457 | 63,110 | ||||||||
| Deferred tax recovery | 575 | 1,398 | 3,221 | 4,201 | ||||||||
| Finance costs | (471 | ) | (32,871 | ) | (8,944 | ) | (6,741 | ) | ||||
| Loss on fair valuation of embedded derivative liability | (4,171 | ) | (20,727 | ) | (139,271 | ) | (39,961 | ) | ||||
| General administrative expenditure | (10,573 | ) | (12,345 | ) | (14,001 | ) | (14,947 | ) | ||||
| Exploration and project evaluation expenditure | (12,813 | ) | (10,589 | ) | (8,901 | ) | (8,637 | ) | ||||
| Share-based payments | (7,504 | ) | (8,505 | ) | (8,933 | ) | (7,715 | ) | ||||
| Profit (loss) attributable to: | ||||||||||||
| Owners of the Company | 117,942 | 76,401 | (65,552 | ) | 27,739 | |||||||
| Non-controlling interests | (9,760 | ) | (9,885 | ) | (3,858 | ) | (1,980 | ) | ||||
| Total comprehensive income (loss) attributable to: | ||||||||||||
| Owners of the Company | 141,525 | 88,223 | (73,648 | ) | 37,155 | |||||||
| Non-controlling interest | (7,469 | ) | (8,672 | ) | (4,728 | ) | (1,003 | ) | ||||
| | ||||||||||||
| Basic profit (loss) per share | 0.09 | 0.06 | (0.05 | ) | 0.02 | |||||||
| Diluted profit (loss) per share | 0.09 | 0.06 | (0.05 | ) | 0.02 | |||||||
| Three months ended | ||||||||||||
| September | June | March | December | |||||||||
| 2023 | 2023 | 2023 | 2022 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| | ||||||||||||
| Share of profit from joint venture | 69,829 | 73,066 | 82,659 | 83,324 | ||||||||
| Finance income | 56,671 | 61,956 | 57,826 | 58,477 | ||||||||
| Gain (loss) on fair valuation of embedded derivative liability | 12,218 | (26,618 | ) | (30,900 | ) | (66,600 | ) | |||||
| General administrative expenditure | (9,841 | ) | (10,474 | ) | (8,571 | ) | (11,870 | ) | ||||
| Finance costs | (8,752 | ) | (5,539 | ) | (10,465 | ) | (10,457 | ) | ||||
| Share-based payments | (6,732 | ) | (7,120 | ) | (7,702 | ) | (7,809 | ) | ||||
| Exploration and project evaluation expenditure | (6,264 | ) | (4,375 | ) | (3,381 | ) | (3,887 | ) | ||||
| Deferred tax (expense) recovery | 1,212 | 1,965 | 926 | (3,839 | ) | |||||||
| Profit (loss) attributable to: | ||||||||||||
| Owners of the Company | 112,510 | 92,042 | 86,637 | 41,884 | ||||||||
| Non-controlling interests | (4,988 | ) | (4,859 | ) | (4,157 | ) | (4,705 | ) | ||||
| Total comprehensive income (loss) attributable to: | ||||||||||||
| Owners of the Company | 109,681 | 86,588 | 74,154 | 53,078 | ||||||||
| Non-controlling interest | (5,250 | ) | (5,443 | ) | (5,420 | ) | (3,621 | ) | ||||
| | ||||||||||||
| Basic profit per share | 0.09 | 0.08 | 0.07 | 0.03 | ||||||||
| Diluted profit per share | 0.08 | 0.07 | 0.07 | 0.03 | ||||||||
DISCUSSION OF RESULTS OF OPERATIONS
Review of the three months ended September 30, 2024 vs. September 30, 2023
The company recorded a profit for Q3 2024 of
The total comprehensive income for Q3 2024 was
Ivanhoe's exploration and project evaluation expenditure amounted to
Finance income for Q3 2024 amounted to
The company recognized a loss on the fair valuation of the embedded derivative financial liability of
The Kamoa-Kakula Copper Complex sold 103,106 tonnes of payable copper in Q3 2024 realizing revenue of
| Three months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| | ||||||
| Company's share of profit from joint venture | 83,507 | 69,829 | ||||
| Interest on loan to joint venture | 57,077 | 51,561 | ||||
| Company's income recognized from joint venture | 140,584 | 121,390 | ||||
The company's share of profit from the Kamoa Holding joint venture was
| Three months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| | ||||||
| Revenue from contract receivables | 836,871 | 681,821 | ||||
| Remeasurement of contract receivables | (8,983 | ) | 13,014 | |||
| Revenue | 827,888 | 694,835 | ||||
| Cost of sales | (408,919 | ) | (286,030 | ) | ||
| Gross profit | 418,969 | 408,805 | ||||
| | ||||||
| General and administrative costs | (22,260 | ) | (32,632 | ) | ||
| Amortization of mineral property | (4,507 | ) | (3,002 | ) | ||
| Profit from operations | 392,202 | 373,171 | ||||
| | ||||||
| Finance costs | (83,815 | ) | (85,097 | ) | ||
| Foreign exchange loss | (4,232 | ) | (15,249 | ) | ||
| Finance income and other | 5,737 | 5,323 | ||||
| Profit before taxes | 309,892 | 278,148 | ||||
| | ||||||
| Current tax expense | (125,852 | ) | (44,276 | ) | ||
| Deferred tax expense | 34,093 | (55,212 | ) | |||
| Profit after taxes | 218,133 | 178,660 | ||||
| | ||||||
| Non-controlling interest of Kamoa Holding | (49,431 | ) | (37,592 | ) | ||
| Total comprehensive income for the period | 168,702 | 141,068 | ||||
| Company's share of profit from joint venture ( | 83,507 | 69,829 | ||||
The realized and provisional copper prices used for the remeasurement (mark-to-market) of contract receivables for the three months ended September 30, 2024, and for the same period in 2023, can be summarized as follows:
| Three months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| | ||||||
| Realized during the period - open at the start of the period | ||||||
| Opening forward price ($/lb.)(1) | 4.32 | 3.77 | ||||
| Realized price ($/lb.)(1) | 4.18 | 3.86 | ||||
| Payable copper tonnes sold | 63,633 | 69,089 | ||||
| Remeasurement of contract receivables ($'000) | (20,442 | ) | 16,881 | |||
| | ||||||
| Realized during the period - new copper sold in the current period | ||||||
| Provisional price ($/lb.)(1) | 4.15 | 3.83 | ||||
| Realized price ($/lb.)(1) | 4.14 | 3.78 | ||||
| Payable copper tonnes sold | 68,725 | 26,271 | ||||
| Remeasurement of contract receivables ($'000) | (2,088 | ) | (3,040 | ) | ||
| | ||||||
| Open at the end of the period - new copper sold in current period | ||||||
| Provisional price ($/lb.)(1) | 4.23 | 3.76 | ||||
| Closing forward price ($/lb.)(1) | 4.41 | 3.76 | ||||
| Payable copper tonnes sold | 34,382 | 70,534 | ||||
| Remeasurement of contract receivables ($'000) | 13,547 | (827 | ) | |||
| | ||||||
| Total remeasurement of contract receivables ($'000) | (8,983 | ) | 13,014 | |||
| | ||||||
| (1) Calculated on a weighted average basis | ||||||
The finance costs recognized in the Kamoa Holding joint venture can be broken down as follows:
| Three months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Interest on shareholder loans | 118,364 | 104,132 | ||||
| Interest on shareholder loans - capitalized as borrowing costs | (80,922 | ) | (40,172 | ) | ||
| Interest on provisional and advance payment facilities | 32,121 | 14,786 | ||||
| Interest on bank loans and overdraft facilities | 10,113 | 2,142 | ||||
| Interest on equipment financing facilities | 2,370 | 2,700 | ||||
| Lease liability unwinding | 1,769 | 1,509 | ||||
| 83,815 | 85,097 | |||||
Review of the nine months ended September 30, 2024 vs. September 30, 2023
The company recorded a profit of
The total comprehensive income for the nine months ended September 30, 2024 was
Ivanhoe's exploration and project evaluation expenditure amounted to
As explained in the accounting for the convertible notes section of the company's MD&A for the three months and nine months ended September 30, 2024, the company recognized a loss on fair valuation of the embedded derivative financial liability of
Finance income amounted to
The company recognized income in aggregate of
| Nine months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Company's share of profit from joint venture | 218,288 | 225,554 | ||||
| Interest on loan to joint venture | 170,591 | 148,990 | ||||
| Company's income recognized from joint venture | 388,879 | 374,544 | ||||
The company's share of profit from the Kamoa Holding joint venture was
| Nine months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Revenue from contract receivables | 2,263,184 | 2,071,274 | ||||
| Remeasurement of contract receivables | 97 | 15,066 | ||||
| Revenue | 2,263,281 | 2,086,340 | ||||
| Cost of sales | (1,015,688 | ) | (803,253 | ) | ||
| Gross profit | 1,247,593 | 1,283,087 | ||||
| General and administrative costs | (96,000 | ) | (91,072 | ) | ||
| Amortization of mineral property | (10,343 | ) | (8,603 | ) | ||
| Profit from operations | 1,141,250 | 1,183,412 | ||||
| Finance costs | (228,674 | ) | (264,471 | ) | ||
| Foreign exchange loss | (25,220 | ) | (49,467 | ) | ||
| Finance income and other | 10,846 | 15,511 | ||||
| Profit before taxes | 898,202 | 884,985 | ||||
| Current tax expense | (327,171 | ) | (239,869 | ) | ||
| Deferred tax expense | 16,705 | (64,551 | ) | |||
| Profit after taxes | 587,736 | 580,565 | ||||
| Non-controlling interest of Kamoa Holding | (146,750 | ) | (124,900 | ) | ||
| Total comprehensive income for the year | 440,986 | 455,665 | ||||
| Company's share of profit from joint venture ( | 218,288 | 225,554 | ||||
The realized and provisional copper prices used for the remeasurement (mark-to-market) of contract receivables for the nine months ended September 30, 2024, and for the same period in 2023, can be summarized as follows.
| Nine months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Realized during the period - open at the start of the period | ||||||
| Opening forward price ($/lb.)(1) | 3.86 | 3.79 | ||||
| Realized price ($/lb.)(1) | 3.81 | 4.19 | ||||
| Payable copper tonnes sold | 35,966 | 57,803 | ||||
| Remeasurement of contract receivables ($'000) | (4,014 | ) | 52,098 | |||
| Realized during the period - new copper sold in the current period | ||||||
| Provisional price ($/lb.)(1) | 4.15 | 3.93 | ||||
| Realized price ($/lb.)(1) | 4.13 | 3.85 | ||||
| Payable copper tonnes sold | 249,780 | 213,492 | ||||
| Remeasurement of contract receivables ($'000) | (9,436 | ) | (36,205 | ) | ||
| Open at the end of the period - new copper sold in current period | ||||||
| Provisional price ($/lb.)(1) | 4.23 | 3.77 | ||||
| Closing forward price ($/lb.)(1) | 4.41 | 3.76 | ||||
| Payable copper tonnes sold | 34,382 | 70,534 | ||||
| Remeasurement of contract receivables ($'000) | 13,547 | (827 | ) | |||
| Total remeasurement of contract receivables ($'000) | 97 | 15,066 | ||||
| (1) Calculated on a weighted average basis | ||||||
The finance costs recognized in the Kamoa Holding joint venture for the nine months ended September 30, 2024 can be broken down as follows:
| Nine months ended | ||||||
| September 30, | ||||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Interest on shareholder loans | 347,622 | 300,903 | ||||
| Interest on shareholder loans - capitalized as borrowing costs | (227,090 | ) | (91,716 | ) | ||
| Interest on provisional and advance payment facilities | 79,893 | 41,480 | ||||
| Interest on bank loans and overdraft facilities | 15,183 | 4,067 | ||||
| Interest on equipment financing facilities | 7,693 | 7,652 | ||||
| Lease liability unwinding | 5,373 | 2,085 | ||||
| 228,674 | 264,471 | |||||
Financial position as at September 30, 2024, vs. December 31, 2023
The company's total assets increased by
The company's investment in the Kamoa Holding joint venture increased by
| September 30, | December 31, | |||||
| 2024 | 2023 | |||||
| $'000 | $'000 | |||||
| Company's share of net assets in joint venture | 1,003,554 | 785,265 | ||||
| Loan advanced to joint venture | 1,902,877 | 1,732,286 | ||||
| Total investment in joint venture | 2,906,431 | 2,517,551 |
The company's share of net assets in the Kamoa Holding joint venture can be broken down as follows:
| September 30, 2024 | December 31, 2023 | |||||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Assets | ||||||||||||
| Property, plant and equipment | 5,818,641 | 2,880,227 | 4,195,216 | 2,076,632 | ||||||||
| Mineral property | 768,079 | 380,199 | 778,423 | 385,319 | ||||||||
| Indirect taxes receivable | 555,226 | 274,836 | 419,779 | 207,791 | ||||||||
| Current inventory | 435,354 | 215,500 | 435,212 | 215,430 | ||||||||
| Run of mine stockpile | 403,654 | 199,809 | 304,261 | 150,609 | ||||||||
| Long-term loan receivable | 374,244 | 185,251 | 306,594 | 151,764 | ||||||||
| Trade receivables | 346,366 | 171,451 | 241,944 | 119,762 | ||||||||
| Cash and cash equivalents | 152,184 | 75,331 | 72,486 | 35,881 | ||||||||
| Other receivables | 115,999 | 57,420 | 320,143 | 158,471 | ||||||||
| Right-of-use asset | 49,698 | 24,601 | 56,966 | 28,198 | ||||||||
| Prepaid expenses | 4,735 | 2,344 | 81,802 | 40,492 | ||||||||
| Non-current deposits | 1,872 | 927 | 1,872 | 927 | ||||||||
| Deferred tax asset | 599 | 297 | 606 | 300 | ||||||||
| Liabilities | ||||||||||||
| Shareholder loans | (3,844,638 | ) | (1,903,096 | ) | (3,500,105 | ) | (1,732,552 | ) | ||||
| Term loan facilities | (678,538 | ) | (335,876 | ) | (111,193 | ) | (55,041 | ) | ||||
| Advance payment facility | (665,295 | ) | (329,321 | ) | (150,449 | ) | (74,472 | ) | ||||
| Trade and other payables | (327,854 | ) | (162,288 | ) | (471,377 | ) | (233,332 | ) | ||||
| Deferred tax liability | (226,587 | ) | (112,161 | ) | (322,194 | ) | (159,486 | ) | ||||
| Overdraft facility | (208,426 | ) | (103,171 | ) | (177,775 | ) | (87,999 | ) | ||||
| Rehabilitation provision | (143,710 | ) | (71,136 | ) | (95,081 | ) | (47,065 | ) | ||||
| Other provisions | (104,992 | ) | (51,971 | ) | (33,344 | ) | (16,505 | ) | ||||
| Provisional payment facility | (75,336 | ) | (37,291 | ) | (51,501 | ) | (25,493 | ) | ||||
| Income taxes payable | (107,684 | ) | (53,304 | ) | (217,028 | ) | (107,429 | ) | ||||
| Lease liability | (49,870 | ) | (24,686 | ) | (51,913 | ) | (25,697 | ) | ||||
| Non-controlling interest | (566,339 | ) | (280,338 | ) | (446,950 | ) | (221,240 | ) | ||||
| Net assets of the joint venture | 2,027,382 | 1,003,554 | 1,586,394 | 785,265 | ||||||||
Before commencing commercial production in July 2021, the Kamoa Holding joint venture principally used loans from its shareholders to develop the Kamoa-Kakula Copper Complex through investing in development costs and other property, plant and equipment. No additional shareholder loans were advanced from 2022 to date with joint venture cashflow and joint venture level facilities funding its operations and expansions.
Overdraft facilities represent drawn unsecured financing facilities from DRC financial institutions at an attractive cost of capital, utilized to augment cash generated from operations for Kamoa-Kakula's continued expansion and working capital. Total available overdraft facilities amount to
The term loan facilities of the Kamoa Holding joint venture can be summarized as follows:
| Description | Repayment terms | September 30, | December 31, | ||||
| 2024 | 2023 | ||||||
| $'000 | $'000 | ||||||
| Syndicated term facility | Repayable in eight equal quarterly installments starting from March 31, 2026 | 397,047 | - | ||||
| Facility agreement | Full repayment on June 25, 2025 | 201,767 | - | ||||
| Equipment financing facilities | Installments on each quarterly facility repayment date, with | 79,724 | 111,193 | ||||
| Total term loan facilities | 678,538 | 111,193 |
The cash flows of the Kamoa Holding joint venture can be summarized as follows:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Net cash generated from operating activities before change in working capital items | 266,662 | 321,035 | 911,263 | 1,172,992 | ||||||||
| Change in working capital items | (193,352 | ) | (233,835 | ) | (265,948 | ) | (490,748 | ) | ||||
| Net cash used in investing activities | (522,970 | ) | (377,240 | ) | (1,622,033 | ) | (1,000,628 | ) | ||||
| Net cash generated from (used in) financing activities | 214,626 | (26,885 | ) | 1,024,519 | (30,629 | ) | ||||||
| Effect of foreign exchange rates on cash | (1,538 | ) | 7,740 | 1,246 | 7,399 | |||||||
| Net cash inflow (outflow) | (236,572 | ) | (309,185 | ) | 49,047 | (341,614 | ) | |||||
| Cash and cash equivalents - beginning of the period | 180,330 | 333,204 | (105,289 | ) | 365,633 | |||||||
| Cash and cash equivalents - end of the period | (56,242 | ) | 24,019 | (56,242 | ) | 24,019 | ||||||
The Kamoa Holding joint venture's net increase in property, plant and equipment from December 31, 2023, to September 30, 2024, amounted to
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Kamoa Holding joint venture | ||||||||||||
| Expansion capital | 468,216 | 342,326 | 1,397,523 | 860,375 | ||||||||
| Sustaining capital | 90,526 | 34,546 | 219,545 | 140,253 | ||||||||
| 558,742 | 376,872 | 1,617,068 | 1,000,628 | |||||||||
| Depreciation capitalized | 13,581 | 11,216 | 39,974 | 29,413 | ||||||||
| Total capital expenditure | 572,323 | 388,088 | 1,657,042 | 1,030,041 | ||||||||
| Borrowing costs capitalized | 80,924 | 40,099 | 227,092 | 91,643 | ||||||||
| Total additions to property, plant and equipment for Kamoa Holding | 653,247 | 428,187 | 1,884,134 | 1,121,684 | ||||||||
| Less depreciation, disposals and foreign exchange translation | (94,110 | ) | (41,797 | ) | (260,709 | ) | (128,338 | ) | ||||
| Net increase in property, plant and equipment of Kamoa Holding | 559,137 | 386,390 | 1,623,425 | 993,346 | ||||||||
Ivanhoe's cash and cash equivalents decreased by
The net increase in property, plant and equipment amounted to
The main components of the additions to property, plant and equipment - including capitalized development costs - at the Platreef Project and Kipushi Mine for the nine months ended September 30, 2024, and for the same period in 2023, are set out in the following tables:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Platreef Project | ||||||||||||
| Phase 2 construction | 25,075 | 15,620 | 96,105 | 41,405 | ||||||||
| Phase 1 construction | 30,841 | 40,370 | 49,728 | 96,282 | ||||||||
| Salaries and benefits | 8,014 | 3,065 | 17,035 | 9,543 | ||||||||
| Administrative and other expenditure | 3,352 | 2,226 | 8,308 | 5,514 | ||||||||
| Depreciation | 2,170 | 1,259 | 6,314 | 4,411 | ||||||||
| Social and environmental | 1,319 | 548 | 2,548 | 1,431 | ||||||||
| Site costs | 1,478 | 1,114 | 3,731 | 3,098 | ||||||||
| Studies and contracting work | 1,048 | 1,210 | 2,671 | 3,391 | ||||||||
| Total development costs | 73,297 | 65,412 | 186,440 | 165,075 | ||||||||
| Other additions to property, plant and equipment | 1,172 | 344 | 8,373 | 6,577 | ||||||||
| Total additions to property, plant and equipment for Platreef | 74,469 | 65,756 | 194,813 | 171,652 | ||||||||
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Kipushi Mine | ||||||||||||
| Mine construction costs | 14,069 | 56,870 | 108,470 | 96,029 | ||||||||
| Other expenditure | 282 | 3,241 | 14,196 | 8,427 | ||||||||
| Salaries and benefits | 8,064 | 4,430 | 26,715 | 12,262 | ||||||||
| Administration and overheads | 8,182 | 5,451 | 17,619 | 12,070 | ||||||||
| Studies and contracting work | 4,003 | 2,228 | 9,995 | 5,797 | ||||||||
| Depreciation | 1,305 | 2,070 | 4,530 | 6,240 | ||||||||
| Electricity | 3,302 | 1,760 | 7,841 | 5,293 | ||||||||
| Other additions to property, plant and equipment | 59 | 24 | 171 | 451 | ||||||||
| Total project expenditure | 39,266 | 76,074 | 189,537 | 146,569 | ||||||||
| Accounted for as follows: | ||||||||||||
| Additions to property, plant and equipment | 14,128 | 58,215 | 108,641 | 96,480 | ||||||||
| Development costs capitalized to property, plant and equipment | 25,138 | 17,859 | 80,896 | 50,089 | ||||||||
| Total project expenditure | 39,266 | 76,074 | 189,537 | 146,569 | ||||||||
Costs incurred during 2024 at the Platreef Project and Kipushi Mine are deemed necessary to bring the project to commercial production and are therefore capitalized as property, plant and equipment.
The carrying value of Ivanhoe’s inventory increased by
The company's total liabilities decreased by
On May 22, 2023, Kipushi Corporation SA (Kipushi), a subsidiary of the company and the operator of the Kipushi Mine, entered into a loan agreement with Rawbank SA (Rawbank), a financial institution in the Democratic Republic of the Congo. Under the terms of the loan agreement, Rawbank provided an
On May 28, 2024, Kipushi entered into a
On June 28, 2024 and July 5, 2024, Kipushi entered into offtaker facility agreements with Trafigura Asia Trading Pte Ltd. (Trafigura) and CITIC Metal (HK) Limited (CITIC) respectively. Each of the offtaker facility agreements made
Accounting for the convertible notes closed in March 2021
The company closed a private placement offering of
The convertible senior notes are senior unsecured obligations of the company which will accrue interest payable semi-annually in arrears at a rate of
On April 30, 2024, the company announced that it would redeem all outstanding convertible senior notes on July 11, 2024 (the "Redemption Date") at a price equal to
The conversion rate for all conversions of notes was 138.7073 Class A shares of the company per
Holders of
Before the commencement of the conversion period, on June 10, 2024, the company adjusted the amortized cost of the host liability to reflect actual and revised estimated contractual cash flows using the original effective interest rate in accordance with the requirements of IFRS 9. The adjustment resulted in finance costs of
Each conversion request was treated separately. The number of shares required to be issued on receipt of a conversion request was calculated with reference to the conversion rate of 138.7073 Class A shares per
The host liability and embedded derivative liability components of the convertible notes were settled at each delivery date in proportion to the number of notes converted as a percentage of the total number of notes issued.
LIQUIDITY AND CAPITAL RESOURCES
The company had
The company's capital expenditure can be summarized as follows:
| Capital Expenditure | YTD 2024 Actuals | 2024 Guidance (1) | 2025 Guidance (1) | ||||||
| ($' million) | ($' million) | ($' million) | |||||||
| Kamoa-Kakula | |||||||||
| Phase 3 and other expansion capital | 1,397 | 1,350 - 1,750 | 950 - 550 | ||||||
| Sustaining capital | 220 | 240 | 265 | ||||||
| 1,617 | 1,590 - 1,990 | 1,215 - 815 | |||||||
| Platreef | |||||||||
| Phase 1 initial capital | 66 | 110 - 140 | 100 - 70 | ||||||
| Phase 2 capital | 123 | 130 - 180 | 220 - 170 | ||||||
| 189 | 240 - 320 | 320 - 240 | |||||||
| Kipushi | |||||||||
| Initial capital | 185 | 185 | 5 | ||||||
| Sustaining capital | - | 35 | 40 | ||||||
| 185 | 220 | 45 | |||||||
(1) As updated in the MD&A for the three and six months ended June 30, 2024, with the exception of the 2025 guidance for Platreef's Phase 2 capital which has been reduced from The ranges provided reflect uncertainty in the timing of Kamoa-Kakula Phase 3 expansion and Platreef Phase 2 capital between calendar years 2024 and 2025. | |||||||||
First ore to Kamoa-Kakula's Phase 3 concentrator was achieved on May 26, 2024, with first concentrate reported on June 10, 2024. Construction of the direct-to-blister copper smelter is over
Construction of Platreef's Phase 1 concentrator was completed on schedule in July 2024. Hot commissioning and ramp-up of production are planned for the second half of 2025. Platreef's 2025 guidance is provisional only and will be updated upon the completion of the Feasibility Study with the updated project development strategy, which will be completed in Q4 2024.
Construction of the Kipushi concentrator facility is now complete with the first batch of concentrate produced on June 14, 2024. Kipushi is expected to reach commercial production in Q4 2024.
During the second quarter of 2024, Kipushi entered into a
On October 25, 2024, Ivanhoe Marketing (Pty) Ltd., a subsidiary of the company, entered into a
On August 4, 2023, the company entered into an
Ivanhoe's exploration budget for 2024 has been set to approximately
The company has a mortgage bond outstanding on its offices in London, United Kingdom, of £3.2 million (
In 2013, the company became a party to a loan payable to ITC Platinum Development Limited, which had a carrying value and contractual value of
The company has an implied commitment in terms of spending on work programs submitted to regulatory bodies to maintain the good standing of exploration and exploitation permits at its mineral properties. The following table sets forth the company's long-term obligations:
| Contractual obligations as at September 30, 2024 | Payments Due By Period | ||||||||||||||
| Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | |||||||||||
| $'000 | $'000 | $'000 | $'000 | $'000 | |||||||||||
| Debt | 149,368 | 43,539 | 65,856 | 39,973 | - | ||||||||||
| Lease commitments | 71,599 | 9,355 | 62,244 | - | - | ||||||||||
| Total contractual obligations | 220,967 | 52,894 | 128,100 | 39,973 | - | ||||||||||
Debt in the above table represents the mortgage bond owing to Citibank, the loan payable to ITC Platinum Development Limited, the loans from Rawbank and FirstBank and the aircraft loan as described above.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
Kamoa-Kakula's cash cost (C1) per pound is a non-GAAP financial measure. These are disclosed to enable investors to better understand the performance of Kamoa-Kakula in comparison to other copper producers who present results on a similar basis.
Cash cost (C1) is prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines but are not measures recognized under IFRS Accounting Standards. In calculating the C1 cash cost, the costs are measured on the same basis as the company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash cost is used by management to evaluate operating performance and includes all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to the final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of finished metal. C1 cash cost and C1 cash cost per pound exclude royalties, production taxes and non-routine charges as they are not direct production costs.
Reconciliation of Kamoa-Kakula's cost of sales to C1 cash cost, including on a per pound basis:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Cost of sales | 408,919 | 286,030 | 1,015,688 | 803,253 | ||||||||
| Logistics, treatment and refining charges | 119,980 | 122,460 | 344,495 | 357,790 | ||||||||
| General and administrative expenditure | 22,260 | 32,631 | 96,000 | 91,071 | ||||||||
| Royalties and production taxes | (66,515 | ) | (60,450 | ) | (187,985 | ) | (174,256 | ) | ||||
| Depreciation | (73,918 | ) | (49,692 | ) | (210,660 | ) | (135,902 | ) | ||||
| Power rebate | (4,208 | ) | (4,654 | ) | (13,163 | ) | (13,926 | ) | ||||
| Non-cash adjustments to inventory | 16,816 | 1,133 | 21,213 | (329 | ) | |||||||
| Extraordinary taxes | (60 | ) | - | (21,917 | ) | - | ||||||
| General and administrative expenditures of other group entities | (772 | ) | (4,465 | ) | (2,893 | ) | (9,110 | ) | ||||
| C1 cash costs | 422,502 | 322,993 | 1,040,778 | 918,591 | ||||||||
| Cost of sales per pound of payable copper sold ($ per lb.) | 1.80 | 1.34 | 1.62 | 1.28 | ||||||||
| C1 cash costs per pound of payable copper produced ($ per lb.) | 1.69 | 1.46 | 1.60 | 1.43 | ||||||||
| Payable copper produced in concentrate (tonnes) | 113,313 | 100,569 | 295,471 | 291,543 | ||||||||
| | ||||||||||||
| Figures in the above table are for the Kamoa-Kakula joint venture on a | ||||||||||||
EBITDA, Adjusted EBITDA and EBITDA margin, normalized profit after tax and normalized profit per share
EBITDA and Adjusted EBITDA are non-GAAP financial measures. Ivanhoe believes that Kamoa-Kakula's EBITDA is a valuable indicator of the mine's ability to generate liquidity by producing operating cash flow to fund its working capital needs, service debt obligations, fund capital expenditures and distribute cash to its shareholders. EBITDA and Adjusted EBITDA are also frequently used by investors and analysts for valuation purposes. Kamoa-Kakula's EBITDA and the EBITDA and Adjusted EBITDA for the company are intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS Accounting Standards and should not be considered in isolation or as a substitute for measures of performance prepared per IFRS Accounting Standards. EBITDA and Adjusted EBITDA exclude the impact of cash cost of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA and Adjusted EBITDA differently.
The EBITDA margin is an indicator of Kamoa-Kakula's overall health and denotes its profitability, which is calculated by dividing EBITDA by revenue. The EBITDA margin is intended to provide additional information to investors and analysts, does not have any standardized definition under IFRS Accounting Standards, and should not be considered in isolation, or as a substitute, for measures of performance prepared per IFRS Accounting Standards.
Reconciliation of profit after tax to Kamoa-Kakula's EBITDA:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Profit after taxes | 218,133 | 178,660 | 587,736 | 580,565 | ||||||||
| Finance costs | 83,815 | 85,097 | 228,674 | 264,471 | ||||||||
| Finance income | (5,683 | ) | (5,341 | ) | (10,775 | ) | (15,668 | ) | ||||
| Current and deferred tax expense | 91,759 | 99,488 | 310,466 | 304,420 | ||||||||
| Other taxes | 60 | - | 21,917 | - | ||||||||
| Unrealized foreign exchange loss | 3,226 | 12,613 | 22,864 | 58,857 | ||||||||
| Depreciation | 78,425 | 52,694 | 221,003 | 144,505 | ||||||||
| EBITDA | 469,735 | 423,211 | 1,381,885 | 1,337,150 | ||||||||
Figures in the above table are for the Kamoa-Kakula joint venture on a
Reconciliation of profit after tax to Ivanhoe's EBITDA and adjusted EBITDA:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | |||||||||||
| Profit after taxes | 108,182 | 107,522 | 105,288 | 277,185 | ||||||||
| Finance income | (60,164 | ) | (56,671 | ) | (185,494 | ) | (176,453 | ) | ||||
| Depreciation | 1,010 | 703 | 2,456 | 1,788 | ||||||||
| Current and deferred tax expense (recovery) | 644 | (1,107 | ) | (1,733 | ) | (3,757 | ) | |||||
| Finance costs | 471 | 8,752 | 42,286 | 24,756 | ||||||||
| Unrealized foreign exchange (gain) loss | (1,319 | ) | 986 | 7,053 | 4,211 | |||||||
| EBITDA | 48,824 | 60,185 | (30,144 | ) | 127,730 | |||||||
| Share of profit from joint venture net of tax | (83,507 | ) | (69,829 | ) | (218,288 | ) | (225,554 | ) | ||||
| Company's share of EBITDA from Kamoa-Kakula joint venture(1) | 184,720 | 167,200 | 552,997 | 528,485 | ||||||||
| Loss on fair valuation of embedded derivative liability | 4,171 | (12,218 | ) | 164,169 | 45,300 | |||||||
| Non-cash share-based payments | 5,764 | 6,561 | 20,563 | 19,688 | ||||||||
| Adjusted EBITDA | 159,972 | 151,899 | 489,297 | 495,649 | ||||||||
| (1) The company's attributable share of EBITDA from the Kamoa-Kakula joint venture is calculated using the company's effective shareholding in Kamoa Copper SA ( | ||||||||||||
Normalized profit after tax and normalized profit per share are non-GAAP financial measures. Normalized profit after tax and normalized profit per share for the company is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS Accounting Standards and should not be considered in isolation or as a substitute for measures of performance prepared per IFRS Accounting Standards. Other companies may calculate normalized profit after tax and normalized profit per share differently.
Below is a table reconciling the company's profit after taxes to the company's normalized profit after taxes. Normalized profit after taxes excludes the loss on fair valuation of the embedded derivative liability and the finance costs on the early redemption of the convertible notes.
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Profit after taxes | 108,182 | 107,522 | 105,288 | 277,185 | ||||||||
| Finance costs on early redemption of convertible notes | - | - | 28,076 | - | ||||||||
| Loss (gain) on fair valuation of embedded derivative liability | 4,171 | (12,218 | ) | 164,169 | 45,300 | |||||||
| Normalized profit after taxes | 112,353 | 95,304 | 297,533 | 322,485 | ||||||||
Below is a table reconciling the company's basic profit per share to the company's normalized profit per share. Normalized profit per share excludes the loss on fair valuation of the embedded derivative liability and the finance costs on the early redemption of the convertible notes:
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| $'000 | $'000 | $'000 | $'000 | |||||||||
| Profit attributable to the owners of the Company | 117,942 | 112,510 | 128,791 | 291,189 | ||||||||
| Finance costs on early redemption of convertible notes | - | - | 28,076 | - | ||||||||
| Loss (gain) on fair valuation of embedded derivative liability | 4,171 | (12,218 | ) | 164,169 | 45,300 | |||||||
| Normalized profit attributable to owners of the Company | 122,113 | 100,292 | 321,036 | 336,489 | ||||||||
| Weighted average number of basic shares outstanding | 1,349,849,000 | 1,219,757,229 | 1,300,495,911 | 1,218,429,918 | ||||||||
| Basic profit per share | 0.09 | 0.09 | 0.10 | 0.24 | ||||||||
| Normalized profit per share | 0.09 | 0.08 | 0.25 | 0.28 | ||||||||
This news release should be read in conjunction with Ivanhoe Mines' audited 2023 Financial Statements and Management's Discussion and Analysis report available at www.ivanhoemines.com and www.sedarplus.ca.
Disclosure of technical information
Disclosures of a scientific or technical nature in this press release regarding the Kamoa-Kakula Copper Complex, the Kipushi Mine and the Platreef Project have been reviewed and approved by Steve Amos, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of National Instrument 43-101 (NI 43-101). Mr. Amos is not considered independent under NI 43-101 as he is the Executive Vice President, Projects, at Ivanhoe Mines. Mr. Amos has verified the technical data related to the foregoing disclosed in this press release.
Disclosures of a scientific or technical nature regarding the Western Foreland Exploration Project in this press release have been reviewed and approved by Tim Williams, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Williams is not considered independent under NI 43-101 as he is the Vice President, Geosciences, at Ivanhoe Mines. Mr. Williams has verified the technical data regarding the Western Foreland Exploration Project disclosed in this press release.
Ivanhoe has prepared an independent, NI 43-101-compliant technical report for the Kamoa-Kakula Project, the Platreef Project and the Kipushi Mine, each of which is available on the company's website and under the company's SEDAR+ profile at www.sedarplus.ca.
- Kamoa-Kakula Integrated Development Plan 2023 Technical Report dated March 6, 2023, prepared by OreWin Pty Ltd.; China Nerin Engineering Co. Ltd.; DRA Global; Epoch Resources; Golder Associates Africa; Metso Outotec Oyj; Paterson and Cooke; SRK Consulting Ltd.; and The MSA Group.
- The Kipushi 2022 Feasibility Study dated February 14, 2022, prepared by OreWin Pty Ltd., MSA Group (Pty) Ltd., SRK Consulting (South Africa) (Pty) Ltd, and METC Engineering.
- The Platreef 2022 Feasibility Study dated February 28, 2022, prepared by OreWin Pty Ltd., Mine Technical Services, SRK Consulting Inc., DRA Projects (Pty) Ltd and Golder Associates Africa.
These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef Project, the Kipushi Mine and the Kamoa-Kakula Copper Complex cited in this press release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this press release in respect of the Platreef Project, Kipushi Mine and Kamoa-Kakula Copper Complex.
Information contact
Follow Robert Friedland (@robert_ivanhoe) and Ivanhoe Mines (@IvanhoeMines_) on Twitter.
Investors
Vancouver: Matthew Keevil +1 604 558 1034
London: Tommy Horton +44 7866 913 207
Media
Tanya Todd +1 604 331 9834
Website www.ivanhoemines.com
Forward-looking statements
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the company, its projects, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified using words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "forecast", "predict" and other similar terminology, or state that certain actions, events, or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. These statements reflect the company's current expectations regarding future events, performance, and results and speak only as of the date of this release.
Such statements include, without limitation: (i) statements that at current copper prices, cash flow generated from Kamoa-Kakula's operations, as well as project level financing facilities, will be sufficient to fund the remaining capital cost requirements for the Phase 3 expansion; (ii) statements that major capital cost requirements are expected to be resolved in the fourth quarter following completion of Kamoa-Kakula's direct-to-blister smelter, with construction on track to be complete by year-end, and smelter ramp-up expected from Q1 2025; (iii) statements that Kamoa Copper continues to work closely with the DRC's state-owned power company, La Société Nationale d'Electricité (SNEL), to deliver solutions for the identified causes of instability experienced across the southern DRC's grid infrastructure and that the project work and is expected to be completed by the end of 2025; (iv) statements that the project consists of grid infrastructure upgrades, such as an increase in grid capacity between the Inga II dam and Kolwezi, a new harmonic filter at the Inga Converter Station, as well as a new static compensator at the Kolwezi Converter Substation; (v) statements that various smaller initiatives have been identified to strengthen the transmission capability and improve the long-term stability of the southern grid; (vi) statements that Ivanhoe Mines Energy is working with SNEL to put in place maintenance contracts to maintain key generation capacity and transmission infrastructure; (vii) statements that Kamoa Copper's engineering team continues to expand its on-site backup generation capacity to ensure sufficient redundancy for the current Phase 1, 2, and 3 operations; (viii) statements that the on-site backup power capacity is sufficient to power Kamoa-Kakula's Phase 1 and 2 concentrators at full capacity in the event of intermittent power; (ix) statements that Kamoa's project team remains on schedule to install a further 60 MW of on-site backup power generation capacity by year-end, with imported power expected to increase to 200 MW in the medium to long term; (x) statements that refurbishment works of Turbine #5 at the Inga II hydroelectric facility are approximately
Also, all of the results of the Kamoa-Kakula 2023 IDP, the Platreef 2022 feasibility study, and the Kipushi 2022 feasibility study constitute forward-looking statements or information and include future estimates of internal rates of return, net present value, future production, estimates of cash cost, proposed mining plans and methods, mine life estimates, cash flow forecasts, metal recoveries, estimates of capital and operating costs and the size and timing of phased development of the projects.
Furthermore, concerning this specific forward-looking information concerning the operation and development of the Kamoa-Kakula Copper Complex, Platreef and Kipushi projects, and the exploration of the Western Forelands Exploration Project and the Mokopane Feeder Exploration Project, the company has based its assumptions and analysis on certain factors that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii) geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc, platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities necessary to complete development and exploration; (vii) the cost of consumables and mining and processing equipment; (viii) unforeseen technological and engineering problems; (ix) accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in regulations; (xii) the compliance by joint venture partners with terms of agreements; (xiii) the availability and productivity of skilled labour; (xiv) the regulation of the mining industry by various governmental agencies; (xv) the ability to raise sufficient capital to develop such projects; (xvi) changes in project scope or design; (xvii) recoveries, mining rates and grade; (xviii) political factors; (xviii) water inflow into the mine and its potential effect on mining operations, (xix) the consistency and availability of electric power.
Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indicators of whether such results will be achieved. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, however not limited to, the factors discussed above and under the "Risk Factors" heading in the company's MD&A for the three and nine-months ended September 30, 2024, in the company's current annual information form, and elsewhere in this release, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.
Although the forward-looking statements contained in this release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release.
The company's actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors outlined in the "Risk Factors" section in the company's MD&A for the three and nine-months ended September 30, 2024, in the company's current annual information and elsewhere in this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/228310
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