Ivanhoe nets $193M profit but floods, quick expansion cloud outlook

Ivanhoe Mines’ (TSX: IVN) upgrade on 2024 programs strong efficiency scheduling a $193 million revenue, yet an expert states it’s tainted by functional troubles and an excessively enthusiastic development strategy.

The firm’s front runner Kamoa-Kakula copper complicated in the Autonomous Republic of Congo established record result of 437,061 tonnes of copper in concentrate and $3.11 billion in income. Readjusted revenues prior to rate of interest, tax obligation, devaluation and amortization increased to $625 million from $604 million in 2023, the firm claimed on Thursday.

The efficiency contrasts with Canaccord Genuity mining expert Dalton Baretto remembering exactly how a Jan. 2 fire knocked senseless backup power and postponed Ivanhoe’s projection for this year. Baretto additionally critiqued the firm’s $1.2 billion strategy to increase the Platreef task in South Africa to result of 450,000 to 550,000 oz. of 3 platinum team steels and gold by late 2027.

” We keep in mind that these were extra hostile on timelines, capex and specifically prices,” Baretto claimed on a note on Friday. “We have actually changed our quotes.” The financial institution’s target share cost moved to C$ 24 from C$ 27.50.

Ivanhoe shares dropped 11% to shut on Friday at C$ 14.97 each as bigger markets went down. The firm is trading near to all-time low of its 12-month variety at C$ 13.84, having actually accomplished C$ 21.32 in the duration. It has a market capitalization of C$ 20.3 billion.

After changes, Ivanhoe’s stabilized revenue was $386 million. This consisted of a $164 million loss from the reasonable worth of exchangeable notes and added financing prices.

Kamoa-Kakula

Owner and co-chairman Robert Friedland admired Kamoa-Kakula’s “phenomenal efficiency” in its document 133,819 tonnes for the 3 months to Dec. 31. “The conclusion of Africa’s biggest and greenest copper smelter notes a zero hour, opening brand-new possibility for improved earnings, decreased prices and structured performances,” he claimed.

Ivanhoe reported the intricate encountered obstacles like greater use imported and backup power. Still, its C1 or cash money expense was in between $1.65 and $1.85 per extra pound.

The website’s stage-three growth is full. The new, direct-to-blister copper smelter is to be turned on in April after a three-month hold-up brought on by recurring power schedule. Comparable obstacles impend in 2025.

Kipushi flooding

The Kipushi mine, a high‐grade zinc– copper– germanium– silver property additionally in the DRC, took care of to strike layout handling prices late in 2024 after first ramp-up obstacles. Nevertheless, an electric failing complied with by flooding has actually currently postponed more growth.

A 344,000-tonne surface area accumulation maintains mill procedures going for layout prices. However experts alert that hold-ups could injure manufacturing later on this year if growth does not fulfill assumptions.

The interruption at Kipushi not just pressed C1 prices greater yet additionally underscores the susceptability of procedures when essential facilities problems occur.

A debottlenecking initiative is continuous to enhance handling capability by 20%. They are additionally examining an upstream thick media splitting up circuit to deal with penalties.

” For 2025, Ivanhoe is directing to C1 prices of 90 cents to $1 per lb., well over our quotes,” Baretto claimed in Friday’s note. “We have actually upgraded our life-of-mine expense presumptions to be extra traditional.”

Platreef

Ivanhoe’s growth prepare for Platreef intends to increase yearly handling to 700,000 tonnes late this year with forecasted result of 100,000 oz. of 3 platinum team steels plus gold.

The 2nd phase is forecasted to enhance mining and handling prices to 4.1 million tonnes annually at an all-in maintaining expense (AISC) of about $700 per ounce. A 3rd phase strategies to more boost capability to 10.7 million tonnes at an added funding expense of concerning $800 million, with manufacturing projections of 1 to 1.2 million oz. annually at an AISC of around $650 per oz. coming online in late 2030.