Ivanhoe Mines Hits Record Copper Production, $108 Million Profit in Q3 2024
Ivanhoe Mines Ltd. (TSX: IVN) has reported strong Q3 2024 financial results, fueled by increased production at the Kamoa-Kakula Copper Complex in the Democratic Republic of Congo (DRC) and expansion progress at other Southern African sites.
The mining firm reported Q3 2024 profits of $108 million, mirroring Q3 2023 earnings, with normalized profit for the period reaching $112 million—an 18% increase from $95 million in Q3 2023. Adjusted EBITDA, while lower than Q2 2024’s $203 million, stood at $160 million, indicating growth from $152 million in the same period last year.
Revenue for Q3 2024 at Kamoa-Kakula reached $828 million, driven by the sale of 103,106 tonnes of payable copper, compared to 95,900 tonnes in Q2 2024 and 85,155 tonnes in Q1 2024. This quarterly growth also represents a significant leap from Q3 2023, reflecting the expanded production capabilities following the completion of its Phase 3 concentrator.
Ivanhoe’s cost of sales per pound of payable copper rose to $1.80 in Q3 2024, up from $1.53 in Q2 2024 and significantly above the $1.34 seen in Q3 2023. Cash cost (C1) per pound of payable copper produced climbed to $1.69 this quarter, compared to $1.52 in Q2 2024 and $1.46 in Q3 2023. Despite these increases, Ivanhoe’s nine-month C1 cash cost averaged $1.60 per pound, remaining within the company’s guidance range.
The increased costs are being attributed to several factors, including Phase 3 ramp-up costs, which involved processing lower-grade surface stockpiles to support production continuity, and power stability investments due to intermittent grid power, necessitating Ivanhoe’s investment in backup generation capacity to stabilize operations.
The company’s flagship Kamoa-Kakula Copper Complex achieved record quarterly production in Q3 2024 with 116,313 tonnes of copper in concentrate, a 15% increase from 100,812 tonnes in Q2 2024 and significantly higher than earlier quarters in 2024. The complex’s Phase 3 concentrator reached a steady-state production level of 600,000 tonnes annually, advancing Ivanhoe’s position as one of the world’s largest copper complexes.
Founder Robert Friedland underscored the achievement, stating, “Kamoa-Kakula’s steady expansion and increased smelter capacity are rare milestones in the mining industry, and we expect 2025 to be a banner year as we deliver significant production and financial growth.”
The Phase 3 expansion aims to deliver further copper output growth, supported by Ivanhoe’s new direct-to-blister copper smelter on schedule for completion by year-end.
Due to periodic power disruptions impacting earlier phases, Ivanhoe revised Kamoa-Kakula’s 2024 annual production guidance to 425,000–450,000 tonnes, down from the initial 440,000–490,000 tonnes estimate. Approximately 36,000 tonnes of potential production were lost in the first nine months due to grid power issues, with significant effects in Q1.
The Kipushi zinc mine, another core Ivanhoe project, produced 17,817 tonnes of zinc in Q3 2024, compared to earlier estimates of 100,000–140,000 tonnes for the year. Ivanhoe has since revised its guidance for Kipushi’s 2024 production to a range of 50,000–70,000 tonnes of zinc concentrate. The concentrator at Kipushi was challenged by higher iron content and fines within the ore feed, which initially impacted recoveries, though operations have since stabilized with recovery rates exceeding 90%.
Ivanhoe is advancing a de-bottlenecking initiative to increase Kipushi’s concentrator capacity by 20% by Q3 2025, aiming to boost processing to 960,000 tonnes of ore per annum. The project positions Kipushi as one of the world’s lowest greenhouse gas (GHG) emitters per tonne of zinc, with projected 2025 emissions intensity of 0.019 equivalent tonnes of CO2 per tonne of contained zinc.
Ivanhoe’s Platreef Project in South Africa, known for its multi-metal reserves including palladium, platinum, and nickel, also reported milestone achievements with Phase 1 concentrator construction completed. Although this facility will remain on care and maintenance until mid-2025, Ivanhoe’s preparatory efforts are in line with plans for a Phase 2 feasibility update, expected in Q1 2025.
Looking toward 2025, Ivanhoe anticipates substantial operational and financial benefits from the on-site smelter at Kamoa-Kakula, expected to be operational by Q1 2025. The smelter will allow Ivanhoe to reduce logistics costs significantly, as each truckload will carry blister copper anodes, which are 99% pure, versus wet concentrate. Additionally, local sulfuric acid production is projected to provide a new revenue stream, capitalizing on regional demand.
To counteract the challenges posed by unreliable power supply, Ivanhoe has augmented Kamoa-Kakula’s on-site backup generation capacity to 145 MW and plans to add 60 MW by year-end. This investment reflects the company’s commitment to stabilizing energy requirements, even as it anticipates improved grid reliability following the completion of infrastructure upgrades in partnership with La Société Nationale d’Électricité (SNEL), the DRC’s state-owned power company.
Ivanhoe Mines last traded at $19.75 on the TSX.
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