by @newsfile on 10 May 2022, 07:37
Ivanhoe Mines Issues First Quarter 2022 Financial Results, as Well as Review of Mine Construction and Exploration Activities
Kamoa-Kakula Copper Mining Complex in the Democratic Republic of Congo sold 51,919 tonnes of payable copper and recognized record revenue of $519.6 million in Q1 2022
The Kamoa-Kakula joint venture recorded record EBITDA of $399.4 million, and operating profit of $380.5 million for Q1 2022
Kamoa-Kakula's cost of sales total $1.08 per pound of payable copper in Q1 2022, with C1 cash costs trending towards lower end of 2022 guidance at $1.21 per pound
Kamoa-Kakula Phase 2 offtake agreements concluded
Regional exploration drill campaign commences at the Western Foreland Copper Project in the Democratic Republic of Congo
Kamoa-Kakula positioned to be the world's third-largest copper producer by Q4 2024, with projected annualized copper output of approximately 600,000 tonnes
Ivanplats completes Platreef's Shaft 1 changeover to a production shaft, commences lateral mine development toward Flatreef orebody
Toronto, Ontario--(Newsfile Corp. - May 10, 2022) - Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) today announced its financial results for the three months ended March 31, 2022. The first quarter was highlighted by many important milestones, including: the early declaration of Phase 2 commercial copper production at the Kamoa-Kakula Mining Complex; the commencement of lateral mine development toward the high-grade Flatreef platinum-group-metals orebody at Platreef; a new agreement to return the ultra-high-grade Kipushi Zinc Mine to commercial production; and the initiation of an extensive regional drilling program at the Western Foreland Copper Exploration Project. All figures are in U.S. dollars unless otherwise stated.
HIGHLIGHTS
Ivanhoe Mines recorded a profit of $21.5 million for Q1 2022, compared to a profit of $20.4 million for the same period in 2021. Ivanhoe Mines' share of profit from the Kamoa-Kakula copper joint venture and finance income therefrom totaling $115.4 million, were the principal contributors to the profit recorded in the first quarter.
The Kamoa-Kakula Mining Complex set a new quarterly production record during the period, with 55,602 tonnes of copper in concentrate produced. Commercial production from the Phase 2 concentrator was declared on April 7, 2022.
A de-bottlenecking program is underway at Kamoa-Kakula to expand processing capacity of Phase 1 and Phase 2 concentrators by 21%, to a combined 9.2 million tonnes of ore per year. Copper production from Kamoa Copper's first two phases is projected to exceed 450,000 tonnes per year by Q2 2023.
Kamoa-Kakula's cost of sales per pound (lb.) of payable copper sold was $1.08/lb. for Q1 2022, while cash costs (C1) per pound of payable copper produced totaled $1.21/lb., compared to $1.12/lb. and $1.28/lb. respectively in Q4 2021.
During Q1 2022, Kamoa-Kakula sold 51,919 tonnes of payable copper and recognized record EBITDA of $399.4 million and revenue of $519.6 million, with an operating profit of $380.5 million.
On May 3, 2022, Ivanhoe Mines announced details of the Phase 3 expansion at Kamoa-Kakula, which will include an additional 5-million-tonnes-per-annum concentrator adjacent to new underground mines at Kamoa - named Kamoa 1 and Kamoa 2. Phase 3 will increase total processing capacity to more than 14 million tonnes of ore per annum, and grow annualized copper production to approximately 600,000 tonnes by the fourth quarter of 2024. This production level will elevate Kamoa-Kakula to the world's third-largest copper mining complex, and the largest copper mining complex in Africa.
Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of $562 million as at March 31, 2022, and expects that Kamoa-Kakula's expansion capital for Phase 2 and Phase 3 will be funded from copper sales and facilities at Kamoa.
During the first quarter of 2022, Ivanhoe commenced a regional drilling program, expected to total approximately 95,000 metres, targeting Kamoa-Kakula-style copper mineralization on its Western Foreland licences, which cover approximately 2,407 square kilometres in close proximity to the Kamoa-Kakula mining licenses.
Exploration models that successfully led to the discoveries of Kakula, Kakula West, and the Kamoa North Bonanza Zone on the Kamoa-Kakula joint-venture mining licence are being applied to the extensive Western Foreland land package by the team of exploration geologists responsible for the previous discoveries.
On May 9, 2022, Ivanhoe Mines announced the completion of the Platreef Project's Shaft 1 changeover to a production shaft, as well as the first blast on the 950-metre level, which marked the commencement of lateral mine development toward the high-grade Flatreef platinum-group-metals, nickel, copper and gold orebody.
In February 2022, Ivanhoe Mines announced the outstanding results of a new independent feasibility study for the Platreef Project that builds on the alternate scenario to expedite production, based on a steady-state production rate of 5.2 million tonnes per annum, confirming the viability of a new phased-development pathway to fast track Platreef into production in Q3 2024.
The Platreef 2022 Feasibility Study yields an after-tax NPV8% of $1.7 billion and IRR of 18.5% at long-term consensus metal prices. At spot prices as at May 6, 2022, the after-tax NPV8% increases to $3.5 billion and the IRR increases to 27%.
In February 2022, Ivanhoe Mines and Gécamines signed a new agreement to return the ultra-high-grade Kipushi Zinc Mine back to commercial production.
Ivanhoe Mines announced the positive findings of an independent feasibility study for the planned resumption of commercial production at Kipushi based on a two-year construction timeline. The Kipushi feasibility study's sensitivity analysis at spot zinc prices of approximately $1.70/lb. (May 6, 2022), results in an after-tax NPV8% of $2.4 billion with an after-tax real IRR of 75.8%.
On May 2, 2022, Ivanhoe Mines issued its fifth annual Sustainability Report, highlighting the company's commitment to becoming a global ESG leader in mining.