Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ivanhoe Mines Ltd (IVPAF, Financial) achieved record quarterly revenue of $828 million for Q3, despite a decrease in realized copper prices.
- The company is on track to complete its new smelter by December, with commissioning expected early next year, enhancing production capabilities.
- Ivanhoe Mines Ltd (IVPAF) has made significant progress in ramping up its phase three concentrator, achieving nameplate capacity in early October.
- The company has a strong focus on sustainability, with initiatives to increase green energy usage and reduce reliance on diesel power.
- Ivanhoe Mines Ltd (IVPAF) is actively expanding its exploration efforts, with 11 rigs drilling in the Western Forelands, indicating potential for future resource growth.
Negative Points
- Ivanhoe Mines Ltd (IVPAF) had to reduce its production guidance due to intermittent power issues experienced earlier in the year.
- The company experienced a fatality during the quarter, highlighting ongoing safety challenges despite having impressive safety statistics.
- There was an increase in unsold copper stock in inventory at the end of Q3, impacting financial results.
- Cash costs increased to $1.69 per pound of payable copper in the third quarter, partly due to higher power costs.
- The company faced challenges in commissioning its Kipushi zinc mine, initially struggling with metallurgical issues and excess fines in the run of mine.
Q & A Highlights
Q: Can you provide an update on the timeline for Phase 4 of the Kamoa-Kakula project?
A: Mark Farren, Chief Operating Officer, mentioned that it's too early to provide a definitive timeline. However, Phase 4 is definitely in the plans, and they are considering different scenarios, including treating old tailings and ramping up underground resources. The previous plan had Phase 4 around 2030, but it is likely to be accelerated.
Q: What is the strategy regarding a joint venture partner for the Western Forelands?
A: Robert Friedland, Executive Co-Chairman, stated that Ivanhoe Mines is in a strong financial position and does not necessarily need a partner. If a partner is considered, it must be compelling and add value to Ivanhoe Mines. The decision will be made at the right time in the value cycle.
Q: Are there any geological similarities between the new Western Forelands targets and existing mineralization?
A: Mark Farren, Chief Operating Officer, noted that the new targets are highly prospective, and while work is ongoing, it's too early to provide detailed comparisons. The area is very promising, and there is potential for more than one or two mines.
Q: What are the expectations for dividends from Kamoa-Kakula to Ivanhoe Mines?
A: David Van Heerden, Chief Financial Officer, explained that they expect dividends to flow up in 2025, with 20% of distributable accounting profit being distributed as dividends. The excess cash generated will be used to start repaying shareholder loans.
Q: What is the expected concentrate inventory build during the smelter ramp-up?
A: Mark Farren, Chief Operating Officer, stated that they plan to stockpile about 30,000 tons of copper equivalent ahead of the smelter ramp-up, with a continuous lockup of about 15,000 tons at steady state, expected by Q4 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
