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 2024, despite a decrease in realized copper prices.
- The company successfully ramped up its Phase 3 concentrator, achieving nameplate capacity in early October, which is expected to significantly boost production.
- Ivanhoe Mines Ltd (IVPAF) has made substantial progress on its smelter construction, which is 94% complete and expected to be operational by Q1 2025.
- The company has a strong focus on sustainability, with initiatives to increase green energy usage, including solar projects and hydroelectric power imports.
- Ivanhoe Mines Ltd (IVPAF) is in a strong financial position with minimal debt and has secured additional liquidity through new working capital facilities.
Negative Points
- The company had to reduce its production guidance due to intermittent power issues, resulting in a loss of approximately 36,000 tons of copper production.
- Ivanhoe Mines Ltd (IVPAF) experienced a fatality during the quarter, highlighting ongoing safety challenges despite having impressive safety statistics compared to industry averages.
- The ramp-up of the Phase 3 concentrator involved higher costs, including increased power costs due to reliance on diesel generators.
- There is uncertainty regarding the timeline for Phase 4 of the Kamoa-Kakula project, with no definitive answer on its commencement.
- The company faces challenges in stabilizing power supply, requiring significant investment in backup generation and grid stability projects.
Q & A Highlights
Q: When do you anticipate Phase 4 of the Kamoa-Kakula project to come into the plan, and will it be moved up from the previous plan?
A: It's too early to provide a definitive answer. We are exploring different scenarios and sequencing for Phase 4, which will likely involve two more plants over time. While the previous plan had Phase 4 coming in around 2030, it is more likely to be accelerated.
Q: What is the strategy regarding a potential joint venture partner for the Western Forelands?
A: The landscape for Ivanhoe Mines has changed, and we don't necessarily need a partner for the Western Forelands. If we do bring in a partner, it must be compelling and add value to Ivanhoe Mines. We are prepared to proceed independently and will not rush into a deal at the wrong time in the value cycle.
Q: Can you provide insights into the geological similarities between the new Western Forelands targets and existing mineralization?
A: 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 we expect to develop multiple mines over time.
Q: What is the expected trajectory for dividends from Kamoa-Kakula to Ivanhoe Mines?
A: We are past our spending peak at Kamoa-Kakula, and new agreements are expected to include sizable advance payments. We anticipate dividends to flow upwards in 2025, with 20% of distributable accounting profit distributed as dividends. Excess cash will be used to repay shareholder loans.
Q: What are the expectations for copper production in 2025, and will it be close to 600,000 tons?
A: We will provide a more definitive guidance towards the end of the year. Production might be slightly below 600,000 tons for 2025, but we expect to exceed 600,000 tons in 2026 once Project 95 is completed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
