Ivanhoe Mines (IVN) Q2 2024 earnings summary

Executive summary

• Commissioned and ramped up the 5 Mtpa Phase III plant at Kamoa-Kakula, boosting annualized copper production capacity to over 600,000 tonnes; 100,812 tonnes produced in Q2 at a cash cost of $1.52/lb.

• Completed Kamoa-Kakula Phase III and Kipushi concentrators ahead of schedule; both ramping to steady state, with Kipushi producing first zinc concentrate and ramp-up expected to steady state in September.

• Kamoa-Kakula achieved record Q2 revenue of $817 million and EBITDA of $547 million, with a 67% margin, driven by higher copper prices and volumes.

• First dividend of $98 million declared by Kamoa-Kakula, with 20% payable to the DRC government.

• Platreef Phase I concentrator completed, with first ore feed deferred to H2 2025 to prioritize Shaft 3 and Phase II expansion.

Financial highlights

• Payable copper tons sold increased 13% quarter-over-quarter; realized copper price was $4.34/lb in Q2 2024.

• Ivanhoe recognized Q2 profit of $67 million and normalized profit of $115 million, both up from Q1; adjusted EBITDA reached a record $203 million.

• Net cash position of $88 million at June-end after redeeming $575 million convertible notes; cash and cash equivalents stood at $246 million.

• Drew $450 million in new term and working capital facilities; in-country facilities totaled $800 million at quarter-end.

• C1 cash cost at Kamoa-Kakula was $1.52/lb, at the lower end of FY2024 guidance.

Outlook and guidance

• Kamoa-Kakula maintains 2024 copper production guidance of 440,000–490,000 tonnes in concentrate; strong H2 expected with Phase III and power stability.

• Kipushi 2024 zinc production guidance set at 100,000–140,000 tonnes in concentrate.

• Platreef Phase I hot commissioning deferred to H2 2025 to prioritize Shaft 3 and Phase II expansion; targeting 4 Mtpa hoisting by 2026.

• Project 95 aims to increase copper recoveries to ~95% and add up to 30,000 tonnes of copper production within 18 months; Phase IV and tailings retreatment under consideration.