Ivanhoe Mines (IVN) Q2 2024 earnings summary

Executive summary

• Kamoa-Kakula produced 100,812 tonnes of copper in Q2 2024, with Phase III ramp-up ahead of schedule, boosting annualized capacity to over 600,000 tonnes; annual guidance maintained at 440,000–490,000 tonnes.

• Kipushi zinc concentrator completed ahead of schedule, first concentrate produced in June 2024, with ramp-up to steady state expected in September and 2024 guidance of 100,000–140,000 tonnes zinc.

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

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

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

Financial highlights

• Ivanhoe Mines' normalized net profit reached $115M in Q2 2024, with adjusted EBITDA of $203M and Q2 profit of $67M.

• Kamoa-Kakula Q2 2024 revenue was $817M, up from $702M in Q2 2023, with a realized copper price of $4.34/lb.

• C1 cash cost at Kamoa-Kakula was $1.52/lb in Q2 2024, within the lower range of guidance.

• Net cash position of $88M at June-end after redeeming $575M convertible notes; cash and equivalents stood at $246M as of June 30, 2024.

• $800M in Kamoa-Kakula JV term loans and working capital facilities at <9% interest.

Outlook and guidance

• Kamoa-Kakula maintains 2024 copper production guidance of 440,000–490,000 tonnes in concentrate, with C1 cash cost guidance of $1.50–$1.70/lb.

• Kipushi 2024 zinc production guidance is 100,000–140,000 tonnes; C1 cash cost guidance to be provided after ramp-up.

• Platreef Phase I first ore feed deferred to H2 2025; Phase II expansion accelerated by repurposing Shaft 3, targeting 4 Mtpa hoisting by 2026.

• Project 95 aims to increase copper recoveries to ~95% and add up to 30,000 tonnes of copper annually within 18 months.

• Kamoa-Kakula's on-site smelter is over 85% complete, targeting construction completion by end of 2024 and ramp-up in early 2025.