The de-bottlenecking initiative will include a number of modifications, such as increasing the diameter of a number of pipes, replacing several motors and pumps with larger ones, and installing additional flotation, concentrate-thickening, concentrate filtration and tailings disposal capacity.
The improvements were expected to cost approximately US$50 million and take one year to complete. This means annual copper output from the two phases is likely to surpass 450,000 tonnes by the second quarter of 2023, making Kamoa-Kakula - which is in the DRC - the fourth-largest copper producer in the world.
BMO Capital Markets analyst Andrew Mikitchook said the expanded production profile is the main driver behind BMO's targeted increase to $16.50 per share, up from $15.
"We reiterate our top-pick designation for Ivanhoe as a growing copper producer with world-class assets," he said. BMO Capital Markets has also updated its production assumptions for the mine to model a long-term 4.5Mt/y each from phases one and two, starting in Q1 2024.
The phase-one concentrator is running at a throughput of more than 22% above its 3.8Mtpa design capacity, with copper recoveries above 87% in January alone. Copper production has remained at record highs so far this year, despite some downtime.
For phase-two, construction of the 3.8Mtpa concentrator plant is nearing completion with early-stage commissioning activities underway. The concentrator is anticipated to reach hot commissioning with first ore and initial copper concentrate production in April this year.
The company has already announced that 2022 production guidance for the Kamoa-Kakula copper complex is 290,000-340,000 tonnes of copper in concentrate.
On February 22, Ivanhoe Mines traded on the TSX at C$11.75/share, up 5.665% on the day. Its shares have continued to rise since March last year when prices dropped below the $7 mark.
