Ivanhoe Mines delivers record profit

Ivanhoe Mines reported a record profit of US$351.5 million for the second quarter of 2022 and has lifted the lower end of production guidance for its Kamoa-Kakula operation in the Democratic Republic of Congo while costs are expected to come in at the upper end of the guidance range.

 Ivanhoe's Marna Cloete

Ivanhoe's Marna Cloete

The Q2 profit compares to a loss of $108.6 million for the same period in 2021 and includes the company's share of profit from the Kamoa-Kakula joint venture of $84.6 million.

Commercial production began from the Phase 2 concentrator at Kamoa-Kakula on April 7 and the mine delivered a new quarterly production record of 87,314 tonnes of copper concentrate in Q2.

The phase 2 commissioning was four months ahead of schedule and has enabled Ivanhoe to lift the lower end of its full year 2022 production guidance with the new range standing at 310,000-340,000 tonnes of copper in concentrate, compared to the previous range of 290,000-340,0000 tonnes.

"Ivanhoe Mines is very well positioned to manage the current commodity-market volatility and industry-wide inflationary pressures, with a strong balance sheet, tier-one, low-cost mining assets, and an experienced management team," company president Marna Cloete said.

Ivanhoe's C1 cash cost guidance for Kamoe-Kakula of $1.20-$1.40/pounds for 2022 remains unchanged after recording $1.42/lb for the second quarter.

"Cash costs for the second quarter included a significant increase in off-site concentrate transportation and logistics changes, which is projected to continue during the third quarter as a result of the ongoing maintenance at the Lualaba Copper Smelter and as Komia Copper and its partners implement logistical optimizations," the company said.

Ivanhoe's EBITDA was $286.31 million in Q2, which was down from $399.39 million in Q1.

Ivanhoe's share price was C$8.60 (US$8.60) on 15 August, giving the company a market capitalisation of C$10.42 billion.

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