Ivanhoe pulls Kakula output guidance, shares dive

Ivanhoe Mines (TSX: IVN) shares tumbled on Monday after the miner withdrew cost and production guidance for its Kakula copper mine in the Democratic Republic of Congo, following a temporary suspension of underground operations due to recent seismic activity.

The company said it is reviewing its 2025 copper production target of 520,000 to 580,000 tonnes from the Kamoa-Kakula complex. The ramp-up schedule for a new smelter has also been withdrawn.

Following the announcement, Ivanhoe Mines’ shares fell 16% in Toronto to $10.79, giving the company a market capitalization of $14.6 billion (US$10.6 billion).

Kamoa-Kakula is Africa’s largest copper mine. Ownership is split among Ivanhoe (39.6%), Zijin Mining (39.6%), Crystal River Global (0.8%), and the DRC government (20%). In April, the mine produced a record 50,176 tonnes of copper.

Normal by 2026?

In spite of limited information so far on the underground damage, Raymond James mining analyst Farooq Hamed said he’s assuming mining operations will be able to begin ramping up after de-watering and remediation efforts are completed.

“We have made an assumption that de-watering and remediation efforts will continue through the third quarter this year with the Kakula undergound beginning to ramp up in the fourth quarter with normalized run rates in early 2026,” Hamed wrote in a note on Monday.

“As a result, we are decreasing our target price to $21 per share from $23 based on the short-term impact to 2025 cash flows. The update has minimal impact to our long-term net asset value estimate on the assumption that remediation efforts will allow the mine to return normal operations in early 2026.”

More quaking

Underground operations were paused again over the weekend after additional seismic activity, following a previous suspension last Tuesday. Mobile equipment has been removed from the mine, and employees have been brought to the surface.

Ivanhoe said it is working to boost pumping capacity to address increased water inflows into the mine.

Preliminary indications suggest the seismic activity “could potentially continue for weeks,” which would inhibit access to the mine and prolong the temporary suspension of operations at Kakula, according to the company.

The Kamoa mine remains operational, and Kakula’s concentrators are currently processing surface stockpiles, Ivanhoe said.

On Friday, Ivanhoe disputed a claim by Zijin Mining regarding operational issues and the potential of missing annual production guidance.

“I remind readers that SpaceX—today responsible for approximately 90% of total payload launched into space by humanity—did not attain this status without numerous setbacks. Each setback brought their team new knowledge, making the mission stronger,” Ivanhoe Executive Co-Chairman Robert Friedland said in a statement. “We approach our operations at Kamoa-Kakula with the same mindset.”