Ivanhoe profit shrinks on copper mine disruption

Shares in Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) fell on Thursday after disruptions at its flagship copper mine knocked third-quarter results. 

For the three months to Sept. 30, the Vancouver-based miner booked an after-tax profit of $31 million, less than a third of what it recorded in the same period last year ($108 million), and also $2 million lower than the second quarter. Its adjusted earnings before interest, taxes, depreciation and amortization was also down from last year and the quarter before.

Seismic activity in May flooded part of its Kamoa-Kakula copper complex in the Democratic Republic of the Congo, lowering output. The operation produced 71,226 tonnes of copper concentrate during the quarter compared with 116,313 tonnes in the same period last year and 112,009 in the second quarter. Sales of copper also saw similar declines.

For the first nine months, Ivanhoe’s total copper production was 316,393 tonnes, placing it on track to meet its 2025 production estimate of 370,000-420,000 tonnes, which was revised down following the Kamoa-Kakula incident.

Shares of Ivanhoe Mines fell more than 5% during early trading in Toronto before climbing to 1.2% weaker at $14.41 apiece for a market capitalization of $20.5 billion. Analysts remain optimistic on the company’s future outlook, with BMO maintaining its price target of $23 a share.

Kamoa-Kakula rehab

The second stage of draining of the affected Kakula mine is progressing towards an early December completion, the company said. At that point, its crew would have regained access to the currently submerged mine areas, which have higher grades.

“As this critical work is completed, underground workings and infrastructure are systematically inspected and rehabilitated to prepare for the resumption of mining activities in higher-grade areas,” Ivanhoe founder and co-chairman Robert Friedland said in the release.

Ivanhoe’s management is also working on an updated development plan for the complex, which it co-owns with China’s Zijin Mining, with the target of increasing mining rates up to 17 million tonnes per year.

“We expect production to continue to rise over the coming months and quarters, ultimately targeting over 550,000 tonnes of copper per year, reaffirming Kamoa-Kakula’s position among the world’s most essential and lowest-carbon copper producers,” Friedland said.

Critical minerals

The company’s Kipushi zinc mine, also in Congo, produced a record 57,200 tonnes in the third quarter, bringing its annualized production rate up to 315,000 tonnes, which is above its 2025 forecast range of 180,000-240,000 tonnes.

In South Africa, its Platreef mine is expected to produce its first concentrate in mid-to-late November. The first feed of platinum-palladium-nickel-rhodium-copper-gold ore into the phase one concentrator took place this week, marking the final stage of its hot commissioning.

“Kipushi’s rebirth as one of the world’s great zinc mines is now complete – the debottlenecking program has elevated it to the ranks of the globe’s top producers,” Friedland said, while also highlighting its potential to produce germanium, gallium and silver.

With its three mines, Ivanhoe Mines stands “on the threshold of becoming one of the largest and most significant producers of these critical metals to power our planet’s future,” he added.