Ivanhoe Mines Issues 2023 Fourth Quarter and Annual Financial Results

On 26 February, Ivanhoe Mines issued their 2023 Fourth Quarter and Annual Financial Results – providing an overview of construction and exploration activities. A key highlight is that Kamoa-Kakula has signed a term sheet outlining the key terms for a Reserved Capacity Agreement for the transportation of up to 240,000 tonnes of copper products along the Lobito Corridor from 2025.

Financial Highlights

• Ivanhoe Mines recorded a profit of $303 million in 2023, equivalent to $0.26 per share, and normalized profit of $388 million, equivalent to $0.33 per share. The normalized profit excludes an $85 million loss on fair value on the convertible notes following the 20% appreciation in the share price from C$10.70 to C$12.85 during the year.
• Ivanhoe’s profit for the year includes Ivanhoe Mines’ share of profit and finance income from the Kamoa-Kakula joint venture of $482 million for 2023, up from $405 million in 2022.
• Ivanhoe Mines’ Adjusted EBITDA was $604 million in 2023, up from $491 million in 2022, which includes an attributable share of EBITDA from Kamoa-Kakula of $664 million.
• Kamoa-Kakula recognized record revenue of $2.70 billion, operating profit of $1.45 billion and EBITDA of $1.68 billion for 2023.
• Cash cost (C1) per lb. of payable copper produced in 2023 totalled $1.45/lb., compared to $1.39/lb. in 2022. This achieved the mid-point of the guidance range of $1.40/lb. to $1.50/lb.
• Kamoa-Kakula sold 375,779 tonnes of copper (net of payability) in 2023 at a cost of sales per pound (lb.) of payable copper of $1.33/lb., compared with $1.09/lb. in 2022. At year-end, approximately 9,100 tonnes of finished copper in concentrate remained in the warehouse or was in the process of being tolled at a nearby smelter, with a carrying value at cost, for accounting purposes, of $22 million. These 9,100 tonnes of copper have a significantly higher net realizable value based on current copper prices of approximately $8,580 per tonne.
• Since entering Phase 1 commercial production on July 1, 2021, the Kamoa-Kakula joint venture has generated $3.6 billion of EBITDA.
• Ivanhoe Mines completed a private placement offering of 47,917,050 Class A common shares for aggregate gross proceeds of C$575 million (approximately $430 million) in December 2023. Ivanhoe has a strong balance sheet with cash and cash equivalents of $574 million on hand as at December 31, 2023.
• Ivanhoe Mines announces Kamoa-Kakula’s full-year cash cost (C1) guidance for 2024 of $1.50/lb. to $1.70/lb of payable copper produced.
• Increased cash cost guidance in 2024, relative to 2023, reflects in part the favourable early commissioning of the Phase 3 concentrator late in the second quarter of 2024. The early commissioning of the Phase 3 concentrator will require additional backup power generation for the remainder of 2024 until the Inga II dam hydroelectric dam refurbishment is complete at year-end. Phase 3 and associated backup power generation will temporarily increase cash costs by up to $0.20/lb. for the remainder of this year. Kamoa-Kakula is on a path to full hydroelectric power generation and anticipates lower cash costs after 2024, following the commissioning of the direct-to-blister smelter.
• Ivanhoe Mines continued its excellent record of project execution in 2023, with capital expenditure of $1.52 billion at Kamoa-Kakula on the Phase 2 and 3 expansions, $234 million at Platreef and $226 million at Kipushi. Projects remain on or ahead of schedule and on budget, with any underspending in 2023 expected to be caught up in 2024.
• Ivanhoe Mines executed a $150 million senior debt facility for Platreef Phase 1 mine with its mandated lead arrangers, Société Générale and Nedbank.
• Kamoa-Kakula secured and drew down on unsecured financing facilities of $400 million from DRC financial institutions at an attractive cost of capital to augment cash generated from operations for its continued expansion and working capital.

Get the full financial details here: https://www.ivanhoemines.com/news-stories/news-release/ivanhoe-mines-issues-2023-fourth-quarter-and-annual-financial-results-overview-of-construction-and-exploration-activities/