Ivanhoe Mines Issues 2024 Fourth Quarter and Annual Financial Results

 Ivanhoe Mines’ (TSX: IVN) (OTCQX: IVPAF) President Marna Cloete and Chief Financial Officer David van Heerden presented the company’s financial results for the fourth quarter and year ended December 31, 2024, and provide an operations and project development update.

Ivanhoe Mines is a leading Canadian mining company developing and operating its four principal mining and exploration projects in Southern Africa: expanding production at the world-class Kamoa-Kakula Copper Complex in the Democratic Republic of the Congo (DRC); ramping up the ultra-high-grade Kipushi zinc-copper-lead-germanium mine in the DRC; building the tier-one Platreef platinum, palladium, rhodium, nickel,  gold, and copper mine in South Africa; as well as and advancing exploring for new copper discoveries across the expansive exploration licenses of Ivanhoe’s Western Forelands Exploration Project, which hosts the Makoko, Kitoko, and Kiala copper discoveries near Kamoa-Kakula. All figures are in U.S. dollars unless otherwise stated.

Founder and Co-Chairman Robert Friedland commented:

“In 2024, Ivanhoe Mines achieved remarkable milestones, solidifying our position as a global leader in the copper mining sector and reinforcing our commitment to sustainable development and production growth.

The extraordinary performance at Kamoa-Kakula, highlighted by record-breaking copper production levels and industry-leading operational efficiency, reflects our dedication to innovation and excellence in every aspect of our operations.

The completion of Africa’s largest and greenest copper smelter marks a pivotal moment, unlocking new potential for enhanced profitability, reduced costs, and streamlined efficiencies.

“Beyond our achievements at Kamoa-Kakula, the steady progress on the Phase 2 and Phase 3 development plans at the Platreef Project further underscores Ivanhoe Mines’ unwavering commitment to long-term value creation.

Platreef stands as a world-class operation poised to produce a diversified suite of critical metals vital to the global energy transition, advancing our goal of driving sustainable production growth.

These advancements align with our ambition to become a pre-eminent supplier of responsibly sourced metals while creating lasting economic benefits for the communities in which we operate.

“With peak capital expenditures now behind us at Kamoa-Kakula, Ivanhoe Mines is entering an era of exceptional free cash flow generation.

Our disciplined approach to capital allocation will enable us to expand exploration programs across our high-potential, diversified portfolio and pursue strategic opportunities that align with our core values.

The success we have achieved to date is reflective of the dedication, resilience, and expertise of our global team. It is their contributions that empower us to rise above challenges and deliver consistent value to our shareholders and stakeholders alike. Our vision for the future is clear-to responsibly grow, innovate, and lead in the critical metals sector as we continue to build a legacy of excellence.”

FINANCIAL HIGHLIGHTS

• Ivanhoe Mines recorded a profit of $193 million in 2024, equivalent to a basic profit of $0.17 per share, and normalized profit of $386 million, equivalent to $0.32 per share. This compares with 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 in 2024 excludes a $164 million loss on fair value on the convertible notes following the 40% appreciation in the share price from C$12.85 on December 31, 2023, to a weighted average of C$17.95 during the redemption period as well as $28 million in finance costs associated with the early redemption of the notes.
• Ivanhoe’s profit for the year includes Ivanhoe Mines’ share of profit and finance income from the Kamoa-Kakula joint venture of $516 million for 2024, up from $482 million in 2023.
• Ivanhoe Mines’ record adjusted EBITDA was $625 million in 2024, up from $604 million in 2023, which includes an attributable share of EBITDA from Kamoa-Kakula of $712 million.
• Kamoa-Kakula recognized record revenue of $3.11 billion, operating profit of $1.43 billion, and EBITDA of $1.81 billion for 2024, equivalent to a margin of 58%.
• Kamoa-Kakula recognized EBITDA of $432 million for the fourth quarter of 2024, compared with $470 million in the third quarter, in part impacted by a negative remeasurement of contract receivables of $52 million due to a fall in the copper price from $4.41/lb. at the beginning of the quarter to $4.01/lb. at the end of the quarter.
• Kamoa-Kakula sold 396,972 tonnes of copper (net of payability) in 2024 at an average realized copper price of $4.09/lb., compared with 375,779 tonnes in 2023 at an average realized copper price of $3.84/lb. Concentrate produced from Phase 3 is being toll-treated into blister copper at the Lualaba Copper Smelter (LCS) to maximize profitability until the on-site smelter is completed. At year-end, there were approximately 30,000 tonnes of unsold copper in inventory, up from approximately 16,000 tonnes of unsold copper in concentrate at the end of the third quarter. The unsold copper in inventory is expected to be sold during the first and second quarter.
• Kamoa-Kakula’s cost of sales per pound (lb.) of payable copper sold was $1.71/lb. for 2024 compared with $1.33/lb. in 2023. Cash cost (C1) per pound of payable copper produced in 2024 totaled $1.65/lb., compared with $1.45/lb. in 2023, and within the guidance range of $1.50/lb. to $1.70/lb. for a fourth consecutive year.
• The year-on-year increase in cash costs was due to an increased use of imported power and on-site back-up power to make up for shortfalls in available DRC grid power, and; the processing of lower-grade surface stockpiles and run-of-mine ore during the commissioning of the Phase 3 concentrator in H2 2024.

• Ivanhoe Mines announces Kamoa-Kakula’s full-year cash cost (C1) guidance for 2025 of $1.65/lb. to $1.85/lb. of payable copper produced. Cash cost (C1) per pound of payable copper produced for the fourth quarter of 2024 amounted to $1.75/lb.
• The increase in cash cost guidance in 2025, relative to 2024, is in part due to the expectation that Kamoa-Kakula will continue to use imported and back-up power sources, particularly until Turbine #5 at Inga II is commissioned in the second half of 2025. In addition, that the savings associated with the on-site copper smelter are not expected to be realized until ramp up is well underway later in the year.
• Since entering Phase 1 commercial production on July 1, 2021, the Kamoa-Kakula joint venture has generated $5.5 billion of EBITDA and $4.7 billion of operating cash flow, excluding working capital movements, which has largely been re-invested in the now-complete Phase 2 and 3 expansions and the direct-to-blister copper smelter, as well as optimization initiatives.
• Kipushi achieved commercial production during Q4 2024 and sold 16,999 tonnes of zinc (net of payability) during the quarter, which was significantly affected by ramp-up, recognizing revenue of $41 million at a cost of sales of $52 million and EBITDA of $4 million. Kipushi’s cost of sales per pound (lb.) of payable zinc sold was $1.38/lb. and cash cost (C1) per pound of payable zinc sold totaled $1.13/lb.
• Ivanhoe Mines announces Kipushi’s full-year cash cost (C1) guidance for 2025 of $0.90/lb. to $1.00/lb. of payable zinc. Cash costs are expected to steadily improve over the course of 2025.
• Ivanhoe Mines continued its excellent record of project execution in 2024, with capital expenditure, excluding sustaining capital, of $1.62 billion at Kamoa-Kakula on the now-complete Phase 3 expansion and smelter, $267 million at Platreef on advancing Phase 1 and 2, and $185 million completing the Kipushi mine re-start, all being within capex guidance.
• During the fourth quarter of 2024, Ivanplats drew $70 million of a $150 million senior debt facility for the Platreef Phase 1 mine; Ivanhoe Mines’ marketing subsidiary entered into a $75 million revolving credit facility and drew $40 million; and Kipushi entered into a $50 million revolving credit facility and drew $26 million.
• On January 24, 2025, Ivanhoe Mines closed the inaugural offering of an aggregate principal amount of $750 million senior unsecured notes due 2030, bearing a coupon rate of 7⅞%.
• Ivanhoe Mines’ cash and cash equivalents on hand as at December 31, 2024, was $117 million, which excludes the net proceeds from the subsequent $750 million notes issue.

OPERATIONAL HIGHLIGHTS

• The Kamoa-Kakula Copper Complex produced 437,061 tonnes of copper in concentrate in 2024, a year-over-year increase of 11% compared with 393,551 tonnes in 2023 following the ramp-up of the Phase 3 concentrator in the second half of 2024.
• Kamoa-Kakula achieved record quarterly production of 133,819 tonnes of copper in concentrate in the fourth quarter of 2024, compared with 100,812 tonnes in Q2 2024 and 116,313 tonnes in Q3 2024. This included record monthly production in December of 47,058 tonnes of copper in concentrate.
• Kamoa-Kakula’s Phase 1 and 2 milled 8.9 million tonnes of ore during 2024 at an average grade of 4.95% and Phase 3 milled 2.3 million tonnes of ore at an average grade of 2.70% since first ore was fed on May 26, 2024. The three concentrators combined achieved a milling record of approximately 3.7 million tonnes of ore during the fourth quarter, as Phase 3 reached and at times exceeded nameplate capacity.
• Kamoa-Kakula’s 2025 production guidance has been set at 520,000 to 580,000 tonnes of copper in concentrate. Kamoa-Kakula is targeting a production rate of approximately 600,000 tonnes of copper in concentrate for 2026, following the completion of power initiatives currently underway, together with optimization projects for improved Phase 1 and 2 recoveries (“Project 95”) and increased Phase 3 throughput underway.
• Construction of Kamoa-Kakula’s 500,000-tonne-per-annum on-site, direct-to-blister copper smelter, the largest in Africa, is now complete. The ramp-up of the smelter complex has been deferred by up to three months due to power availability and is expected to commence in Q2 2025 and will drive improvement in margins.
• The refurbishment of Turbine #5 at Inga II is expected to be completed in H2 2025. Wet commissioning has been delayed and is expected during the second half of 2025. Simultaneously, Kamoa-Kakula is expected to receive an initial 70 MW of grid-supplied hydropower, increasing to the Turbine #5 nameplate capacity of 178 MW as the ongoing grid improvement initiatives are completed over the remainder of the year.
• The “Project 95” initiative on Kamoa-Kakula’s Phase 1 and 2 concentrators is advancing towards completion in Q1 2026. The increase in concentrator recoveries to 95% is expected to increase annualized copper production by up to 30,000 tonnes, with an industry-leading capital intensity of $6,000 per tonne of copper.
• The ongoing ramp-up of the ultra-high-grade Kipushi zinc mine continued during the fourth quarter, following first ore feed on May 31, 2024. The nameplate milling rate is expected to be achieved later in the first quarter of 2025.
• Kipushi produced 50,307 tonnes of zinc during its inaugural year. A monthly record of 14,900 tonnes of zinc was achieved in December.
• The Kipushi debottlenecking program is advancing on schedule for completion early in the fourth quarter. The debottlenecking program is targeting a 20% increase in the Kipushi concentrator’s processing capacity, up to 960,000 tonnes of ore per annum. Engineering and the procurement of long-lead order equipment items are well underway.
• Kipushi’s 2025 production guidance has been set at 180,000 to 240,000 tonnes of zinc in concentrate based on the ramp-up schedule. Kipushi is targeting a production rate of over 250,000 tonnes of zinc in concentrate for 2026, following the completion of ramp-up and debottlenecking activities.
• Ivanhoe Mines announced on February 18, 2025, two independent studies on the Phase 2 and Phase 3 expansion of the Platreef platinum-palladium-rhodium-nickel-gold-copper mine, outlining plans for Platreef to become one of the world’s largest and lowest-cost platinum group metal producers, with significant nickel and copper by-products.

• Platreef’s first production is expected from the completed Phase 1 concentrator in Q4 2025. The Phase 2 expansion is accelerated to Q4 2027, increasing production to over 450 koz of platinum, palladium, rhodium, and gold per annum, as well as significant nickel and copper byproducts.
• Platreef’s Phase 3 expansion is expected to produce over 1.0 million ounces of platinum, palladium, rhodium, and gold per annum, plus approx. 25,000 tonnes of nickel and 15,000 tonnes of copper.
• Reaming of the 5.1-meter diameter Shaft #3 from the 950-meter level was completed in Q4 2024 and equipping has commenced. Shaft #3 is expected to commence hoisting from Q1 2026 with a capacity of approximately 4 million tonnes per annum.
• Ivanhoe continues exploration across its vast Western Forelands licenses, adjacent to Kamoa-Kakula. Diamond drilling during the fourth quarter of 2024 focused on wide-spaced, step-out drilling to define the extent of copper mineralization at the Makoko, Makoko West, and Kitoko discoveries. Drilling during the fourth quarter was conducted using eight contractor rigs and produced a total of 18,703 metres of core in 38 holes. A total of 81,734 metres were drilled in 2024 in 126 holes, exceeding the planned diamond drilling by more than 11,500 metres.
• Ivanhoe Mines announced on February 12, 2025, that it has formed a joint venture to explore the Chu-Sarysu Basin in Kazakhstan, the world’s third-largest sedimentary copper basin. The joint venture is targeted a licence package of 16,000 km², the largest in the basin, with $18.7 million committed to exploration activities over the first two years.