A brand new report by BMO Capital Markets analyst Andrew Mikitchook outlines a equally speedy development path for Kamoa-Kakula, with the DRC mine coming into peak manufacturing of 841,000 tonnes by 2028.
Kamoa-Kakula could by no means hit seven figures in annual output (though exploration on Ivanhoe’s adjoining Western Foreland licences which the Vancouver-based firm owns 90%–100% of could rework the advanced’s prospects as soon as once more) however dimension isn’t essentially its standout characteristic.
In keeping with a 2019 PEA, Kamoa-Kakula is being developed in 5 phases of three.8m tonnes (part 2 has been introduced ahead to Q3 2022) for whole ore processing capability of 19m tonnes per 12 months.
The primary desk based mostly on BMO’s ramp-up projections compares Kamoa-Kakula with the ten largest copper mines on the planet based mostly on 2020 manufacturing quantity. On the bumper grades throughout ramp-up, Kamao-Kakula’s ore is many components extra worthwhile than its friends.
Subsequent 12 months the mine will enter the highest 10, and by 2026 when it enters regular state manufacturing it’s going to vie with Freeport’s Grasberg, itself in aggressive ramp up, because the quantity two mine on the planet.
That 12 months – all issues being equal and naturally they received’t be – each tonne milled could be value eight instances Escondida’s, 20 instances Morenci’s and even towards Grasberg’s underground enlargement, it’s an element of 5 (solely on a Cu foundation – Grasberg’s gold and silver credit put it in a different camp altogether).
Grade at Kamoa-Kakula declines steadily over the 5 phases as per the PEA, averaging between 4%-3% through the second half of its 47-year mine life, however even then Kamao-Kakula could be by far the richest copper mine virtually of any dimension on the planet.
Desk 2 reveals BMO’s projected efficiency metrics for the mine and Ivanhoe’s monetary efficiency, displaying how Kamoa-Kakula’s ore high quality feeds into low all-in sustaining prices (comparable with the 2020 PEA) and torrents of free money – topping a billion simply 4 years after first focus.
The efficiency stats present Kamao-Kakula manufacturing at 100% (for consistency with firm disclosure) and adjusted for the precise startup on 25 Could. The monetary metrics embody Ivanhoe’s revival of the Kipushi zinc-copper mine from 2024 and the Platreef undertaking (PGM-Ni-Cu-Au at 4mtpa) in South Africa from 2026.
Even at 39.6% possession (matching that of Zijin Mining with Kinshasa holding a fifth) BMO factors out that Ivanhoe’s stake continues to be substantial at slightly below 300,000 tonnes for many of the mine life. And the potential money circulation streams attributable to Ivanhoe is a sign of its potential to self-finance via part 5 in addition to Kipushi and Platreef, says Mikitchook.
BMO has an outperform score on Ivanhoe Mines (TSE:IVN) and upped its worth goal to $15.00 on this report. Ivanhoe was final buying and selling at $8.54 a share in Toronto with a market worth of C$10.3 billion ($8.4 billion). Copper was final buying and selling at $4.32 a pound or $9,525 per tonne.