Ivanhoe: Kamoa-Kakula to Set Another Record with 437,000 mt of Copper Production in 2024, Kipushi Is Expected to Produce 180,000-240,000 mt of Zinc in 2025

According to Ivanhoe Mines: Johannesburg, South Africa — Ivanhoe Mines Co-Chairmen Robert Friedland and Weibao Hao, along with President Marna Cloete, announced on January 9 that the company has released the Q4 and full-year 2024 production results for the Kamoa-Kakula Copper Mine Project and the Kipushi Ultra-High-Grade Zinc Mine Project, both located in the Democratic Republic of Congo (hereinafter referred to as "DRC"). They also disclosed the 2025 production guidance for Kamoa-Kakula and Kipushi, as well as an updated version of the 2025 group capital expenditure guidance.

Kamoa-Kakula Sets a New Record with 437,000 mt of Copper Production in 2024, Up 12% YoY

The Kamoa-Kakula Phase III beneficiation plant achieved capacity ramp-up in H2 2024, with total annual production reaching 437,000 mt of copper, setting a new record, up 12% YoY.

In Q4 2024, a record-breaking 134,000 mt of copper in concentrate was produced, 15% higher than in Q3. During the quarter, the Phase I and Phase II beneficiation plants performed strongly, achieving record-high production with improved grades and recovery rates, while the Phase III plant reached and occasionally exceeded its designed capacity.

In December 2024, Kamoa-Kakula produced 47,000 mt of copper, setting a new monthly production record. The annualized processing capacity of the Phase III plant reached 5.7 million mt/year, 13% above its designed capacity, with an average recovery rate of 86.6%, meeting design specifications.

As of the end of December 2024, Kamoa-Kakula had stockpiled approximately 4.19 million mt of high-grade and medium-grade ore on the surface, with an average copper grade of about 3.18%. The surface stockpile contained 133,000 mt of copper.

By year-end 2024, approximately 30,000 mt of copper inventory was pending sale, compared to 16,000 mt at the end of Q3, which is being processed at the Lualaba Copper Smelter for sale. The inventory is expected to decrease in Q1 2025.

Fire Damages Part of Kamoa-Kakula's Backup Power System, Repairs Underway

On January 2, 2025, a fire broke out at a generator near the Kakula mine. The Kamoa-Kakula emergency team quickly contained and extinguished the fire. Fortunately, there were no injuries or damage to other infrastructure, and mining operations were not affected.

Prior to the fire, the site had a total diesel generator capacity of approximately 190 megawatts (MW), serving as a backup to the power grid and imported hydropower. An additional 48 MW of diesel power capacity was added in Q4.

The fire damaged 36 MW of diesel generators at the site. Preliminary estimates indicate that 34 MW of the damaged units can be repaired, with operations expected to resume in about 3 to 6 months. The company plans to file an insurance claim under its existing policy. A comprehensive assessment is expected to be completed in the coming weeks.

The Kamoa-Kakula engineering team is conducting a full investigation into the cause of the fire to evaluate whether additional preventive measures are needed for the generators. Enhanced monitoring measures, including additional firefighting resources at each diesel power station, are also being implemented.

Approximately 160 MW of backup power remains available at the site, supplying power to the Kakula and Kamoa mining operations. Currently, Kamoa-Kakula is utilizing 90 MW of hydropower from the national grid and imports from Southern Africa. The management team is in discussions to increase domestic and imported hydropower as soon as possible. Even in the extreme scenario of a complete grid power outage, the site's backup power system can meet the current power needs of Kamoa-Kakula's Phase I, Phase II, and Phase III operations, excluding the smelter.

The total power requirement for the full operation of the Phase I, Phase II, and Phase III beneficiation plants, as well as the smelter, is approximately 240 MW. The Kamoa-Kakula smelter operations team is considering delaying the start of the on-site copper smelter by three months to focus on repairing the damaged generators and increasing domestic or imported hydropower supply.

The commissioning of Turbine 5 (178 MW) at the Inga II hydropower station is expected in Q2 2025. Kamoa-Kakula plans to initially add 70 MW of hydropower from the grid in Q2, gradually increasing to 178 MW after grid upgrades are completed.

Ivanhoe Mines Is Exploring the Option of Importing Hydropower from Angola

On July 4, 2024, Trafigura Group of Geneva, Switzerland, and ProMarks of Luanda, Angola, signed a memorandum of understanding with the Angolan government to conduct technical and economic feasibility studies for a 2,000 MW high-voltage "intercontinental transmission project" (HVDC transmission line). The project aims to export environmentally friendly hydropower to the DRC Copperbelt and Zambia. Through this project, power generated by hydropower stations in northern Angola will be connected to the Southern African Power Pool. ProMarks and Trafigura will establish a joint venture to develop, finance, construct, and operate the "intercontinental transmission project," with investments planned through a combination of equity capital and third-party debt. Following the final investment decision, the project is expected to take approximately four years for planning, approval, and construction.

Kipushi Produced 50,000 mt of Zinc in Its First Year of Operation, Reaching Near Designed Capacity, and Set a Monthly Record of 15,000 mt in December

In 2024, the Kipushi beneficiation plant processed 228,000 mt of ore with an average zinc grade of 29%, producing 50,000 mt of zinc in concentrate with a grade of approximately 50%.

Although the ramp-up progress in Q3 was slower than expected, the Kipushi beneficiation plant made significant progress in Q4, setting multiple processing records. In Q4, the plant processed 135,000 mt of ore with an average grade of 28%, producing a record-breaking 32,000 mt of zinc, including 15,000 mt in December, equivalent to an annualized capacity of 175,000 mt of zinc.

On December 31, 2024, the Kipushi beneficiation plant set a new daily record of 750 mt of zinc production, exceeding its designed capacity. On the same day, the plant processed 2,200 mt of ore, meeting design specifications. The Kipushi beneficiation plant is expected to consistently achieve its designed capacity in Q1 2025.

As of the end of December, Kipushi had stockpiled approximately 344,000 mt of high-grade and medium-grade ore on the surface, with an average zinc grade of about 23%, containing 80,000 mt of zinc.

2025 Production Guidance

Ivanhoe Mines' 2025 production guidance is based on assumptions and estimates as of December 31, 2024. The guidance reflects estimates of known and unknown risks, uncertainties, and other factors, which may result in significant differences from actual performance.

Recent droughts in Zambia and Mozambique have impacted hydropower generation, reducing the hydropower imported by Kamoa-Kakula. Although the rainy season has begun, the extent to which hydropower reservoirs in Zambia and Mozambique will recover remains uncertain. Given this uncertainty, the company plans to reassess its 2025 production guidance at the end of the rainy season in Q2.

Kamoa-Kakula is implementing power generation and grid upgrade plans, as well as optimization initiatives to improve recovery rates at the Phase I and Phase II beneficiation plants ("Project 95") and increase the capacity of the Phase III plant, aiming to achieve approximately 600,000 mt/year of copper production by 2026.

Kipushi is expected to complete its ramp-up and expansion plan in Q3 2025, targeting 250,000 mt/year of zinc production by 2026.

Ivanhoe Mines will provide guidance on 2025 C1 cash costs for copper and zinc on a per-pound basis in its full-year 2024 financial report. The Platreef Project is expected to provide production and C1 cash cost guidance after achieving ramp-up in H2 2025.

Ivanhoe Mines Provides an Updated Version of Its 2025 Capital Expenditure Guidance

A summary of the updated capital expenditure guidance is as follows:

The guidance ranges reflect uncertainties regarding the timing of the Phase III expansion at Kamoa-Kakula and the capital allocation for Phase II of Platreef across the 2024 and 2025 calendar years. The 2024 guidance remains unchanged, consistent with the figures as of September 30, 2024. Subsequently, capital expenditures at Kamoa-Kakula are expected to be at the upper end of the 2024 guidance range, sustaining capital expenditures are expected to exceed the guidance range, and capital expenditures at Platreef are expected to be near the lower end of the guidance range.

The Phase III beneficiation plant at Kamoa-Kakula was completed on May 26, 2024, and the smelter project is nearing completion.

The operations of Kamoa-Kakula Phase I, Phase II, and Phase III are expected to generate significant cash flow, which, combined with financing loans from joint ventures and current copper prices, will be sufficient to support the project's capital expenditures.

The Phase I beneficiation plant at Platreef was completed on schedule in July 2024, but commissioning and ramp-up have been delayed to H2 2025. The 2024 guidance for Platreef (as shown above) remains unchanged, while the 2025 guidance is provisional and will be updated after the feasibility study is completed in Q1 2025. The 2025 capital expenditures are expected to remain within the guidance range (as shown above).

The Kipushi beneficiation plant has been completed and has achieved ramp-up to designed capacity. The 2025 capital expenditure guidance for Kipushi has been increased by $20 million to fund the plant's expansion plan, which is expected to increase processing capacity by approximately 20% starting in Q3 2025, as well as to enhance backup power capacity at the site.

Ivanhoe Mines will provide guidance on 2026 capital expenditures in its full-year 2024 financial report.

Kamoa-Kakula Signs Offtake and Prepayment Agreements for Copper Anode Production from Its On-Site Smelter

CITIC Metal Co., Ltd. and Jinshan International Mining Co., Ltd., a subsidiary of Zijin Mining (hereinafter referred to as "Jinshan"), have signed offtake agreements with Kamoa Copper to purchase 80% of the smelter's copper anode production. The agreements, valid for three years, were negotiated on fair competition terms. Once the smelter reaches full production, it is expected to produce 500,000 mt of 99.7% copper anodes annually. The offtake agreements include standard international commercial terms and copper refining fees based on annual industry benchmarks.

CITIC Metal and Jinshan will purchase copper anodes from Kamoa-Kakula on an FCA mine delivery basis (Free Carrier). CITIC Metal has engaged Ivanhoe Trading, a subsidiary of Ivanhoe Mines, to handle inland transportation of the copper anodes to African loading ports.

Additionally, CITIC Metal and Jinshan have each provided $250 million in prepayments under the offtake agreements, totaling $500 million. The prepayments have been fully received, with interest set at SOFR +3.75%.

Meanwhile, Kamoa Copper is in detailed negotiations for a third offtake agreement covering the remaining 20% of the smelter's production, which is expected to be finalized in the coming weeks.

Following the release of the Integrated Development Plan (IDP) on January 30, 2023, Kamoa's engineering team is preparing an updated version of the 2025 IDP, which is expected to be published in Q2 2025. The 2025 IDP will include initiatives to enhance processing recovery rates and capacity at the Phase I, Phase II, and Phase III beneficiation plants, as well as advance the Phase IV expansion plan.

The Kamoa engineering team aims to increase the recovery rates of Phase I and Phase II beneficiation plants, as well as the Phase III beneficiation plant, from 87% and 86% to 95% and 92%, respectively, through initiatives such as the "Project 95 Plan." The team also plans to increase the combined processing capacity of the Phase I, Phase II, and Phase III beneficiation plants from the current 14.2 million mt/year by 20% to 17 million mt/year.

The Phase IV expansion plan includes doubling the processing capacity of the grinding and flotation facilities adjacent to Phase III. Similar to the Phase II expansion during Phase I, the crushing plant in the front-end process of Phase III has been designed with sufficient redundancy to accommodate the needs of the Phase IV expansion.

New mining areas at Kamoa-Kakula will ramp up production to supply ore to the Phase IV beneficiation plant, with the timeline to be included in the 2025 IDP study.

The updated feasibility study for the Platreef Phase II optimization plan and the preliminary economic assessment for Phase III are scheduled to be released in Q1 2025. Platreef is expected to become one of the world's largest producers of precious and base metals.

Ivanhoe's engineers completed an internal optimization study for the phased expansion plan of the Platreef project in 2023. Before the commissioning of Shaft 2, which has a hoisting capacity of 8 million mt/year, underground development and mining operations will rely on Shaft 1, which has a hoisting capacity of 1 million mt/year. The study indicates that accelerating the Phase II commissioning will create significant value for the project.

Following the completion of the optimization study, the company engaged DRA Global in Johannesburg, South Africa, to update the 2022 feasibility study for Platreef, incorporating the optimization plan and the accelerated Phase II expansion. The study is nearing completion and is expected to be published in Q1 2025.

Ivanhoe is concurrently conducting an updated feasibility study for Phase II and a preliminary economic assessment for Phase III, which aims to increase the project's combined processing capacity to approximately 10 million mt/year. The Phase III expansion will involve constructing two new beneficiation plants, each with a capacity of 3.3 million mt/year, near the Phase I and Phase II beneficiation plants. The Phase III expansion is expected to make Platreef one of the world's largest and lowest-cost producers of platinum group metals, nickel, copper, and gold. Upon completion of the Phase III expansion, the combined processing capacity will reach up to 10 million mt/year, representing a 12.5-fold increase compared to Phase I and a 2.5-fold increase compared to the optimized Phase II expansion. The results of the Phase III preliminary economic assessment and the updated Phase II feasibility study will be released simultaneously.

Ivanhoe Mines Successfully Completes Trial Shipment via Lobito Corridor

In February 2024, Kamoa Copper signed a term agreement for a reserved carriage contract with Lobito Atlantic Railway, outlining the export of Kamoa-Kakula copper mine products via the Lobito Atlantic Railway Corridor. Following the trial shipment of the first 10,000 mt of copper concentrates via the Lobito Corridor in 2024, the agreement stipulates that Kamoa-Kakula will export no less than 120,000 mt and no more than 240,000 mt of concentrates annually via the Lobito Corridor for at least five years starting in 2025. The first trial shipment of concentrates was announced on August 16, 2023, and subsequently increased to 20,000 mt on April 30, 2024.

Lobito Atlantic Railway is a consortium comprising Trafigura Pte Ltd., a leading global commodity trading group based in Singapore; Mota-Engil, a Portuguese construction and infrastructure management company; and Belgium's Vecturis SA. The consortium holds a 30-year concession for the railway services and logistics project of the Lobito Corridor. Lobito Atlantic Railway has committed to investing $455 million in Angola and up to $100 million in the Democratic Republic of Congo to improve the railway infrastructure, carriage capacity, safety standards, and locomotives of the Lobito Corridor.

On December 3, 2024, the US government announced an additional $560 million investment in the Lobito Atlantic Railway, bringing the US's total investment to over $4 billion. Combined with partnerships with G7 partners and regional development banks, international investments in the Lobito Corridor have exceeded $6 billion. Full details of the White House press release: https://www.whitehouse.gov/briefing-room/statements-releases/2024/12/03/fact-sheet-partnership-for-global-infrastructure-and-investment-in-the-lobito-trans-africa-corridor/

Lobito Atlantic Railway plans to increase its annualized carriage capacity from 160,000 mt/year in 2025 to 2 million mt/year by 2030, equivalent to six fully loaded trains of mineral products per day. During the trial period from 2024 to date, the average transit time from Kolwezi to Lobito has been 6–8 days, compared to 20–25 days for truck transport to Durban, South Africa. As carriage capacity gradually increases, transit times are expected to further decrease, with Lobito Atlantic Railway aiming to reduce westbound transit to 3.5–4 days.

Additionally, Trafigura Group estimates that greenhouse gas emissions from transporting 1,716 kilometers by rail from Kolwezi to Angola's Lobito port are significantly lower than emissions from trucking 3,000 kilometers to Durban port. Preliminary measurements indicate that diesel consumption per ton of copper transported to the port (including shipping) has decreased from 37.50 liters (Kolwezi to Durban) to 12.46 liters (Kolwezi to Lobito), reducing emissions by 66%, equivalent to a reduction of at least 75 kilograms of carbon emissions per ton of copper transported (excluding truck idling time).

About Ivanhoe Mines

Ivanhoe Mines is a Canadian mining company advancing three flagship projects in Southern Africa: the expansion of the Kamoa-Kakula copper mine in the Democratic Republic of Congo; the development of the Platreef world-class palladium-nickel-platinum-rhodium-copper-gold mine in South Africa; and the redevelopment of the renowned Kipushi ultra-high-grade zinc-copper-germanium-silver mine, also in the Democratic Republic of Congo.

Meanwhile, Ivanhoe Mines is exploring new copper resources within its Western Foreland exploration licenses, adjacent to the Kamoa-Kakula copper mine project in the Democratic Republic of Congo. Ivanhoe Mines holds a 60–100% interest in the Western Foreland exploration licenses, which cover a highly prospective area of 1,808 square kilometers. Ivanhoe is seeking new sedimentary copper resources and plans to expand and delineate the high-grade copper resources of its next major development projects, Makoko, Kiala, and Kitoko.