Ivanhoe Mines: Kamoa-Kakula produced 245,000 mt of copper in H1, and zinc production at Kipushi will increase significantly in H2

In the second quarter of 2025, the Kamoa-Kakula Phase I, II, and III beneficiation plants processed a total of 3.62 million mt of ore, producing 112,000 mt of copper, up 11% YoY.

The "Phase I" dewatering operation was carried out as planned on June 2, 2025, and the water level in the eastern section of the Kakula mine has slightly decreased. The "Phase II" dewatering operation will commence next month. Five newly purchased large-power pumps, which can be operated from the surface, are currently being assembled at a factory in China and are expected to be airlifted to the site in the coming weeks.

Mining operations in the western section of the Kakula (Kakula) mine resumed in early June, and by mid-June, the mining capacity had ramped up to 300,000 mt per month (3.6 million mt/year on an annualized basis), with copper grades ranging from 3% to 4%. Since mid-June, the combined processing capacity of the Phase I and II beneficiation plants has been increased to approximately 670,000 mt per month (8 million mt/year on an annualized basis).

Underground development work has commenced to open up new mining areas in the far eastern section of the Kakula mine, and two main access tunnels will be constructed eastward from the existing underground infrastructure.

Robert Friedland, Founder and Co-Executive Chairman of Ivanhoe Mines, commented: "We highly commend the diligent, dedicated management team, mining crews, and engineers at Kamoa-Kakula. Their unwavering efforts have been instrumental in the successful resumption of operations at the Kakula mine."

"Since the initial announcement of the mine tremor on May 20, the Kamoa-Kakula management has taken proactive and decisive actions, enabling the mine to smoothly advance towards restarting operations. The top priority at Kamoa-Kakula is to ensure the safety of our employees and contractors. Currently, we are systematically and cautiously increasing tunneling and mining activities to supply more high-grade ore from the newly opened western section of the Kakula mine to the Phase I and II beneficiation plants. It is expected that by the end of 2025, the mining crews will be able to return to the mining area in the western section of the Kakula mine with a copper grade of approximately 5% to resume production, which will further enhance operational performance and efficiency."

"Meanwhile, we have commenced development work in a new high-grade mining area in the far eastern section of the Kakula mine, and it is expected that more high-grade ore will be available by the second quarter of 2026. Additionally, ore extracted from the Kamoa and Kansoko mines continues to excel in various indicators, and we will transport (support) newly mined ore to the Phase I and II beneficiation plants as soon as possible."

"The dewatering operation at the Kakula mine is progressing as planned, which will open up access for us and enable the safe mining of high-grade ore from the affected sections, thereby increasing ore supply to the Phase I and II beneficiation plants."

"Beyond the Kamoa-Kakula project, we also commend the Kipushi management team for their strong operational performance this quarter. Kipushi is currently on a steady path to becoming one of the world's largest, highest-grade, and most environmentally friendly large-scale zinc mines. Finally, the highly anticipated Platreef mine is set to commence production later this year, laying the foundation for subsequent staged expansions that will ultimately position it as the world's largest and lowest-cost producer of platinum group metals (PGMs), nickel, copper, and gold. Given the current rise in PGM prices and the growing global demand for these metals, we firmly believe that Platreef will stand out during this golden period, delivering substantial returns to our shareholders."

In the second quarter of 2025, the Phase I, II, and III beneficiation plants processed a total of 3.62 million mt of ore, producing 112,000 mt of copper, up 11% YoY. In the first half of 2025, a total of 245,000 mt of copper was produced.

The Phase I, II, and III beneficiation plants at Kamoa-Kakula collectively produced 28,000 mt of copper in June. The Phase I and II beneficiation plants produced approximately 15,000 mt of copper in June, with an average copper grade of 3.3% and an average recovery rate of 79%. The lower-than-average recovery rate was primarily due to the lower recovery rate of surface low-grade ore.

The Phase I and II beneficiation plants began processing ore from the Kakula West section on June 8, 2025. Since mid-June, the combined processing capacity of the Phase I and II beneficiation plants has increased to approximately 670,000 mt per month (annualized at 8 million mt per year). It is expected that the Phase I and II beneficiation plants will continue to operate at this rate for the remainder of 2025, with the goal of processing approximately 50% of the ore from surface stockpiles and 50% of the newly mined ore from the Kakula West section. It is anticipated that the beneficiation plants will continue to process ore from surface stockpiles until they are exhausted in the first quarter of 2026.

On June 11, 2025, the company announced that mining operations at the Kakula West section resumed on June 7, 2025. By mid-June, mining output had increased to approximately 300,000 mt per month (annualized at 3.6 million mt/year). Mining operations in the western section of the Kakula mine will initially focus on the higher elevation mining areas in the north and southwest (see Figure 1), with copper grades ranging from 3% to 4%. Mining in these areas will continue in Q4 until the successful advancement of the dewatering operations for Phase II in the eastern section of the Kakula mine. Starting from the end of 2025, mining teams are expected to penetrate deeper into the western section of the Kakula mine, with copper grades projected to increase to approximately 5%.

The Phase III beneficiation plant broke records by processing a total of 1,631 mt of ore in Q2 and setting a new record for producing 41,000 mt of copper concentrate, equivalent to an annualized processing capacity of 6.5 million mt of copper, exceeding the Phase III beneficiation plant's designed capacity of 5 million mt/year by over 30%. The average grade of ore processed quarterly by the Phase III beneficiation plant also reached a record high of 2.92%. It is expected that for the remainder of 2025, the average feed copper grade of the Phase III beneficiation plant will be approximately 2.5%, aiming to reduce the cut-off grade to achieve a higher mining rate. Currently, all ore mined from the Kamoa and Kakoso mines is processed by the Phase III beneficiation plant.

In H2 of 2025, the combined mining output from the Kamoa and Kakoso mines will increase to 100,000 mt of ore per month, supplying ore to both the Phase I and Phase II beneficiation plants to replace some of the ore from the stockpiles.

The "Phase I" dewatering operations were implemented and put into operation as planned on June 2, 2025, slightly lowering the water level in the eastern section of the Kakula mine before the start of the "Phase II" dewatering operations in August. Meanwhile, the water level drop enabled mining teams to access other mining areas for partial rehabilitation work.

The "Phase II" dewatering operations will involve the installation of large power pumps and a permanent dewatering system that can be operated from the surface, enabling comprehensive drainage operations throughout the Kakula mine. Kamoa Copper has ordered five large power pumps from Hefei Hengda Jianghai Pump Industry Co., Ltd. in China, each with a dewatering flow rate of 650 liters per second. The large power pumps are currently being assembled at the factory and are expected to be shipped by air in August.

The new mining area is located in the far east of the Kakula mine (as indicated by the red arrow in Figure 2). Initially, two main access tunnels will be constructed, and the mining team commenced work last week.

During the initial stage of development work in the new mining area, waste rock will be extracted, and ore extraction will commence in early 2026. It is expected that ore mining operations will commence in the new mining area in Q2 2026.

The construction of the two main access tunnels will proceed simultaneously, advancing eastward from the existing underground infrastructure. The new mining area will be accessed through the existing underground infrastructure and will not be affected by the pumping operations, thus eliminating the need for constructing new access tunnels from the surface.

On June 11, 2025, the senior management of Kamoa-Kakula confirmed that the one-step copper smelter at the mine site would commence operations in early September 2025 and is expected to produce the first batch of copper anodes in October. The smelter can operate at a minimum of 50% capacity, equivalent to an annualized production of approximately 250,000 mt of copper. Kamoa-Kakula management expects that the smelter at the mine site will prioritize processing all concentrates produced by the Phase I, II, and III beneficiation plants, with the remaining concentrates being transported to the Lualaba Copper Smelter for processing.

As of June 30, 2025, there were approximately 54,000 mt of copper inventories pending sale at the Kamoa-Kakula mine site, with 32,000 mt stockpiled at the smelter site. Approximately four to six weeks after the smelter commences operations in early September, the first batch of copper concentrates will be fed into the smelter, and it is expected that there will be approximately 35,000 mt of copper inventories pending sale at the site.

The "Project 95 Plan" at Kamoa-Kakula is progressing smoothly and is currently 50% complete, with completion scheduled for Q1 2026. The "Project 95 Initiative" aims to increase the overall copper recovery rate of the Kamoa-Kakula Phase I and II beneficiation plants from the designed 87% to 95%, based on 5% high-grade ore.

During the production resumption at the Kakula mine, some lower-grade ores from the Kakula and Kamoa mines will be transported to the Phase I and II beneficiation plants. The engineering team at Kamoa-Kakula aims to maintain the recovery rate of low-grade ores at no less than 90%.

Between late March and early April 2025, Kamoa Copper signed power purchase agreements with Cross Boundary Energy DRC (hereinafter referred to as "CBE") in Nairobi, Kenya, and La Societe Green World Energie (hereinafter referred to as "GW") in China, respectively, to construct PV power plants at the Kamoa-Kakula mine site, providing an additional 60MW of environmentally friendly power for Kamoa-Kakula's operations. The two PV power plants will be funded, owned, and operated by CBE and GW, collectively producing 406MW of PV power and up to 1,107 megawatt hours (MWh) of battery energy storage systems (BESS). The power generated by the two PV power plants will be exclusively off-taken by Kamoa Copper.

Kamoa-Kakula plans to gradually expand the PV power plants at the mine site to 120MW.

Preliminary earthworks commenced in Q2, with geotechnical investigations, land clearing, and long-lead equipment procurement, including battery energy storage systems, pre-fabricated substation (E-house), and components, at the mine site, expected to be completed by mid-2026.

On June 11, 2025, the company announced that the full-year production guidance target for Kamoa-Kakula was revised to 370,000 to 420,000 tonnes of copper. Ivanhoe Mines will announce the production guidance targets for Kamoa-Kakula in 2026 and 2027 in early September.

In addition, Ivanhoe Mines will announce its Q2 2025 financial results, as well as the revised guidance targets for the Group's 2025 capital expenditure and Kamoa-Kakula's 2025 C1 cash cost, on July 30, 2025.

It is expected that the revised guidance target for Kamoa-Kakula's 2025 capital expenditure will not exceed the upper end of the originally announced 2025 guidance target range ($1.42 billion to $1.67 billion) (on a 100% equity basis) announced on January 8, 2025.

The company announced on January 8, 2025, that CITIC Metal Hong Kong Limited (hereinafter referred to as "CITIC Metal") and Jinshan (Hong Kong) International Mining Co., Ltd., a subsidiary of Zijin Mining (hereinafter referred to as "Jinshan"), had signed off-take agreements with Kamoa Copper, collectively undertaking the off-take of 80% of the copper anode production from the Kamoa-Kakula smelter. CITIC Metal and Jinshan (Hong Kong) have provided a US$500 million advance payment under the off-take contract, which is in addition to the US$300 million advance payment under the Phase I and II concentrate off-take contracts signed with the two off-takers in 2024.

The company signed an off-take agreement with Trafigura Asia Trading Pte. Ltd. in June, committing to off-take the remaining 20% of the smelter's production for a three-year term. The off-take contract also includes a US$200 million advance payment with an interest rate of 1-month SOFR +3.75%.

In June, Kamoa Copper extended the existing US$200 million loan agreement with Standard Bank for 12 months on favorable terms. This financing arrangement will provide liquidity flexibility for the restart of operations at the Kakula mine.

Summary of Kipushi's Quarterly Production:

In the second quarter of 2025, zinc production at the Kipushi beneficiation plant continued to rise. Multiple production records were set in May, with a total of 60,000 mt of ore processed and 18,000 mt of zinc concentrate produced. In June, 41,000 mt of ore was processed, mainly due to a nine-day shutdown of the beneficiation plant to integrate the Phase I expansion plan and the processing of ore with lower zinc grades in the three weeks preceding the shutdown.

The Phase I expansion plan focused on upgrading the tailings pumping system, enabling the beneficiation plant to operate continuously at its designed capacity. The Phase I expansion work has now been completed.

The Phase II (final) expansion plan involves upgrading some of the beneficiation plant's ore processing equipment, aiming to increase ore processing capacity from 800,000 mt/year by 20% to 960,000 mt/year. It will be completed on schedule in the third quarter of 2025, and a seven-day shutdown is planned for August to integrate the upgrades of all remaining equipment.

During the integration of the expansion plan, the June shutdown also coincided with the upgrade of the heavy medium separation (HMS) process at the beneficiation plant.On October 7, 2024, the company stated that ore entering the HMS process contained a higher-than-expected proportion of fine-grained raw materials, causing blockages that led to the shutdown of the beneficiation plant. After the upgrade, the availability of the HMS process will increase from approximately 6 hours per day to 16 hours per day, significantly reducing operational downtime. The Phase II upgrade will be carried out during the planned shutdown in August, and it is expected that the availability of the HMS process will further increase to 22 hours per day.

Once the above measures are completed, Kipushi's annual production guidance target (180,000–240,000 mt of copper) will remain unchanged.

on May 8, 2025. The company announced that on April 30, 2025, it officially entered the Flatreef orebody through development work at the 850-meter level, and has since completed 43 meters of in-vein development. From now on, the tunneling rate will be increased to 80 meters per month. It is expected that in-vein development work will commence at the 750-meter level in October 2025.

The developed ore is transported to the surface and stored in the mine's stockyard. The Ivanplats team aims to stockpile approximately 60,000 mt of developed ore to supply the first batch of feed ore for the Platreef Phase I beneficiation plant. The Platreef Phase I beneficiation plant is scheduled to commence production in Q4. During the initial stage of capacity ramp-up, the beneficiation plant will primarily process developed ore. After the completion of Shaft 3, mining operations are expected to commence in Q1 2026. As the beneficiation plant achieves capacity ramp-up, the proportion of ore from stope operations will gradually exceed that of developed ore.

The underground exploration drilling program launched last year is progressing smoothly. The first block at the 850-meter level (the initial area to be mined) has been drilled, and the analysis results are consistent with Ivanplats' grade model.

Shaft 3 is currently being equipped and is progressing smoothly, with hoisting operations expected to commence in Q1 2026. The shaft tube with a diameter of 5.1 meters has been extended from the surface to the bottom at 950 meters, and the excavation of the shaft loading and unloading headframe has also been completed. The installation of the headframe and the hoist is progressing smoothly, and the mechanical installation of the hoist is also nearing completion.