Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) posted a record profit of US$434 million for the year ended Dec. 31, 2022, a near tenfold increase over the US$45 million recorded in 2021.
Revenue of US$2.15 billion, operating profit of US$1.27 billion and earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$1.39 billion, were also record highs, based on 323,733 tonnes of copper sold.
The Southern Africa-focused miner founded by billionaire Robert Friedland is coming off a strong fourth quarter performance in 2022, during which it sold 92,208 tonnes of copper and posted record revenue of US$673 million, record operating profit of US$418 million and record EBITDA of US$451 million.
During the year, its Kamoa-Kakula copper complex in the Democratic Republic of the Congo produced 333,497 tonnes of copper concentrates - within its guidance range of 325,000 and 340,000 tonnes - at cash costs of US$1.39 per pound. Production in the fourth quarter alone totalled 92,761 tonnes, partly owing to the early commissioning of the Phase 2 expansion.
Ivanhoe is now advancing the Phase 3 expansion of Kamoa-Kakula, which includes a 500,000-tonne-per-annum, direct-to-blister flash smelter. This expansion is expected to be completed on schedule in late 2024, and, according to Ivanhoe's estimates, would lead to improvements in cash costs by between 10% and 20%.
At current copper prices, it is expected that cashflow from Kamoa-Kakula's Phase 1 and Phase 2 operations will be sufficient to fund the 2023 and 2024 expansion capital cost requirements of US$2.53 billion, the company said.
Since entering Phase 1 commercial production on Jul. 1, 2021, Kamoa-Kakula has generated US$1.22 billion of net cash from operating activities, which has funded both the Phase 2 and Phase 3 expansion activities to date.
The Kamoa-Kakula copper complex is operated as a joint venture between Ivanhoe and China's Zijin Mining. The project has been independently ranked as the world's fourth-largest copper deposit by international mining consultant Wood Mackenzie from 2025.
Elsewhere, Ivanhoe is continuing its expansive copper exploration program on its Western Foreland licences, which cover about 2,407 sq. km and are adjacent to Kamoa-Kakula. The 2023 exploration program is budgeted at around US$19 million and includes up to 70,000 metres of total drilling.
In mid-2023, the company plans to release an initial mineral resource estimate for its Makoko and Kiala high-grade copper discoveries in the Western Foreland, to be followed by a preliminary economic assessment.
Ivanhoe has also commenced an optimization study at its Platreef palladium, nickel, platinum, rhodium, copper and gold mine in South Africa to potentially accelerate production from the Phase 2 expansion. First production is scheduled for the third quarter of 2024.