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On Tuesday, BMO Capital Markets maintained a positive outlook on Ivanhoe Mines Ltd. (TSX:IVN:CN) (OTC:IVPAF), with analyst Andrew Mikitchook reiterating an Outperform rating and a price target of Cdn$24.00. The affirmation comes despite recent market concerns over uncertainties at the company’s Kakula mine.
Mikitchook addressed the market’s reaction to the challenges at Kakula, suggesting that it might be exaggerated. He believes that based on current reports, the underground infrastructure at the mine remains largely undamaged. The analyst anticipates further updates in the upcoming weeks and expects that processing existing stockpiles will help mitigate the effects of the mining interruption.
The BMO analyst has factored in a potential three-month halt of mining activities at Kakula into his evaluation. He emphasized that this provisional scenario does not alter the long-term valuation of the mine, which boasts a projected lifespan of 30 to 40 years or more.
Ivanhoe Mines is engaged in the exploration and development of mineral properties. The Kakula mine is part of the company’s Kamoa-Kakula project, considered to be one of the world’s largest high-grade copper discoveries in recent times.
The company and its stakeholders are awaiting more detailed information on the situation at Kakula. In the meantime, the operation of processing the stockpiles is expected to provide some level of ongoing activity at the site, partially compensating for the pause in mining operations.
BMO Capital Markets’ stance indicates confidence in Ivanhoe Mines’ long-term prospects, despite the temporary challenges at the Kakula mine. Investors will be looking to the forthcoming updates for clarity on the path forward and the potential resumption of full mining operations.
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