Earnings call transcript: Ivanhoe Mines Q2 2025 sees mixed results

Ivanhoe Mines Ltd. (IVN) reported its earnings for Q2 2025, showing a mixed financial performance. The company reported earnings per share (EPS) of $0.03, missing the forecasted $0.042 by 28.57%. However, revenue came in at $96.76 million, slightly surpassing expectations of $95.33 million. The stock saw a minor decline of 0.45% in after-hours trading, closing at $11.02, as investors digested the earnings results and future guidance. According to InvestingPro data, the company’s market capitalization stands at $10.6 billion, with analysts maintaining a bullish consensus rating of 1.43 (where 1 is Strong Buy and 5 is Strong Sell).

Key Takeaways

• Ivanhoe Mines missed EPS expectations by 28.57%.
• Revenue exceeded forecasts by 1.5%.
• The stock price fell by 0.45% in after-hours trading.
• Operational disruptions due to a seismic event in May affected performance.
• Production guidance for copper was maintained at 370,000-420,000 tonnes.

Company Performance

Ivanhoe Mines demonstrated resilience despite operational challenges in Q2 2025. The company maintained its production guidance for copper and continued to advance its projects, including the direct-to-blister smelter and the Platreef Phase one concentrator. However, a seismic event in May caused some operational disruptions, affecting the quarter’s overall performance.

Financial Highlights

• Revenue: $96.76 million, surpassing forecasts of $95.33 million.
• Earnings per share: $0.03, below the forecast of $0.042.
• EBITDA for Kamoa-Kakula: $325 million.
• Consolidated quarterly adjusted EBITDA: $123 million.
• Net cash flow: ZAR 169 million.

Earnings vs. Forecast

Ivanhoe Mines reported an EPS of $0.03 against a forecast of $0.042, reflecting a 28.57% miss. The revenue, however, was slightly above expectations, with a surprise of 1.5%. This mixed performance underscores the challenges faced during the quarter, including the impact of a seismic event.

Market Reaction

The stock price of Ivanhoe Mines fell by 0.45% in after-hours trading, closing at $11.02. This decline reflects investor concerns over the missed EPS expectations and operational disruptions. The stock remains within its 52-week range, with a high of $20.95 and a low of $8.76.

Outlook & Guidance

Ivanhoe Mines maintained its production guidance for copper, projecting 370,000-420,000 tonnes in concentrate. The company expects to return to pre-incident production levels by 2027 and plans to halve logistics costs with the new smelter by early 2026. Future EPS forecasts are set at $0.02 for the next two quarters, with an increase to $0.07 by Q2 2026.

Executive Commentary

Marna Clote, CFO, expressed optimism about production volume, stating, "We are quite optimistic around production volume." Mark Farrin, Executive VP, highlighted the quality of the company’s resources, saying, "It’s the best ore body in the world." These statements reflect confidence in the company’s long-term prospects despite short-term challenges.

Risks and Challenges

• Operational disruptions due to seismic events could affect future performance.
• Fluctuating copper, platinum, and palladium prices may impact profitability.
• The company’s ability to manage dewatering and mine rehabilitation is crucial.
• Supply chain issues and power infrastructure improvements remain ongoing challenges.

Q&A

Analysts focused on the timeline and confidence in future guidance, the long-term impacts of the seismic event, and progress on dewatering and mine rehabilitation. Questions also addressed stockpile management and the company’s ability to meet production targets.

Overall, Ivanhoe Mines faces challenges but remains committed to its strategic initiatives and production goals. With a beta of 1.89 indicating higher volatility than the market average, and a weak gross profit margin of -11.36%, investors will be closely watching the company’s progress in addressing operational disruptions and achieving its guidance targets. For comprehensive analysis including Fair Value estimates and detailed financial health scores, explore the full Pro Research Report available on InvestingPro.

Full transcript - Ivanhoe Mines Ltd. (IVN) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the Ivanhoe Mines Limited Q2 Earnings Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, 07/31/2025. I would now like to turn the conference over to Matthew Kevo, Director, Investor Relations and Corporate Communications.

Please go ahead.

Matthew Keeble, Director, Investor Relations and Corporate Communications, Ivanhoe Mines: Thanks very much, operator, and good morning and afternoon, everyone. It’s my pleasure to welcome you to Ivanhoe Mines’ second quarter twenty twenty five financial results conference call. As the operator mentioned, my name is Matthew Keeble. I am the Director of Investor Relations and Corporate Communications with Ivanhoe Mines. On the line today with the company, we have Founder and Executive Co Chairman, Robert Friedland President and Chief Executive Officer, Marna Clote Chief Financial Officer, David Van Hilden Chief Operating Officer, Mark Farrin and Executive Vice President, Corporate Development and Investor Relations, Alex Pickard.

We will be finishing today’s event with a q and a session. You can submit a question using the q and a box on the webcast as well as through the conference operator via your phone line. Please do contact our investor relations team directly if your question is not addressed during the call. We’d be more than happy, to follow-up with any unanswered questions. And before we begin, I’d like to remind everyone that today’s event will contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements.

Details of these forward looking statements are contained in our July 30 news release as well as on SEDAR plus and at www.ivenhomemines.com. It is now my pleasure to introduce Ivanhoe Mines founder and executive co chairman, Robert Friedman, for opening remarks. Robert, please go ahead.

Robert Friedland, Founder and Executive Co-Chairman, Ivanhoe Mines: Thank you, and, best of wishes to everybody from Switzerland. It’s a beautiful day here, and I wanna start by thanking everybody on the operating team, at Kamo Kukula for having experienced a bump in the road, immediately getting to work on restoring Ivanhoe Mines as the fastest growing and best new major mining company in the world. I also wanna thank very much, the people in our Chinese office and our partners at Zijin and CITIC who expedited a major effort to get world class pumping systems in place on the site already in record time. And we’re gonna be telling you more about that pumping and our plans for the future imminently, but never have I seen such a great effort by such a diverse group of people responding to a challenge and working rapidly to overcome it. So with that, and without further ado, let’s go on to the management team.

Thank you.

Marna Clote, Chief Financial Officer, Ivanhoe Mines: Thank you, Robert. This is Marna. Maybe just flick back to that previous photo where Robert was talking. So there you can see the team. That’s the first submersible pump that arrived on-site.

It was flown there on a Boeing, so we are all flying in four of these pumps, and then we’re also bringing in a spare pump on a ship. So quite a magnificent effort by our team. If we can then go over to my highlights. I think this picture is a tells tells a big story. We’ve been in operation for five years now, and the old truck you see there in the back was one of the first fleet that we used underground at Kamaukakula.

We have now successfully rebuilt this fleet, and you can see the maintenance team standing in front of it that’s very proud of its first rebuild. And we used this exercise as a skills transfer exercise. And it also shows how the mine is slowly maturing to become one of the biggest, best copper mines in the world. So with that as an intro, I will quickly talk you through the highlights of the quarter. So despite our operational challenges, and it feels like I’ve been engaging with most of you and surely our team out of London and Vancouver as well continuously and Robert over the past two, three months, We have returned a positive net cash flow of about ZAR 169,000,000 for the second quarter.

And we’ve spoke about the dewatering activities. All our dewatering activities are on track, and we should be dewatered by the end of this year. Our Phase one and two concentrators are operating at between 80% to 85% capacity, and Phase three is operating at above 30% capacity. So really just one of the success stories. We are planning to start the smelter in September still.

And what’s quite exciting for us is, as we get closer to production at Flatreef here in South Africa, we see a turn in sentiments around PGMs with platinum and palladium prices at a high. So bringing online Plattreef just at the right time. And then we’re also in the final stages of completing the Kapushi debottlenecking project, and that should enable us to increase our production capacity with about 20%. You can see the statistics there on the left hand side of the slides. I’m not going to delve into that because David Van Yarden, our CFO, will talk you through the financials.

If we then go to the next slide, I think it would be a miss not to just discuss our safety achievements that we’ve had during the quarter. I think when a company experienced the type of event that we did in May and to get through it without any lost time injuries, it’s a significant accomplishment. And I would like to commend the team at Kamaukakula for handling this situation with absolute maturity and professionalism, and looking after all our people. And it’s team effort. It’s not just one person that makes a mine safe, it’s a culture of safety, and it’s everybody working together to ensure that we look after each other.

But also another significant achievement that should not go unnoticed is that the Kupushi project engineering team has not recorded a single lost arm injury since the construction of the Kupushi Concentrator and throughout the debottlenecking program. So that’s also a significant milestone and something that we are very proud of. And then going to the next slide, just on our sustainability efforts, and there’s little deck we produce with our quarterly news releases where you can see what we are up to. But this quarter, we decided to showcase Kipushi. I think we really show sort of the photos of what we achieved at Kipushi, but what we’ve done over the years is we’ve replicated what we’ve done in Kamaukakula at Kapushi on a slightly smaller scale.

But we’ve started aquaculture and agricultural community projects. There’s about 53 fishponds at Kapushi and 21 hectares of agricultural farming, and as well as poultry farming similar to what we have at Kamaukoku Land. And these projects really influence the whole town. It provides food security and business opportunities for the local community members that’s not employed at the mine. So with that as an intro, I will now hand over to David Vaniertlin to take you through our quarterly financials.

Thank you, David.

Mark Farrin, Executive Vice President, Ivanhoe Mines: Thank you,

David Van Hilden, Chief Financial Officer, Ivanhoe Mines: Mana, and good morning and good day to everyone joining the call today. We can move straight into the next slide. Notwithstanding the impact of the seismic activity in May, Kamaukukula sold almost 102,000 tons of copper in the second quarter. That’s just 8% down from the 110,000 tons sold in Q1. Contained copper in concentrate inventory on hand increased to 53,600 tons, up from the 48,000 tons on hand at the end of q one.

Approximately 31,500 of those tons are located at Kamau Kukula’s on-site copper smelter for a buffer during the ramp up. And 18,500 tons of the remaining unsalt copper was stored at the nearby Lua Lava copper smelter awaiting toll treatment. We expect that to decrease gradually over the next few months, which would mean that sales tons would exceed tons produced in the coming quarters. Kamaukokulla recorded revenue of $875,000,000 in the 2025 and that at a realized copper price of $4.34 per pound of payable copper. Revenue included a gain of $6,000,000 on the mark to market of provisionally priced sales and while the q one results included a gain of $51,000,000.

Moving to the next slide, Kamaua Kukula recorded EBITDA of $325,000,000 for Q2, which was impacted by the lower tons sold, lower grade processed and abnormal costs as a result of the seismic activity, but more on that on the on a later slide. Cash cost for the second quarter was $1.89 per pound of payable copper with cash cost for the year to date and sitting at a dollar 78 per pound of payable copper. The increase in cash costs in Q2 twenty twenty five was driven primarily by lower grade of ore processed, which included stockpiled ore since May. The quarter’s results just really show how well diversified and resilient Kamau Kukula is as a mining complex with its various mines, concentrators, and ample infrastructure. And moving to the next slide where we illustrate Kamaukukula’s EBITDA waterfall.

The EBITDA waterfall highlights the drivers of the quarter on quarter EBITDA change. The decrease in tons sold contributed $49,000,000 to the quarter on quarter EBITDA decrease and that can sort of be seen in red there on the left hand side of your screen. And while there were favorable changes on the copper price and logistics and treatment and refining charges. And in Q1, as I’ve mentioned previously, we recognized a $51,000,000 gain on the market to market of provisionally priced sales, which was only $6,000,000 in q two, and that resulted in a $45,000,000 delta when comparing the the two quarters. Realization cost was slightly up from q one, and then there was the big standout abnormal cost due to seismic activity.

So for q two, the cost that did not contribute to production from May onwards were identified and ring fenced and classified as abnormal cost. As per the accounting standards, these costs are not included in inventory and expensed straight into cost of sales. So in simple terms, the abnormal cost strips out the cost in the quarter related to the downtime at Kukula. And as an example, and I’ll go into a bit more detail because I’ve seen there’s some analyst questions around the abnormal costs. So as an example, all the costs at Kukula as a business unit was classified as abnormal since the mining ceased until it recommenced.

So abnormal costs therefore includes the dewatering response costs, both permanent and temporary underground pumps, and infrastructure to regain the lost pumping capacity, stabilize water levels and resume the limited mining in the waste and would of course include the electricity for the dewatering effort. It also includes the cost of idle crews until we were able to utilize them at Kukula Waste or at Komawa as well as similar costs that did not contribute to production. The abnormal cost treatment was applied to the Kukula mine operations both east and west until the operations recommenced on the West and thereafter it was applied to the East and dewatering only. And so with the mining crews now and no longer idle, we do expect that the abnormal cost for the third and the fourth quarter will only be the cost linked to the dewatering and likely only electricity costs because of the fact that the pumps are already procured and still new and limited maintenance is required. So not not a reoccurring item essentially.

Of course, the seismic activity resulted in additional inefficiencies over and above the abnormal costs and that resulted in further quarter on quarter impact on cost of sales, which also impacted on c one, where I’ll go into a little bit more detail on the following slide. Kamal Fukula recorded an impairment of $59,000,000 in the 2025 where specific assets, including fleet, pumps, and other assets impacted by the seismic activity and resulting water inflow were identified that may be lost or irrecoverable and this included a full assessment of assets and the team believes are completely unrecoverable as well as an impairment charge on the assets that are potentially recoverable using a probability assessment. So ultimately a fairly small number given the scale of the incident, think. Moving on to the next slide. We have revised our 2025 cash cost guidance range and to between a dollar 90 and $2.20 per pound of payable copper.

The increase from our previous guidance is driven by the impact of the lower expected feed grade of ore into the concentrators for the remainder of 2025. Grade mined at Kukula was roughly 5% before the seismic activity and now we expect the average feed grades into the phase one, phase two concentrators to be approximately 3% of copper until the end of the year and will be sourced from both surface stockpiles as well as from the western side of the Kukula mine. And I would like to stress that elevated cash cost level is only temporary while the Kukula mine is undergoing the turnaround and we will get back to the higher portions of Kukula later this year and then cash costs will obviously drop again. Also noteworthy that we will of course get the cash cost reduction benefits of the smelter from very early next year. And as we’ve explained in the past, this will at the very least half the logistics cost which was 49¢ in Q2 as shown on the breakdown on the right and this decrease is due to the smelter halving the volumes that will be transported due to the anodes being more than double the grade of the copper concentrate currently being produced and transported.

As we turn to Kapushi on the next slide, Kapushi has again contributed positively to our EBITDA while the ramp up to optimal levels continue. Mark will talk you through the production results, which has been positive since the completion of the first debottlenecking step, but we look forward to seeing improved financial results once step two is completed later this year. The cash cost of Kupushi has been controlled nicely and sitting right in the middle of our 2025 guidance range and we expect that mining support services and processing costs will come down as production increases in the remainder of the year. Turning to Ivanow Mines’ consolidated profit and EBITDA on the next slide. And Ivano reported a quarterly adjusted EBITDA of a $123,000,000 in the second quarter of this year, and that’s lower than the q one EBITDA and due to the lower attributable EBITDA from Kamaokukula and for reasons I’ve already explained, and adjusted EBITDA for the first six months of the year was $353,000,000 Even with the seismic activity experienced at Kukula during the quarter, Ivano still recorded a profit of $35,000,000 in q two and a profit of a $158,000,000 for the first six months of the year.

Turning to the liquidity snapshot on the next slide, and I mean this slide is pretty clear that Ivano had $672,000,000 of cash and cash equivalents on hand at the June, while Kamawa had cash on hand of $246,000,000. So we are very well placed to weather this short period of recovery. And we look at Kamoa’s CapEx guidance revision on the next slide and after careful review of the capital expenditure requirements for the recovery and optimization station efforts at the Moa, we lowered the top end of our 2025 guidance range. The change includes deferring certain non essential capital projects while the cost required for the phase one and phase two pumping as well as a new box cut, an additional decline at Consoco and the decline at Kamara two has been incorporated. We have also updated our 2026 guidance to cater for the latest mine plans and to include the portions of this recovery capital that will be spent next year.

This range has been made wide enough to provide ample contingency for additional work as the plans are firmed up. But the top end might very well decrease as these plans are finalized. Now turning to our CapEx plans for Platreef and Kapushi on the next slide. And we have kept spending on our growth plans on track during the second quarter and keep our guidance unchanged. Expenditure at Platreef is tracking at the lower end of our 2025 guidance and with phase one almost complete.

We drew an additional $30,000,000 on Plattreef senior debt facility during the quarter and we also continue to advance phase two development and negotiations for a $700,000,000 phase two senior project finance facility, which is expected to close in the 2026 is going well. And the first phase of Kapushi’s debottle making program was completed in June and with the second phase on schedule to be completed in August and Mark will talk more about that later in the presentation. Looking at our pro rata financial ratios on the next slide, our leverage ratio has increased a little from where it was at the end of Q1, but it remains relatively low even with the well timed completion of our $750,000,000 notes that was closed in January. Our target net leverage ratio remains one one times through the cycle and although it’s higher than the self imposed target on a backward looking basis at the moment, it will come down pretty quickly when the Kukula recovery plan is complete. And as I already mentioned, we’re in a very healthy pro rata cash position and at the June our pro rata cash on hand was $774,000,000 With that, I hand over to Alex Pickard, our Executive Vice President, Corporate Development and Investor Relations to cover the exciting operations and project updates together with Mark Farron, our COO.

Alex Pickard, Executive Vice President, Corporate Development and Investor Relations, Ivanhoe Mines: Thank you, David, and good day to everyone on the line. It’s Alex Pickard here first, then I will share I’ll share the honors on this section with our chief operating officer, Mark Farron. You can see on the photo here, two of our mine superintendents recently underground at Kukula, so we can certainly prove to you that the mine that the mine hasn’t gone anywhere. But for the avoidance of doubt, that is not myself and Mark pictured in the photo. We can move to the next slide, please.

So this slide is the usual recap of production at Kamo Okakula during the 2025. So as David alluded to, overall, the drop in production quarter on quarter was not actually that dramatic, but we did have the benefits of a record month in April, which was our first month operating at over 50,000 tonnes of copper production, which is over 600,000 tonnes of copper annualized. So that was a huge milestone prior to the unfolding of the, the seismic events. So those events, as mentioned, really began in mid May, they did have a significant impact on our mining and processing at the Kukula operation at least from that point onwards. We lost around three weeks of operations at Kukula in total due to stoppages.

But since we restarted underground mining on June 7, we have been operating at a curtailed mining rate supported by the stockpiles. But Mark will comment in much more detail on our plans to resolve that in the next few slides. Looking at Phase three in isolation, I think Marna mentioned this, it was a fantastic quarter coming from the Comoa operations, record throughputs of 1,600,000 tonnes from Comoa or Phase three, which was very close to 6,500,000 tonnes annualized, and that’s without any further spending on debottlenecking. It was also a record in terms of grade at 2.92%, so getting very close to three. And then the recovery of 86% was basically closing in on on the design parameter, before any of the sort of, project 95 or project 92 optimization.

So over 41,000 tons of copper was produced during the quarter from phase three alone. I’ll pass to Mark Farrin to take you through the next few slides on the dewatering progress and the mining side of things.

Mark Farrin, Executive Vice President, Ivanhoe Mines: Thank you, Alex. Maybe just to reflect backwards to I think Robert referred to it as the bump in the road. It’s not a brick wall, it’s a bump. It’s a big bump, but it is a bump. So since the seismic activity happened in May, we had to do two stages of dewatering.

The one was to stabilize the water levels as they were flowing into the mine because there’s a water inflow of 3,700 liters per second every second all the time on the mine. All the vertical pumping infrastructure remained intact. So it was really figuring out how to get how to feed that vertical pumping infrastructure from different areas within the mine. So if you have a look at the dotted lines on the eastern side, so basically to the top of your to the left hand side of your page, those dotted lines are the areas that are currently being mined. And basically, that sort of shows you where the water levels are in a saddle between the east and the west.

So Stage two is really to lower that water completely down, all the red areas basically on the west and the east. And once we’ve done that, we would have dewatered the mine completely. And I’ll talk a little bit about that on the next slide. Next slide, please. So if you have a look at what we’ve done is we’ve got the delivery of the first the first pump is actually on-site at the moment.

We’re gonna put in four four of these big 650 liter per second pumps at 2,000 they are they are 2,000 kilowatt pumps each. And they’re going to go in sets of two. I think it’s about 150 tons of steel and pump that’s going to be lowered down two of the raised bores that we have. One is the old multistage pump area and one is a vent shaft, which sort of moves right into the center of the footprint. And if you can imagine, so these are submersible multistage pumps.

They’ll be lowered into the water, basically to the bottom or close to the bottom of a mine and then switched on. With that infrastructure pumping, it’s at about 2,600 liters per second, and you’ve got your other infrastructure being lowered downwards, you’ll quickly dewater the mine. The plan is actually to be completely dewatered by December. That’s the plan that we have. But as we move down, we’ll have access on the western side of the mine, which also happens to be the higher grade areas that Alex was referring to just now.

Next slide, please. So if I can refer you guys to this slide, the one, the two and the two, those are the areas that you’re mining at the moment. And then that dark red in the middle is the area actually east to west, east to west where your high grade mining zone sits. It also happens to be at the bottom of the mine. And in terms of where we are, we’ve done stability.

We’ve managed to create stability. So in other words, we’re pumping all the water that flows into the mine is being removed from the mine. It’s stable. We have started mining on the West with a number of crews, about between 10,015 tonnes per day, but it’s not the grades that we want to mine in the longer term, obviously. So 10,000 to 15,000, we need about 15,000 tonnes a day to run one of those concentrators, one of the two concentrators.

So the rest, to get to the 80%, 85% production or feed, is being fed from stockpiles at the moment. Then there’s a plan on the Eastern Side to develop new mining to the areas beyond the area with that was impacted by the seismic activity. That development is already underway. It’s going quite nicely. And then we said we’re going to dewater the Kukula Mine, so the target is from August.

So the first set of pumps, set of two big multisage pumps will be switched on towards the August and then the next set will go in September and then we’ll be dewatering that mine. Complete geotechnical assessment and then redesign basically from there. We have done a lot of work with David Beck and we’ve got other other some of the best geotech experts in the world looking at what happened, number one. Number two, also looking at how we’re going to lay the mines out going forward, not only this mine, but obviously the rest of the mining footprints at Komowa and Kokula and Kansoco. We’re quite excited about what we’re seeing, and I’ll get to it when I refer to it on the next slide.

Next slide, please. So if you have a look at this slide, on the right hand side is the east. We are doing redevelopment, we’re planning it, and we’ve started executing that redevelopment to open up the footprint on the other side of where the seismic activity occurred. We won’t have a full assessment of the damage of the areas that were mined until we’ve completely dewatered the workings on the eastern side. And that will be by December, as I said before.

It is very possible that we will get through some of those areas and reestablish mining on the other side. But the backup plan is this black redevelopment that you see. That redevelopment will be done by next year. And after that, we will be back into the footprint on the east. On the western side, it’s really lowering the water levels.

We are in at on the South and the North, as I said earlier. And but to lower the water levels, what’s important is to get back into the plus 5% copper. As we lower the water levels, it should happen in this year, so quarter four in this year, we should start seeing an improvement in the mine grade on the Western Side. So I think all in all, it’s really getting the water levels down, reestablishing the East as a worst case scenario and then getting the mine up and going, and we’re talking about this mine only. In terms of where we are, I think the next milestones for us will be to come back to the market and the people that are listening on this call and explain what things look like for the future, short term future.

We’ll have something by September, which will look at the remainder of ’25, which has already been forecast, ’26 and ’27, and then I’ll and probably I look forward to what the steady state looks like. I’m personally quite upbeat that we will be in the year ’27. We will be up and around the numbers that we’re aiming at before. That’s where I am personally, and we’ll have to come back to you on those issues. And then we will complete a full life of mine integrated development plan by quarter one twenty twenty six.

With the right building blocks, with the right of sequencing of all these mines for the next forty years, it still remains a fantastic ore body. It’s the best ore body in the world. We’ve managed to look at a number of opportunities, especially around Comoa 1 And 2 and Konsorko, in fact, as well, which open up more opportunities for us, short term and long term. And obviously, we’ll have to completely relook at geotechnically at the way we’ve been mining at Kukula. But I think all in all, the long term prognosis to me is solid, as solid as as you’d like to see.

Thank you. Next slide. Do you want to talk about the processing strategy, Alex?

Alex Pickard, Executive Vice President, Corporate Development and Investor Relations, Ivanhoe Mines: Yeah. Thanks, Mark. I think it’s it’s back to me on this one. So this is talking about the concentrators, and we did show a similar slide to this on a previous conference call. This is really the processing strategy for the remainder of 2025.

So in the bar charts on the right hand side, first of all, looking at the left hand bar, that’s the Phase one and two concentrators with 9,200,000 tonnes of nameplate capacity. Really our aim and where we are right now is filling those concentrators at roughly 80% to 85% of total capacity or potentially more if we can possibly manage it. So today, around 50% of that capacity is being fed from the ore stockpiles that we have at a grade of 2% to 2.5% copper. And the remaining 50% is being fed from the successful restart of mining operations from Kokula West, albeit in that kind of limited footprint until the dewatering advances. So that is sort of roughly a three percent grade.

It will hopefully be a 4% grade before too long and then getting back up towards 5% grade by the end of the year. Through the year, you will start to see a bit of a shift in this balance, probably in favor of more ore tons coming from the run of mine, both from Kukula and then also potentially supplemented by run of mine ore coming from the Kimoa side. And obviously, that stockpile contribution will also start to reduce. In terms of those stockpiles, we do have enough to basically keep on running until they’re depleted in Q1 of next year. And by that time, we should have ramped up other mining areas to support the concentrator.

The right hand bar is showing Phase three, which as I mentioned, is continuing to be the star performer. Our intention is to basically run Phase three at its 6.5% capacity, which is well in excess of its nameplate and really squeeze as many tonnes out of that side of the mining operation as we can. So we are very much on target to meet the revised 2025 production guidance, which was 370,000 to 420,000 tonnes of copper in concentrate. But noting that year to date, and this is just up until the June, we’ve produced already 245,000 tons of copper in concentrate. Next slide, please.

So moving on to the direct to blister smelter, and this is really probably the most exciting thing that’s happening in the upcoming quarter. The smelter is now basically mechanically complete. You can see a great photo here with the blending facility in the foreground and the smelter in the background. So we’re in the final stages of commissioning and then the heat up of the furnaces is planned in September. So that will be a a big milestone for Kamaokukuila to basically turn into a fully integrated underground mine to blister copper or anode copper operation.

So we look forward to updating you on that in our next results. And as David mentioned, we do have a lot of copper in inventory at present. There’s 31,500 tonnes of copper at the smelter ready to support the startup. So we’re looking forward to working down that balance to roughly 17,000 tonnes, which will be the sort of working capital in the circuit at the smelter at a normal point in time. We’ve spoken many times as well about the dramatic reduction in C1 costs that the smelter will bring.

If anything, that is more pronounced currently because as we produce ore from lower grade sources, that does produce a slightly lower grade concentrate than what we would typically get from Kukula. So that has higher associated, logistics and realization charges. And so the smelter you know, really can’t come soon enough from that point of view to assist with what David was saying to bring those cash costs back down again. The next slide is moving on to power, and power availability was really the big challenge that we used to discuss in the previous quarters. It really feels quite trivial in comparison to some of the operational issues that we faced during the second quarter.

But you know, I think one of the hallmarks of this world class team is the ability that we’ve shown to address key challenges over time, make a plan, and then execute on that plan very successfully. And in power, I think you will very soon see the fruits of our labor as the giant Inge Turbine Number 5 is now mechanically complete. So that’s what you can see on this image. The pre commissioning activities have already started and then the wet commissioning of that turbine is on track for early next quarter, which will start to supply 178 megawatts of clean energy into the grid. In terms of the supply of that energy into Colwazi and ultimately Kamocha Kukula, there is a big milestone taking place in Q1 of next year when we will complete a new static compensator at the substation.

So that will basically allow for much more stable voltage coming from Inga to reach Kamoakakula. And so I think it’s very realistic to say that by early next year, will have broken the back of our power challenges and that also dovetails quite nicely onto the next slide. So the additional power that we will be generating from Ingo, which is close to a 180 megawatts, will also be quickly followed up by the completion of a 60 megawatts battery solar energy project. So that’s now in execution. The site’s clearance and early earthworks are underway.

That’s actually built in two modules of 30 megawatts each, and they are both, separate independent power providers that are funding that CapEx and will complete that project by mid twenty twenty six. So Kamoa Kukula will be the off taker, of that power and that power will cover up to 25% of Kamoa Kukula’s, total energy requirements coming from a captive and very green source. The project is also very scalable, so we plan to move up to 120 megawatts. There’s no reason that we can’t continue to move beyond that. So we are now actually facing a realistic possibility.

It didn’t seem so realistic a few years ago, but we may actually have a surplus of power by this time next year. So with that, that really concludes Komoa Kukula and I’ll pass back to Mark Farron to take you through some of the progress we’ve been making at Kipushi.

Mark Farrin, Executive Vice President, Ivanhoe Mines: Thanks, Alex. Okay. So Kipushi,

Conference Operator: just

Mark Farrin, Executive Vice President, Ivanhoe Mines: in a nutshell, no no big surprises. We we’re busy with basically a few two big shots through the year, which we’re we’re ready to finish the debottlenecking and a bit of upgrade to take the circuit to be able to produce ran about 250,000 tons per annum of zinc. That whole project plan has gone very well. You’ll see the first half, basically, we’ve done 84,000 tons of zinc and we forecast one hundred and eighty two forty, I think, odd thousand tons of zinc. And we’re maintaining guidance, which means that it’s sort of back end loaded.

We’ve got if you can go to the next slide, I think it’s better. So there’s one more big shut that’s going to happen in August. And then we finish the debottlenecking and then that sort of unlocks an additional 20% capacity. In this first half, we’ve had a number of shuts, so basically about 11 of production taken off. And I think there’s about five days left in August of shuts.

And then we should be at the rate of running it beyond 20,000 tons of zinc per month short term and then longer, probably 25,000 of So all in all, Kupushi, no surprises on the feed grades, no surprises on the mining, a good result with the work that we’ve done on the concentrator. This final shutdown is the last one in August, and I think we’re going to it’s going to shoot the lights out. It’s going to go well as a zinc mine. It’s really one of the major zinc mines in the world. Can you believe it?

K. Next slide. I think I’ve discussed this. No. Sorry.

Yeah. Platreef. Platreef, if you cast your mines back, we planned the small the small phase one concentrator that you see in the in the in the foreground over there. And that was gonna be fit with the Shaft 1 mine, which was really a bulk sample shaft in the beginning. And then we made a decision last year to do Shaft 3 to equip it for wasting and to move quickly into, let’s call it, Phase two, into Phase two and then schedule a Phase two concentrator to go with that.

So the Phase one concentrator is ready. We are mining in reef at the moment, and we will feed that first concentrator in quarter four, which is exciting for us. At the moment, we are mining development ore, we’re stockpiling it on surface, and we will start commissioning that concentrator in quarter four this year. At the same time, we are completing the construction of Shaft 3, which really is a game changer for us. It takes the wasting capacity to 5,000,000 tonnes per annum.

And as part of that, we are going to accelerate and we have committed to accelerate Phase two, which basically unlocks Platreef. Next slide. So this shaft that you’re looking at, the one here in front of you with the blue roof, Robert, the roof is now on. This is Shaft number two. It’s a 10 meter diameter shaft.

It can be used for some of Phase II work, but it’s actually the Phase III expansion shaft. This shaft can waste 8,000,000 tons. So if you add that, you can add five and eight to 13, so there’s a massive amount of hoisting capacity that goes in when the shaft is complete. As we go with Phase one and Phase two, we will also be scheduling Phase three. That is in the published study that we’ve released.

Thank you. Next slide. I think tailwinds for a change on platinum side is really going around pricing. There’s been a massive change in platinum and palladium prices in this year alone. It has a massive impact on our new net present value running through our FS and our Phase III PEA.

So I mean, you have a look at sensitivities, it takes the NPV from 1.7 to 3.8. And that’s in a long lead time to get to Phase three. So I think we are here as we’re walking into this year, the quarter four, We will start producing PGMs and selling them. And I think you’ll start seeing the major shift from quarter one when shaft number three is running. So quarter one next year, shaft number three is running and we can accelerate the development of Phase two.

And in my opinion, then you sort of get the right kind of scale that you want. What’s also very important here is our $599 per ounce of three e. It’s gonna be the lowest in the industry, I believe. I’m not sure that anyone will able to beat this cost. Thank you.

Next slide. Alex, are you gonna you gonna cover this?

Alex Pickard, Executive Vice President, Corporate Development and Investor Relations, Ivanhoe Mines: Yeah. Thanks, Mark. I’ll I’ll close out the presentation as usual with an update on exploration and starting with the Western Follands. So during the second quarter in mid May, which which feels like a long time ago now, we did announce a very significant resource increase at the combined Macoco District, which you can see in the image on the right hand side. So what this really boils down to is that in the space of about eighteen months worth of drilling, we almost doubled the total resource, and we are fast closing in on 10,000,000 tonnes of contained copper.

And really to put it in context in terms of the efficiency of what we’re doing in the Western Forlands, that probably came at a cost of somewhere in the region of 30,000,000 to $40,000,000 to basically add another 4,000,000 or 5,000,000 tons of contained copper. So the strike rate is exceptionally high. On that plan on the right hand side, you can see the increased dimension of the new resource base. So in red, it’s a little bit faint, but you can see the, the inferred resource outline of the 2023 update. And so now what we’ve added to that footprint at Makoko is the new discoveries at Makoko West and Kitoko, and then we’ve significantly infilled the ground between Makoko West, Kitoko, and Makoko.

So they’re not really new discoveries anymore. They’re really shaping up to be a a new combined sort of cohesive copper district, which we sort of refer to as Makoko Kitoko now, and that is really already comparable in scale to, for example, a Kimoa mine. So it does feel quite similar to to that discovery story from 2008 onwards. The mineralization is open in multiple directions, including to the south. And and so you can see there’s a zone that we are planning to infill, which is really between the bottom edge of the resource shell.

Then there is a step out hole that you can see labeled KTK 40 eight, which is well mineralized. That’s two kilometers to the south. So there’s a lot of potential to keep on adding to this resource. It was really a a technical cutoff at a point in time to, to update and QP the statement, but we’ve continued drilling since then. If you move to the next slide, this is really just looking at the Western Falllands, what we’ve discovered alongside Kamoa Kukula on a global scale, and I think you can already see it’s certainly one of the largest discoveries of the past decade or more.

We we count number five, but, you know, still very much growing. And the stars, as always, are highlighting the grade that we have at the Western Falllands, which is very similar to Kamoa Kukula, you know, in between 2.53 copper, and it really is sort of unsurpassed on a on a global scale. Just repeating, see the number the resource number again. So now we have over 500,000,000 tons of resource tonnage. So this really already has the scale to be a major development and a standalone mine or in fact multiple standalone mines.

But we are by no means finished. The drilling is underway. We’re in we’re in the middle of the dry season now. We have nine rigs turning in the Western Folland, and we are focusing on some new licenses that we acquired in the Western Folland. So so I would watch this space very carefully over the next next quarter and beyond.

The final slide in the presentation and moving to our new exploration horizons, the logo of Ivanhoe Mines did used to say new horizons, but we dropped it at a point in time. But we are now very active in our neighboring countries, Angola and Zambia, as well as much further afield in Kazakhstan. But all of this is following a similar thesis, is chasing sedimentary copper, which we know as much as anybody in the world about from what we’ve done at Kamoa Kakula and in the Western Forlands. So in Angola, we are making steady progress on a massive land package. This is very greenfield exploration, but we have a first drilling contract that’s been awarded to drill over 6,000 meters that will commence later on this year and progress into 2026.

And in Kazakhstan, think you’ll recall that we announced in January, we signed a Vendin exploration partnership to stake a very large basin or position in the Chu Sarisu Belt in Kazakhstan. The Chu Sarisu Belt is thought to be the third largest sedimentary copper belt in the world. And so since January, we’ve actually moved very quickly there together with our joint venture partner. We’ve been awarded already close to 17,000 square kilometers of licenses in the space of six months. So that’s a license position roughly seven times larger than the Western Follands.

It’s kind of quite comparable to what Ivanhoe Mine started within the DRC going way back to the late nineteen nineties. And as always, our thesis is to focus very much on drilling as much as possible within the confines of our budget. So the drilling has already commenced in this month of July, and we have 17,500 meters planned and some exciting initial targets to focus on. So with that, I think we will wrap up the presentation, and I’ll pass back to Matt Kevel to chair our Q and As.

Matthew Keeble, Director, Investor Relations and Corporate Communications, Ivanhoe Mines: Thanks, Alex. Yeah. We we now will begin the question and answer session. First and foremost, I’ll hand it back to the operator to proceed with any questions we have waiting on the phone line with analysts. And then if we have some time at the end, we’ll answer any web questions, as, the time allows.

So operator, please do, proceed with, the questions on the phone.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. First question comes from Daniel Major at UBS. Please go ahead.

Daniel Major, Analyst, UBS: Hi. Thanks. Can you hear me okay?

Matthew Keeble, Director, Investor Relations and Corporate Communications, Ivanhoe Mines: Yes. You sound great, Daniel.

Daniel Major, Analyst, UBS: Hello. Can you hear me all right? Okay. Great. Thanks.

Yeah. So a few questions. The first one, just thinking about the timeline of information around guidance at Kamoa Kakula. I understand you’re going to give an update to the market in September around the site visit. Can you give us a sense of what you expect to communicate to the market then and then in q one as you’re kind of working through the dewatering and the, you know, kind of work on redesigning geotechnical?

Mark Farrin, Executive Vice President, Ivanhoe Mines: I I can maybe help. So so we would want to guide the market on ’26 the year ’26 and ’27. That will be the September guidance. And then at the end of q one, it’ll be full life of mine planning with the forty three one zero one, March year, a new full life of mine plan.

Daniel Major, Analyst, UBS: Okay. Just a just a question on the kind of the guidance for twenty two, twenty six, twenty seven. What gives you the confidence that you’re gonna be able to have conviction in that if you haven’t actually fully dewatered the mine or or redesigned the mine plan yet?

Mark Farrin, Executive Vice President, Ivanhoe Mines: That’s a good question. So so so that so the assumptions you can assume would be conservative. Let’s put it that way. We won’t assume

Marna Clote, Chief Financial Officer, Ivanhoe Mines: that Maybe also just to to jump in here, what we what we were planning to do is also to just isolate the section that we cannot access yet and provide certain sensitivities around that. But it will show you what it looks like in terms of our future plans based on the new mining method, and then what will still be uncertain would be that central block, and that we will then be able to communicate once dewatered. So the the that’s the section where you will have to make certain assumptions. But for the rest of it, I think we will have a pretty high level of confidence as it will flow into our life of mine plans that will be published early in 2026.

Daniel Major, Analyst, UBS: Okay. Thanks. And then the second question, I don’t know if you took a step back and look at what was the cause of the kind of seismic issue and how that might impact mining method productivity and cost going forward. I mean, should we be thinking about this as as smaller blocks ultimately less productive to prevent these issues happening going forward and having a knock on impact on the cost outlook for the operation over the life of mine?

Marna Clote, Chief Financial Officer, Ivanhoe Mines: It’s too soon to say. It’s too soon to say. I think where we are what we are seeing, as Mark alluded to earlier, we’re actually quite optimistic around production volume. But it’s too soon to say if, we still need to schedule crews, we still need to schedule Pfizer’s. You can only really make an assumption around cost once you’ve done that work.

So so you will, unfortunately, have to wait until we make the information available.

Daniel Major, Analyst, UBS: Okay. That’s good. And just one more question on Kamaoka Kula. When I look at the sort of implied C1 cost relative to the difference between revenue and EBITDA, there seems to be quite a large much larger adjustment this quarter in terms of reconciling the costs. Is that yeah.

Those costs kind of additional costs associated with the incident. Can you just provide a bit more color on that?

David Van Hilden, Chief Financial Officer, Ivanhoe Mines: Yeah. Happy to, Daniel. So our EBITDA reconciliation is included in our MD and A. So if you if you look at that and you’ve still got questions around any of those line items, please do reach out. But it is the it is the impact of the abnormal costs that that has played the the biggest role as that is ultimately added back for for c one purposes.

Daniel Major, Analyst, UBS: Right. Okay. That that’s clear. Yeah. Because I wasn’t really actually talking about the the reconciliation of group EBITDA.

It’s it’s the specific EBITDA, the three two five million for Komura Kukula. But there is a yeah. There is additional costs associated with the incident that aren’t captured in the c one. With those,

David Van Hilden, Chief Financial Officer, Ivanhoe Mines: it’s not

Daniel Major, Analyst, UBS: to continue in q three and q four. I would expect that would be the case as well.

David Van Hilden, Chief Financial Officer, Ivanhoe Mines: So so so, no, we we don’t we don’t expect those additional costs to be re reoccurring in q three and q four other than maybe a little bit of abnormal costs related to the the dewatering. But, I mean, we currently estimate that that would be roughly in the in in the range of $10,000,000 for, the remainder of the year. So so that won’t move the needle much.

Daniel Major, Analyst, UBS: Great. That’s really helpful. Thanks a lot. I’ll get back in the queue.

David Van Hilden, Chief Financial Officer, Ivanhoe Mines: No problem.

Conference Operator: Thank you. Next question comes from Andrew Mikichow at BMO Capital Markets. Please go ahead.

Andrew Mikichow, Analyst, BMO Capital Markets: Hi. I just wanted to come back to I think it was Slide 24, if I can see this correctly where you showed the updated and long term mine plans. I guess if we stare at that in in fine detail, I’m sure some of this is still being addressed, there’s an additional ramp there. Is that kind of a ramp that would have gone down anyway to access the Kukula West portion, not the West part of Kukula? Or is that something that’s just being done to adjust tundages in in the near to meeting medium term?

Mark Farrin, Executive Vice President, Ivanhoe Mines: That’s mainly for logistics. Basically, to I think it’s a belt section. It might not be the only solution that that’s lying there. We’re looking at raise boring as well in the central block of the West. So it’s logistics mainly.

Andrew Mikichow, Analyst, BMO Capital Markets: Okay. And then I just wanted to just confirm because you guys put some pictures of what I interpret to be a a dewatered portion of Kukula East and made commentary in the press release that some port that you had modest continued dewatering of that with the existing pumping capacity. From what you’ve seen, has there been any surprises or any, you know, material damage dewatered so far?

Mark Farrin, Executive Vice President, Ivanhoe Mines: At the moment, no. So what we have been doing is slowly lowering the the pump trains as we go, but we can’t really move fast until we put these big pumps in. And and that’s where we are. On the West, we’re not seeing any damage at all. And on the East, we’ve been rehabilitating those top drifts as we go down.

So, yeah, that’s where we are. It’s actually looking okay for now.

Andrew Mikichow, Analyst, BMO Capital Markets: Okay. Well, that’s good to hear, and we’ll I guess we’ll all look forward to the September update where we get kind of the the medium term. Under the current very near term plan, I think, again, there’s wording in the press release similar to the last disclosures that the stockpile runs out in q two. Is that a or is q one is that an early q one, mid, late? What’s the best case scenario?

Alex Pickard, Executive Vice President, Corporate Development and Investor Relations, Ivanhoe Mines: I’m not sure, Andrew, we can we can sort of predict that with accuracy because it’s a bit of a moving target in terms of exactly, you know, how much tonnage we can push out of the Western section as we continue to dewater. You know, obviously, that that dewatering is not a kind of binary process. It’s a it’s a linear process. So as we dewater, it’s likely that we might be able to open up more areas of the mine sooner. And it also depends to some extent on how quickly we can push more tonnage coming out of the Komoa side of the mine.

So it’s it’s difficult to say exactly, you know, how we will manage that stockpile, you know, within within q one.

Andrew Mikichow, Analyst, BMO Capital Markets: Okay. Just one last quick question. As the dewatering does start on the West of I’d say on the East Of Kukula, this stage two, would that conceptually open up some portions of the upper mine just to restart the mining, or or is that really all kinda closed off until it’s completely dewatered?

Mark Farrin, Executive Vice President, Ivanhoe Mines: The the dewatering process itself, once those big pumps are running, will be quite quick. So it’s sort of putting in the first two and then and starting them up and then putting in the next two and starting them up and then lowering quite quickly. So you’d be assessing them, I guess, on the Eastern side. But what we’re saying is by December, we’ll be completely dewatered, and we’ll be able to do a full geotechnical assessment of the East. And so within that time frame, there might be some mining and whatever.

But we will make sure that we’ve done the geotechnical assessment properly before we reenter the East.

Andrew Mikichow, Analyst, BMO Capital Markets: Okay. Well, thank you very much. I’ll step back and let others ask questions. Congratulations on navigating these difficult weeks and months so far successfully so far.

Conference Operator: Thank you. We have no further questions on the line. I’ll turn the call back over to Matthew Kevo.

Matthew Keeble, Director, Investor Relations and Corporate Communications, Ivanhoe Mines: Thanks very much, operator. We actually have no questions waiting in webcast either, and we are coming up on the hour. So we will, wrap up the call here. Again, I’d just like to reiterate, if you do have unanswered questions, please do reach out to our IR team, Alex, Tommy, Matt, myself, with any questions that, require follow-up. But thank you again for attending today’s event, we very much do look forward to speaking with everyone and updating you on on the many exciting milestones management outlined here through the remainder of the year, and moving forward.

So with that, have a great day, and we’ll talk to you soon. Thanks, operator. You can wrap up.

Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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