IVN shares have rallied nearly 60 percent over the past six months to $12.33 as of Tuesday's close. Earlier this week, the company released its first development plan for Kamoa-Kakula since 2020, which was well received by analysts.
Ivanhoe Mines president Marna Cloete (second from left) with DRC officials in the Kakula Mine
The stock: Robert Friedland is better known as a finder than an operator of mines. He’s bestowed the name Ivanhoe Mines (TSX:IVN) on more than one blockbuster exploration venture over the years before selling it, usually at top dollar, to a willing custodian. (The last Ivanhoe Mines became Turquoise Hill Resources, which was swallowed whole by mining giant Rio Tinto in December.) These days, the moniker applies to the Vancouver-based company developing a number of exploration properties in Africa, the most advanced of which is the Kamoa-Kukula copper complex in the Democratic Republic of Congo. It’s not to be confused with another Friedland venture, Ivanhoe Electric (TSX, NYSE:IE), also headquartered in Vancouver, which is advancing energy transition-related exploration properties in the U.S. along with proprietary mineral exploration and energy storage technologies.
The drivers: Kamoa-Kukula, which is jointly owned with China’s Zijin Mining Group and the Congolese government, began operating in 2021. At full build-out, it could become the second largest copper mine in the world. But working in the DRC comes with heaps of geopolitical risk. Shareholders will breathe easier if and when Ivanhoe’s 64-percent-owned Platreef platinum-nickel-copper-gold project in South Africa comes online as planned in 2024.
Nonetheless IVN shares have rallied nearly 60 percent over the past six months to $12.51 as of Tuesday’s close. Earlier this week the company released its first development plan for Kamoa-Kakula since 2020, which was well received by analysts, though 2023 cash costs came in higher than what they had expected. The plan foresees more than doubling output to 19.2 million tonnes of copper per year over a 33-year mine life with a possible nine-year extension. That looks likely given the projected demand for copper from all those electric cars.
Word on the street: With the release of the 2023 Kamoa-Kakula Development Plan, RBC Capital Markets analyst Sam Crittenden raised his target to $15 with an “outperform” rating with “speculative risk,” calling the mine “a world-class asset that can generate significant cash flow.”
Coming & going: Vancouver-based Lithium Americas Corp. (TSX:LAC) got a 14.7-percent share price boost Tuesday from General Motors Co. (NYSE:GM), which has agreed to finance development of the company’s proposed Thacker Pass lithium mine in Nevada to the tune of US$650 million in return for a guaranteed supply of the mineral, essential for electric vehicle batteries. The deal is contingent on Lithium Americas’ obtaining necessary approvals for the project, which is expected to begin production in 2026.