Q1 2023 Ivanhoe Mines Ltd Earnings Call
Speaker 1: You.
Speaker 2: Yes. Good day, and thank you for standing by. Welcome to the Ivanhoe Mines first quarter 2023 financial results conference call.
Speaker 2: At this time, all participants are in the Sononi mode. After the speaker's presentation, there will be a question and answer session.
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Speaker 2: Please be advised that today's conference is being recorded. I would now like to hand the conference over to Matthew Kevel, Director of Investor Relations and Corporate Communications. Please go ahead. Thank you, Aubrey. Good morning, everyone. It's my pleasure to welcome you to our first quarter of the 2022 Financial Results Conference call.
Speaker 2: My name is Matthew Kievel, I'm the Director of Investor Relations and Corporate Communications, dialing in from sunny Vancouver this morning. On the line from Ivan O'Mines, we have founder and Executive Co-Chair Robert Friedland, President Marni Kletay, Chief Financial Officer David Van Hamden, and Senior Vice President of Corporate Development and Investor Relations Alex Pickard.
Speaker 3: We will finish today's event with a question and answer session. You can submit a question using the Q&A box on the webcast page as well as through the conference operator via your phone line. Please do contact our investor relations team directly for follow-up questions that are not addressed during the call.
Speaker 3: 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.
Speaker 3: Details of the forward-looking statements are contained in our May 3rd news release as well as on CEDAR and at www.ivanomines.com
Speaker 3: It is now my pleasure to introduce Ivan Homain's founder and Executive Co-Chair Robert Friedland for some opening remarks. Robert, please go ahead.
Speaker 4: Thank you. I hope my voice is coming through from Beijing, China.
Speaker 4: I want to welcome everybody to this call after we've had another amazing quarter of achievements by our people working so assiduously in the Democratic Republic of the Congo and South Africa.
Speaker 4: It's been an amazing quarter and there's more to come and there's a lot to talk about this morning
Speaker 4: to this opening slide, which you can see the enormous extent of growth at Kamohekula. And we'll turn this over to Marna to begin going through the highlights. Thank you very much. Marna?
Speaker 5: Thank you, Robert, and good afternoon and good morning everyone. I'm speaking from sunny South Africa and we are very pleased to announce another quarter of operational excellence.
Speaker 5: A few key highlights this quarter and beyond include the completion of our de-bottlemaking program in February of 2023, again ahead of schedule and budget. And this enables us to produce 450,000 tonnes of copper on an annualised basis using our material.
Speaker 5: will take you through later this call. Post the quarter, Kapushi signed a term sheet for a 250 million off-site and pre-payment facility with Glencoe and Jacobin.
Speaker 5: we published our sixth annual sustainability report and I invite our audience to carefully study this report as we illustrate how we mine with a greater purpose.
Speaker 5: Our quarterly results speak for itself. To name a few key metrics, Kamau Kukula produced on a 100% basis over 93,000 tonnes of copper, of which it sold over 86,000 tonnes of copper, resulting in net revenue of $689 million.
Speaker 5: and Ipador of 452 million dollars.
Speaker 5: Our cash costs for the quarter was $1.42 per pound of copper produced. And that was again at the lower end of our cash cost guidance.
Speaker 5: Our phase three expansion at Kamaoka Gula is also on track for completion in 2024 and this will increase our copper production up to 650,000 tonnes on an annualised basis.
Speaker 5: One of the key statistics highlighted in our 2022 Sustainability Report is our constant improvement on health and safety.
Speaker 5: We had a 40% reduction in our total recordable injury frequency rate across all sites during 2022.
Speaker 5: This was operating, expanding and building new projects.
Speaker 5: Safety is a team effort and we are immensely proud of our staff and contracted commitment to both our zero home policy.
Speaker 5: In the first quarter, we have continued this trajectory with a more pre-duction in our total recordable injury frequency right across all our sites.
Speaker 5: and our performance is well below the industry standard of 2.9 at our respective sites.
Speaker 5: This is a lovely picture of community members in front of a newly built church close to Kamauka Kula. They are participating in our LiveLoot restoration program receiving citrus saplings.
Speaker 5: Our group-wide sustainability team have gone to great lengths to showcase the work we do in our 2022 Annual Sustainability Report, but the statistics and pictures speak for themselves and I will highlight only a few.
Speaker 5: We have increased our female employment across the group from 9% to 10% against an increase in workforce of 20%. And 76% of our group wide energy consumption is from renewable sources.
Speaker 5: This slide depicts a graphic representation of the world class Kamawa Centre of Excellence that is scheduled for completion in September of this year. The centre will be used as a training facility, ultimately providing access to DRC students to participate in internationally recognised programmes.
Speaker 5: This slide depicts a graphic representation of the world-class Kamawa Centre of Excellence that is scheduled for completion in September of this year. The centre will be used as a training facility, ultimately providing access to DRC students to participate in internationally recognised programs. Some further interesting facts.
Speaker 5: Kamara Kukula contributed 4% to the GDP of the DRC in 2022 and this has dissipated to approximately double in 2023.
Speaker 5: The Moa Kukula paid $311 million in government taxes and royalties in 2022, the first full year of production. And we spent $95 million on our group-wide payroll, with $70 million in local payroll taxes.
Speaker 5: This is a picture of our top academic scholars in Mookabarney where we have over 644 scholarships on a group-wide basis and we have formed 332 formal and informal local enterprises. This is up from 66 in 2021.
Speaker 5: We have spent in excess of 20 million on socio-economic development and it's important to note that most of the businesses we incubate or assist deliver services or goods outside of our minds too.
Speaker 5: With that as an introduction, I will now hand over to David van Jerden, our CFO , to take you through our quarterly financial results. Over to you, David.
Speaker 6: Thanks very much, Marna, and thank you for everybody joining the call today. I'm very pleased to present our first quarter results for 2023, which once again includes a number of records from Kumar Kulkunga.
Speaker 6: Today's presentation is of course only a high level summary of our results and should be viewed in conjunction with our condensed consolidated interim financial statements.
Speaker 6: and MD&I for the three months ended March 31, 2023.
Speaker 6: Kamauka Kula recorded record revenue for the quarter with almost 87,000 tonnes of payable copper sold. Kamauka Kula sold less than was produced during the quarter, resulting in higher finished wood inventory at the end of the quarter.
Speaker 6: There was approximately 18,000 tons of concentrated inventory at the end of March.
Speaker 6: with approximately 14,000 tons of that told to the Lualava Copper Smelter for smelting right to smell.
Speaker 6: with a reminder either in bulk or bagged.
Speaker 6: in preparation for export.
Speaker 6: C1 cash cost was kept stable quarter over quarter.
Speaker 6: And I will discuss that a little bit more in the later slide.
Speaker 6: Record revenue and stable costs lead to record quarterly EBITDA for Kamau Kukula at the continued high margin which leads nicely into the next slide.
Speaker 6: The increase in revenue for the quarter was driven by the higher copper prices during the period, with copper sales realising that the increase in revenue for the quarter was
Speaker 6: at a copper price of $4.04 per pound of Babel copper during the quarter.
Speaker 6: The Maokukula maintained its excellent margin which was only marginally down from the fourth quarter.
Speaker 6: of 2022 and due to Q4 revenue including a $52 million re-measurement compared to only $30 million in the first move of 2017.
Speaker 6: So 66% just an exceptional margin once again.
Speaker 6: I know everybody is pretty used to seeing the slide breakdown by now, but we want to continue to emphasise the underlying profitability of Comoco Computer.
Speaker 6: Revenue included a remeasurement of $30 million, as I mentioned, with provisional sales at the end of the period remeasured at $4.05.
Speaker 6: $89 million is mainly interest on shield the loans used to fund initial capex.
Speaker 6: But that represents income for Ivanov and Amtashen who provided that funding.
Speaker 6: The tax expense for the first quarter of $116 million, what was $76 million of that was income tax, with the remainder being deferred tax.
Speaker 6: often a non-controlling interest.
Speaker 6: the DRC government, the market had profit attributable to its shareholders of $167 million.
Speaker 6: $83 million of which was Arden O'Shea.
Speaker 6: On this slide, I would like to firstly focus on the chart at the bottom left of the slide.
Speaker 6: as we view the consistent cost level achieved by the Mark Kula as a real achievement.
Speaker 6: And we are proud to highlight that. We obviously track the results of our peers as well. And I think everyone there on the school who does the same would agree that the Kamauas results and should be applauded.
Speaker 6: If we turn to the C1 breakdown to the right, you would note that processing costs increased quarter on quarter due to the power tariff increase that became effective in December as we warned in our guidance, as well as higher diesel usage during the quarter due to power interruptions.
Speaker 6: Logistics costs eased slightly due to lower ocean frames.
Speaker 6: We continue to focus on further cost-saving initiatives.
Speaker 6: One of the key initiatives is of course the 500,000 tonne to an onsite smelter.
Speaker 6: which is being constructed as ball-fist-feed.
Speaker 6: bit below $1.20 per pound of copper. As was shown a few slides back, Ivanov's share of profits from Kumo Akakula was $83 million for Q1.
Speaker 6: And Aibana recognised $47 million of finance income from Kamaoka Kula, bringing the total income from Kamaoka Kula to a record $130 million for the quarter. Aibana spent $3 million on Western freelance exploration, while the development of Black Reef and Kapushi continued to be capitalised as the development cost. Aibana therefore recognised a $2.5 million investment in the development of the Aibana
Speaker 6: from $10.70 to $12.21 and at the end of March.
Speaker 6: This brought Ivan's profit for the quarter to $82 million after the impact of the non-cash convertible bond revaluation.
Speaker 6: This slide shows our impressive adjusted and EBITDA.
Speaker 6: and definitely impressive adjusted EBITDA growth and also includes how we suggest how adjusted EBITDA should be calculated.
Speaker 6: Our adjusted EBITDA of 168 million includes our share of Kumba and Kula's EBITDA and we look forward to adding revenue from Kipushi and Blackreef to our adjusted EBITDA next year.
Speaker 6: Our B seizures. They cover water, blood, dresser. Christian Help … in for diabetes.
Speaker 6: remains unchanged and we would like to reiterate that.
Speaker 6: The first water spent was on the lower end.
Speaker 6: but largely the curve we expect. And as Marna, Alex and Robert will report later on, the curve we expect.
Speaker 6: the progress continues swimming. Kamawa Kokula continues to fund its CapEx with operating cash flow and Kamawa had a healthy cash balance of $390 million.
Speaker 6: continue swimming. Kamawa Kokula continues to fund its CapEx with operating cash flow and Kamawa had a healthy cash balance of $390 million at the end of March.
Speaker 6: Ivanow, in turn, had cash-in-cash equivalents of $497 million at the end of March.
Speaker 6: We expect to spend between $257 million on platteries in the remainder of the year where we are progressing well with our 150 million senior day facility.
Speaker 6: as previously disclosed. And as you would have seen from the recent release on Kupushi, construction activities there are progressing ahead of schedule and the terms for the $250 million financing facility.
Speaker 6: has been agreed. Ivanov is also evaluating a bank facility of up to $80 million in addition to $250 million financing. And lastly, the
Speaker 6: I would just, we showed this slide when we presented the annual results and a lot of shareholders picked up on this and we thought it was good to just update the numbers with the latest results and once again emphasize that.
Speaker 6: Ivanova will receive distributions in excess of our ownership, the same pitch.
Speaker 6: once the development of Black
Speaker 6: I would just like to hand over now to Alex Picard, our Senior Vice President, Corporate Development. Alex, my bookingint next.
Speaker 6: for a operations update on Gomorrah. Thank you David and good day to everybody on the line. It's Alex Pickard here speaking from also a rare sunny day in London. As David mentioned we will take you through the latest update from our operations exploration efforts and our project.
Speaker 6: But first maybe I'll just talk quickly about the slide that we have in the background here. What you can see in the foreground is the Kamoa phase 1 and phase 2 concentrator lines today. And the long grey building in the background or in the middle of the picture is the concentrate building where currently we are bagging and dispatching up to 90 traffic.
Speaker 7: melter of its kind anywhere in the world.
Speaker 7: So first looking at Komodo Coolers operations in the first quarter, I think Marna mentioned the strong copper production we had which was close to 94,000 tons for the quarter. But what we were really pleased to see was the record of close to 35 tons achieved in the month of March.
Speaker 7: So really now we are viewing this level as a benchmark of what the plant is capable of following the completion of the de-bottle necking program and but also taking into consideration that during this month we achieved that production level despite experiencing some grid instability.
Speaker 7: And I will come back to that on the next few slides.
Speaker 7: In March and continuing through April we've also achieved better and better copper recoveries, achieving over 88% which compares very favorably to our design rate of 86%. But on some days we are well over 90% which is an outstanding achievement by the Concentrate team. We've also achieved several times now a daily milling rate in the last two weeks.
Speaker 7: to 430,000 tons of copper in concentrate. Obviously Q1 was always going to be a bit of a slower quarter with the tie-in of the de-bottlemaking and then also the electricity availability. But we've got more than enough time to make that up, especially with the full capability of the plant following the completion of the de-bottlemaking program.
Speaker 7: That being said, we've made the decision to protect Kumaoka Kula from any potential future grid instability by investing in backup generation capacity. So what you can see in this image is our currently installed generator farm at Kula, which is providing 32 megawatts of backup power.
Speaker 7: We use that today for emergency facilities as well as powering one line of the plant.
Speaker 7: And then added to that we have another 11 megawatts arriving by the end of this quarter, which will be installed. And we're aiming to get to over 90 megawatts by year-end. Coincidentally, 90 megawatts is around the maximum power draw on site today. So we will have the capability to run the phase one and phase two mills using backup power if necessary. 20
Speaker 7: Longer term, we're looking to roll out up to 200 megawatts, which will basically account for the Phase III expansion and the smelter. And we're also definitely considering renewable energy as part of the mix here.
Speaker 7: Finally, and something that will help the broader DRC grid in the shorter term, we're in discussions with the Zambian government to secure up to 100 megawatts from the DRC Zambia interconnector. This will be gradually phased into the DRC grid starting with 30 megawatts in the short term. Thank you.
Speaker 7: mining license in the western Poland.
Speaker 7: So over the years we've been working with SNEL since 2017 on hydro power refurbishment projects and we've developed an excellent relationship. And so in response to the recent power instability we completed with SNEL a grid stability study. You'll meet another accomplished user.
Speaker 7: And this identified key areas of the transmission network that will provide significantly improved stability for all the users on the network. And so in the coming months and years we will be working closely with SNELL on those initiatives going forward. I'll take you through a few slides now which just show you in images the excellent program.
Speaker 7: for the steel work which is arriving imminently and the major pieces of equipment that will be arriving over the course of this year to be prepared for installation.
Speaker 7: This slide is just showing the underground mining progress that we're making in the Camoa 1 and Camoa 2 mining areas. So these mines will really be the backbone of the Phase 3 concentrator in terms of supplying feed.
Speaker 7: So that will be 5 million tons per annum to begin with from next year as the phase 3 concentrator ramps up.
Speaker 7: In terms of the progress that we've made there, we've already completed well over two kilometers of development in the Kamoa 1 and Kamoa 2 D-flines. And then the plan is to open up the Kamoa 1 mine later on this year. I think the Kamoa 2 mine is not scheduled to begin until 2025. We can rely on Kamoa 1 in the meantime and the existing stockpiles that we've already built up at the Kansoko mine.
Speaker 7: From a mining perspective it's important to add that it's very similar to what we've already done at Kakula. You can see we're using similar style machinery, similar scale and we will also be using drift and fill mining.
Speaker 7: And then this slide is coming back to the smelter that I pointed out earlier and you can see that the reality is already very much taking shape on the ground. So this is showing the foundations of the Direct to Blister furnace building.
Speaker 7: And we are preparing for the arrival of the equipment also later on this year. So, you know, I think across the Camoa site, we're really moving into an exciting phase of the build where we will start to see the installation of the major equipment items that are currently en route to the mine or finishing off the fabrication process. And then perhaps just to come back to the hydropower at the end.
Speaker 7: What you can see here is the work underway of turbine number five at Inga. So, that is also progressing on schedule with the intention to tie in with the start-up of phase three at the end of 2024. turbine five will bring an additional 178 megawatts of green hydropower into the grid.
Speaker 7: for priority use by Ivanhoe Mines and Tomo-Otokula. What you can actually see here in the image is the rotor and the stator. And just as an interesting fact, it itself contains about 40 tons of copper, which gives a great example of the huge copper intensity of renewable energy infrastructure.
Speaker 7: So with that I will pass to Robert for an update on our exploration activities. Robert just in case you can't see the slides we're on the Western Poland.
Speaker 4: Thank you very much. I do see the slides. I got them on my end phone. Is everybody on this call?
Speaker 4: From day one, expiration is in our DNA. It's the life flow of our company.
Speaker 4: Expression requires both patience
Speaker 4: and determination, but it's my considered opinion that we will soon realize additional rewards.
Speaker 4: The Avido Mines Group historically finds a Tier 1 discovery around every four years or so. And so the time is coming up for us to come up with another one. In the western forelands we've drilled 70,000 meters on our target for this year. We drilled about just under 5,000 meters of net in the first quarter which...
Speaker 4: that's going to make everybody in the Congo and all of our stakeholders very happy.
Speaker 4: And Makoko and Keala, in the opinion of our senior management, are going to be a mine.
Speaker 4: and Chialla in the opinion of our senior management are gonna be a mine. It's really just a question of how big.
Speaker 4: We're working on the maiden resource estimate for this project that is wholly owned by Ivanow Mines. The geology, the genetic setting is identical to the other mines in the Copper Belt. We have a lot of understanding of these systems, both a genetic understanding of what...
Speaker 4: causes them to be birthed.
Speaker 4: over eons of time in the first place and how to find more of them. The preliminary economic assessment of this mine
Speaker 4: is underway since we own it all, it's gonna have quite a big impact. And if we find a big one out here, we can start dreaming about being there.
Speaker 4: second largest copper complex in the world, or ultimately even the biggest. But I think what's not getting enough attention is the next slide, our Mokopane feeder exploration. I think apart from the fact that our Platte Reef Project is the largest precious metals project in the world under development.
Speaker 4: with a hell of a lot of copper and nickel required for the electrification of the world economy as by-product.
Speaker 4: It remains a fundamental fact that the Bushwold complex in South Africa is one of the world's greatest mineral endowments.
Speaker 4: certainly in the top three, if not the largest mineral endowment of any geologic structure I can think of on a planetary basis.
Speaker 4: The question is where did the Buschfeld come from? I mean, how did it come up from the middle of the earth? These things come up from great depth in the earth like toothpaste.
Speaker 4: Where did the buschfeld come from? I mean, how did it come up from the middle of the Earth? These things come up from great depth in the Earth, like toothpaste. And they have to have a source.
Speaker 4: So we're doing a high resolution magnetic survey, and we're doing gravity work. And we're going to start drilling on the Mokopane feeder. And Mokopane feeder is a high resolution magnetic survey.
Speaker 4: An unbelievably powerful gravity anomaly. Something very, very heavy exists at the Moka Bani feeder. It's only about 10 kilometers away from our shafts that you see in this picture with the yellow airplane.
Speaker 4: The critical zone of the Bush Belt which hosts are
Speaker 4: enormous indomitable precious metals.
Speaker 4: It's very heavy rock. If you pick it up, it's just astonishing how dense that rock is.
Speaker 4: And so the gravity anomaly is very significant. And an academic geologist believed that the Mokohane feeder is named.
Speaker 4: because it fed the Mokopane area where all this metal really is. And so if there was ever a visionary exploration target on this planet, it's a Mokopane feeder and I would urge all of the analytical community to come to understand it and pay it a lot more attention.
Speaker 4: And then on Plant Reef, we are rapidly.
Speaker 4: barreling it had to be a producing mine. You know the original idea was the same philosophy as Kamo Kukula, start small and then expand. So the phase one concentrators under production, the underground development is advancing very rapidly and recently we've come up with some new ideas.
Speaker 4: on the optimization of SHAP3. Alex, why don't you pick it up and explain to people some of our thinking about SHAP3 and why this could be such important good news.
Speaker 5: Thank you Robert, I will take that over and Robert indeed says we are working on an optimization study at Flat Reef where a shelf tree with a diameter of 5.1 meters is currently being reamed and we've got approximately 150 meters after 950 meters completed to date and we're planning to...
Speaker 5: to hoist. So what we are saying is that we are planning to pull forward production at Platteries. We always get a flap from Robert that we're taking way too long to bring this mine into production and we are now trying to pull everything forward and bring this mine to its fullest potential.
Speaker 5: Just maybe to follow on from what Robert was discussing, a lot of the listeners do not have the opportunity to visit our site, so we've changed our presentation slightly and we're taking you through a bit of a visual library so you can see what our projects look like on surface and underground.
Speaker 5: gear concrete structure has been completed to a height of approximately 79 metres and Shorvthu's overall height will be approximately 100 metres above ground, including the steel structure housing the main winders.
Speaker 5: Drilling of the pilot drill, inch of two down to the shore bottom commenced during the first quarter and the total of 680 metres have already been completed with drilling on schedule to finish during the second quarter of this year, where after reaming of a 3.1 metre diameter hole is planned. Drilling of the pilot drill, inch of two down to the shore bottom commenced during the first quarter and the total of 850 metres have already been completed with drilling on schedule to finish during the first quarter of this year. Drilling of the pilot drill, inch of two down to the shore bottom commenced during the first
Speaker 5: So things are very exciting at Platt Reef and when you drive into town you can see the headgear miles away. Over to Kupushi, last but not least we've made significant progress at Kupushi. In late April we issued a press release announcing that we signed a term sheet.
Speaker 5: for the off-take of zinc concentrate and a $250 million facility with Plenco and Jeckomins. We are also negotiating a breach facility with local banks for up to $80 million and this will be used to fund ongoing capital expenditure at Kebushi.
Speaker 5: Just back to our visual library, this is underground at Kapushi where our development is 30% ahead of schedule. It was 682 meters completed in the third quarter.
Speaker 5: Mining of the big zinc ore body with grades in excess of 35% will commence ahead of schedule in January 2024 and it will be stopped by pending plant commissioning.
Speaker 5: Then we go to surface. On the processing plant our fabrication is on schedule with all major equipment currently being fabricated. The bulk of the earthworks and civil works is nearing completion and as you can see in the picture steel erection has started. Our first concentrate is on schedule.
Speaker 5: for the third quarter of 2024. And then lastly on Kapushi, and this is an initiative I'm personally very excited about. We have entered into negotiations with the provincial and the national government for a new commercial border crossing at Kapushi.
Speaker 5: This new border will benefit both Kapushi and Kamoa and should assist in alleviating congestion at the existing border crossings. The Kapushi border will also benefit the town of Kapushi through creating an economic hub for the town and we are currently doing a study on the road conditions and upgrades required on the Zambian side of the border.
Speaker 3: and answer session. I'm just going to quickly hand it back to the operator to populate the line. We'll take questions off the phone first and then we will field anything through the webcast subsequently. So operator please do proceed with questions on the line.
Thank you. If you would like to ask a question, please press star 11 on your telephone. One moment while we prepare for questions.
Okay, our first question is coming across. Can you as well please wait for your name to be announced before you start with your question? The first question is coming from Gartin Lawson of Paradigm. Your line is open.
Thank you very much for taking my question. My first one is regarding your tax rates. It was a little high this quarter. Can you provide any guidance for the rest of the year and how much of that is related to shipping concentrate versus smelted product?
No problem. Just to confirm, are you referring to income tax and deferred tax?
or are you referring to our royalties and indirect taxes that's disclosed in our
C1, frequency action? No, I'm referring to the current in the forward axis. OK, so.
The current and deferred tax would not change irrespective of whether we toll or whether we self-concentrate. The tax for this quarter does include provisional tax adjustments.
on provisional assessments received. So just a minor accrue for that. So it's slightly higher than we would expect that to be going forward, but not the dairy leaf side.
I think a fair modelling percentage going forward would be sort of what was experienced will be average for last year and with just a right of slightly above 30% would be normal.
question. Okay. Thank you. Um and my second question, if I may, uh, the payable copper versus copper sold has been a little like the past few quarters. Should we expect higher rates of OK sighs weight
I think yes. I think we can definitely expect some of the copper to come back. We do just like to mention that the inventory levels of finished goods at the end of December was pretty low and we were able to clear.
almost everything on the floor just before the end of the year. So inventory levels have sort of normalized but of course we will try to to clear those and make our inventory levels as small as possible. So they will definitely flow through the income statement.
Okay, thank you very much. Thank you 1 moment while we prepare for the next question. And please remember to wait for your name.
to have peaked Q3 of last year.
recording, you know, significant improvements since then. Is that a trajectory that can continue or the new levels that we see now in Q1, what we should expect going forward?
Andrew, maybe I can venture a guess here. We've managed to get a good handle on our logistic cost and obviously what we've seen trending down was the shipping rights. We are however hopeful that in the longer term we can get our trucking rights lower too. We do foresee a bit of a backlog period as Tinky starts exporting.
slightly lower than what it was.
Well, it's obviously going to be a lot lower. Obviously it just depends how far you want to look forward or how much of a nitpicker you want to be for the next quarter or two. This is a hundred year mine. We're going to have a railroad through Angola and we're going to be shipping finished metal at 99.7% copper.
So obviously our shipping costs are going to plummet to much lower levels if you're willing to wait a year or two in the mining business. And that's a nanosecond in the mining business, young man.
Thanks, Robert, for putting that into context. Yes, thank you. I'll hand the microphone off to the next question.
Thank you as a reminder, if you would like to ask a question, please press star one one on your telephone. At this time, there are no more questions in the audio queue. I would turn it back over to Matthew.
Thank you very much operator. We have a few webcast questions. I will kind of group them as there's a few that are a little bit similar in theme. First and foremost, just another follow up, I guess, Marna on logistics. This one on the Capushi crossing. There's a lot of moving parts now with the railway and Capushi coming on. If you could just give a bit more color on how these are all going to work together and sort of the timing of how these might ease logistics.
Thank you Matt. The Kaposi border in our mind is a short to medium term solution. We are planning to implement it as soon as we get sign off, which we anticipate to be in the next couple of months. That will alleviate border congestion that's currently...
significantly for our truckers. The Angola Rail will service Camoa more directly with a direct link into Angola and that should then also alleviate traffic out of the country. We cannot put in place enough measures. There's a lot of projects ramping up in Congo, there's a lot of drives in Congo.
And we think all these initiatives that we are embarking on are complementary to each other. But we sort of boxed them into short, medium and long-term solutions. And the border is sort of the immediate focus. Obviously, the ROW will remain strategic and is also a greener solution. So we work closely with Traffic
Robert, where do you see Ivanhoe Mines fitting into this world of heightened copper M&A? Where do you see the company going post the three assets we currently have under construction?
Well, I don't know, back to the previous question. The Congo is the absolute epicenter of copper development on this planet.
President Felix Cisicati has recently met with President Joe Biden. He's about to go to China to meet with President Xi Jinping.
Everybody on the planet wants copper metal, not only for the energy transition, could there be enough copper to even have one?
and national security demands given that it's going to take an ocean of copper to rebuild Ukraine if we can ever generate a just and lasting peace there.
People don't really understand that Katanga is a happening place. The economic growth there is exploding.
Places like Canada and the United States are sleepy by comparison. When people get to the site, they're amazed that we have 5G wireless and they see such intelligent young Congolese writing code and to see how advanced things really are there.
When that railroad gets going through Angola, bringing everything into this part of the Congo will be cheaper, whether it's steel or cement or any other material. And the hydroelectric capacity expanding just makes this literally the best place in the world to be mining copper. According to independent observers, the Democratic Republic.
Congo has just nosed out or is in a dead tie with Peru to be the second largest producer of copper in the world.
Where does this audience think more copper discoveries are going to be made in the next five or ten years? The DRC or Peru?
or Chile for that matter. Today, Tidalco announced miserable production numbers for the Chilean government with $2.04 a pound cash costs and for 10 years, Chile has not been able to grow production. Where is the production exploding is right here in Katanga.
Glencore knows it and we agree this is the best place in the world to be mining copper and we're proving it quarter by quarter. So please stay with us and understand this is a long-term business.
The average age of a person in the Congo, the median age, is only 18 or 19 years of age. There's a young, hungry population eager for a better life.
having operated in over 60 countries around the world. I took a lot of heat when I stood up in London and said, I'd rather be mining copper in the Democratic Republic of the Congo than in Chile. But I played this game with my friends and all our friends
Given the government of Chile announcing partial nationalization of their lithium metal, it's obvious that they've fallen on the wrong path.
and the leadership in the transformation of the world economy, depending on this copper metal, we're right here at the epicenter. I might add that we get a lot of visitors.
from the industry. One of the largest major mining companies in the world had a technical delegation underground.
at Komokokula and they said that the Komokokula is the best mind in the world.
And they also noted that they never could have done it themselves. It took 30 years of dedicated effort by thousands of people to go to where the copper actually was and to participate in the rebirth of the country. So we'd like you all to join hands and...
enjoy the experience of watching Iverdo Mines become a major diversified mining company, carrying the best of ESG and Canadian practices, idealistic practices, and the sort of United Nations of people who work together to...
find this metal that we desperately need. We need to mine it in a green and clean way, and that's exactly what we're doing. And so hats off to Marna and her team, hats off to our board of directors, which is continuing to get stronger.
desperately need. We need to mind it in a green and clean way. And that's exactly what we're doing. And so hats off to Marna and her team. Hats off to our board of directors, which is continuing to get stronger. And.
Let's put our hands together and pray for the next big discovery because we're certainly working on it in the Western Four Lands and at the Mokopane feeder. Thank you. Thanks very much, Robert. And next one, a rather popular question as well, maybe one for David. A few questions on the shareholder loan, specifically in terms of Camo and scheduling on cash flow, as well as consideration of potentially an upcoming dividend. Yes, please.
Thanks Matt. I think it's been evident from previous quarters that Gamora Kokula is just a cash flow machine and we are currently...
and doing what we feel is the most value-pre-tip and obviously using the majority of that.
and cash towards development of Ice3.
and cache towards development of Ice3. At current copper levels...
I think we definitely see Kamawa being able to successfully fund its proportionate share of that capital expenditure and then who knows, shell the loans.
and might start to get read by sometime next year.
with the Moa's cash generating ability and the fact that I've been able, VC Oktoberfestwords and I met him two years ago of theunnav Agophy fair.
Everyone on the board now has very limited data, which is basically the convertible lights and material in 2026.
Any additional cash flow could be other used.
to distribute back to shareholders. But who knows, it's fully dependent on other successes. Maybe we need the cashflow for building another mine at the Western foreland. So...
I think the future is sort of open to us, but yes, we do have a very strong cash generating business.
especially from 2025 onwards. And I think shareholders can expect to reap the rewards of that.
Great, thanks David. And I think we have time for one more, so maybe a little air time for Platte Reef as well. Alex, I think maybe this one might be for you. Just on the scoping for SHAF3, just some questions on sort of what the market can expect in terms of news flow from that study and a little bit more detail on when that might actually impact Platte Reef's development. Yes, it's a work in progress.
to that feasibility study. But in terms of the critical path, you know the only real decision which is not a major CAPEX decision is whether we equip that shaft or not and I think we're basically willing to go ahead with that because irrespective of the timing of phase two, equipping that third shaft will give us a lot more flexibility in terms of the ramp up of phase one. It's not a big-ticket capital item and it de-risks
the flat reef proposition overall. That's really what we will be looking to do over the next couple of years. Hopefully, we can bring forward that start date to phase two from where it was originally constrained, which was the completion of SHAP2 sinking in 2027. Hopefully, we can do better than that, as Marlon mentioned. Great. Thanks, Alex. We are coming up on the 60 minutes and have run our way through questions.