Q2 2023 Ivanhoe Mines Ltd Earnings Call
Yeah.
Good day and thank you for standing by welcome to the Ivanhoe mines second quarter 2023 financial results Conference call.
We've run internal numbers and this takes into account the extra capital cost and the operating cost of doing this and the economics are very positive and so the plan now is that we will conclude this work over the coming months to bring it to an investment decision and but we're also evaluating this test work alongside of the <unk>.
Unconventional technologies that may potentially yield even better results.
Okay.
Moving into a quick construction update on phase III and starting with the concentrate.
Overall, the expansion of the mine and the concentrator as well as the ingot to turbine upgrade on the smelter projects are on time.
For the fourth quarter of next year and on budget as David mentioned.
You can see in the photo here that the phase III concentrates there is now really taking shape and it's 38% complete overall, but within that we have 85% of the steel and plate work already shipped 90% of the concrete port.
And we remind the listeners that this is the same team who delivered the phase one and phase two concentrated so successfully so I think we're very excited about what's to come in the next year.
Just looking at the smelter briefly in Isolette isolation, the smelter Israeli Mega projects I think you could say in its own right. It has a capital cost of a $1 billion of the total of roughly $2 five for the whole of phase III.
So here in the photo you have a great shot which shows the.
The direct Atlas to fairness and the off gas handling facilities really starting to take shape.
In terms of overall project completion were up 56% and the major equipment deliveries are starting to come in this quarter.
That includes some of the largest pieces single pieces of equipment that have ever been delivered into the DRC.
So we're very much looking forward to that.
And finally, just from from me at least moving to regional logistics in the DRC.
So we've been talking for a while now about exporting from the DRC via Angola, along what is known as the low beta railcar at all.
The <unk> corridor would very much be transformational to come out with a cooler and you can see that from this map the distance still a beta of 6800 kilometers is approximately half the trucking distance to turbine today.
Even as were approximately half of our volumes are going today and not only that that would be significantly less carbon emissions associated with shipping by rail rather than route.
So not only will be expect this route to be faster, but as a result of being faster.
It should be more cost efficient and will also create much needed competition between the different logistics corridors in the copper belt.
It's also just worth noting that there'll be Colorado, which which stands today there is an existing rail in the DRC.
It makes his journey from the DRC Angola border to the town of <unk>, which is just to the east of Comerica cooler and it actually runs directly through the western for the licenses and within five kilometers of the comerica cooler boundary.
Just looking at the bigger picture, we have seen some recent political movements here.
In may the U S government announced their support for the <unk> project, which includes a potential $250 million financing from the Dfc.
We're watching the space very closely.
And with that I will now pass back to our executive co chairman for an update on exploration starting with the western fault.
Well. Thank you. It's my favorite subject were driven by exploration, where we have a very large drilling program underway.
Both of them are Coco resource in the high high grade.
The resource and we will be telling the market of luck or about that in the fall.
In addition, we have a major exploration program going on.
Which couldnt, possibly have a better hunting ground, we'll find more tier one copper so when we get past the dog days of summer.
Sure we will have a lot more to say about the incredible mineral potential and the western for loans.
The United States government has come in.
To support the Western corridor railroad through Angola.
Also opens up the entire western Portland landholding to real access.
Is enormously attractive further development the future mined from the Western parlance, which is unquestionably the.
So first on the ground for copper.
So in this particular planet.
We're also very excited about the <unk> feature.
PSC geologist sneak it could be the source of the.
Entire bushveld complex, which is the world's richest intelligently province, we have been doing a lot of geophysics there.
Very sophisticated gravity work being done there all.
All of this will coalesce and drilling.
More capacity figure, which is an opportunity for us to find additional tier one super Giants.
Alpha nickel and associated precious metals systems, only about 10 kilometers away from <unk>.
Our chefs, who you see pictured here under Moca punish it here you can see one of the aircrafts during the airborne geophysics.
Only six miles away to the Moca finally theater.
Our tier one discovery in either the western four islands.
Or the most part of theater.
We'll launch.
I would remind you into the right.
The tier one major mining companies.
With that let's go back and talk about the <unk> mine.
Alex.
Yes. Thank you Robert that's me.
I will quickly provide a construction update on Paris flagship and depreciate them. Then we will open the floor for Q&A. So we are looking at the construction activities on site for the plant.
And it's advancing well and a contract for first production in the third quarter as we mentioned earlier most of our long lead equipment orders were placed and is scheduled for delivery in the third quarter of 2023.
160 tons of the total of 1500 tonnes from steel related.
Right.
And from an underground point of view more than 2000 meters of lateral development has been completed to date across all three labor saving 50 meter at <unk> 950 million till April and we are advancing at a rate of approximately 200 meters per month.
Once they are installed the crusher and lighting feed on the 950 meter level.
Which is expected at the end of August the rate of lateral underground development is expected to continue to increase to approximately 300 meters per month.
The remainder of the year and then from January onwards, we expect our advancement drive increased to approximately 500 meters per month.
Looking at the next slide we initiated an optimization study at <unk>.
And this is to potentially accelerate production from <unk>.
The study will consider converting to five one meter diameter ventilation secondary access shaft shaft D.
The production chart with the capability to hoist.
All three is currently being redeemed with approximately 340 meter of the 950 meters completed to date.
And it's planned for completion in the fourth quarter of this year.
The manufacturing of the accelerated wind therefore shelf III Hakea is also well advanced and on schedule.
And then.
Shaft, two construction mcgladrey, if the shaft two hakea concrete structure was completed early in the quarter to a height of approximately 79 meters.
<unk> overall hydro will be approximately a 100 meters above ground and thats, including the steel structure that will house. The mine winders drop it always joke that we should Peter revolving restaurant at the top of the.
It get.
The shocks to hit internal structure steel construction is also progressing very well and the.
<unk> in stage one the civil construction is nearing completion with the winder deliveries planned for December of this year. They keep a winder ropes with recently that Leavitt and drilling of the pilot Joe law for the dreaming of shelf scale, which we can maintain February of this year as reached the shaft bottom and preparations are now.
The way to come in three main shaft.
Initial diameter of three one meters and dry spring book remained from the 950 meter level once we <unk>.
Established bottom axis.
And then last but not least we.
I will get to completion.
In late April we announced the signing of a chalkboard.
<unk> of that can financing term sheet.
Between completion, jacobina and clean coal.
The offtake is for 100% of depreciate zinc concentrates between 402000 600000 dry metric tonnes per annum is like a five year term.
The offtake and financing term sheet is subject to execution of final binding agreements, which we expect to conclude in conjunction with the nuc appreciate joint venture agreement in the next month or two and then as we mentioned before we also reached the term facility for $18 million with rural Bank.
It's the largest domestic bank in the DRC with alliance boots expected to reach hybrid barley and by the end of 2020 for it.
Just indicative of the economic activity in the DRC.
If we look at.
The underground construction at completion of the development activities ramping up with 20% ahead of schedule.
We completed 1526 meters of lateral development.
Year to date and mining of the <unk> zinc ore body with grades in excess of 35% will commence ahead of schedule in January of 2024, and this will be stockpiled pending plant commissioning.
And then last but not least.
This is a picture of the plant construction, but 800000 ton per annum concentrate is 50% complete.
<unk> designed this is complete and ahead of schedule and procurement activities are nearing completion with Andy five equipment packages outstanding.
<unk> 15 of the total 73 equipment packages have been delivered to site with a number including the ball mill currently on rate.
And that concludes our presentation for today I will now hand over to Matt.
Randall Q&A.
Thanks, very much we will now begin the question and answer session. Firstly I'll hand, it back to the operator to proceed with any questions waiting on the line. So I'll get the queue going for dial in questions and then following clearing line will look what we have on the webcast. So please go ahead operator.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
<unk> will compile the Q&A roster.
Our first question comes from the line of Lawson Winder of Bank of America Global Research. Your line is now open.
Fantastic. Thank you very much operator, and good morning afternoon evening, everybody on the iron ore team. Thank you for taking my question I wanted to ask about the western Portland.
Very exciting.
We're approaching the release of a.
The first resource so two questions or one question on the resource on one question generally on western for land. So on the resource are.
Are we expecting an inferred resource or is there.
And Australia that there could be some level of MNI coming with that.
And then secondly, what is your latest vision on how western Portland, Ultimately gets developed do you see it being developed by Ivanhoe with a partner or.
Potentially ivanhoe developing it on its own thanks very much.
Okay.
You want to take a stab at that.
Well why don't I take the first part Robyn I am not sure which.
Which is just to say hey this.
The resource will have an indicated portion and it will have an inferred portion.
So.
So the first part.
In terms of.
Sorry, Robert.
No. It wasn't go ahead okay.
So in terms of partnership loss.
Okay.
Deliver messages, it's far too soon to say.
Makoko NPL or is really just the beginning.
While we think well it unfolds.
There is no reason why that couldnt be more come out water cooler scale and grade deposits.
The western Poland. So.
And menu items it seems.
To be looking into partnership with <unk>.
All of the variables within our control today that we have more than enough money to go exploring we have the expertise in house and we have the exact same team working on this.
We discovered <unk> cooler the Bonanza zones, Makoko and so on.
Often use to evolve and improve so there are things that we're learning this year about the western for them that we said that we didn't know last year.
Which is which is very exciting.
So if we work with.
If I go down that route the partnership I think it would need to be something.
Something quite spectacular to entice us, but perhaps ill, let robert comment on anything else.
Yeah.
No longer a junior mining company losses were a major mining company.
Execution capability.
To engineer design and construct mindset I think is the best in the industry.
We're delivering on time on schedule under budget and nobody else's. So we don't need a partner in the western <unk>.
We have been approached by most everybody you could think of to get exposure to copper and the Democratic Republic of Congo because.
That's where you can produce green copper, we have hydro electric power demand.
Your line that were stringing from being a jam into the western Forlenza designed for 900 megawatts.
I'm carrying capacity is enough to build a zillion mines.
So where in the world can you find 567% copper with Hydroelectricity Nols or snow.
We don't need a partner, but there sure is a hell of a lot of parties that would like to be our partner.
Too early to talk about that now.
For evidence and some interest in the subject.
Thank you for those responses and then maybe if I could just get your thoughts on the libido corridor and when you think.
This project could actually be realized to its towards potential aware.
Ivan how can get benefit from that that logistics options.
Yes.
Last quarter, we reported that in.
Initial shipments over the little bit of a quarter should happen this year.
202, three and then it'll increase is it two to four.
<unk> is a two to two five we welcome the support of the United States government actually.
The president as well as senior representative President Stacey G 7 million announced American government support for the quarters. So that says it all G. Seven nations view of it is critically important because where else is the copper metal is going to come from.
But you know it's sort of a watching brief at this point in time.
<unk> ends the questions we have for today. So just kind of concludes the call. So thank you again, everyone for attending and we look forward to speaking with you again soon on the many exciting milestones coming forward driving home mines in 2023, so with that I'll pass it back to the operator wrap up the call. Thanks very much this.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Okay.
[music].