Q1 2024 Ivanhoe Mines Ltd Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to the Ivanhoe Mines First Quarter 2024 Financial Results Conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone.
Speaker Change: Good day, and thank you for standing by and welcome to the I've been home Mines' first quarter 2024 financial results conference. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message.
Operator: You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Matthew Keevil, Director of Investor Relations and Corporate Communications. Please go ahead.
Advising that your hand is raised to withdraw your question. Please press star one again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker, Matthew Campbell Director of Investor Relations and corporate Communications. Please go ahead.
Matthew Richard Keevil: Thank you, operator. And hello everyone, and good day from sunny Vancouver. It's my pleasure to welcome you to Ivanhoe Mines' first quarter 2024 financial results conference call. My name is Matthew Keevil, and I'm the director of IR and corporate communications at Ivanhoe Mines. On the line today from the company are founder and executive co-chairman Robert Friedland, President Marna Cloete, Chief Financial Officer David Van Kalen, Chief Operating Officer Mark Farren, Executive Vice President, Corporate Development and Investor Relations Alex Pickard, and Executive Vice President, Project Steve Amos. 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.
Matthew Richard Keevil: Thank you, operator, and Hello, everyone and good day from Saudi Vancouver, and it's my pleasure to welcome to Ivanhoe mines first quarter 2024 financial results Conference call.
Matthew Richard Keevil: My name is Matthew keep one I'm, the director of IR and corporate communications at Ivanhoe mines on the line today from the company, we our founder and Executive Chairman, Robert Friedman, President Martin <unk>, Chief Financial Officer, David <unk>, Chief Operating Officer, Mark Ferret Executive Vice President corporate development, and Investor Relations, Alex Baird and executive Vice President.
Matthew Richard Keevil: Next.
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 to the conference operator.
Matthew Richard Keevil: Please contact our investor relations team directly for follow-up questions that are not addressed during the call. Before we begin, I'd like to remind everyone that today's events 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 the forward-looking statements are contained in our April 30th news release, as well as on CDAR Plus and at www.ivanhoemines.com. It is now my pleasure to introduce Ivanhoe Mines founder and executive co-chairman Robert Friedland for some opening remarks. Robert, please go ahead.
Speaker Change: Good morning.
Speaker Change: Please contact our Investor relations team directly for follow up questions that are not address during the call before we begin I would.
Speaker Change: Like to remind everyone that today's events that 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 and forward looking statements are contained in our news release as well as on SEDAR at Www Dot Ivanhoe mines.
Speaker Change: It is now my pleasure to introduce iron ore mines, founder and executive co Chairman Robert Friedman for some opening remarks, Robert Please go ahead.
Robert Martin Friedland: Yes, thank you. Welcome to our quarterly conference call. A few general remarks. We're extremely happy with progress in the Congo. For those of you that are unfamiliar with our copper business, we can find more copper faster than we can build new production. We are only limited by electrical energy, and we've solved that problem.
Robert Martin Friedland: Yes. Thank you welcome to our quarterly conference call.
Robert Martin Friedland: A few general remarks.
Robert Martin Friedland: We are extremely happy with progress in the Congo for.
Robert Martin Friedland: For those of you that aren't familiar with our copper business we have.
Robert Martin Friedland: We can find more copper faster than we can build new production.
Robert Martin Friedland: We are only limited by electrical energy and we've solved that problem, we're going to explain why that problem is behind us.
Robert Martin Friedland: We're going to explain why that problem is behind us. We have taken the opportunity to convert our convertible notes, as our shares have traded near an all-time high, which will leave us essentially debt-free. We see nothing but clear sailing towards growing our production in the third and fourth phase at our joint venture at Komoku Kula, and we see nothing but upside in the Western Forelands in finding more metal. Somebody has to go out and find the metal that the world needs.
Robert Martin Friedland: We've taken the opportunity to convert our convertible notes as our shares have traded near an all time high which will leave us essentially debt free.
Robert Martin Friedland: We see nothing but clear sailing towards growing our production in the third and fourth phase at our joint venture <unk>.
Robert Martin Friedland: <unk> can cooler.
Robert Martin Friedland: And we see nothing but upside in the western Portland's on finding more metal.
Robert Martin Friedland: Somebody has to go out and find the metal that the world needs is going to be either at our mines.
Robert Martin Friedland: It's going to be Ivanhoe Mines. I think we have a lot of new information to give to the market today, and you'll see why we've taken the position to do what we're doing. If you could show the next slide, please.
Robert Martin Friedland: I think we have a lot of new information to give to the market today and you'll see why we've taken the position to do what we're doing if you can show the next slide please.
Robert Martin Friedland: We've been sending this Batman picture around about the absolute centrality of copper to the energy transition. There will be no energy transition without it. And we also see enormous amounts of offtake demand in the re-militarization of the world economy. Tensions and the balkanization of the world economy are causing copper to be a definitive national security issue for each nation state.
Robert Martin Friedland: We've been selling this.
Robert Martin Friedland: That man picture around about the absolute centrality of copper.
Robert Martin Friedland: For the energy transition.
Robert Martin Friedland: There will be no energy transition without it and we also see enormous amounts of offtake demand.
Robert Martin Friedland: And the re militarization of the world economy tension and the balkanization of the world economy are causing copper to be definitive national security issue for each nation state.
Robert Martin Friedland: So Ivanhoe Mines is unique in its ESG characteristics. We'd like to introduce all of our shareholders to the progress and the culture that the women and men that lead our company have created. And with that, I'm going to turn this over to the specifics and tell you why I think it's a fantastic opportunity now to get involved with Ivanhoe Mines. Marna, it's over to you. You're in Johannesburg. Please give them some specifics.
Robert Martin Friedland: So I would remind you is unique in its ESG characteristics, we like to refer all of our shareholders to the progress and the culture that the women and men that lead our company have created and with that I'm going to turn this over to the specifics.
Speaker Change: And tell you why I think it's a fantastic opportunity now to get involved with either of the mines.
Speaker Change: So over to you.
Speaker Change: You're in Johannesburg, Please give us some specifics.
Marna Cloete: Thank you, Robert, and it is indeed the season for copper. They say a picture speaks a thousand words. And what you see here in my introduction slide is Phase 3, the five million pound per annum concentrator that's basically being commissioned as we speak, and we will be starting our production there in May, which starts tomorrow. So it's really exciting times at Kamau Ka Kula. If we go on to the next slide, The first quarter of 2024 was slightly below our expectations.
Speaker Change: Thank you Robert and it is indeed the season for Copa.
Speaker Change: Chesapeake settlement with kind of what you're seeing in my introduction slide.
Speaker Change: I see that 5 million ton per annum concentrate that.
Speaker Change: Basically being commissioned as we speak and we will be starting up production in.
Speaker Change: In may at which starts tomorrow.
Speaker Change: Clotting times at Comerica cooler.
Speaker Change: If we go onto the next slide.
Speaker Change: The first quarter of 2024 was slightly below our expectations and as Robert alluded to that was mainly due to more than expected power interruptions and grid instability in the DRC. Our Tms subsequently implemented several mitigating measure and we have already started to see the.
Marna Cloete: And as Robert alluded to, that was mainly due to more than expected power interruptions and grid instability in the DRC. Our team has subsequently implemented several mitigating measures, and we have already started to see the results of these efforts. First, we secured an additional 15 megawatts of power through the Zambian grid. And secondly, we have embarked on an extensive grid upgrade and maintenance plan with our project team stationed in Kinshasa working alongside the state-owned power utility to prioritize and implement critical initiatives.
Speaker Change: Results of these efforts in April.
Speaker Change: Firstly, we secured an additional 15 megawatts of power to the Zambian grid.
Speaker Change: And secondly, we are involved in an extensive grid upgrades and maintenance plan with our project teams passions in Kinshasa, working alongside the site and power utility to prioritize and implement critical initiatives.
Speaker Change: This has already had a positive impact on production in April Lasalle production expected to be in excess of 32000 tons for the month.
Speaker Change: In addition to this we have authenticate an additional 14 megawatts from item beat all have to be transmitted to the interregional grit and this will commence tomorrow on the first of my title an additional 55 megawatts of power.
Marna Cloete: These initiatives have already had a positive impact on production in April, with our production expected to be in excess of 32,000 tons for the month. In addition to this, we have also secured an additional 40 megawatts from Mozambique, also to be transmitted through the interregional grid. And this will commence tomorrow, the 1st of May. So, in total, an additional 55 megawatts of power.
Speaker Change: Pre commissioning of our class III constant drive to as I said earlier, it's ahead of schedule with office or expect that in mind and the phase III smelter is also unchanged for the fourth quarter of this year.
Speaker Change: As we entered the dry season on April.
Marna Cloete: Pre-commissioning of our Phase 3 concentrator, as I said earlier, is ahead of schedule with our first ore expected in May, and the Phase 3 smelter is also on schedule for the fourth quarter of this year. As we enter the dry season in April, our drilling activities are ramping up on the Western Forelands, and we have 17,000 meters of drilling planned. May will be a busy month overall as we also start with pre-commissioning of the concentrator at Kapushi, which is scheduled for the first ore in June. Next slide. On a group-wide basis, our total recordable injury frequency rate is well below the industry standard.
Speaker Change: Drilling activities are ramping up on the waste in Poland, and we have 17000 meters of drilling planned for this year.
Speaker Change: Now it will be a busy month overall as we also start with pre commissioning of the concentrate that completion.
Speaker Change: Schedule for first oil in June next.
Speaker Change: Next slide.
Speaker Change: On a group wide basis, our total recordable injury frequency rate trades, well below the industry standard metric Ratably after quarter end, we had a fatality at the <unk> mine.
Speaker Change: Markup is undertaking a comprehensive internal investigation into this accident. Once the investigation is complete our management will reveal and implement any additional <unk> recommended to prevent such an accident from occurring.
Speaker Change: Excellent.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: On the 17th of April we also launched our seventh annual sustainability report and we invite all of you to country incredible stories of how we continue on our journey to mind with greater purpose.
Marna Cloete: But regrettably, after quarter int, we had a fatality at the Kinsoko mine. Kamau Coppa is undertaking a comprehensive internal investigation. Once the investigation is complete, our management will review and implement any additional safety measures recommended to prevent such an accident from recurring. Next slide On the 17th of April, we also launched our seventh annual sustainability report, and we invite all of you to go and read the incredible stories of how we continue on our journey to mine with a greater purpose.
Speaker Change: Few highlights for 2023 in place Kabaka cooler contributed 6% to the DRC GDP that is.
Speaker Change: Standing achievement too.
Speaker Change: <unk> 7 billion with paint on local suppliers group what we.
Speaker Change: We provided.
Speaker Change: 100 <unk>.
Speaker Change: 49 scholarships intensity group wide illustrating our commitment to education and local empowerment.
Marna Cloete: A few highlights for 2023 include Kamauka Kula contributing 6% to the DLC GDP. That is an outstanding achievement. $2.7 billion was spent on local supplies group wise. We provided 849 scholarships and bursaries group-wide, illustrating our commitment to education and local empowerment.
Speaker Change: 845, local suppliers, they supported group large representing 150% increase in gallons yet.
Speaker Change: And we spent $39 million on cash economic activities across the group.
Speaker Change: Next slide.
Speaker Change: For 'twenty 'twenty four we will focus on the following strategic initiatives that will be incorporated into our scorecard.
Speaker Change: Carbonization strategy to HCA.
Speaker Change: Our tailing management income improvements with the global industry standard some tailings management.
Marna Cloete: 845 local suppliers were supported group-wide, representing a 150% increase year-on-year, and we spent $39 million on socioeconomic activities across the Next slide. For 2024, we will focus on the following strategic initiatives that will be incorporated into our scorecard or decarbonization strategy to NAICS VRM: Tailings Management in conformance with the Global Industry Standards on Tailings Management, embedding human rights into our business practices, best practices in responsible sourcing, as well as stringent diversity and inclusion targets.
Speaker Change: Embedding human rights into our business practices.
Speaker Change: Based practice in responsible sourcing as well as stringent diversity and inclusion talk as well.
Speaker Change: That doesn't introduction I will now hand over to David <unk> to take you through the quarterly results.
David: Thank you Martin and good morning, and good tied to if you're going to joining the call today.
David: Martin already mentioned instability, the dlcs southern power grid, which impacted on the financial results for the quarter to quarterly revenue of $618 million was stable compared to the previous quarter.
Speaker Change: The Bible tons.
Speaker Change: Copper sold for Q1 was 85000.
Speaker Change: At our realized copper price.
Speaker Change: 382 per pound.
Marna Cloete: With that as an introduction, I will now hand over to David Heerden to take you through the quarterly financial results for the court. Marna has already mentioned the instability with the DRC's southern-powered grid, which impacted the financial results for the court. The quarterly revenue of $618 million was stable compared to the previous quarter.
Speaker Change: With the average price of $4 30 per pound in April to date, we expect a nice uptick in revenue in the second quarter.
Speaker Change: We expect a sizable remeasurement adjustment in the second quarter.
Speaker Change: 30000 tons of payable copper proficiently price is realized.
Speaker Change: <unk>.
Speaker Change: The higher price, we will of course also benefit to revenue for the tons sold in the.
Speaker Change: The second quarter.
Speaker Change: If we move to the next slide.
Speaker Change: Okay.
David Harry Van Heerden: The payable tonnes of copper sold for Q1 were $85,000 at a realized copper price of £3.82 per pound. With an average price of $4.30 per pound in April to date, we expect a nice uptick in revenue in the second quarter. We expect a sizable remeasurement adjustment in the second quarter as the 30,000 tonnes of payable copper provisionally priced are realized, and the higher price will, of course, also benefit the revenue for the tons sold in the second quarter. The cash cost per pound of payable copper produced for the quarter was $1.57 per pound.
Speaker Change: The cash cost per pound of payable copper produced for the quarter was $1 57 per pound. This was towards the bottom end of our 2020 full guidance of $1 50 to $1 70 per pound, which we reiterate that.
Speaker Change: The increase in Comarco cooler Q1 cash cost in the first quarter is principally due to the decrease.
Speaker Change: And copper and concentrate produced during the quarter, but also.
Speaker Change: <unk> of the lower grade of copper.
Speaker Change: Probably in Q1, the greater stability during the quarter not only impacted on bolt ons mode, but also impacted on the copper ore grade processed due to the reduced underground access to high grade areas due to the water in Greece during power interruptions model really highlighted how these challenges are being.
David Harry Van Heerden: This was towards the bottom end of our 2024 guidance of $1.50 to $1.70 per pound, which we reiterate. The increase in Kamalka Kula C1 cash costs in the first quarter is principally due to the decrease in copper and concentrate produced during the quarter, but also as a result of the lower grade of copper processed in Q1. The grid instability during the quarter not only impacted on Auton's mold but also impacted on the copper ore grade processed due to the reduced underground access to high-grade areas due to water ingress during power interruptions.
Speaker Change: Overcome and Mark will give more color later on in the presentation.
Speaker Change: The completion on bonds of the onsite smelter on schedule for commissioning later this year is still expected to drive a decrease in average cone cash cost over the first five years post completion.
Speaker Change: From 2025 by approximately 20%.
Speaker Change: <unk> EBITDA was up quarter on quarter to $365 million with EBITDA margin also up 259% in Q1.
Speaker Change: On the next slide.
Speaker Change: <unk> EBITDA waterfall illustrated on this slide.
Speaker Change: Lots of that.
Speaker Change: The EBITDA increased from the last quarter was driven by the higher copper price during the quarter, which had an accumulated impact of $35 million.
David Harry Van Heerden: Marna has already highlighted how these challenges are being overcome, and Mark will give more color later in the presentation. The completion of the onsite smelter on schedule for commissioning later this year is still expected to drive a decrease in average C1 cash costs over the first five years post completion, from 2025 by approximately 20%. Kamau Kokula's EBITDA was up quarter on quarter to $365 million, with the EBITDA margin also up to 59% in Q1.
Speaker Change: This was partially offset by the impact of the reduction in tons sold while we benefited from lower logistics charges Pcs in the off season quarter, while other costs increased only marginally.
Speaker Change: The next slide shows a snapshot of <unk> consolidated results.
Speaker Change: Okay.
Speaker Change: Often are recognized.
Speaker Change: Normalized profit of $70 million in Q1 slightly up from the previous quarter.
Speaker Change: This excludes the $139 million noncash loss on the revaluation of the $575 million convertible notes, which is as a result of the 26% increase in our shape Raj.
David Harry Van Heerden: Kamauakakula's Ibadol Waterfall, illustrated on this slide, highlights that the EBITDA increase from the last quarter was driven by the higher copper price during the quarter, which had an accumulated impact of $35 million. This was partially offset by the impact of the reduction in time sold, while we benefited from lower logistics charges, PCs, and RCs in the quarter, while other costs increased only margin. The next slide shows a snapshot of Ivanhoe's consolidated results. Ivanhoe registered a normalised profit of $70 million in Q1, slightly up from the previous quarter.
Speaker Change: Increasingly shaped process obviously.
Speaker Change: Great problem to have but the impact of the revaluation on our results.
Speaker Change: Yes somewhat distorting.
Speaker Change: This is one of the reasons that we announced the redemption of the notes earlier today. So we will no longer happen. This problem from Q3 onwards.
Speaker Change: Yeah.
Speaker Change: If we look at our strong balance sheet.
Speaker Change: On the next graph.
Speaker Change: Okay.
Speaker Change: So with the redemption of the convertible notes, we will be in a net cash position with our cash on hand exceeding the consolidated on the balance sheet. A continued investment in growth during the quarter remained materially on budget and will start providing additional returns imminently with the completion of the phase III constant.
David Harry Van Heerden: This excludes the $139 million non-cash loss on the revaluation of the $575 million convertible notes, which is as a result of the 26% increase in our share price. The increase in our share price is obviously a great problem to have, but the impact of the revaluation on our results is, yeah, somewhat distorting.
Speaker Change: Aftermarket cooler and the commencement of production of depreciate, a schedule or not.
Speaker Change: Not only are our projects significantly derisked the capital intensity is much lower than the massive numbers that have recently gotten a lot of media attention.
Speaker Change: We have been able to arrange joint venture enabled facilities with great terms that can market cooler with working capital and I would draw facility subtracting interest of EMEA six 5%.
David Harry Van Heerden: This is one of the reasons that we announced the redemption of the notes earlier today. So, we will no longer have this problem from Q3 onwards. If we look at our strong balance sheet on the next graph, we will be in a net cash position, with our cash on hand exceeding the consolidated date on the balance sheet.
Speaker Change: The arrangement of additional facilities for depreciation is also progressing well with finalization expected in the second quarter.
Speaker Change: We really have a bright future of growth with almost no date, making us more nimble.
David Harry Van Heerden: Our continued investment and growth during the quarter remained materially on budget, and we'll start providing additional returns imminently with the completion of the Phase 3 concentrate at Kamakukula and the commencement of production at Kapusia ahead of schedule. Not only are our projects significantly de-risked, but the capital intensity is much lower than the massive numbers that have recently gotten a lot of media attention. We have been able to arrange joint venture level facilities with great terms at Kamau Kokula, with working capital and overdraft facilities attracting an interest of a mere 6.5%.
Speaker Change: Yes.
Speaker Change: Mark <unk>, our CFO will take the presentation further to highlight our recent.
Mark Farren: Operations and project progress.
Mark Farren: Okay.
Mark Farren: And we're just going to turn the call over to our CFO Mark Ferrer No moment to see connects July Mark.
Mark Farren: Thank you.
Mark Farren: Matthew I'm going to talk to.
Mark Farren: I'm looking at I'm, using my phone divestiture drops through the <unk>.
Mark Farren: <unk> portion of the presentation comes from Concho screen.
Mark Farren: The first picture of that smelter in the background.
Speaker Change: I can move to the next one which.
Mark Farren: Which is basically your copper production Coachella copper production slot.
David Harry Van Heerden: The arrangement of additional facilities for Kapushi is also progressing well, with finalization expected in the second quarter. We really have a bright future of growth ahead with almost no debt, making us more nimble than any of our peers. Mark Farren, our COO, will take the presentation further to highlight our recent operations and project program. And we're just going to turn the call over to our COO, Mark Farren, in a moment as he connects the line, Mark. Thank you. Matthew, I'm going to talk through, I'm looking at, and I'm using my phone to basically drive through my portion of the presentation because I can't see your screen.
Mark Farren: And that's been mentioned by David and monitor that we produced 86000 tons of copper in the quarter. The first quarter, which is not exactly a normalized number and if you ever look youll see that the December quarter end.
Mark Farren: Quarter.
Mark Farren: Impacted you positively power grid instability for some of the reasons mentioned.
Mark Farren: Actually when I talk about what youre doing about it.
Mark Farren: And Thats the next slot.
Speaker Change: So we've got a team as Marty mentioned it can chaucer working with the state utilities snow.
Speaker Change: On projects across the group not just the two Barnett tree installing and inger, but also to stabilize the grid that got to DC power lines and pretty busy working with.
Speaker Change: Reactive power projects and synchronous converter stations that are being upgraded as we speak.
Mark Farren: So here's the first picture of that nice melter in the background. And if I can move to the next one, which is basically your copper production, quarterly copper production slide, and it was mentioned by David and Marna that we produced 86,000 tons of copper in the quarter, the first quarter, which is not exactly our normalized number. And if you have a look, you'll see that the December quarter and the August quarter were impacted quite heavily by power and so grid instability for some of the reasons mentioned.
Speaker Change: It's about a $200 million or dollar.
Speaker Change: <unk>, which is going into a loan agreement with snow, which gets paid back we've discussed this before.
Speaker Change: Reduction in power tariffs and the longer term for us so.
Speaker Change: So that's the one the one I mentioned is to make the.
Speaker Change: There is no great stable with the team the second one is importing power.
Speaker Change: And in the month of April we managed to get 15 megawatts from Zambia.
Speaker Change: <unk> Zambian grid stable secure power, it's consistent and it's working.
Speaker Change: And then tomorrow is the first of May we've signed an agreement to secure an additional 14 megawatts of palace, which will take our important balance grew 55 megawatts, which is a major breakthrough for us because its stable and this sources actually from Mozambique.
Mark Farren: I'll actually want to talk about what we're doing about it. And that's the next slide. So we've got a team, as Marna mentioned in Kinshasa, working with the state utilities now on projects across the grid, not just the turbine that we're installing at Ingo, but also to stabilize the grid. They've got two DC power lines that we're busy working with. There are a whole lot of reactive power projects and synchronous converter stations that are being upgraded as we speak.
Speaker Change: So if you add the two together you could 55 megawatts and we've actually done projects, which are stabilizing the grid.
Speaker Change: <unk>.
Speaker Change: Sorry at snow.
Speaker Change: So at the moment, it's a lot more stable April is looking pretty good and we will be north of 33000 tons, which is more or less weighted to constant trying to should be.
Mark Farren: It's about a $200 million investment, which is going into our loan agreement with Snell, which gets paid back, as we've discussed this before, by a reduction in power tariffs in the longer term for us. So that's the one dimension to make the snow grid stable with the team.
Speaker Change: Maybe a little bit more and we've had almost no interruptions in the month of April.
Speaker Change: In addition to this we have also spoken about this we are installing backup diesel generated power for basically the whole month to be able to run under any conditions.
Speaker Change: And a big chunk of that will be commissioned in general this year sort of about 120 megawatts running.
Speaker Change: <unk> and <unk> 220 megawatts of diesel power in stone, which will give you 100% redundancy in terms of what's required to provide power.
Mark Farren: The second one is importing power, and in the month of April, we managed to get 15 megawatts from Zambia through the Zambian grid. And then tomorrow, the 1st of May; we have signed an agreement to secure an additional 40 megawatts of power, which will take our imported power to 55 megawatts, which is a major breakthrough for us, because it's stable power and this source is actually from Mozambique. So if you add the two together, you get 55 megawatts, and we've actually done projects which are stabilizing the grid in snow. So at the moment, it's a lot more stable. April is looking pretty good so far.
Speaker Change: And then just just two.
Speaker Change: Summarize where we are on power.
Speaker Change: The imported power will probably increase by the end of this year to 100 megawatts. We are busy signing of long term offtake with secured the power supply for that and then the bulk of the work at snow will be completed in quarter, two next year and quarter three quarter four Adobe stable.
Speaker Change: In that case, we will probably have a 100% redundancy on what's required in our Boulder.
Speaker Change: We don't.
Speaker Change: We have enough power for phase one phase two phase III and phase four in future expansions.
Speaker Change: I think it is a.
Speaker Change: It has been a problem for the last two quarters, we've done a lot of work to Derisk power and I think it's going ahead of a lot better and going forward I believe there'll be enough redundancy in the system to be able to expand as we as we need to.
Mark Farren: We'll be north of 33,000 tonnes, which is more or less where the two concentrators should be, maybe a little bit more. And we've had almost no interruptions in the month of April. In addition to this, we have also spoken about this; we are installing backup diesel generator power for basically the whole mine to be able to run under any conditions. And a big chunk of that will be commissioned in July this year.
Speaker Change: So I'm quite comfortable that we are getting there now.
Speaker Change: If we can move on to the next.
Speaker Change: The next slide.
Speaker Change: So, let's discuss the backup power and imported power.
Speaker Change: Some comments on the phase III concentrates.
Speaker Change: Again, we have about two quarters ahead of plan in terms of commissioning that concentrates on.
Speaker Change: I'm quite excited about that that thing is going to run in may.
Speaker Change: The back end of this month.
Speaker Change: And it's going to run and I know Steve has dialed in on this.
Speaker Change: Conference call, but we expect it to ramp up very quickly assignments. We did on trains one and two I think phase III ramped up that concentrates and something about six weeks.
Mark Farren: So we'll have about 120 megawatts running by July this year, and by December, 220 megawatts of diesel power installed, which will give you 100% redundancy in terms of what's required to provide power. And then just to summarise where we are on power. The imported power will probably increase by the end of this year to 100 megawatts. We're busy signing off long-term off-dates.
Speaker Change: So.
Speaker Change: I think that this one will also kick in quite quickly and hopefully.
Speaker Change: But the fact that we.
Speaker Change: Commissioning it a bit earlier should help us to get.
Speaker Change: The back end of our guidance and potentially the upside of our guidance.
Speaker Change: This year.
Speaker Change: The smelter itself is another the next slot on the smelter construction.
Mark Farren: We've secured the power supply for that. And then the bulk of the work at Snell will be completed in quarter two next year, and quarter three, quarter four, it'll be stable. In that case, we'll probably have 100% redundancy on what's required in our builder. So we'll have enough power for phase one, phase two, phase three, phase four, and future expansion. So I think it has been a problem in the last two quarters.
Speaker Change: Smelter.
Speaker Change: We will run its first feed will be in December this year.
Speaker Change: On track no major issues on that smelter and we are very excited bucket smelter running because it's going to drop our operating costs by summing up 20% through through the year of 2020 funds.
Speaker Change: And it will reduce your logistics and the complexity of logistics significantly as we go forward.
Speaker Change: The next slide is on Inger.
Speaker Change: Just as I spoke about earlier and cause a big tube on entry installing its 178 megawatt toubon to massive toubon, it's something about 20 meters in diameter.
Mark Farren: We've done a lot of work to de-risk power, and I think it's going a hell of a lot better. And going forward, I believe there'll be enough redundancy in the system to be able to expand as we need to. So I'm quite comfortable that we're getting there now. Thank you.
Speaker Change: In terms of one.
Speaker Change: 100 <unk>.
Speaker Change: Tons of copper.
Speaker Change: Saga Alternators are big installation.
Speaker Change: It's going to be commissioned a slightly diets.
Speaker Change: January February next year, where we had aimed for December this year.
Speaker Change: And Thats, who is mainly a logistics issue, but all of the major componentry is on <unk>. The team has mobilized it's an excellent team and is moving nicely.
Mark Farren: If we can move on to the next slide, I've discussed the backup power, the imported power. Just some comments on the phase three concentrator. Again, we're about two quarters ahead of plan in terms of commissioning that concentrator. I'm quite excited about that.
Speaker Change: That's on the on the smelter.
Speaker Change: Okay.
Speaker Change: And I think that's where we are is there anything else.
Speaker Change: I'm just looking for my side.
Speaker Change: I've covered everything.
Speaker Change: Mark just another slide on the graph.
Speaker Change: Project non quick.
Speaker Change: Sorry.
Mark Farren: That thing is going to run in May, the end of the back end of this month of May. And I know Steve has dialed in on this conference call, but we expect it to ramp up very quickly, the same as we did on phase one and two. I think phase two, he ramped up that concentrator in something like six weeks.
Speaker Change: Sorry on the growth in three areas here.
Speaker Change: I guess forward looking slightly forward looking so the one the one area is taking that infrastructure that we've already installed so phase one phase II and phase III. We believe that we can move beyond the 14 million tons per annum that we've been talking about to about 17.
Speaker Change: With those three plants.
Speaker Change: There is some work that we've done on phase, one and phase two phase one and phase II, we believe can do 10 million tons.
Mark Farren: And so I think that this one will also kick in quite quickly, and hopefully we, but the fact that we commissioned it a bit earlier, should help us to get the back end of our guidance and potentially the upside of our guidance for this year. The smelter itself is another slide.
Speaker Change: Easily and phase III, we believe we will be able to get to between six and 7 million tonnes.
Speaker Change: Instead of.
Speaker Change: The.
Speaker Change: Tons that we've looked at it 14 million tons, it's probably more likely 717 million tons then.
Mark Farren: The next slide is on the smelter construction. The smelter will run. Its first feed will be in December this year.
Speaker Change: He has a project difficult project 95.
Speaker Change: And that's also very exciting it's a flow sheet that will take us from our current 80, 889% recoveries to 95% recovery.
Mark Farren: It's on track. There are no major issues with that smelter. And we're very excited about that smelter running because it's going to drop our operating costs by something like 20% through the year of 2025. And it will reduce your logistics and the complexity of logistics significantly as we go forward. The next slide is on Inga, which is, as I spoke about earlier, Inga is a big turbine that we're installing. It's a 178 megawatt turbine. It's a massive turbine. It's something like 20 meters in diameter, and 100 tons of copper are inside the alternator. So it was a big installation.
Speaker Change: That work is done and we will have engineering done with a budget estimate for that.
Speaker Change: Basically in the next couple of weeks, we will have net engineering budget really.
Speaker Change: What's nice about that these two things. The first one is <unk>, obviously, you get the increased 7% recovery in the second thing is that all of the tailings that we have accumulated over the last couple of years, it's about 50 million tons that can be reprocessed.
Speaker Change: And that will be repriced, and we will get the benefit of that extra tonnage.
Mark Farren: It's going to be commissioned slightly late, so about January or February next year, where we had aimed for December this year. And that was mainly a logistics issue. But all of the major componentry is on site. The team is mobilized.
Speaker Change: If you enter two together its around about 80000 tonnes per annum.
Speaker Change: Yes.
Speaker Change: Very effective capital cost and obviously, a massive improvement in operating cost because youre getting much more youre getting another 7% recovery without any additional operating cost. So that's exciting and then phase four.
Mark Farren: It's an excellent team, and it's moving nicely. So that's on the smelter. And I think that's where we are. Is there anything else about it? I'm just looking from my side.
Speaker Change: <unk> is going to be I believe it will be accelerated we haven't got a timeline, yet, but it's not going to take too long to get phase for moving and there is some synergy between what we want to do on phase four and project non too far.
Mark Farren: I've covered everything, more kids than ever slide on the ground. Project 95. Okay, sorry, I'm through. Sorry, on growth, there are three areas here. And I guess forward looking, slightly forward looking.
Speaker Change: So basically if I can talk about it is we would probably start some of HIFU.
Speaker Change: Early production by utilizing the tailings and online on that on the tailings dam at 50 million tons that I spoke about that would be something that we could do to initiate the first production at phase four so all very very exciting projects I believe power, we've derisked significantly.
Mark Farren: So the one area is taking the infrastructure that we've already installed. So phase one, phase two, and phase three, we believe that we can move way beyond the 14 million tonnes per annum that we've been talking about to about 17 with those three plants. There is some work that we've done on phase one and phase two. We believe phase one and phase two can do 10 million tonnes easily. And phase three, we really will be able to get to between six and seven million tonnes. So instead of the tonnes that we've looked at, at 14 million tonnes, it's probably more likely to be 17 million tonnes.
Speaker Change: Over this last quarter, we have a plan to be able to install enough power within the country and importing power as well as backup generation to Derisk this operation completely and to be able to grow.
Speaker Change: The important thing for us was always to be able to grow at the rate that we need to grow and I believe we have derisked.
Speaker Change: Significantly.
Speaker Change: I think better to empower and on what we're doing in the future. Thank.
Speaker Change: Thank you.
Speaker Change: Thanks, Marcus I'd like to pick out speaking, we're going to just take you through a couple of slides.
Mark Farren: There is a project that we call Project 95, and that's also very exciting. It's a flow chart that will take us from our current 88-89% recoveries to 95% recovery.
Speaker Change: On the Western fault and so I think Mark gave a really good overview there of.
Speaker Change: Our planet Comerica cooler to accelerate production.
Speaker Change: Car throughput rate to potentially 20 million tonnes and beyond and what we're really lucky we'll do a cloud corollaries chase down the wells number two in wells number one copper producers over time what.
Mark Farren: That work is done, and we'll have engineering done with a budget estimate for that work in May. So basically, in the next couple of weeks, we'll have that engineering budget ready. What's nice about that is there are two things. The first one is all your new risings, obviously, you get the increased 7% recovery.
Speaker Change: What we have next door at the Westin <unk> and has the opportunity to really start to produce over 1 million tonnes per annum from this new grades copper district on the hull.
Speaker Change: Some very exciting work that's going on that today. So during the first quarter, we drove 17000 meters and bearing in mind January through March is very much the middle of the rainy season. So 17000 meters is an excellent achievement and it shows that now we are into the dry season towards the end of April we are clear.
Mark Farren: And the second thing is that all the tailings that we have accumulated over the last couple of years, it's about 50 million odd tons, that can be reprocessed, and they will be reprinted, and we'll get the benefit of that extra time. If you add the two together, it's around about 80,000 tonnes per annum with a very effective capital cost and obviously a massive improvement in operating costs because you're getting another 7% recovery without any additional operating costs. So that's exciting. And then Phase 4 is going to be; I believe it will be accelerated. We haven't got a timeline yet, but it's not going to take too long to get Phase 4 moving.
Speaker Change: Early on track to meet or even possibly exceed our target of 70000 meters drilled this year, which was a four times increase in the drilling budget from last year.
Speaker Change: Most of the drilling we are doing at least currently is focusing on expanding the high grades K telco discovery that was made in the fourth quarter of <unk>.
Speaker Change: 2023.
Speaker Change: We have a slide coming just to sort of preview some of the work we're doing to telco.
Speaker Change: But also as well as <unk> I think it's worth reminding the audience that we've already discovered and delineated 5 billion tons of resources.
Speaker Change: <unk>. This is a major achievement I think in the context of the copper industry.
Mark Farren: And there's some synergy between what we want to do on Phase 4 and Project Nancy 5. So basically, if I could talk about it, we would probably start summer phase four early production by utilising the tailings that are lying on that tailings dam. That 50 million tonnes that I spoke about, that would be something that we could do to initiate the first production at phase 4. So all very, very exciting projects. I believe power we've de-risked significantly over this last quarter.
Speaker Change: The third largest discovery basically since the cooler.
Speaker Change: Put another way 5 billion tons of resources is roughly the same as a 200000 ton copper mine over a 25 year life. So you can see that we already have a critical mass to start a new mining operation in the west in Poland that what we're drilling now.
Speaker Change: Telco and elsewhere, Israeli looking to improve and augment what we already have the cocoa.
Speaker Change: I think we can move to the next slide please.
Speaker Change: So this is showing the maps and the western for the license, which you can see is a joining to the western side of the <unk> mining license, where it stays colder west.
Mark Farren: We have a plan to be able to install enough power within the country and import power, as well as have backup generation to de-risk this operation completely and to be able to grow. The important thing for us was always to be able to grow at the rate that we needed to grow. And I believe we have de-risked that significantly. So I think that's it on power and on what we're doing in the future. Thank you. Thanks, Mark. It's Alex Pickard speaking.
Speaker Change: And really the key thing to take away here is first of all where we're putting a lot of drill holes on a daily basis in ticket telco you can see all of the Red stars that are indicating how has that are currently being drilled.
Speaker Change: We have I think eight rigs on site currently which will soon be 10 rigs, including two rigs with specialization for deeper drilling, but the exciting thing for now the key telco deposit is very much open and all of the day all in all directions.
Alex Pickard: We're going to just take you through a couple of slides on the Western Foreland. So I think Mark gave a really good overview there of our plan at Kamoaka Cooler to accelerate production, take our throughput rate to potentially 20 million tons and beyond. And you know, what we're really looking to do at Kamoaka Cooler is chase down the world's number two and world number one copper producers over time. What we have next door at the Western Foreland is the opportunity to really start to produce over a million tons per annum from this new great copper district on the whole. And we have some very exciting work that's going on there today. So during the first quarter, we drilled 17,000 meters. Bearing in mind, January through to March is very much the middle of the rainy season.
Speaker Change: So really what we're looking to do is understand the extent of the mineralization that we have and also the structure.
Speaker Change: We're starting to explore the connectivity between you can see the telco and cocoa, which are roughly five kilometers of parts.
Speaker Change: They could potentially be developed as part of the same mining operation and then ultimately there may be a connection also between the cocoa on the western edge of the cooler, which you can see as indicated is roughly 10 10 kilometers.
Speaker Change: In terms of distance so.
Speaker Change: For the Western fault and it really is an exciting year ahead, we are getting into the dry season, and the bulk of our drilling activities and I am sure.
Speaker Change: Over the course of this dry season, we will be providing the market with further updates in terms of our activities.
Alex Pickard: So 17,000 metres is an excellent achievement, and it shows that we are now into the dry season, towards the end of April. We are clearly on track to meet or even possibly exceed our target of 70,000 metres of drilling this year, which was a four times increase in the drilling budget from last year. Most of the drilling we are doing, at least currently, is focusing on expanding the high-grade Kitoko discovery that was made in the fourth quarter of 2023.
Speaker Change: I'm going to hand back to Mark <unk>, who is actually.
Mark: Setting up appreciate at the moment. So he is the best person to give you a quick update on what we're doing that.
Mark: Thanks, Alex I'll carry on Okay, just in broad strokes can pushy.
Mark: The underground mine is fantastic.
Mark: <unk> already trading at 35% zinc.
Mark: One of the highest grade in the world.
Alex Baird: The development footprint is open we opened up seven levels already we've started with the sub level the sub level open stoping, the long hole stoping, that's working perfectly.
Alex Pickard: We have a slide coming up just to sort of preview some of the work we're doing at Kitoko. But also, as well as Kitoko, I think it's worth reminding the audience that we've already discovered and delineated 5 million tons of resources at Makoko and Kiala. This is a major achievement, I think, in the context of the copper industry, the third largest discovery, basically, since Kikula. And put another way, 5 million tons of resources is roughly the same as a 200,000 ton copper mine over a 25-year life.
Alex Baird: We've got about 300000 tons of stock more than three months of ore on surface already ahead of our concentrate.
Mark: And that concentrates will run in my answer at the end of May We don't believe there's anything.
Mark: Complex and that concentrated to simple concentrate.
Speaker Change: Quite a small one actually.
Speaker Change: But it's a fantastic mine, it's looking very very good.
Mark: People that have been the minute was flooded will not recognize what we've done it's a modern mine underground.
Mark: Development is very very good the ground conditions are fantastic.
Alex Pickard: So you can see that we already have the critical mass to start a new mining operation in the western forelands. But what we're drilling now at Kitoko and elsewhere is really looking to improve and augment what we already have at Makoko. I think we can move to the next slide, please, Matt.
Mark: And everything days ahead of schedule, So I cannot think of any major risks.
Mark: And maybe just to mention what is quite encouraging as it is zinc prices to be moving in the right direction.
Mark: And just at the right time to I think that would be my opinion.
Mark: I don't believe there's any major technical risk on that one.
Mark: We are very excited to get the true seat moving and then to do exactly the same way as we have at the other months and that is to improve the productivity and then obviously the throughput maybe over Tom to lift him a little bit more because it's such a good ore body that we just need to get it up a little bit more so I'm.
Alex Pickard: So this is showing the map and the Western Fallen license, which you can see is adjoining to the western side of the Kamoa Kukula mining license where it says Kukula West. And really, you know, the key thing to take away here is, first of all, we're putting a lot of drill holes on a daily basis into Kitoko. You can see all of the red stars there that are indicating holes that are currently being drilled.
Mark: Current debt capricious, moving and we'll be using it.
Mark: Schedule like the other two.
Mark: And it's looking really good.
Speaker Change: Thanks, Mark and I will just close out with an update.
Speaker Change: Lastpass ethylene I mean at least on a flat rate.
Speaker Change: With <unk>, we announced during the previous annual.
Alex Pickard: We have, I think, eight rigs on site currently, which will soon be 10, including two rigs with specialization for deeper drilling. But the exciting thing for now is that the Kitoko deposit is very much open in all directions. And so really, what we're looking to do is understand the extent of the mineralization that we have and also the structure.
Speaker Change: Annual results that we have made a change in strategy.
Speaker Change: To accelerate the expansion of flat rates.
Mark: So what this means in reality is that we will finish the phase one concentrates the project on time in the third quarter.
Speaker Change: We've deferred the ramp up of these concentrates are until the middle of next year.
Speaker Change: The reason that we've done this deferral is so that we can focus on the underground development that we need to do.
Alex Pickard: And we're starting to explore the connectivity between, you can see, Kitoko and Makoko, which are roughly five kilometers apart. They could potentially be developed as part of the same mining operation. And then, ultimately, there may also be a connection between Makoko and the western edge of Kokula, which you can see is indicated as roughly 10 kilometers in terms of distance.
Speaker Change: Shaft, three and four the phase two expansion.
Speaker Change: So just to remind people on the line.
Speaker Change: What we decided is shaft three which was originally supposed to be a ventilation shaft.
Speaker Change: The changed approach and we decided to equip that shaft for hoisting and which will be ready by the end of 2025 and so this will boost the total hoisting capacity to around 5 million tons, including shack, one onshore III.
Speaker Change: So with that 5 billion tons of hoisting capacity of the plan is to ramp up the phase one and phase II concentrated at a capacity of around 4 million tons, not just leaving a little bit of extra.
Alex Pickard: So for Western Fuland, it really is an exciting year ahead. We are getting into the dry season, and the bulk of our drilling activities. And I'm sure over the course of this dry season, we will be providing the market with further updates in terms of our activities. I'm going to hand over to Mark Farren, who is actually sitting in Kipushi at the moment, so he's the best person to give you a quick update on what we're doing there. No, thanks, Alex.
Speaker Change: <unk> for development for all phase III expansion.
Speaker Change: And just to give an idea around the numbers at 4 million tonnes.
Speaker Change: <unk> will be producing somewhere between four to 500000 ounces of the four metals, so that platinum palladium, rhodium and gold plus up to 10000 tonnes of nickel and copper.
Speaker Change: And then longer term the strategy is very much to keep shack number two going thats one of the largest hoisting shaft in the wells.
Mark Farren: I'll carry on. Okay, just in broad strokes, Kapushi, the underground mine is fantastic. It's a fantastic ore body. It's running at 35% zinc, by far the highest grade in the world.
Speaker Change: It will enable that phase III expansion up to 10 million tons hoisting capacity at which point, we will produce around 1 million ounces of the precious metals plus around 20000 tonnes of nickel and copper. So a major major producer of all of those muscles and all of this will be published and updated studies feasibility.
Mark Farren: The development footprint is open. We've opened up 7 levels already. We started with the sub-level open stoping, the long oil stoping, and that's working perfectly.
Mark Farren: We've got about 300,000 tons of stock, so more than three months of ore on the surface already ahead of that concentrate. And that concentrator will run in May, also the end of May. We don't believe there's anything complex in that concentrator. It's a simple concentrator. It's quite a small one, actually.
Speaker Change: Study on a scoping study that will be out in the fourth quarter.
Speaker Change: With that I think we're at the end of the presentation slides, but it perhaps just before I hand back to Matt.
Matt: I would point out that we are a little bit of flex looking at the trading activity on the screen. This morning.
Speaker Change: I think we very much see this is an overreaction caused by the convertible redemption.
Matt: But then I would point out that this redemption is going to cause a lot of short positions in ivanhoe mines to be closed out over the coming weeks as these bonds are redeemed.
Mark Farren: But it's a fantastic mine. It's looking very, very good. I mean, people that were there when it was flooded will not recognize what we've done. It's a modern mine. It's underground, and development is very, very good. The ground conditions are fantastic, and everything there is ahead of schedule. So I cannot think of any major risk there. And maybe just to mention what is quite encouraging is that the zinc price has been moving in the right direction. And just at the right time, too, I think. That would be my opinion.
Speaker Change: So I think fundamentally we believe this has been a very strong set of results and especially into the month of April.
Speaker Change: In terms of the production was showing at Comerica cooler.
Speaker Change: Much more to come on the Westin <unk> and we only proceed with this to be an opportunity for our investors, but I'll hand over to Matt to chat to Q&A.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Matt: Thanks, Alex.
Matt: Operator, I think we'll move to the phone lines first and foremost and clear all the phone questions and then if we have time at the end, we'll hop over to the web and see if theres any web questions. We'd like to thank you very much certainly 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, please standby will be compiled the QE.
Mark Farren: I don't believe there's any major technical risk in that mine. We're very excited to get that first feed moving and then do exactly the same as we have at the other mines. And that is to improve the productivity and then, obviously, the throughputs, maybe over time, to lift them a little bit more because it's such a good ore body that we just need to get it up a little bit more. So I'm confident that Kapush is moving forward and is ahead of schedule like the other two and is looking really good.
Matt: <unk> roster.
Matt: And one moment for your first question.
Speaker Change: And our first question will be coming from Lawson Winder of Bank of America Securities. Your line is open.
Lawson Winder: Hi, Thank you operator very much good morning, good evening and afternoon, everyone. Thank you for the presentation I just I wanted to ask about.
Mark Farren: Thank you. Thanks, Mark. And I will just close out with an update. Last but certainly not least on Platt Reef.
Lawson Winder: This potential updated my mine life plan for.
Lawson Winder: For <unk> cooler is is that intended to be published at some point. This year and then if so what are you expecting in terms of the range of possible plans at our consideration for that.
Alex Pickard: So with Platt Reef, we announced during the previous annual results that we've made a change in strategy to accelerate the expansion of Platt Reef. So, what this means in reality is that we will finish the phase one concentrator project on time in the third quarter, but we've deferred the ramp-up of this concentrator until the middle of next year. The reason that we've done this deferral is so that we can focus on the underground development that we need to do for shaft three and for the phase two expansion.
Speaker Change: Alex and Mark do you want to talk about our plans to keep expanding in treasury rates show the position of number one if that number two in the world.
Alex Baird: Yes sure.
Alex Baird: Robert I'll take that and thanks Lawson.
Alex Baird: Look I think mark highlighted what the separate initiatives are that we're looking at so just to go through those again.
Alex Baird: The optimization of the phase III concentrated so we think like phase one and phase two we can probably get at least 20% more capacity out of that concentrate.
Speaker Change: We have the project 95, which is the plan to increase the recoveries and basically get 30 40 50000 tons is effectively free copper from what we have already that will also apply to phase III as well as phase one into the.
Alex Pickard: So just to remind people on the line, what we decided on shaft three, which was originally supposed to be a ventilation shaft. We changed our approach, and we decided to equip that shaft for hoisting, which will be ready by the end of 2025. And so this will boost the total hoisting capacity to around 5 million tons, including shaft one and shaft three.
Speaker Change: The opportunity to recover that 70000 tons that is already locked in our tailings integrator <unk>, 7% and then also mark was alluding to our plans to potentially accelerate phase four we're looking at a lot of things around our mine planning in order to see that phase for operation, but fundamentally we have 40 million tonnes plus copper in the ground here.
Alex Pickard: So with that 5 million tons of hoisting capacity, the plan is to ramp up the phase one and phase two concentrators at a capacity of around 4 million tons. That's just leaving a little bit of extra capacity for development for our phase three expansion. And just to give you an idea of the numbers, at 4 million tons of capacity, we'll be producing somewhere between four and five hundred thousand ounces of the four e-metals, so that's platinum, palladium, rhodium, and gold, plus up to 10,000 tons of nickel and copper. And then, longer term, the strategy is very much to keep shaft number two going. That's one of the largest hoisting shafts in the world.
Speaker Change: There are all sorts of opportunities to expand.
Speaker Change: Very efficient long haul mining, we can even look at open pit mining in different parts of the ore body. So there is no no fundamental shortage of ore to feed a much expanded milling circuit.
Speaker Change: Specifically low cents.
Speaker Change: In terms of when we will publish watts.
Speaker Change: Project 95 were <unk>.
Speaker Change: Planning to.
Speaker Change: Well at least publish a press release, giving you the details on that when the engineering is completed this month.
Speaker Change: I think what our intention is to publish a kind of more fundamental overarching updated study for come out with a cooler that will incorporate all of these elements.
Speaker Change: The last one we did was a couple of years old.
Speaker Change: That should be done by sometime around the end of the year, so we'd like to get it done and published before year end.
Alex Pickard: That will enable that phase three expansion up to 10 million tons of hoisting capacity, at which point we will produce around a million ounces of precious metals, plus around 20,000 tons of nickel and copper. So a major, major producer of all of those metals. And all of this will be published in updated studies, a feasibility study and a scoping study that will be out in the fourth quarter. With that, I think we're at the end of the presentation slides, but perhaps just before I hand over to Matt, I would point out that we are a little bit perplexed looking at the trading activity on the screen this morning. I think we very much see this as an overreaction caused by the convertible redemption.
Speaker Change: Okay.
Speaker Change: Serbia.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: To add a few more comments.
Speaker Change: All of our ore sources that we've been mining ore from underground.
Speaker Change: There are shallow open pit able resources that would be the highest grade open pit copper mines in the world.
Speaker Change: And the advantage of the open pit able reserves is that the mineralized horizons of a lot of pyrite and the hanging wall.
Speaker Change: And the pyrite that you get all the way down would be extremely beneficial for the smelter.
Speaker Change: So for the first time, we're looking as we have more and more milling capacity, we can potentially fill the milling capacity was very significant.
Speaker Change: Open pit resources that exist on the Molla license.
Alex Pickard: But then I would point out that this redemption is going to cause a lot of short positions in Ivanhoe Mines to be closed out over the coming weeks as these bonds are redeemed. So fundamentally, we believe this has been a very strong set of results, and especially into the month of April, in terms of the production we're showing at Kamoa Kakula, much more to come on the Western Forlands, and we only perceive this to be an opportunity for our investors. But I'll hand it over to Matt to chair the Q&A.
Speaker Change: So you can do the math yourself on getting into 16 or 17 million tonnes of milling with the existing concentrator has been of course concentrate or in the future.
Speaker Change: Get us well over 20 million tonnes, and that's really just a question of.
Speaker Change: How large that concentrated might be so this year.
Speaker Change: Should start showing the world what <unk> could look like.
Matthew Richard Keevil: Thanks, Alex. And Operator, I think we'll move to the phone line first and foremost and clear all the phone questions. And then, if we have time at the end, we'll hop over to the web and see if there are any web questions we'd like to field. Thank you very much.
Speaker Change: Four and a half dollar per pound price environment, or a $5 per price environment, we bring on additional capacity with less additional capital than any mining company in the world.
Speaker Change: If there's any place in the world that can expand production quickly in response to higher prices, it's kabaka cooler.
Operator: Certainly. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker Change: And then of course, there's the western for lens, where we already have 5 million tonnes of high grade.
Speaker Change: And as the spring and summer and go on and we will update you on our drilling success in the Western <unk>.
Operator: Please stand by while we compile the Q&A roster and one moment for our first question. And our first question will be from Lawson Winder of Bank of America Securities. Your line is open. Hi, thank you, operator very much. Good morning.
Speaker Change: But clearly the next mine, which will be <unk>.
Speaker Change: Lines operation will be accretive, but we do see the <unk> joint venture.
Speaker Change: Definitely being in striking range to be the second largest copper complex in the world.
Speaker Change: And given challenges we've seen in Chile, and we are intimately familiar with those challenges.
Lawson Winder: Good evening. Afternoon, everyone. Thank you for the presentation. I just wanted to ask about the potential updated mine life plan for Kamala Kukula. Is that intended to be published at some point this year? And then, if so, what are you expecting in terms of the range of possible plans that are in consideration for that? Alex.
Speaker Change: We're beginning to think we have a chance to be number one just in the joint venture even without the western four islands.
Speaker Change: So we'll be running more tours as we bring this all into focus.
Speaker Change: A $4 or four and a half dollars copper world for us.
Speaker Change: It is very very different than a three and a half dollar per pound copper world.
Speaker Change: Thank you Leslie.
Leslie: Yes, very well said, thank you Robert if I could follow up on one sort of finer point I mean with the huge amount of throughput that you are getting just from phases, one two and three.
Robert Martin Friedland: Alex and Mark, do you want to talk about our plans to keep expanding and try to reach the position of number one, if not number two in the world, just at the same venture? Absolutely, Robert. I'll take that. Thanks, Lawson. So look, I think Mark highlighted what the separate initiatives are that we're looking at. So just to go through those again, it's the optimization of the phase three concentrator. So we think, like phase one and phase two, we can probably get at least 20% more capacity out of that concentrator.
Speaker Change: Is there any thought to foregoing a phase four and focusing that expansion on.
Speaker Change: Western for land.
Speaker Change: You might think.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yeah Yeah.
Speaker Change: Sure is.
Speaker Change: For the joint venture.
Speaker Change: It is for us.
Speaker Change: All of us without a doubt we're doing a phase four little out of phase five.
Speaker Change: We're looking at a phase five.
Speaker Change: The joint venture is sitting on an ocean of copper that is immediately developable.
Speaker Change: Western Formula as a completely separate thing we're not in a joint venture that graph is held by the iron ore mines.
Speaker Change: And they are perfectly.
Speaker Change: Accretive with each other because now that the railroad capacity is opening up.
Robert Martin Friedland: We have Project 95, which is the plan to increase the recoveries and basically get, you know, 30, 40, 50,000 tons of effectively free copper from what we have already. That will also apply to phase three as well as phase one and two.
Speaker Change: To Angola that railroad goes right through the Western four islands.
Speaker Change: And as we as we're increasing the stability of the grid and putting our foot on a more regional power a lot of people are confused.
Alex Pickard: The opportunity to recover that 70,000 tons that's already locked in our tailings at a grade of 0.7%, and Mark was also alluding to our plans to potentially accelerate phase four. We're looking at a lot of things around our mine planning in order to feed that phase four operation. But fundamentally, you know, we have 40 million tons plus copper in the ground here. There are all sorts of opportunities to expand very efficient long-haul mining.
Speaker Change: Power is wheeled through Zambia, but it comes from Mozambique.
Speaker Change: The vast majority of the Mozambique powers hydropower combined with our backup power that's really our limiting factor we're not limited by the amount of copper we have here which is unique.
Speaker Change: We don't have a shortage of water.
Speaker Change: We're not fighting and ice and snow like you would be up in the Andes or in Canada.
Speaker Change: A real shortage of electrical energy and we're telling you today, we really think we're pretty that electrical energy constraints behind us now in the current quarter.
Speaker Change: And so the joint venture is to see how far it can go and I would I would wager, having talked to mark and our team. We just had our board meeting in London.
Alex Pickard: We can even look at open pit mining in different parts of the ore body. Thus, there is no fundamental shortage of ore to feed a much expanded milling circuit. Specifically, Lawson, in terms of when we will publish project 95, we're planning to, well, we'll at least publish a press release giving you the details on that when the engineering is completed this month. I think what our intention is to publish a kind of more fundamental overarching updated study for Kamoaka cooler that will incorporate all of these elements.
Speaker Change: We really are moving to a phase for that phase four won't touch cuckoo la west.
Speaker Change: Enormous resources in <unk>, west, which could make our phase five to joint venture.
Speaker Change: The western for lens is a completely different story, which we will be telling the market about a lot more.
Speaker Change: In the near future.
Speaker Change: Very exciting thank you.
Speaker Change: Again, if you have a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: <unk>.
Speaker Change: And our next question will be coming from Andrew and the kitchen.
Andrew: BMO capital markets. Your line is open.
Andrew: Thank you.
Robert Martin Friedland: Obviously, the last one we did was a couple of years old, and that should be done by sometime around the end of the year. So we'd like to get it done and published before year end. You know, I could be more. You know, that's where we are. Yeah, I'd like to add a few more comments. All of our ore sources that we've been mining are underground. There are shallow open pittable resources that would be the highest grade open pit copper mine in the world.
Andrew: Mark maybe you could just give us a little bit more context on this power that youre securing.
Andrew: From the various grades to the cells through the Zambian Interconnector.
Andrew: Obviously.
Andrew: There is not an active demand for power.
Andrew: In the region in the Congo to the south of the Congo.
Andrew:
Andrew: Can you just give us a sense of.
Andrew: Your level of first mover or ability to secure this power and I think you used the words in your previous comments.
Robert Martin Friedland: And the advantage of open pittable resources is that the mineralized horizons have a lot of pyrite in the hanging wall, and that pyrite that you get on the way down would be extremely beneficial for the smell.
Speaker Change: Long term offtake agreements that these arent.
Speaker Change: Two months that these or something.
Speaker Change: Are we correct I understand that this is kind of a multi year agreement.
Robert Martin Friedland: So for the first time, we're looking as we have more and more milling capacity, we can potentially fill that milling capacity with very significant Open Pinnable Resources that exist on the COMOA license. So you can do the math yourself on getting to 16 or 17 million tons of milling with the existing concentrators, then a fourth concentrator in the future would get us well over 20 million tons. And it's really just a question of how large that concentrator might be. So this year, we should start showing the world what Kamoka Kula could look like in a four and a half dollar per pound price environment or a five dollar per pound price environment.
Speaker Change: Something resembling a 100 megawatt should be available for.
Speaker Change: For a very long time.
Speaker Change: Thank you Roger that's exactly what we're doing we've entered into short term agreements.
Roger: <unk> done a couple of months ago, and that's where that 15 megawatts came from an additional <unk>.
Roger: <unk> thats coming from Tomorrow.
Speaker Change: We have been busy with setting up long term agreements because to get that stability in the long term and the volume the amount of megawatts that you need we need to enter into longer term agreements because these.
Speaker Change: B piece actually need to capitalize some of the some of the investments they need to invest in some of the long term infrastructure.
Speaker Change: <unk> down the track with that we've got 100 megawatts agreements that were busy finalizing now and Thats a long term agreement is basically a permanent.
Speaker Change: Agreement that will be in place so we've as.
Robert Martin Friedland: We bring on additional capacity with less additional capital than any mining company in the world. If there's any place in the world that can expand production quickly in response to higher prices, it's Kamau Kukula. And then, of course, there's the Western Forelands, where we already have 5 million tons of high-grade. And as the spring and summer go on, we will update you on our drilling success in the Western Forelands. But clearly, the next mine, which will be an Ivanhoe Mines operation, will be acquired.
Speaker Change: As a minimum will have been 100 megawatts in place by the end of this year. In addition to 250 odd megawatts that we've done.
Speaker Change: By improvements in the DLC itself, the two bonds that we've upgraded.
Speaker Change: All lines that we proceed with the infrastructure that between and then in addition to that we've got 220 megawatts of diesel that were putting in which we never want to use but if you add it all up phase one two and three will use about 222 megawatts and we will have 540 megawatts of installed power via everything.
Speaker Change: And we will not need to use the diesel and the long term.
Robert Martin Friedland: But we do see the Kamokukula Joint Venture definitely being in striking range to be the second largest copper complex in the world, and given the challenges we've seen in Chile, and we're intimately familiar with those challenges. We're beginning to think we have a chance to be number one just in the joint venture, even without the Western Foreland. So we'll be running more tours as we bring this all into focus; a four dollar or four and a half dollar copper world for us is very, very different from a three and a half dollar per pound real world. Thank you. Yeah, very well said.
Speaker Change: I think.
Speaker Change: In terms of de risking we've done that.
Speaker Change: In the ranch dips redoing that looking for more power to build waste in Poland to get this into the copper district over 1 million tonnes kind of number we busy with all of those long term strategies and an account on this call explained all of them, but other international suppliers at all why teachers plant to snowfall.
Speaker Change: So to us two different metrics.
Speaker Change: I do think if you concentrate on a problem for example power that we had we resolve these problems like we do with everything else.
Robert Martin Friedland: Thank you, Robert. If I could follow up on one sort of finer point, I mean, with the huge amount of throughput that you're getting just from phases one, two, and three, is there any thought to foregoing a phase four and focusing that expansion on Western Foreland? There must be a phase four. Yeah, there has to be a phase four.
Speaker Change: Im very confident that we've gone a long way in the last couple of quarters.
Speaker Change: And securing stable grid power from not only from snowbird from.
Speaker Change: The Zambian grid and from Mozambique, Confect as well.
Speaker Change: That's happened quite recently, but in the longer term I think we will be able to get.
Robert Martin Friedland: Yeah, phase four is for the joint venture. It's, almost without a doubt, we're doing a phase four, let alone a phase five. We're looking at phase five. The joint venture is sitting on an ocean of copper that is immediately developed. The Western Forelands is a completely separate thing. We're not in a joint venture there. That ground is held by Ivanhoe Mines, and they're perfectly fine. Accretive with each other because now that the railroad capacity is opening up to Angola, that railroad goes right through the Western Foreland.
Speaker Change: A lot more megawatts from other sources.
Mark: And Mark any comments on the competitiveness of this is clearly there's other people looking for power.
Mark: So you guys are ahead of the curve.
Mark: We are ahead of the curve is not the cheapest power, but it is not like diesel. So for example, we are running between 13 cents per kilowatt hour and 18 since Jim purchase power.
Mark: <unk> is growing at about 11.
Mark: It's a little bit more expensive, but it is not prohibitive and if you compared to diesel diesel is running at about 40, something 47 odd cents per kilowatt hour. So no more with universe power the Beecher who has to grow.
Robert Martin Friedland: And as we've been increasing the stability of the grid and putting our foot on more regional power, a lot of people are confused. The power is wheeled through Zambia, but it comes from Mozambique, and the vast majority of the Mozambican power is hydropower. Combined with our backup power, that's really our limiting factor. We're not limited by the amount of copper we have here, which is unique. We don't have a shortage of water. We're not fighting ice and snow like you would be up in the Andes or in Canada.
Mark: We all know phase one phase II phase III and I'm going to say faithful we've secured enough power, we're going to be fun with power. If we can have more sizes will reduce waste and photo depending on the size. We can have we can have to do more work at all but I think we archive for the next couple of year.
Mark: Our next five year window.
Speaker Change: And we are not stopping.
Speaker Change: We've got work streams running we got very competent people working on this we also have.
Robert Martin Friedland: Our real strategy is electrical energy, and we're telling you today that we really think we're putting that electrical energy constraint behind us now in the current quarter. And so the joint venture has to see how far it can go. And I would wager, having talked to Mark and our team, we just had our board meeting in London, we really are moving to phase four. That phase four won't touch Kukula West because there are enormous resources in Kukula West, which could make a phase five at the joint venture. And then the Western Forelands is a completely different story, which we will be telling the market about a lot more in the near future. Very exciting. Thank you.
Speaker Change: We're moving quite quickly to look at solar solutions.
Speaker Change: We have some firm bids on solar already and I think that will be added to edit to oh.
Speaker Change: And the two are different sources as we go over time.
Speaker Change: So it's all good it's actually good we're getting there nicely.
Speaker Change: Thanks, Marc just one non power question.
Speaker Change: I'm not sure if there was any comments made about the.
Speaker Change: Tim Opine a feeder.
Speaker Change: Exploration Theres, a little bit of description of that in.
Speaker Change: In the release today.
Speaker Change: Ken.
Speaker Change: We get any additional comments on what kinds of targets depths timing.
Speaker Change: The proposed work on that property.
Speaker Change: Yes.
Ken: I'll take a crack at that.
Ken: The multiparty theater has been named as such by leading Phd government platinum Palladium nickel experts.
Operator: Again, if you have a question, please press star 11 on your telephone and wait for your name to be announced. And our next question will be from Andrew Mikitchook of BMO Capital Markets. Your line is: Thank you, Mark. Maybe you could just give us a little bit more context on this power that you're securing from the various grids to the south through the Zambian Interconnector, obviously. There is an active demand for power in the region, in the Congo, to the south of the Congo. Can you just give us a sense of, you know, your level of being a first mover or ability to secure this power?
Speaker Change: The government of South Africa.
Speaker Change: There exists a giant gravity anomaly 10 kilometers away from our shaft.
Speaker Change: It's one of the largest if not the largest gravity anomalies on this particular planet that we inhabit.
Speaker Change: We have run a much more detailed gravity survey.
Speaker Change: Over the ground.
Speaker Change: And there is something extremely heavy.
Speaker Change: In our neighborhood it could be iron ore it could be.
Speaker Change: The critical is out of the plot rates a critical zone, where we have the mineralization is very heavy rock.
Speaker Change: Grids almost four tons.
Speaker Change: For cubic meter of normal ton of rock will probably grade 272.8.
Andrew Rostislav Mikitchook: And I think you used the words in your previous comments, you know, long-term off-take agreements that these aren't, you know, month to month, that these are something. Are we correct to understand that this is kind of a multi-year agreement that, know, something resembling 100 megawatts should be available? [inaudible] on the web.
Speaker Change: <unk> for cubic meters, so there's something very heavy.
Speaker Change: When you're measuring gravity and you don't know how deep it is it could be something ultra heavy very deep or it could be just the heavy but closer to the surface.
Speaker Change: So we're running a lot of other geophysics and mapping and we see a world class targets.
Speaker Change: I'm of the personal belief that the nickel and dominant sulphide nickel and Thomas <unk>.
Speaker Change: And then northern limb of the Bush felt right where our farms are is probably the largest sulphide nickel in dominant on planet Earth.
Mark Farren: RPPs actually need to capitalise on some of their investments. They need to invest in some of the long-term infrastructure. We fall down the track with that.
Speaker Change: And everybody takes that we're just gonna be mining platinum and palladium, but actually we had historical intercepts.
Mark Farren: We've got 100 megawatts of agreements that we're busy finalizing now, and that's a long-term agreement. It's basically a permanent agreement that will be in place. So we've, As a minimum, we'll have that 100 megawatts in place by the end of this year, in addition to the 250 odd megawatts that we've done through improvements in the DRC itself, the turbines that we've upgraded, the power lines that we're busy with, and the infrastructure that we're doing.
Speaker Change: 700 meters thick.
Speaker Change: Sulphide nickel with grammar, so of platinum Palladium and gold as a byproduct now where all of this metal came from is a mystery in fact.
Speaker Change: The entire Bush felt came from is a mystery.
Speaker Change: The theoretical target in the multifamily figure would be the stem of the mushroom that we called the Bush felt.
Speaker Change: So it's a crazy interesting target, we're doing a lot of work on it.
Speaker Change: We'll be taking people on tour later this year.
Mark Farren: And then, in addition to that, we've got 220 megawatts of diesel that we're putting in, which we never want to use. But if you add it all up, phase one, two, and three, we'll use about 220 megawatts, and we'll have 540 megawatts of installed power, if you add everything up.
Speaker Change: They are ready to drill it but we have no idea whatsoever, what it is.
Speaker Change: What is so heavy.
Speaker Change: Just don't know how deep it is but.
Speaker Change: There are deep mines in the world and it could be deep it could be shallow and time will tell South Africa is probably the most under explored high.
Speaker Change: Entry in the World.
Speaker Change: If the numerator is its mineral potential the denominator is what has been actually done theres been really no significant exploration in South Africa since we found.
Mark Farren: And we will not need to use diesel in the long term. So I think, in terms of de-risking, we've done that. Taking the right steps, we're doing that. Looking for more power to build Western Forlands, to get this into the Copper District, over a million tons of the kind. We're busy with all of those long-term strategies, and I can't explain all of them on this call, but there are other international suppliers that are waiting to supply additional power to us through different networks. So I do think that if you concentrate on a problem, for example, the power that we have, we resolve these problems like we do with everything else.
Speaker Change: The <unk> mine, which is itself the largest precious metals mine being developed in the world.
Speaker Change: Given the well advertised problems in South Africa to secure mineral title the 10 years.
Speaker Change: But we'd rather challenging during the zoom in euro.
Speaker Change: The World is just stayed away from South Africa for our mineral exploration, but often reminds us there and we see a number of very compelling opportunities for tier one discoveries.
Speaker Change: First of which is the local party feeder.
Mark Farren: I'm very confident that we've gone a long way in the last couple of quarters in securing stable grid power from not only Snell but the Zambian grid and, in fact, Mozambique, as well. That happened quite recently, but in the longer term, I think we will be able to get a lot more megawatts from other sources. And Mark, any comments on the competitiveness of this? Clearly, there are other people looking for power.
Speaker Change: Were that to be the case that would be a negative cost base metals discovery, because there's so much precious metals dominant. So this is a third or fourth quarter project and it'll be telling you more about it in the near future.
Speaker Change: Thank you for the question.
Speaker Change: Well, thank you Robert and I will turn over the microphone to the next.
Speaker Change: Thank you very much.
Speaker Change: Okay.
Speaker Change: And I would now like to turn the call back to Matthew <unk> for additional questions from the web.
Matthew Richard Keevil: Thanks, very much operator, we have a few minutes left here I have just one or two questions from the web that are warrants from ascension. So we'll just group them together I think Robert this is probably geared.
Mark Farren: You guys are ahead of the curve. We're ahead of the curve. It's not the cheapest power, but it's not like diesel.
Speaker Change: Geared towards you I have a couple of questions on premiums for our low emissions and responsibly produced metals, both nickel and copper are some people asking if you could speak to the.
Mark Farren: So for example, we're running between $0.13 per kilowatt hour and $0.18 to import this power. Right now, power is going at about $0.11. So it's a little bit more expensive, but it's not prohibitive. And if you compare it to diesel, diesel is running at about 40 something 47 odd cents per kilowatt hour.
Speaker Change: The potential for seeing premiums on responsibly produce metal and what youre hearing in the market on that movement.
Speaker Change: The 100% certain.
Speaker Change: The iron ore mines will be rewarded with premiums for our metal.
Speaker Change: Because we are the lowest.
Speaker Change: Generator of global warming guests per unit of metal produced in fact.
Speaker Change: It's becoming blatantly obvious that the mining industry in general that the giant porphyry coffers.
Mark Farren: So the more we get of this power, the better for us to grow. For where we are now, phase one, phase two, phase three, and I'm going to say phase four, we've secured enough power; we're going to be fine with power. If we're going to build more phases, when we do the Western Fulham, depending on the size, we're going to have to do more work, that's all. But I think we're okay for the next couple of years, the next five-year window. We're okay.
Speaker Change: <unk>.
Speaker Change: Have only had to compete on one parameter cash cost per pound of making copper.
Speaker Change: But when you look at the global warming guests per unit of copper produced unless that those open pit mines are powered by a nuclear power plant or a hydropower.
Speaker Change: They create a horrendous amount of global warming gas per year of copper produced so it makes no sense for kids or grandkids.
Mark Farren: And we are not stopping. We've got work streams running. We've got very competent people working on this. We also have, We're moving quite quickly to look at solar solutions. And we have some firm bids on solar already. And I think that will be added to our, Added to our different sources as we go over time. That's all good. It's actually good.
Speaker Change: The green the world economy, if we're going to mine.
Speaker Change: Low grade copper and grind it down to nothing.
Speaker Change: And get the same prices everybody else today covers $4.58 a pound.
Speaker Change: Whether you produce clean copper or dirty copper no that's coming to a screaming halt.
Speaker Change: <unk> technologies is about to begin trading.
Speaker Change: Metals in relation to their ESG characteristics on the Singapore stock.
Mark Farren: We're getting there nicely. Thanks. Thanks, Mark. Just one non-power question. I'm not sure if there were any comments made about the.
Speaker Change: He has changed and a lot of people don't realize.
Speaker Change: How important the Singapore market is but iron ore it used to be traded between Rio Tinto, BHP and the Korean and Japanese steel mills once a year they have a degree of price and iron.
Andrew Rostislav Mikitchook: The Mokopane Feeder exploration, there's a little bit of description of that in the release today. Do we get any additional comments on what kinds of targets, depth, and timing of the proposed work on that property? Yeah, I'll take it.
Speaker Change: Once Singapore started trading fungible iron contracts, all the iron and the World has traded there.
Speaker Change: So we're about to see all metals traded according to their ESG characteristics by a company that found a way to institutionalize trust using the blockchain, it's not easy to have differential pricing on metals.
Robert Martin Friedland: I'll take a crack at that. The Mukherjee feeder has been named as such by leading PhD government platinum, palladium, and nickel experts from the government of South Africa. There exists a giant gravity anomaly 10 kilometers away from our shaft. It's one of the largest, if not the largest gravity anomalies on this particular planet that we inhabit.
Speaker Change: And sweet and sour crude oil or different grades of crude oil.
Speaker Change: Now Susan different grades of copper and nickel and other metals as well as LNG and other forms of hydrocarbons.
Robert Martin Friedland: We have run a much more detailed gravity survey, and on that ground, there's something extremely heavy in our neighborhood. It could be iron, or it could be the critical zone of the plot reef. The critical zone where we have the mineralization is very heavy rock; it grades almost four times per cubic meter. A normal ton of rock will probably grade 2.7, 2.8 tons per cubic meter. So there's something very heavy, but when you measure gravity, you don't know how deep it is.
Speaker Change: That's because the world has failed to put a price on carbon.
Speaker Change: And that's so silly that we're the greenest producer of copper in the world that is significant.
Speaker Change: And yet we're getting the same prices everybody else that will not persist.
Speaker Change: As soon as we have markets that can reward people.
Speaker Change: Who make clean copper than some of the German automakers will pay a premium for the clean copper and if you're a dirty copper producer you will achieve a discount and that is how it should be and that's why the Democratic Republic of the Congo sits in the best position in the world for developing Green metals.
Robert Martin Friedland: It could be something ultra heavy, very deep, or it could be just something heavy, but closer to the surface. So we're running a lot of other geophysics and mapping, and we see a world-class target. I'm of the personal belief that the nickel endowment, sulfide nickel endowment, in the northern limb of the Bushveld, right where our farms are, is probably the largest sulfide nickel endowment on planet Earth. And everybody thinks that we're just going to be mining platinum and palladium. But actually, we do have historical intercepts.
Speaker Change: Yeah, the only place we're going to find these green metals that scale is the African continent, that's where we have hydropower and high grades and this is becoming increasingly obvious to everybody.
Speaker Change: We're seeing discussions that occur.
Speaker Change: Copper industry needs at least say $15000 a ton to screw up their courage to build a large low tonnage copper mine.
Robert Martin Friedland: 6, 700 meters thick, of sulfide nickel with a gram or so of platinum, palladium, and gold as a byproduct. Now, where all this metal came from is a mystery. In fact, where the entire Bushveld came from is a mystery. The theoretical target in the Mokopani feeder would be the stem of the mushroom that we call bushveld velvet.
Speaker Change: If you look at it provide a block of it came in at close to double the capital that was predicted.
Speaker Change: And so in an uncertain world in Latin America, you, probably do need 15000.
Speaker Change: Is it time to bring on stream.
Speaker Change: Significant 0.6 of 1% porphyry copper mines, a lot of the existing mines have grades are declining in.
Robert Martin Friedland: So it's a crazy, interesting target. We're doing a lot of work on it, will be taking people on tour later this year, and we'll get ready to drill it. But we have no idea whatsoever what it is, what it is so heavy.
Speaker Change: In grids that burn coal to make electrical energy I mean, you know this.
Speaker Change: Suddenly shines three or four hours a day.
Speaker Change: In South America, and so the grid is a coal burning grid in countries like.
Robert Martin Friedland: And we just don't know how deep it is. But, you know, there are deep mines in the world. It could be deep, it could be shallow. And time will tell. South Africa is probably the most underexplored country in the world.
Speaker Change: Peru and Chile.
Speaker Change: We have a tremendous amount of interest in the production of green metal and that's where the Congo will clearly lead the world.
Speaker Change: And we look forward to the day, where we will be able to assure shareholders a premium price for copper, but 100% for sure differential pricing in metals.
Robert Martin Friedland: If the numerator is its mineral potential, the denominator is what has actually been done. There's really been no significant exploration in South Africa since we found the Platte Reef mine, which is itself the largest precious metals mine being developed in the world. Given the well-publicized problems in South Africa to secure mineral title, the 10 years that were rather challenging during the Zuma era. The world has just stayed away from South Africa for mineral exploration, but Ivanhoe Mines is there, and we see a number of very compelling opportunities for Tier 1 discoveries, the first of which is the Mokopuni feeder. If that were to be the case, that would be a negative cost-based metals discovery because there are so many precious metals in diamonds.
Speaker Change: Opening soon in a theater near you brought to you by Eva technologies and these are serious people. They ran the backroom Goldman Sachs and they're involved in the Comex and then IMAX, which are the leading.
Speaker Change: Commodities traders in the world as it changes so it took a long long time to do this but it's really going to happen.
Speaker Change: Thank you for the opportunity to pontificate on that important question.
Speaker Change: Thank you Robert and I believe we've pretty much covered all the questions today online and on the phone. So we'll wrap up the call. Just a quick reminder, if you do have a outstanding question that wasn't answered during the course of this call. Please do follow up with our IR team, Tommy Alex or myself and we'd be happy to answer that question offline, but this concludes the call I'd like to thank Ed.
Robert Martin Friedland: So this is a third or fourth quarter project, and we'll be telling you more about it in the near future. Thank you for the question. Thank you, Robert. I will turn the microphone over to the next speaker. Thank you very much.
Speaker Change: Everyone for attending today's event and we look forward to speaking with you soon on the many exciting milestones coming up this year operator, please do feel free to wrap up.
Matthew Richard Keevil: And I would now like to turn the call back to Matthew Keevil for additional questions from the web. Thanks very much, operator. We have a few minutes left here. I have just one or two questions from the web that warrant some attention.
Speaker Change: Certainly thank you. Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Robert Martin Friedland: So we'll just group them together. I think, Robert, this is probably geared towards you. I have a couple questions on premiums for low emissions and responsibly produced metals, both nickel and copper. Some people are asking if you could speak to the potential for seeing premiums on responsibly produced metal and what you're hearing in the market about that movement. It is 100% certain that Ivanhoe Mines will be rewarded with premiums for our metal because we're the lowest generator of global warming gases per unit of metal produced.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Robert Martin Friedland: In fact, it's becoming blatantly obvious to the mining industry in general that the giant porphyry coppers have only had to compete on one parameter, cash cost per pound of making copper. But when you look at the global warming gas per unit of copper produced, unless those open pit mines are powered by a nuclear power plant or hydropower, they create a horrendous amount of global warming gas per unit of copper produced, and it makes no sense for our kids or our grandkids to green the world economy if we're going to mine low-grade copper and grind it down to nothing, and get the same price as everybody else. Today, copper is $4.58 a pound, whether you produce clean copper or dirty copper.
Robert Martin Friedland: Sure.
Robert Martin Friedland: [music].
Robert Martin Friedland: Now, that's coming to a screaming halt. ABEX Technologies is about to begin trading metals in relation to their ESG characteristics on the Singapore Stock Exchange, and a lot of people don't realize how important the Singapore market is, but iron ore used to be traded between Rio Tinto and BHP and the Korean and Japanese steel mills once a year; they would agree a price in iron. Once Singapore started trading fungible iron contracts, all the iron in the world was traded there.
Robert Martin Friedland: So we're about to see all metals traded according to their ESG characteristics by a company that found a way to institutionalize trust using the blockchain. It's not easy to have differential pricing on metals. You've seen it in sweet and sour crude oil or different grades of crude oil.
Robert Martin Friedland: You will now see it in different grades of copper and nickel and other metals, as well as in LNG and other forms of hydrocarbon. And that's because the world has failed to put a price on carbon. And that's so silly that we are the greenest producer of copper in the world, which is significant. And yet, we're getting the same price as everybody else. That will not persist. As soon as we have markets that can reward people who make clean copper, then some German automakers will pay a premium for that clean copper. And if you're a dirty copper producer, you will get a discount. And that is how it should be.
Robert Martin Friedland: And that's why the Democratic Republic of the Congo sits in the best position in the world for developing green metals. Yeah, the only place we're going to find these green metals at scale is the African continent. That's where we have hydropower and high grade. And this is becoming increasingly obvious to everybody.
Robert Martin Friedland: We're seeing discussions that the copper industry needs at least, say, $15,000 a ton to screw up their courage and build a large, low-tonnage copper mine. If you look at Curvada Blanca, it came in at close to double the capital that was predicted. And so in an uncertain world in Latin America, you probably do need $15,000 a ton to bring significant 0.6 of 1% porphyry copper mines on stream. And a lot of the existing mines have grades that are declining in grids that burn coal to make electrical energy. I mean, you know, the sun only shines three or four hours a day in South America.
Robert Martin Friedland: And so the grid is a coal-burning grid in countries like Peru and Chile. So we have a tremendous amount of interest in the production of green metals, and that's where the Congo will clearly lead the world. And we look forward to the day when we'll be able to show our shareholders a premium price for our copper, but 100% for sure, differential pricing in metals is opening soon at a theater near you, brought to you by ABEX Technologies. And these are serious people. They ran the backroom at Goldman Sachs, and they were involved in ComEx and then IMEX, which are the leading commodities traders in the world as exchanges.
Robert Martin Friedland: So it took a long time to do this, but it's really going to happen. Thank you for the opportunity to pontificate on that important question. Thank you, Robert. And I believe we've pretty much covered all the questions today online and on the phone. So we'll wrap up the call. Just a quick reminder, if you do have an outstanding question that wasn't answered during the course of this call, please do follow up with our IR team, Tommy, Alex, and myself. And we'd be happy to answer that question offline, but this concludes the call.
Operator: I'd like to thank everyone for attending today's event, and we look forward to speaking with you soon on the many exciting milestones coming up this year. Operator, please do feel free to wrap it up. Certainly. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Class A Class B Class C Class D Class B Class C Class D Class A Class B Class C Class D Class B Class C Class D Class A Class B Class C Class D Class B Class C Class D Class A Class B Class C Class D Class B Class C Class D Class A Class B Class C Class D Class A Class B Class C Class D Class A Class B Class C Class D Class A Class B Class C Class D Class A Class B Class C Class
Operator: [music].
Operator: .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A B A, A A A A A A A A A A A A A A, Good day and thank you for standing by.
Operator: Welcome to the Ivanhoe Mines First Quarter 2024 Financial Results Conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone.
Matthew Richard Keevil: You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Matthew Keevil, Director of Investor Relations and Corporate Communications. Please go ahead. Thank you, operator. And hello, everyone.
Matthew Richard Keevil: And a good day from sunny Vancouver. It's my pleasure. Welcome to Ivanhoe Mines' first quarter 2024 financial results conference call. My name is Matthew Keevil, and I'm the director of IR and corporate communications at Ivanhoe Mines. On the line today from the company are founder and executive co-chairman Robert Friedland, President Marna Cloete, Chief Financial Officer David Van Keelden, Chief Operating Officer Mark Farren, Executive Vice President, Corporate Development and Investor Relations Alex Pickard, and Executive Vice President, Project Steve Amos. 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.
Matthew Richard Keevil: Please contact our investor relations directly for follow-up questions that are not addressed during the call. Before we begin, I'd like to remind everyone that today's events 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 the forward-looking statements are contained in our April 30th news release, as well as on CDAR Plus and at www.ivanhoemines.com. It is now my pleasure to introduce Ivanhoe Mines founder and executive co-chairman Robert Friedland for some opening remarks. Robert, please go ahead.
Robert Martin Friedland: Yes, thank you. Welcome to our quarterly conference call. A few general remarks. We're extremely happy with progress in the Congo. For those of you that are unfamiliar with our copper business, we can find more copper faster than we can build new production. We are only limited by electrical energy.
Robert Martin Friedland: [music].
Robert Martin Friedland: And we've solved that problem. We're going to explain why that problem is behind us. We took the opportunity to convert our convertible notes, as our shares have traded near an all-time high, which will leave us essentially debt free.
Robert Martin Friedland: We see nothing but clear sailing towards growing our production in the third and fourth phase at our joint venture at Komoku Kula. And we see nothing but upside in the Western Forelands for finding more metal. Somebody has to go out and find the metal that the world needs.
Robert Martin Friedland: It's going to be Ivanhoe Mines. I think we have a lot of new information to give to the market today, and you'll see why we've taken the position to do what we're doing. If you could show the next slide, please.
Robert Martin Friedland: We've been sending this Batman picture around about the absolute centrality of copper to the energy transition. There will be no energy transition without it. And we also see enormous amounts of offtake demand in the re-militarization of the world economy. Tensions and the balkanization of the world economy are causing copper to be a definitive national security issue for each nation state.
Robert Martin Friedland: So Ivanhoe Mines is unique in its ESG characteristics, and we'd like to refer all of our shareholders to the progress and the culture that the women and men that lead our company have created. And with that, I'm going to turn this over to the specifics and tell you why I think it's a fantastic opportunity now to get involved with Ivanhoe Mines. Marna, it's over to you. You're in Johannesburg. Please give them some specifics.
Marna Cloete: Thank you, Robert. And it is indeed the season for copper. So, say a picture speaks a thousand words, and what you see here in my introduction slide is Phase 3, the 5 million tonne per annum concentrator that's basically being commissioned as we speak, and we will be starting our production there in May, which starts tomorrow. So it's really exciting times at Kumaoka Koola. If we go on to the next slide, the first quarter of 2024 was slightly below our expectations.
Marna Cloete: And as Robert alluded to, that was mainly due to more than expected power interruptions and grid instability in the DRC. Our team has subsequently implemented several mitigating measures, and we have already started to see the results of these efforts. First, we secured an additional 15 megawatts of power through the Zambian grid. And secondly, we have embarked on an extensive grid upgrade and maintenance plan with our project team stationed in Kinshasa working alongside the state-owned power utility to prioritize and implement critical initiatives.
Speaker Change: Good day, and thank you for standing by and welcome to the Ivanhoe mines first quarter 2024 financial results conference. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Marna Cloete: These initiatives have already had a positive impact on production in April, with our production expected to be in excess of 32,000 tons for the month. In addition to this, we have also secured an additional 40 megawatts from Mozambique, also to be transmitted through the interregional grid. And this will commence tomorrow, the 1st of May.
Marna Cloete: We'll then hear an automated message advising that your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker, Matthew Campbell Director of Investor Relations and corporate Communications. Please go ahead.
Marna Cloete: So in total, an additional 55 megawatts of power. Pre-commissioning of our Phase 3 concentrator, as I said earlier, is ahead of schedule with our first ore expected in May, and the Phase 3 smelter is also on schedule for the fourth quarter of this year. As we enter the dry season in April,
Marna Cloete: Okay.
Speaker Change: Thank you, operator, and Hello, everyone and good day from Sunny Vancouver, and it's my pleasure to welcome to Ivanhoe mines first quarter 2024 financial results Conference call.
Marna Cloete: Our drilling activities are ramping up on the Western Forelands, and we have 17,000 meters of drilling planned. May will be a busy month overall, as we also start with pre-commissioning of the concentrator at Kapushi, which is scheduled for first ore in June. Next slide. On a group-wide basis, our total recordable injury frequency rate is well below the industry standard. But regrettably, after quarter int, we had a fatality at the Kinsoko mine. Kamal Koppa is undertaking a comprehensive internal investigation.
Matthew Richard Keevil: My name is Matthew coupon on the director of IR and corporate communications at Ivanhoe mines on the line today from the company, we are a founder and executive Chairman, Robert Friedman, President Martin <unk> Chief financial.
Marna Cloete: Cancel officer, David <unk>, Chief operating Officer, Mark Ferret Executive Vice President corporate development, and Investor Relations, Alex Baird and executive Vice President projects, 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.
Marna Cloete: Please contact our Investor relations team directly for follow up questions that are not address during the call.
Marna Cloete: Once the investigation is complete, our management will review and implement any additional safety measures recommended to prevent such an accident from recurring. Next slide On the 17th of April, we also launched our seventh annual sustainability report, and we invite all of you to go and read the incredible stories of how we continue on our journey to mine with a greater purpose. A few highlights for 2023 include Kamauka Kula contributing 6% to the DLC GDP. That is an outstanding achievement. $2.7 billion was spent on local supplies Group Y. We provided 849 scholarships and bursaries, group-wide, illustrating our commitment to education and local empowerment.
Marna Cloete: Before we begin.
Marna Cloete: To remind everyone that today's events that 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 on forward looking statements are contained in our April 30 news release as well as on SEDAR and at Www Dot Ivanhoe mines Dot Com. It is now my pleasure to introduce Ivanhoe mines founder.
Marna Cloete: Executive co chairman Robert Friedman for some opening remarks, Robert Please go ahead.
Speaker Change: Yes. Thank you welcome to our quarterly conference call.
Marna Cloete: A few general remarks.
Marna Cloete: We're extremely happy with progress in the Congo.
Marna Cloete: For those of you that are unfamiliar with our copper business we have.
Marna Cloete: We can find more copper faster than we can build new production.
Marna Cloete: We are only limited by electrical energy and we've solved that problem. We can explain why that problem is behind us.
Marna Cloete: 845 local suppliers were supported group wise, representing a 150% increase year-on-year, and we spent $39 million on socioeconomic activities across the Next slide. For 2024, we will focus on the following strategic initiatives that will be incorporated into our scorecard, or decarbonization strategy for next year: Tailings Management in conformance with the Global Industry Standards for Tailings Management, embedding human rights into our business practices, based practice in responsible sourcing, as well as stringent diversity and inclusion targets.
Marna Cloete: Taking the opportunity to convert our convertible notes as our shares have traded near an all time high which will leave us essentially debt free.
Marna Cloete: We see nothing but clear sailing towards growing our production in the third and fourth phase at our joint venture <unk>.
Marna Cloete: Who cooler.
Marna Cloete: And we see nothing but upside in the western Portland's on finding more metal.
Marna Cloete: Somebody has to go out and find the metal that the world needs.
Marna Cloete: Going to be either at our mines.
Marna Cloete: I think we have a lot of new information to give to the market today and you'll see why we've taken the position to do what we're doing.
Marna Cloete: Can show the next slide please.
Marna Cloete: We've been sending this.
Marna Cloete: Batman picture wrong about the absolute centrality of copper.
Marna Cloete: The energy transition.
Marna Cloete: There will be no energy transition without it and.
Marna Cloete: With that as an introduction, I will now hand over to David Heerden to take you through the quarterly results. Thank you, Marna, and good morning and good day to everyone joining the call today. Marna already mentioned the instability with the DRC's southern-powered grid, which impacted the financial results of the court. The quarterly revenue of $618 million was stable compared to the previous quarter.
Marna Cloete: And we also see enormous amounts of offtake demand.
Marna Cloete: In the re militarization of the world economy tension.
Marna Cloete: And the bulk of possession of the world economy are causing copper to be definitive national security issue for each nation state.
David Harry Van Heerden: I would remind you is unique in its ESG characteristics, we like to refer all of our shareholders to the progress and the culture that the women and men that lead our company have created and with that I'm going to turn this over to the specifics and tell you why I think it's a fantastic opportunity now to get involved with either in our minds.
David Harry Van Heerden: The payable tons of copper sold for Q1 were $85,000 at a realized copper price of £3.82 per pound. With an average price of $4.30 per pound in April to date, we expect a nice uptick in revenue in the second quarter. We expect a sizable remeasurement adjustment in the second quarter as the 30,000 tonnes of payable copper provisionally priced are realized, and the higher price will, of course, also benefit the revenue for the tons sold in the second quarter. The cash cost per pound of payable copper produced for the quarter was $1.57 per pound.
Speaker Change: So over to you you're in Johannesburg, Please give those specifics.
Speaker Change: Thank you Robert and it is indeed the season for Copa.
David Harry Van Heerden: Hi picture speaks a thousand with kind of what you see yeah in my introduction slide if I see the 5 million tonne per annum concentrate there.
David Harry Van Heerden: They are being commissioned as we speak and we will be starting a production day in may at which starts tomorrow is that its really exciting times at comerica cooler.
David Harry Van Heerden: If we go onto the next slide.
David Harry Van Heerden: The first quarter of 2024 was slightly below our expectations and as Robert alluded to that was mainly due to more than expected power interruptions and grid instability in the DRC.
David Harry Van Heerden: This was towards the bottom end of our 2024 guidance of $1.50 to $1.70 per pound, which we reiterate. The increase in Kamarka Kula C1 cash costs in the first quarter is principally due to the decrease in copper and concentrate produced during the quarter, but also as a result of the lower grade of copper processed in Q1. The grid instability during the quarter not only impacted the ore tons mulled but also impacted on the copper ore grade processed due to the reduced underground access to high-grade areas due to water ingress during power interruptions.
David Harry Van Heerden: Subsequently implemented favorable mitigating measure and we have already started to see the results of these efforts in April.
David Harry Van Heerden: Firstly, we secured an additional 15 megawatts of power to the Zambian grid.
David Harry Van Heerden: And secondly, we have embarked on an extensive grid upgrades and maintenance plan with our project teams passions in Kinshasa, working alongside the size and power utility to prioritize and implement critical initiatives. These initiatives have already had a positive impact on production in April with all production.
David Harry Van Heerden: Marna really highlighted how these challenges are being overcome, and Mark will give more color later on in the presentation. The completion of the onsite smelter on schedule for commissioning later this year is still expected to drive a decrease in average C1 cash costs over the first five years post completion, from 2025 by approximately 20%. Kamau Kakula's EBITDA was up quarter on quarter to $365 million, with the EBITDA margin also up to 59% in Q1.
David Harry Van Heerden: Baked it to be in excess of 52000 tons put them.
David Harry Van Heerden: In addition to this we have authenticate an additional 14 megawatts from item beat all have to be transmitted to the interregional grit and this will commence tomorrow on the first of my title an additional 55 megawatts of power.
David Harry Van Heerden: Pre commissioning of our bis III constant drive to have I would say India is ahead of schedule with our first oil expected in mind and the phase three small based also on schedule for the fourth quarter of this year.
David Harry Van Heerden: On the next slide, Kamaua Kakula's Iwadawa Waterfall, illustrated on this slide, highlights that the EBITDA increase from the last quarter was driven by the higher copper price during the quarter, which had an accumulated impact of $35 million. This was partially offset by the impact of the reduction in time sold, while we benefited from lower logistics charges, PCs, and RCs in the quarter, while other costs increased only margin. The next slide shows a snapshot of Ivanhoe's consolidated results. Ivanhoe reported a normalised profit of $70 million in Q1, slightly up from the previous quarter.
David Harry Van Heerden: As we entered the dry season on April <unk>.
David Harry Van Heerden: Drilling activities are ramping up on the waste in Poland, and we have 17000 meters of drilling planned for this year.
David Harry Van Heerden: Now it will be a busy month out of there or is it also starts with pre commissioning of the concentrate that completion, which is schedule for first oil into next.
David Harry Van Heerden: Next slide.
David Harry Van Heerden: On a group wide basis our title.
David Harry Van Heerden: Total recordable injury frequency rate remains well below the industry standard.
David Harry Van Heerden: Regrettably after quarter end, we had a fatality at the <unk> mine tomorrow.
David Harry Van Heerden: The markup is undertaking a comprehensive internal investigation into this accident. Once the investigation is complete our management will reveal and implement any additional safety measures recommended to prevent such an accident from occurring.
David Harry Van Heerden: This excludes the $139 million non-cash loss on the revaluation of the $575 million convertible notes, which is as a result of the 26% increase in our share price. The increase in our share price is obviously a great problem to have, but the impact of the revaluation on our results is, yeah, somewhat distorting.
David Harry Van Heerden: Next slide.
David Harry Van Heerden: Okay.
David Harry Van Heerden: On the 17th of April we also launched our seventh annual sustainability report and we invite all of you to country incredible story of how we continue on our journey to mind with greater purpose.
David Harry Van Heerden: A few highlights for 2008 2018 played kabaka cooler contributed 6% to the DRC GDP that is.
David Harry Van Heerden: This is one of the reasons that we announced the redemption of the notes earlier today. So, we will no longer have this problem from Q3 onwards. If we look at our strong balance sheet on the next graph, we will be in a net cash position, with our cash on hand exceeding the consolidated date on the balance sheet.
David Harry Van Heerden: Standing achievement.
David Harry Van Heerden: $7 billion were spent on local suppliers group what we.
David Harry Van Heerden: We provided them.
David Harry Van Heerden: 100 <unk>.
David Harry Van Heerden: 49 scholarships intensity group block illustrating our commitment to education and local empowerment.
David Harry Van Heerden: 845, local suppliers, they supported group large representing 150% increase in gallons yet.
David Harry Van Heerden: Our continued investment in growth during the quarter remained materially on budget, and we'll start providing additional returns imminently with the completion of the Phase 3 concentrate at Kamakakula and the commencement of production at Kapusia ahead of schedule. Not only are our projects significantly de-risked, but the capital intensity is much lower than the massive numbers that have recently gotten a lot of media attention. We have been able to arrange joint venture level facilities with great terms at Kamau Kokula, with working capital and overdraft facilities attracting an interest of a mere 6.5%.
David Harry Van Heerden: And we spent $59 million on cash economic activities across the group.
David Harry Van Heerden: Next slide.
David Harry Van Heerden: For 'twenty 'twenty four we will focus on the following strategic initiatives that will be incorporated into our scorecard.
David Harry Van Heerden: Carbonization strategy to natively, Iran.
David Harry Van Heerden: Thailand management in conformance with the global industry standards, some tailings management.
David Harry Van Heerden: Embedding human rights into our business practices.
David Harry Van Heerden: Based practice in responsible sourcing as well as stringent diversity and inclusion talk it.
David Harry Van Heerden: But that doesn't introduction I will now hand over to David to take you through the quarterly results.
Speaker Change: Thank you Martin and good morning, and good day to everyone joining the call today.
Mark Farren: The arrangement of additional facilities for Kapushi is also progressing well, with finalization expected in the second quarter. We really have a bright future of growth ahead with almost no debt, making us more nimble than any of our peers. Mark Farren, our COO, will take the presentation further to highlight our recent operations and project progress. And we're just going to turn the call over to our COO, Mark Farren, in a moment as he connects the line, Mark. Thank you. Matthew, I'm going to talk through, I'm looking at, and I'm using my phone to basically drive through my portion of the presentation because I can't see your screen.
David Harry Van Heerden: <unk> already mentioned being stability, the dlcs southern power grid, which impacted on the financial results for the quarter. The quarterly revenue of $618 million was stable compared to the previous quarter.
Mark Farren: <unk> tons.
Mark Farren: Copper sold for Q1 was 85000.
Mark Farren: At our realized copper price.
Speaker Change: 382 per pound.
Mark Farren: The average price of $4 30 per pound in April to date, we expect a nice uptick in revenue in the second quarter reached.
Mark Farren: We expect a sizable remeasurement adjustment in the second quarter as 30000 tons of copper Proficiently price is realized.
Mark Farren: So here's the first picture of that nice melter in the background. If I can move to the next one, which is basically your copper production, quarterly copper production slide, and it was mentioned by David and Marna that we produced 86,000 tons of copper in the quarter, the first quarter, which is not exactly our normalized number. And if you look at it, you'll see that the December quarter and the service quarter were impacted quite heavily by power and so grid instability for some of the reasons mentioned. And I'll actually want to talk about what we're doing about it. And that's the next slide.
Mark Farren: And at the higher price, we will of course also benefit to revenue for the tons sold in the second quarter.
Mark Farren: If we move to the next slide.
Mark Farren: Okay.
Mark Farren: The cash cost per pound of payable copper produced for the quarter was $1 57 bound this was towards the Bakken.
Mark Farren: Our 2020 full guidance of $1 50 to $1 70 per pound, which we reiterate that.
Mark Farren: The increase in commodity cooler Q1 cash cost in the first quarter is principally due to the decrease.
Mark Farren: So, we've got a team, as Marna mentioned, in Kinshasa, working with the state utilities now on projects across the grid, not just the turbine that we're installing at Inga, but also to stabilize the grid. They've got two DC power lines that we're busy working with. There's a whole lot of reactive power projects and synchronous converter stations that are being upgraded as we speak. It's about a 200 million-odd dollar investment, which is going into our loan agreement with Snell, which gets paid back, as we've discussed this before, by a reduction in power tariffs over the longer term for us. So that's one dimension is to make the snow grid stable with the team.
Mark Farren: And copper and concentrate produced during the quarter, but also as a result.
Mark Farren: All of the lower grade of copper.
Mark Farren: Probably Q1, the greater instability during the quarter not only impacted on bolt ons mode, but also impacted on the copper ore grade processed due to the reduced underground access to high grade areas due to the water in Greece during power interruptions model really highlighted how these challenges have been.
Mark Farren: Overcome and Mark will give more color later on in the presentation.
Mark Farren: The completion on bonds of the onsite smelter on schedule for commissioning later this year is still expected to drive a decrease in average cone cash cost over the first five years post completion.
Mark Farren: The second one is importing power, and in the month of April, we managed to get 15 megawatts from Zambia through the Zambian grid. And then tomorrow, the 1st of May; we've signed an agreement to secure an additional 40 megawatts of power, which will take our imported power to 55 megawatts, which is a major breakthrough for us because it's stable power. And this source is actually from Mozambique.
Mark Farren: From 2025.
Mark Farren: Approximately 20%.
Mark Farren: <unk> EBITDA was up quarter on quarter to <unk> hundred $65 million with EBITDA margin also up 259% in Q1.
Mark Farren: On the next slide.
Mark Farren: Yeah.
Mark Farren: <unk> EBITDA waterfall illustrated on the slide.
Mark Farren: So if you add the two together, you get 55 megawatts, and we've actually done projects which are stabilizing the grid in snow. So at the moment, it's a lot more stable. April's looking pretty good.
Mark Farren: What's that.
Mark Farren: The EBITDA increased from the last quarter was driven by the higher copper price during the quarter, which had an accumulated impact of $35 million.
Mark Farren: We'll be north of 33,000 tonnes, which is more or less where the two concentrators should be, maybe a little bit more. And we've had almost no interruptions in the month of April. In addition to this, we have also spoken about this; we are installing backup diesel generator power for basically the whole mine to be able to run under any conditions. And a big chunk of that will be commissioned in July this year.
Mark Farren: This was partially offset by the impact of the reduction in tons sold while we benefited from lower logistics charges piece is an off season quarter, while other costs increased only marginally.
Mark Farren: The next slide shows a snapshot of <unk> consolidated results.
Mark Farren: Yeah.
Mark Farren: Often I recognize a normalized profit of $70 million in Q1 slightly up from the previous quarter. This excludes the I'm digging to the $9 million noncash loss on the revaluation of the and $575 million convertible notes, which is.
Mark Farren: So we'll have about 120 megawatts running by July this year, and by December, 220 megawatts of diesel power installed, which will give you 100% redundancy in terms of what's required to provide power. And then just to summarize where we are on power. The imported power will probably increase by the end of this year to 100 megawatts. We're busy signing off long-term off-dates.
Mark Farren: As a result of the 26% increase in our shape Ross.
Mark Farren: The increase in our shaped process obviously.
Mark Farren: Great problem to have but the impact of the revaluation on our results.
Mark Farren: Yes somewhat distorting.
Mark Farren: This is one of the reasons that we announced the redemption of the notes earlier today. So we will no longer have this problem and from Q3 onwards.
Mark Farren: We've secured the power supply for that. And then the bulk of the work at Snell will be completed in quarter two next year, and quarter three, quarter four, it'll be stable. In that case, we'll probably have 100% redundancy on what's required in our builder. So we'll have enough power for phase one, phase two, phase three, phase four, and future expansion. So I think it has been a problem in the last two quarters.
Mark Farren: Yeah.
Mark Farren: If we look at our strong balance sheet.
Mark Farren: On the next graph.
Mark Farren: Okay.
Mark Farren: So with the redemption of the convertible notes, we will be in a net cash position with our cash on hand exceeding the consolidate to date on the balance sheet. A continued investment in growth during the quarter remained materially on budget and we will start providing additional returns imminently with the completion of the phase III constant.
Mark Farren: <unk> cooler and the commencement of production of depreciate a schedule.
Mark Farren: We've done a lot of work to de-risk power, and I think it's going a hell of a lot better. And going forward, I believe there'll be enough redundancy in the system to be able to expand as we need to. So I'm quite comfortable that we're getting there now. Thank you. If we can move on to the next slide.
Mark Farren: Not only are our projects significantly derisked the capital intensity is much lower than the massive numbers that have recently gotten a lot of media attention.
Mark Farren: We have been able to arrange joint venture facilities with great terms that can market cooler with the working capital and I would draw facility subtracting interest of EMEA six 5%.
Mark Farren: So I've discussed the backup power, the imported power. Just some comments on the phase three concentrator. Again, we're about two quarters ahead of plan in terms of commissioning that concentrator. I'm quite excited about that.
Mark Farren: The arrangement of additional facilities with the Brushy is also progressing well with Finalization expected in second quarter.
Mark Farren: We really have a bright future of growth with almost no date, making us more nimble than any of us.
Mark Farren: Yes.
Mark Farren: Mark <unk> our CFO.
Mark Farren: That thing is going to run in May, the end of the back end of this month of May. And I know Steve has dialed in on this conference call, but we expect it to ramp up very quickly, the same as we did on phase one and two. I think phase two, he ramped up that concentrator in something like six weeks.
Speaker Change: We'll take the presentation further to highlight our recent operations and project progress.
Mark Farren: Okay.
Mark Farren: And we're just going to turn the call over to our CFO Mark Fair enough I went to see connects July Mark.
Speaker Change: Thank you.
Speaker Change: Matthew I'm going to talk to him.
Mark Farren: Im looking at my phone to best acute drops through the <unk> portion of the presentation comes from Concho screen. So at least the first picture of that smelter in the background if I can.
Mark Farren: And so I think that this one will also kick in quite quickly. And hopefully, the fact that we commissioned it a bit earlier should help us to get the back end of our guidance and potentially the upside of our guidance for this year. The smelter itself is another slide.
Speaker Change: Can move to the next one.
Mark Farren: Which is basically your copper production <unk> copper production slot.
Mark Farren: And that's been mentioned by David and monitor that we produced 86000 tons of copper in the quarter, the first quarter, which is not exactly a normalized number.
Mark Farren: The next slide is on the smelter construction. The smelter will run its first feed in December this year. It's on track, there are no major issues with that smelter, and we're very excited about that smelter running because it's going to drop our operating costs by something like 20% through the year of 2025. And it will reduce your logistics and the complexity of logistics significantly as we go forward. The next slide is Inga, which is, as I spoke about earlier, Inga is a big turbine that we're installing. It's a 178 megawatt turbine. It's a massive generator. It's something like 20 meters in diameter and 100 tons of copper inside the alternator. So it's a big installation.
Mark Farren: And if you ever look youll see that the December quarter end.
Mark Farren: This quarter.
Mark Farren: Were impacted quite heavily.
Mark Farren: I'm sorry.
Mark Farren: And stability for.
Mark Farren: Some of the reasons mentioned.
Mark Farren: Oh, Oh actually went on to talk about what you're doing about it.
Mark Farren: And Thats the next slot.
Mark Farren: We've got a team as Marty mentioned it can chaucer working with the state utility smell.
Mark Farren: On projects.
Mark Farren: Not just the tube on entry installing and anger, but also to stabilize the grid.
Mark Farren: Two D C power lines and pretty busy working with theirs.
Mark Farren: Reaction power projects and synchronous converter stations that are being upgraded as we speak.
Mark Farren: It's about a $200 million Donna.
Mark Farren: It's going to be commissioned slightly late, so about January or February next year, where we had aimed for December this year. And that was mainly a logistics issue. But all of the major componentry is on site. The team is mobilized.
Mark Farren: Enhancement, which is going into a loan agreement with snow, which gets paid back we've discussed this before.
Mark Farren: Reduction in power tariffs in the longer term for us so.
Mark Farren: So that's the one the one I mentioned is to make the.
Mark Farren: It's an excellent team, and they're moving nicely. So that's on the smelter. And I think that's where we are. Is there anything else?
Mark Farren: There is no great stable with the team.
Mark Farren: The second one is importing power.
Mark Farren: And in the month of April we managed to get 15 megawatts from Zambia.
Mark Farren: I'm just looking from my side. I've covered everything. Moki, stand up and slide on the ground.
Mark Farren: Three Zambian grid.
Mark Farren: Stable secure power, it's consistent and it's working.
Mark Farren: Project 95. Okay, sorry, I'm through. Sorry, on growth there are three areas here. And I guess forward looking, slightly forward looking.
Mark Farren: And then tomorrow is the first of May we've signed an agreement to secure an additional 40 megawatts in palace, which will take out important balance sheet 55 megawatts, which is a major breakthrough for us because it is stable and this sources actually from Mozambique.
Mark Farren: So the one area is taking the infrastructure that we've already installed. So phase one, phase two, and phase three, we believe that we can move way beyond the 14 million tonnes per annum that we've been talking about to about 17 with those three plants. There is some work that we've done on phase one and phase two. We believe that phase one and phase two can do 10 million tonnes easily.
Mark Farren: So if you add the two together you get 55 megawatts and we've actually done projects, which are stabilizing the grid.
Mark Farren: Sorry at snow.
Mark Farren: So at the moment, it's a lot more stable April is looking pretty good and we will be north of 33000 tons, which is more or less maintenance to constant trying to should be maybe.
Mark Farren: Maybe a little bit more and we've had almost no interruptions in the month of April.
Mark Farren: And phase three, we really will be able to get to between six and seven million tonnes. So instead of the tonnes that we've looked at, at 14 million tonnes, it's probably more likely 17 million tonnes. Then, we have a project that we call Project 95. And that's also very exciting. It's a flow sheet that will take us from our current 88-89% recoveries to 95% recovery.
Mark Farren: In addition to this we have also spoken about this we are installing backup diesel generated power for basically the whole month to be able to run under any conditions.
Mark Farren: And a big chunk of that will be commissioned in July this year, so whenever about 120 megawatts running.
Mark Farren: July of this year and by the same at 220 megawatt diesel fell in stone, which will give you 100% redundancy in terms of what's required to provide power.
Mark Farren: And then just just two.
Mark Farren: That work is done, and we'll have engineering done with a budget estimate for that work in May. So basically, in the next couple of weeks, we'll have that engineering budget ready. What's nice about that is, there are two things here. The first one is all your new risings, obviously, you get the increased 7% recovery.
Mark Farren: Summarize where we are on power.
Mark Farren: The imported power will probably increase by the end of this year to 100 megawatts with the signing of long term offtake, we've secured the power supply for that and then.
Mark Farren: Bulk of the work at snow will be completed in quarter, two next year and quarter three quarter four Adobe stable.
Mark Farren: In that case, we will probably have 100% redundancy on what's required in our Boulder.
Mark Farren: And the second thing is that all the tailings that we have accumulated over the last couple of years, it's about 50 million odd tons, that can be revalued, and that will be reprinted, and we'll get the benefit of that extra time. If you add the two together, it's around about 80,000 tonnes per annum with a very effective capital cost and obviously a massive improvement in operating costs because you're getting much more; you're getting another 7% recovery without any additional operating costs.
Mark Farren: We don't.
Mark Farren: Do you have enough power for phase one phase two phase III and phase four in future expansions.
Mark Farren: I think it is a.
Mark Farren: It has been a problem for the last two quarters, we've done a lot of work to Derisk power and I think it's going ahead of a lot better and going forward I believe there'll be enough redundancy in the system to be able to expand as we as we need to.
Mark Farren: So I'm quite comfortable that were getting there now.
Speaker Change: If we can move on to the next.
Mark Farren: The next slide.
Mark Farren: Now ill discuss the backup power and imported power just some comments on the phase III concentrates.
Mark Farren: So that's exciting. And then phase four is going to be, I believe it will be accelerated. We haven't got a timeline yet, but it's not going to take too long to get phase four moving. And there's some synergy between what we want to do on phase four and project 95. So basically, if I could talk about it, we would probably start summer phase four early production by utilising the tailings that are lying on that tailings dam at 50 million tonnes that I spoke about. That would be something that we could do to initiate the first production at phase. So all very, very exciting projects. I believe power we've de-risked significantly over this last quarter.
Mark Farren: Again, we have about two quarters ahead of plan in terms of commissioning that.
Mark Farren: Concentrate.
Mark Farren: I am quite excited about that that thing is going to run in may.
Mark Farren: The back end of this month.
Mark Farren: It's going to run and I know Steve has dialed in on this.
Mark Farren: Conference call, but we expect it to ramp up very quickly the same as we did on trains one and two I think phase III ramped up that concentrate in something like six weeks.
Mark Farren: So.
Mark Farren: I think that this one will also kick in quite quickly and <unk>.
Mark Farren: The fact that we.
Mark Farren: Commissioning, but earlier should help us to get.
Mark Farren: The back end of our guidance and potentially the upside of our guidance.
Mark Farren: This year.
Mark Farren: The smelter itself is another the next slot on the smelter construction does.
Mark Farren: We have a plan to be able to install enough power within the country and import power, as well as have backup generation to de-risk this operation completely and to be able to grow. The important thing for us was always to be able to grow at the rate that we needed to grow. And I believe we have de-risked that significantly. So I think that's it on power and on what we're doing in the future. Thank you.
Mark Farren: Smelter.
Mark Farren: We will run its first feed will be in December this year.
Mark Farren: It's on track no major issues on that smelter and we are very excited bucket smelter running because it's going to drop our operating costs by summing up 20% through 2025.
Mark Farren: And that will reduce your logistics and the complexity of logistics significantly as we go forward.
Mark Farren: The next slide is on India.
Mark Farren: Just as I spoke about earlier.
Alex Pickard: Thanks Mark, this is Alex Pickard speaking. We're going to just take you through a couple of slides on the Western Forelands. So I think Mark gave a really good overview there of our plan at Kamoaka Cooler to accelerate production, take our throughput rate to potentially 20 million tons and beyond, and you know what we're really looking to do at Kamoaka Cooler is chase down the world's number two and number one copper producers over time.
Mark Farren: Big tube on entry installing its 178 megawatt toubon massive toubon at something about 20 meters in diameter 100.
Alex Pickard: Tons of killer.
Alex Pickard: Tons of copper.
Alex Pickard: Sagar Tinnitus, a big installation.
Alex Pickard: It's going to be commissioned a slightly diets that January February next year, where we had aimed for December this year.
Alex Pickard: And Thats, who is mainly a logistics issue, but all of the major componentry is on sort of the team has mobilized it's an excellent team and it's moving nicely.
Alex Pickard: That's on the on the smelter.
Alex Pickard: What we have next door at the Western Forelands is the opportunity to really start to produce over a million tons per annum from this new great copper district as a whole, and we have some very exciting work that's going on there today. So during the first quarter, we drilled 17,000 meters, and bearing in mind January through to March is very much the middle of the rainy season, so 17,000 meters is an excellent achievement, and it shows that now we are into the dry season, towards the end of April, we are clearly on track to meet or even possibly exceed our target of 70,000 meters drilled this year, which was a four times increase in the drilling budget from last year.
Alex Pickard: And I think that we are in.
Speaker Change: Is there anything else.
Alex Pickard: I'm just looking from my side.
Speaker Change: Covered everything.
Speaker Change: Mark just another slide on the graph.
Alex Pickard: <unk> sorry.
Alex Pickard: Sorry right.
Alex Pickard: Sorry on the growth in three areas.
Alex Pickard: I guess forward looking slightly forward looking so the one the one area is taking the infrastructure that we've already installed so phase one phase II and phase III. We believe that we can move Y beyond the 14 million tons per annum that we've been talking about to about 17.
Alex Pickard: With those three plants.
Alex Pickard: There is some work that we've done on phase one and phase two phase one and phase two we believe you can do 10 million tons.
Alex Pickard: Easily and phase III, we believe we will be able to get to between six and 7 million tonnes.
Alex Pickard: Most of the drilling we are doing, at least currently, is focusing on expanding the high-grade Kitoko discovery that was made in the fourth quarter of 2023. We have a slide coming just to sort of preview some of the work we're doing at Kitoko.
Alex Pickard: Instead of.
Alex Pickard: The.
Alex Pickard: The tons that we've looked at it 14 million tonnes, it's probably more likely 717 million tonnes.
Speaker Change: Than you.
Alex Pickard: As a project typical project 95.
Alex Pickard: And that's also very exciting it's a flow sheet that will take us from our current 80, 889% recoveries to 95% recovery.
Alex Pickard: But also, as well as Kitoko, I think it's worth reminding the audience that we've already discovered and delineated 5 million tons of resources at Makoko and Kiala. This is a major achievement, I think, in the context of the copper industry, the third largest discovery, basically, since Kikula. And put another way, 5 million tons of resources is roughly the same as a 200,000 ton copper mine over a 25-
Alex Pickard: That work is done and we will have engineering done with a budget estimate for that.
Alex Pickard: So basically in the next couple of weeks, we will have net engineering budget really.
Alex Pickard: What's nice about that these two things. The first one is <unk>, obviously, you get the increased 7% recovery in the second thing is that all of the training that we have accumulated over the last couple of years and it's about 50 million tons that can be reprocessed.
Alex Pickard: So you can see that we already have the critical mass to start a new mining operation in the western forelands. But what we're drilling now at Kitoko and elsewhere is really looking to improve and augment what we already have at Makoko. I think we can move to the next slide, please, Matt.
Alex Pickard: And that will be repriced, and we will get the benefit of that extra tonnage.
Alex Pickard: If you enter two together to write about 80000 tonnes per annum with.
Matt: Very effective capital cost and obviously, a massive improvement in operating cost because youre getting much more youre getting another 7% recovery without any additional operating cost. So that's exciting and then phase four.
Alex Pickard: So this is showing the map and the Western Fallen license, which you can see is adjoining to the western side of the Kamoa Kukula mining license where it says Kukula West. And really, you know, the key thing to take away here is, first of all, we're putting a lot of drill holes on a daily basis into Kitoko. You can see all of the red stars there that are indicating holes that are currently being drilled.
Alex Pickard: <unk> is going to be I believe it will be accelerated we haven't got a timeline, yet, but it's not going to take too long to get phase four moving and there is some synergy between what we wanted to do on phase four and project non too far so.
Alex Pickard: We have, I think, eight rigs on site currently, which will soon be 10, including two rigs with specialization for deeper drilling. But the exciting thing for now is that the Kitoko deposit is very much open in all directions. And so really, what we're looking to do is understand the extent of the mineralization that we have and also the structure.
Speaker Change: So basically if I can talk about it is we will probably start some of HIFU.
Alex Pickard: Early production by utilizing the tailings and online on that on the tailings dam and 50 million tons that I spoke about that.
Alex Pickard: That would be something that we could do to initiate the first production at phase four so all very very exciting projects I believe power. We've derisked significantly over this last quarter, we have a plan to be able to install enough power within the country and importing power.
Alex Pickard: And we're starting to explore the connectivity between, you can see, Kitoko and Makoko, which are roughly five kilometers apart. They could potentially be developed as part of the same mining operation. And then, ultimately, there may also be a connection between Makoko and the western edge of Kokula, which you can see is indicated as roughly 10 kilometers in terms of distance.
Alex Pickard: Well as backup generation to Derisk, this operation completely and to be able to grow that.
Alex Pickard: The important thing for us was always to be able to grow at the rate that we need to grow and I believe we have derisked significantly.
Alex Pickard: So for Western Fulham, it really is an exciting year ahead. We are getting into the dry season, and the bulk of our drilling activities. And I'm sure over the course of this dry season, we will be providing the market with further updates in terms of our activities. I'm going to hand over to Mark Farren, who is actually sitting in Kipushi at the moment, so he's the best person to give you a quick update on what we're doing there. No, thanks, Alex.
Alex Pickard: I think Richard on power and on what we're doing in the future. Thank.
Mark Farren: Thank you.
Mark Farren: Thanks markets I'd like to pick out speaking, we're going to just take you through a couple of slides.
Mark Farren: On the Western fault and so I think Mark gave already good overview there of.
Mark Farren: Our planet Comerica cooler to accelerate production takeoff throughput rate to potentially 20 million tonnes and beyond what we're really lucky we'll do a cloud corollaries chase down the wells number two in wells number one copper producers over time.
Mark Farren: What we have next door at the Westin <unk> lenses, the opportunity to really start to produce over 1 million tonnes per annum from this new grade copper district on the whole economy.
Mark Farren: I'll carry on. Okay, just in broad strokes, Kapushi, the underground mine is fantastic. It's a fantastic ore body. It's running at 35% zinc, by far the highest grade in the world.
Mark Farren: Some very exciting work going on that today. So during the first quarter, we drilled 17000 meters and bearing in mind January through March is very much the middle of the rainy season. So 17000 meters is an excellent achievement and it shows that now we are into the dry season towards the end of April we are clear.
Mark Farren: The development footprint is open. We've opened up seven levels already. We started with the sub-level open stoping, the long-well stoping, and that's working perfectly.
Mark Farren: On track to meet or even possibly exceed our target of 70000 meters drilled this year, which was a four times increase in the drilling budget from last year.
Mark Farren: Most of the drilling we are doing at least currently is focusing on expanding the high grades K telco discovery that was made in the fourth quarter of two.
Mark Farren: We've got about 300,000 tons of stock, so more than three months of ore on the surface already ahead of that concentrate. And that concentrator will run in May, also the end of May. We don't believe there's anything complex in that concentrator. It's a simple concentrator. It's quite a small one, actually.
Mark Farren: 2023.
Mark Farren: We have a slide coming just to sort of preview some of the work we're doing at <unk>, but also as well as <unk> I think it's worth reminding the audience that we've already discovered and delineated 5 million tons of resources.
Mark Farren: <unk>. This is a major achievement I think in the context of the copper industry.
Mark Farren: The third largest discovery basically since the cooler.
Mark Farren: But it's a fantastic mine. It's looking very, very good. I mean, if you people that were there when it was flooded will not recognize what we've done.
Mark Farren: Put another way 5 billion tons of resources is roughly the same as the 200000 ton copper mine over a 25 year life. So you can see that we already have a critical mass to start a new mining operation in the western Poland, What we're drilling now.
Mark Farren: It's a modern mine. It's underground, development is very, very good. The ground conditions are fantastic, and everything there is ahead of schedule. So I cannot think of any major risks there. And maybe just to mention what is quite encouraging is that the zinc price has been moving in the right direction. And just at the right time, too.
Mark Farren: Telco and elsewhere is really looking to improve and augment what we already have that victoza.
Speaker Change: I think we can move to the next slide please.
Mark Farren: So this is showing the map.
Mark Farren: And the western fallen license, which you can see is that joining to the western side of the <unk> mining license, where it stays to cool the west.
Mark Farren: And really the key thing to take away here is first of all where we're putting a lot of drill holes on a daily basis intricate telco you can see all of the Red stars.
Mark Farren: They're indicating how has that are currently being drilled.
Mark Farren: We have I think eight rigs on site currently which will soon be 10 rigs, including two rigs with specialization for deeper drilling, but the exciting thing for now the telco deposit is very much open and all of the day all in all directions, and so really what we're looking to do is understand the extent of the mineralization that we have and also the structure.
Mark Farren: I don't believe there's any major technical risk in that mine. We're very excited to get that first feed moving and then do exactly the same as we have at the other mines. And that is to improve the productivity and then, obviously, the throughputs, maybe over time, to lift them a little bit more because it's such a good ore body that we just need to get it up a little bit more. So I'm confident that Kapushi is moving forward and is ahead of schedule like the other two and is looking really good.
Mark Farren: And we're starting to explore the connectivity between you can see the telco and the cocoa, which are roughly five kilometers apart.
Mark Farren: They could potentially be developed as part of the same mining operation and then ultimately there may be a connection also between the cocoa on the western edge of cooler, which you can see as indicated is roughly 10 10 kilometers.
Alex Pickard: Thank you. Thanks, Mark. And I will just close out with an update.
Alex Pickard: Last but certainly not least, on Platt Reef. So with Platt Reef, we announced during the previous annual results that we've made a change in strategy to accelerate the expansion of Platt Reef. So what this means in reality is that we will finish the phase one concentrator project on time in the third quarter, but we've deferred the ramp-up of this concentrator until the middle of next year. The reason that we've done this deferral is so that we can focus on the underground development that we need to do for shaft three and for the phase two expansion.
Alex Pickard: In terms of distance so.
Alex Pickard: For the western full and it really is an exciting year ahead, we are getting into the dry season, and the bulk of our drilling activities and I'm sure.
Alex Pickard: Over the course of this dry season, we will be providing the market with some further updates in terms of our activities.
Alex Pickard: I'm going to hand back to Mark <unk>, who is actually.
Alex Pickard: <unk> I appreciate at the moment. So he is the best person to give you a quick update on what we're doing that.
Alex Pickard: Yeah.
Alex Pickard: Thanks, Alex I'll carry on Okay, just in broad strokes can pushy.
Alex Pickard: The underground mine is fantastic.
Alex Pickard: So just to remind people on the line, what we decided on shaft three, which was originally supposed to be a ventilation shaft. We changed our approach, and we decided to equip that shaft for hoisting, which will be ready by the end of 2025. And so this will boost the total hoisting capacity to around five million tons, including shaft one and shaft three.
Alex Pickard: Testing already trending at 35% zinc.
Alex Pickard: For the highest grade in the world.
Alex Pickard: Development footprint is open we opened up seven levels already we've started with the sub level the sub level open stoping, the long hole stoping, that's working perfectly.
Alex Pickard: We've got about 300000 tons of stocks is more than three months of ore on surface already ahead of the concentrate to <unk>.
Alex Pickard: And that concentrates will run in my answer at the end of May We don't believe there's anything.
Alex Pickard: So with that five million tons of hoisting capacity, the plan is to ramp up the phase one and phase two concentrators at a capacity of around four million tons. That's just leaving a little bit of extra capacity for development for our phase three expansion. And just to give an idea of the numbers, at four million tons of capacity, we'll be producing somewhere between four and five hundred thousand ounces of the four e-metals, so that's platinum, palladium, rhodium, and gold, plus up to 10,000 tons of nickel and copper. And then, longer term, the strategy is very much to keep shaft number two going. That's one of the largest hoisting shafts in the world.
Alex Pickard: Complex and that concentrated to simple concentrate.
Speaker Change: Quite a small one actually.
Alex Pickard: But it's a fantastic mine, it's looking very very good.
Speaker Change: People that have been the minute was flooded will not recognize what we've done.
Alex Pickard: Modern mine underground.
Alex Pickard: Element is very very good ground conditions are fantastic.
Alex Pickard: And everything days ahead of schedule. So I cannot think of any major risks there.
Alex Pickard: And maybe just to mention what is quite encouraging is zinc prices to be moving in the right direction.
Alex Pickard: And just at the wrong time, too I think that would be my opinion.
Alex Pickard: I don't believe there's any major technical risk on that one.
Alex Pickard: We are very excited to get their feet moving and then to do exactly the same as we have at the other months and that is to improve the productivity and then obviously the throughput maybe over Tom to lift him a little bit more because it's such a good ore body that we just need to get it up a little bit more so I'm confident that.
Alex Pickard: That will enable that phase three expansion up to 10 million tons of hoisting capacity, at which point we will produce around a million ounces of precious metals, plus around 20,000 tons of nickel and copper. So a major, major producer of all of those metals. And all of this will be published in updated studies, a feasibility study and a scoping study that will be out in the fourth quarter. With that, I think we're at the end of the presentation slides, but perhaps just before I hand over to Matt, I would point out that we are a little bit perplexed looking at the trading activity on the screen this morning. I think we very much see this as an overreaction caused by the convertible redemption.
Alex Pickard: Capricious, moving and we will be.
Alex Pickard: Of schedule like the other two.
Matt: And then is looking really good.
Alex Pickard: Sure.
Matt: Thanks, Mark and I will just close out with an update.
Matt: Lastly, as ethylene I mean at least on a flat rate.
Alex Pickard: With flat roof, we announced during the previous Andy.
Matt: Annual results that we have made a change in strategy to.
Alex Pickard: The expansion of flat rates.
Matt: So what this means in reality is that we will finish the phase one concentrate the project on time in the third quarter.
Alex Pickard: We've deferred the ramp up of these concentrates are until the middle of next year.
Alex Pickard: The reason that we've done this deferral is so that we can focus on the underground development that we need to do four shaft, three and four the phase III expansion.
Matt: So just to remind people on the line.
Alex Pickard: What we decided is.
Alex Pickard: Factory, which was originally supposed to be a ventilation shaft, we changed approach and we decided to equip that shaft for hoisting.
Alex Pickard: But then I would point out that this redemption is going to cause a lot of short positions in Ivanhoe Mines to be closed out over the coming weeks as these bonds are redeemed. So fundamentally, we believe this has been a very strong set of results, and especially into the month of April, in terms of the production we're showing at Kamoa Kakula, much more to come on the Western Forlands, and we only perceive this to be an opportunity for our investors. But I'll hand it over to Matt to chair the Q&A.
Matt: Which will be ready by the end of 2025, and so this will boost the total hoisting capacity to around 5 million tons, including shack, one shaft III.
Matt: So with that 5 billion tons of hoisting capacity of the plan is to ramp up the phase one phase two concentrates as added capacity is around 4 million tons, not just leaving a little bit of extra capacity.
Matt: Capacity for development for all phase III expansion.
Matt: And just to give you an idea around the numbers at 4 million tonnes.
Matthew Richard Keevil: Thanks, Alex. And Operator, I think we'll move to the phone line first and foremost and clear all the phone questions. And then, if we have time at the end, we'll hop over to the web and see if there are any web questions we'd like to field. Thank you very much.
Matt: Capacity will be producing somewhere between four and 500000 ounces after.
Matthew Richard Keevil: For <unk>, so that platinum palladium, rhodium and gold plus up to 10000 tonnes of nickel and copper.
Matthew Richard Keevil: And then longer term the strategy is very much to keep shack number two going thats one of the largest hoisting shaft in the wells.
Operator: Certainly. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Matthew Richard Keevil: That will enable that phase III expansion up to 10 million tons hoisting capacity at which point, we will produce around 1 million ounces of precious metals plus around 20000 tonnes of nickel and copper so a major major producer of all of those muscles.
Operator: Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question will be coming from Lawson Winder of Bank of America Securities. Your line is open. Hi, thank you, operator very much. Good morning.
Operator: All of this will be published and updated studies a feasibility study on the scoping study that will be out in the fourth quarter.
Operator: With that I think we're at the end of the presentation slides that Bob just before I hand back to Matt.
Lawson Winder: I would point out that we are a little bit perplexed looking at the trading activity on the screen. This morning.
Lawson Winder: Good evening and afternoon, everyone. Thank you for the presentation. I just wanted to ask about the potential updated mine life plan for Kamala Kukula. Is that intended to be published at some point this year? And then, if so, what are you expecting in terms of the range of possible plans that are in consideration for that? Alex.
Lawson Winder: I think we very much see this is an overreaction caused by the convertible redemption.
Lawson Winder: And then I would point out that this redemption is going to cause a lot of short positions in ivanhoe mines to be closed out over the coming weeks as these bonds are redeemed.
Lawson Winder: I think fundamentally we believe this has been a very strong set of results and especially into the month of April.
Lawson Winder: The production was showing at Comerica cooler.
Alex Pickard: Alex and Mark, do you want to talk about our plans to keep expanding and try to reach the position of number one, if not number two in the world, just at the Dream Venture? Absolutely, Robert. I'll take that.
Lawson Winder: Much more to come on the Westin <unk> and we only perceive this to be an opportunity for our investors.
Alex Pickard: But I'll hand over to Matt to chat a Q&A.
Alex Pickard: <unk>.
Alex Pickard: Okay.
Alex Pickard: Yes.
Alex Pickard: Okay.
Alex Pickard: Thanks, Alex.
Speaker Change: I think we'll move to the phone lines first and foremost and clear all the phone questions and then if we have time at the end, we'll hop over to the web and see if theres any web questions, we'd like to thank you very much sir.
Robert Martin Friedland: And thanks, Lawson. So look, I think Mark highlighted what the separate initiatives are that we're looking at. So just to go through them again, it's the optimization of the phase three concentrator. So, like phase one and phase two, we can probably get at least 20% more capacity out of that concentrator. We have Project 95, which is the plan to increase the recoveries and basically get, you know, 30, 40, 50,000 tons of effectively free copper from what we have already. That will also apply to phase three as well as phase one and two.
Robert Martin Friedland: 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, please standby, while we compile the Q&A roster.
Speaker Change: One moment for your first question.
Robert Martin Friedland: And our first question will be coming from Lawson Winder of Bank of America Securities. Your line is open.
Speaker Change: Hi, Thank you operator very much good morning. Good evening afternoon, everyone. Thank you for the presentation I just I wanted to ask about.
Alex Pickard: The opportunity to recover that 70,000 tons that's already locked in our tailings at a greater 0.7%. And Mark was also alluding to our plans to potentially accelerate phase four. We're looking at a lot of things around our mine planning in order to feed that phase four operation. But fundamentally, you know, we have 40 million tons plus copper in the ground here. There are all sorts of opportunities to expand very efficient long-haul mining.
Robert Martin Friedland: This potential updated my mine life plan for <unk>.
Alex Pickard: For <unk> cooler is is that intended to be published at some point. This year and then if so what are you expecting in terms of the range of possible plans at our consideration for that.
Speaker Change: I'll ask Alex and Mark do you want to talk about our plans to keep expanding in treasury to the position of number one number two in the world just venture.
Speaker Change: Absolutely, Rob I'll take that and thanks Allison so.
Alex Pickard: Look I think mark highlighted what the separate initiatives are that we're looking at so just to go through those again.
Alex Pickard: The optimization of the phase III concentrated so we think like phase one and phase two we can probably get at least 20% more capacity out of that concentrate.
Alex Pickard: We can even look at open pit mining in different parts of the ore body. Thus, there is no fundamental shortage of ore to feed a much expanded milling circuit. Specifically, Lawson, in terms of when we will publish project 95, we're planning to, well, we'll at least publish a press release giving you the details on that when the engineering is completed this month. I think what our intention is to publish a kind of more fundamental, updated study for Kamoaka Kula that will incorporate all of these elements.
Alex Pickard: We have the project 95, which is the plan to increase the recoveries and basically get 30 40 50000 tons is effectively free cost that from what we have already that will also apply to phase III as well as phase one and two.
Alex Pickard: The opportunity to recover that 70000 tons of it is already locked in our tailings integrated up 7% and then also mark was alluding to our plans to potentially accelerate phase four we're looking at a lot of things around our mine planning in order to see that phase for operation, but fundamentally we have multi million tonnes plus copper in the ground here.
Robert Martin Friedland: Obviously, the last one we did was a couple of years old, and that should be done by sometime around the end of the year. So we'd like to get it done and published before year end. You know, I could be, that's where we are. Yeah, yeah, I'd like to add a few more comments. All of our ore sources that we've been mining are underground. There are shallow open pittable resources that would be the highest grade open pit copper mine in the world.
Robert Martin Friedland: There are all sorts of opportunities to expand.
Robert Martin Friedland: Efficient long haul mining, we can even look at open pit mining in different parts of the ore body. So there is no no fundamental shortage of ore to feed a much expanded milling circuit.
Robert Martin Friedland: Specifically Larson.
Robert Martin Friedland: In terms of when we will publish watts.
Robert Martin Friedland: Project 95.
Robert Martin Friedland: Wanting to.
Robert Martin Friedland: Well at least publish a press release, giving you the details on that when the engineering is completed this month.
Robert Martin Friedland: And the advantage of open pittable resources is that the mineralized horizons have a lot of pyrite in the hanging wall, and that pyrite that you get on the way down would be extremely beneficial for the smell.
Speaker Change: I think what our intention is to publish it kind of more fundamental overarching updated study for come out with the cooler that will incorporate all of these elements.
Robert Martin Friedland: The last one we did was a couple of years old.
Robert Martin Friedland: That should be done by sometime around the end of the year, so we'd like to get it done and published before year end.
Robert Martin Friedland: So for the first time, we're looking as we have more and more milling capacity, we can potentially fill that milling capacity with very significant Open Pinnable Resources that exist on the COMOA license. So you can do the math yourself on getting to 16 or 17 million tons of milling with the existing concentrators, than a fourth concentrator in the future would get us well over 20 million tons. And it's really just a question of how large that concentrator might be. So this year, we should start showing the world what Kamoka Kula could look like in a four and a half dollar per pound price environment or a five dollar per pound price environment.
Robert Martin Friedland: Okay.
Robert Martin Friedland: Serbia.
Robert Martin Friedland: Yes.
Robert Martin Friedland: Yes.
Speaker Change: To add a few more comments.
Robert Martin Friedland: All of our ore sources that we've been mining from underground.
Robert Martin Friedland: There are shallow open pit able resources that would be the highest grade open pit copper mine in the world.
Robert Martin Friedland: And the advantage of the open pit reserves is that the mineralized horizons of a lot of pyrite and the hanging wall.
Robert Martin Friedland: And the pyrite that you get all the way down would be extremely beneficial for the smelter.
Robert Martin Friedland: So for the first time, we're looking as we have more and more milling capacity, we can potentially fill the milling capacity was very significant.
Robert Martin Friedland: Open pit able resources that exist on the <unk> license.
Robert Martin Friedland: We bring on additional capacity with less additional capital than any mining company in the world. If there's any place in the world that can expand production quickly in response to higher prices, it's Kamau Kukula. And then, of course, there's the Western Forelands, where we already have 5 million tons of high-grade. And as the spring and summer go on, we will update you on our drilling success in the Western Forelands. But clearly, the next mine, which will be an Ivanhoe Mines operation, will be acquired.
Robert Martin Friedland: So you can do the math yourself on get into 16 or 17 million tonnes of milling with the existing concentrator has been of course concentrated or in the future.
Robert Martin Friedland: Get us well over 20 million tonnes of Thats really just a question of.
Robert Martin Friedland: How large that concentrated might be so this year.
Robert Martin Friedland: Should start showing the world what <unk> could look like.
Robert Martin Friedland: Four and a half dollar per pound price environment or a $5 per price environment, we bring on additional capacity with less additional capitals in any mining company in the world.
Robert Martin Friedland: But we do see the Kamoka Kula Joint Venture definitely being in striking range to be the second largest copper complex in the world, and given the challenges we've seen in Chile, and we're intimately familiar with those challenges. We're beginning to think we have a chance to be number one just in the joint venture, even without the Western Foreland. So we'll be running more tours as we bring this all into focus. A four dollar or four and a half dollar copper world for us is very, very different than a three and a half dollar per pound pepper. Thank you.
Robert Martin Friedland: If there's any place in the world that can expand production quickly in response to higher prices Thats come out can cooler.
Robert Martin Friedland: And then of course, there is the western for lens.
Robert Martin Friedland: We already have 5 million tonnes of high grade.
Robert Martin Friedland: And as the spring and summer and go on and we will update you on our drilling success in the western for lids, but.
Robert Martin Friedland: But clearly the next mine, which I have in our minds operation will be accretive, but we do see the <unk> joint venture.
Robert Martin Friedland: Yeah, very well said. Thank you, Robert. If I could follow up on one sort of finer point, I mean, with the huge amount of throughput that you're getting just from phases one, two, and three, is there any thought to foregoing a phase four and focusing that expansion on Western four? You must be a phase four.
Robert Martin Friedland: Definitely being in striking range to be the second largest copper complex in the world.
Robert Martin Friedland: And given challenges we've seen in Chile.
Robert Martin Friedland: Intimately familiar with those challenges.
Robert Martin Friedland: We're beginning to think we have a chance to be number one just in the joint venture even without the western <unk>.
Robert Martin Friedland: So we will be running more tours as we bring this all into focus.
Robert Martin Friedland: $4 or $5 copper world for us is very very different than a three and a half dollar per pound copper world.
Robert Martin Friedland: Yeah, there has to be a phase four. Yeah, phase four is for the joint venture. Phase four is, almost without a doubt, we're doing a phase four, let alone a phase five. We're looking at a phase five. The joint venture is sitting on an ocean of copper that is immediately developed. The Western Forelands is a completely separate thing. We're not in a joint venture there. That ground is held by Ivanhoe Mines, and they're perfectly accretive with each other because now that the railroad capacity is opening up to Angola, that railroad goes right through the Western Foreland.
Speaker Change: Thank you Lawson.
Speaker Change: Yes, very well said, thank you Robert if I could follow up and one sort of a finer point I mean with the huge amount of throughput that you are getting just from phases, one two and three.
Speaker Change: Is there any thought to foregoing a phase four and focusing that expansion on.
Robert Martin Friedland: Western for land.
Robert Martin Friedland: Yes.
Robert Martin Friedland: Yeah.
Robert Martin Friedland: Yeah.
Robert Martin Friedland: Sure.
Robert Martin Friedland: For the joint venture.
Speaker Change: As for Us.
Robert Martin Friedland: All of us without a doubt we're doing a phase four little out of phase five.
Robert Martin Friedland: We're looking at a phase five.
Robert Martin Friedland: The joint venture is sitting on an ocean of copper that is immediately developable.
Robert Martin Friedland: And as we're increasing the stability of the grid and putting our foot on more regional power, a lot of people are confused. The power is wheeled through Zambia, but it comes from Mozambique, and the vast majority of the Mozambican power is hydropower. Combined with our backup power, that's really our limiting factor.
Robert Martin Friedland: Western <unk> as a completely separate thing we're not in a joint venture.
Robert Martin Friedland: <unk> is held by the iron ore mines.
Robert Martin Friedland: And they are perfectly.
Robert Martin Friedland: Accretive with each other because now that the railroad capacity is opening up.
Robert Martin Friedland: To Angola that railroad goes right through the Western <unk>.
Robert Martin Friedland: We're not limited by the amount of copper we have here, which is unique. We don't have a shortage of water. We're not fighting ice and snow like you would be up in the Andes or in Canada.
Robert Martin Friedland: And as we as we're increasing the stability of the grid and putting our foot on more regional power a lot of people are confused but power is wheeled through Zambia, but it comes from Mozambique.
Robert Martin Friedland: And the vast majority of the Mozambique powers hydropower combined with our backup power that's really our limiting factor we're not limited by the amount of copper we have here which is unique.
Robert Martin Friedland: Our real strategy is electrical energy, and we're telling you today that we really think we're putting that electrical energy constraint behind us now in the current quarter. And so the joint venture is to see how far it can go. And I would wager, having talked to Mark and our team, we just had our board meeting in London, we really are moving to phase four. That phase four won't touch Cuculla West, but there are enormous resources in Kukula West, which could make a phase five at the joint venture. And then the Western Forelands is a completely different story, which we will be telling the market about a lot more in the near future. Very exciting. Thank you.
Robert Martin Friedland: We don't have a shortage of water.
Robert Martin Friedland: We're not fighting and ice and snow like you would be up in the Andes or in Canada.
Robert Martin Friedland: Shortages of electrical energy and we're telling you today, we really think we're putting that electrical energy constraints behind us now in the current quarter.
Robert Martin Friedland: And so the joint venture is to see how far it can go and I would I would wager, having talked to mark and our team. We just had our board meeting in London, We really are moving to a phase four phase four won't touch cuckoo la west.
Robert Martin Friedland: Enormous resources and conclude the west which could make our phase five at the joint venture.
Robert Martin Friedland: The western <unk> lens is a completely different story, which we will be telling the market about a lot more.
Operator: Again, if you have a question, please press star 11 on your telephone and wait for your name to be announced. And our next question will be from Andrew Mikitchook of BMO Capital Markets. Your line is: Thank you, Mark. Maybe you could just give us a little bit more context on this power that you're securing from the various grids to the south through the Zambian interconnector. Obviously, there is an active demand for power in the region, in the Congo, to the south of the Congo. Can you just give us a sense of, you know, your level of being a first mover or your ability to secure this power?
Robert Martin Friedland: In the near future.
Andrew Rostislav Mikitchook: Very exciting thank you.
Operator: Again, if you have a question. Please press star one on your telephone and wait for your name to be announced.
Operator: Yes.
Andrew Rostislav Mikitchook: And our next question will be coming from Andrew and the kitchen.
Andrew Rostislav Mikitchook: BMO capital markets. Your line is open.
Andrew Rostislav Mikitchook: Thank you.
Andrew Rostislav Mikitchook: Mark maybe you could just give us a little bit more context on this power that youre securing.
Andrew Rostislav Mikitchook: From the various grades to the cells through the Zambian Interconnector.
Operator: Obviously.
Operator: There is not an active demand for power.
Andrew Rostislav Mikitchook: In the region in the Congo to the south of the Congo.
Operator: Can.
Andrew Rostislav Mikitchook: Can you just give us a sense of.
Mark Farren: And I think you used the words in your previous comments, you know, long-term offtake agreements that these aren't, you know, month to month, that these are something. Are we correct to understand that this is kind of a multi-year agreement that, you know, something resembling 100 megawatts should be available? [inaudible] the amount of megawatts that you need, we need to enter into longer-term agreements because these RPPs actually need to capitalise on some of their investments.
Andrew Rostislav Mikitchook: Your level of first mover or ability to secure this power and I think you used the words in your previous comments.
Mark Farren: Long term offtake agreements that these arent.
Mark Farren: Amongst the months that these are sort of thing.
Mark Farren: Are we correct I understand that this is kind of a multi year agreement.
Mark Farren: Something resembling 100 megawatts should be available for.
Mark Farren: For a very long time.
Speaker Change: <unk>, that's exactly what we're doing we've entered into short term agreements.
Mark Farren: <unk> done a couple of months ago, and that's where that 15 megawatts came from an additional <unk>.
Mark Farren: They need to invest in some of the long-term infrastructure. We've fallen on the track with that. We've got 100MW agreements that we're busy finalizing now, and that's a long-term agreement. It's basically a permanent agreement that will be in place.
Mark Farren: <unk> thats coming from Tomorrow.
Mark Farren: We have been busy with setting up long term agreements because to get that stability in the long term.
Mark Farren: Volume the amount of megawatts that you need we need to enter into longer term agreements because these.
Mark Farren: So we've got, at a minimum, we'll have that 100 megawatts in place by the end of this year, in addition to 250 odd megawatts that we've done through improvements in the DLC itself, the turbines that we've upgraded, the power lines that we're busy with, the infrastructure that we're doing. And then, in addition to that, we've got 220 megawatts of diesel that we're But if you add it all up, phase one, two, and three, we'll use about 220 megawatts, and we'll have 540 megawatts of installed power.
Mark Farren: Bp's actually need to capitalize some of the some of the investments they need to invest in some of the long term infrastructure.
Mark Farren: Far down the track with that we've got.
Mark Farren: 100 megawatts agreements that were busy finalizing now and Thats a long term agreement is basically a permanent.
Mark Farren: Agreement that will be in place so.
Mark Farren: As a minimum will have been 100 megawatts in place by the end of this year. In addition to 250 odd megawatts that we've done.
Mark Farren: By improvements in the DLC itself, the two bonds that we've upgraded the bolt ons that we proceed with the infrastructure that we're doing and then in addition to that we have.
Mark Farren: Got 232 megawatts of diesel.
Mark Farren: And we will not need to use diesel in the long term. So I think, in terms of de-risking, we've done that. Taking the right steps, we're doing that. Looking for more power to build the western forelands, to get this into the Copper District, over a million tons of the kind. We're busy with all of those long-term strategies, and I can't explain all of them on this call, but there are other international suppliers that are waiting to supply additional power to us through different networks. So I do think that if you concentrate on a problem, for example, the power that we have, we resolve these problems like we do with everything else.
Mark Farren: Putting in which we never want to use but if you add it all up phase one two and three will use about 222 megawatts and we will have 540 megawatts of installed power if you add everything up.
Mark Farren: And we will not need to use the diesel and the long term so I think.
Mark Farren: In terms of de risking we've done that.
Mark Farren: In the ranch dips redoing that looking for more power to build waste in Poland.
Mark Farren: To get this into the copper district over 1 million tonnes kind of number we visited with all of those long term strategies and a comment on this call and explain all of them, but other international suppliers at all why tier two suppliers to sniff out to us two different metrics.
Mark Farren: So I do think if you concentrate on a problem for example power that we had we resolve these problems like we do with everything else.
Mark Farren: I'm very confident that we've gone a long way in the last couple of quarters, in securing stable grid power from not only Snell, but from the Zambian grid and, in fact, from Mozambique as well. That happened quite recently, but in the longer term, I think we will be able to get a lot more megawatts from other sources. Mark, any comments on the competitiveness of this?
Mark Farren: Im very confident that we've gone a long way in the last couple of quarters.
Mark Farren: And securing stable grid power from not only from snow but from.
Mark Farren: The Zambian grid and from Mozambique, Confect as well.
Mark Farren: There have been quite recently, but in the longer term I think we will be able to get.
Mark Farren: A lot more megawatts from other sources.
Mark Farren: And Mark and any comments on the competitiveness of this it clearly there's other people looking for power.
Mark Farren: Clearly, there are other people looking for power, but you guys are ahead of the curve. We're ahead of the curve. It's not the cheapest power, but it's not like diesel. So for example, we're running between 13 cents per kilowatt hour and 18 cents to import this power. Now, power is going at about 11 cents. So it's a little bit more expensive, but it's not prohibitive. And if you compare it to diesel, diesel is running at about 40 something 47 odd cents per kilowatt hour.
Mark Farren: So you guys are ahead of the curve.
Mark Farren: Ahead of the curve, it's not the cheapest power, but it is not like diesel. So for example, we are running between 13 cents per kilowatt hour in 2018 since June purchase power, where snowfall is growing at about 11.
Mark Farren: So it's a little bit more expensive, but it is not prohibitive and if you compared to diesel diesel is running at about 40, something 47 odd cents.
Mark Farren: So the more we get of this power, the better for us to grow. For where we are now, phase one, phase two, phase three, and I'm going to say phase four, we've secured enough power; we're going to be fine with power. If we're going to build more phases, when we do the Western Fulham, depending on the size, we're going to have to do more work, that's all. But I think we're okay for the next couple of years, the next five-year window. We're okay.
Mark Farren: So the more we get over this power.
Mark Farren: Who is to grow.
Mark Farren: We all know phase one phase II phase III and I'm going to say faithful we've secured enough power, we're going to be fun with power. If we can about more sizes will reduce waste and <unk> depending on the size we can have.
Mark Farren: We can have to do more work, that's all but I think we archive for the next couple of years next five year window.
Mark Farren: And we are not stopping. We've got work streams running, we've got very competent people working on this. We also have, We're moving quite quickly to look at solar solutions. And we have some firm bids on solar already. And I think that will be added to our, Added to our different sources as we go over time. That's all good. It's actually good.
Speaker Change: And we're not stopping.
Mark Farren: Streams running we got very competent people working on this.
Mark Farren: <unk>.
Mark Farren: We're moving quite quickly to look at solar solutions.
Mark Farren: Some firm bids on solar already.
Mark Farren: And I think that will be added to edit to Oh.
Mark Farren: And the two are different sources as we go over time.
Mark Farren: So it's all good it's actually good we're getting there nationally.
Mark Farren: We're getting there nicely. Thank you. Thanks, Mark. Just one non-power question.
Speaker Change: Thanks, Thanks, Mark just one non power question.
Speaker Change: I'm not sure if there was any comments made about the.
Andrew Rostislav Mikitchook: I'm not sure if there were any comments made about the Mokopane Feeder exploration, there's a little bit of a description of that in the release today. Do we get any additional comments on what kinds of targets, depth, and timing of the proposed work on that property? Yeah, I'll take it.
Speaker Change: Chemical pine a feeder.
Speaker Change: Exploration Theres, a little bit of description of that in.
Speaker Change: In the release today.
Andrew Rostislav Mikitchook: Ken.
Speaker Change: We get any additional comments on what kinds of targets depths.
Andrew Rostislav Mikitchook: <unk>.
Speaker Change: The proposed work on that property.
Speaker Change: Yes, I'll take I'll take a crack at that.
Robert Martin Friedland: I'll take a crack at that. The Mukherjee feeder has been named as such by leading PhD government platinum, palladium, and nickel experts from the government of South Africa. There exists a giant gravity anomaly 10 kilometers away from our shaft. It's one of the largest, if not the largest, gravity anomalies on this particular planet that we inhabit.
Robert Martin Friedland: The multiparty theater has been named as such by leading Phd governments platinum Palladium nickel experts.
Robert Martin Friedland: The government of South Africa.
Robert Martin Friedland: There exists a giant gravity anomaly 10 kilometers away from our shift.
Robert Martin Friedland: It's one of the largest if not the largest gravity anomalies on this particular planet that we inhabit.
Robert Martin Friedland: We have run a much more detailed gravity survey over that ground, and there's something extremely heavy in our neighborhood. It could be iron, or it could be the critical zone of the plot reef. The critical zone where we have the mineralization is very heavy rock; it grades almost four times per cubic meter. A normal ton of rock will probably grade 2.7, 2.8 tons per cubic meter. So there's something very heavy here. When you measure gravity, you don't know how deep it is.
Robert Martin Friedland: We have run a much more detailed gravity survey.
Robert Martin Friedland: Over the ground.
Robert Martin Friedland: And there is something extremely heavy.
Robert Martin Friedland: In our neighborhood it could be iron ore it could be.
Robert Martin Friedland: The critical is out of the critical zone, where we have the mineralization is very heavy rock.
Robert Martin Friedland: At grids almost four tons.
Robert Martin Friedland: Per cubic meter of normal ton of rock.
Robert Martin Friedland: Probably gray to 72.8 tons per cubic meters. So there's something very heavy.
Robert Martin Friedland: When you're measuring gravity you don't know how deep it is it could be something ultra heavy very deep or it could be just the.
Robert Martin Friedland: It could be something ultra heavy, very deep, or it could be just something heavy, but closer to the surface. So we're running a lot of other geophysics and mapping, and we see a world class target. I'm of the personal belief that the nickel endowment, sulfide nickel endowment, in the northern limb of the Bushveld, right where our farms are, is probably the largest sulfide nickel endowment on planet Earth. And everybody thinks that we're just going to be mining platinum and palladium.
Robert Martin Friedland: Heavy closer to the surface.
Robert Martin Friedland: So we're running a lot of other geophysics and mapping and we see a world class targets.
Robert Martin Friedland: I'm of the personal belief that the nickel and dominant sulphide Nicholas Thomas and the northern limb of the Bush felt right where our farms are is probably the largest sulphide nickel in dominant on planet Earth.
Robert Martin Friedland: Everybody thinks that we're just going to be mining platinum and palladium, but actually we had historical intercepts six 700 meters thick.
Robert Martin Friedland: But actually, we have historical intercepts. 6, 700 meters thick, of sulfide nickel with a gram or so of platinum and gold as a byproduct. Now, where all this metal came from is a mystery. In fact, where the entire Bushveld came from is a mystery. The theoretical target in the Mokopani feeder would be the stem of the mushroom that we call the Bushveldt.
Robert Martin Friedland: Sulphide nickel with.
Robert Martin Friedland: Graeme or so of platinum palladium and gold as a byproduct now where all of this metal came from is a mystery in fact, where the entire Bush felt came from is a mystery.
Robert Martin Friedland: The theoretical target and the most important figure would it be the stem of the mushroom that we call. The bush felt.
Robert Martin Friedland: So it's a crazy, interesting target. We're doing a lot of work on it, will be taking people on tour later this year, and we'll get ready to drill it. But we have no idea whatsoever what it is, what it is so heavy.
Robert Martin Friedland: It's a crazy interesting target.
Robert Martin Friedland: We're doing a lot of work on it.
Robert Martin Friedland: We'll be taking people on tour later this year.
Robert Martin Friedland: Ready to drill it but we have no idea whatsoever.
Robert Martin Friedland: It is.
Robert Martin Friedland: And we just don't know how deep it is. But, you know, there are deep mines in the world. It could be deep, it could be shallow. And time will tell.
Robert Martin Friedland: What is so heavy.
Robert Martin Friedland: We just don't know how deep it is but.
Robert Martin Friedland: There are deep mines in the world and it could be deep it could be shallow.
Robert Martin Friedland: Time will tell South Africa is probably the most under explored country in the world.
Robert Martin Friedland: South Africa is probably the most underexplored country in the world. If the numerator is its mineral potential, the denominator is what has actually been done. There's really been no significant exploration in South Africa since we found the Platte Reef mine, which is itself the largest precious metals mine being developed in the world. Given the well-publicized problems in South Africa to secure mineral title, the 10 years that were rather challenging during the Zuma era.
Robert Martin Friedland: If the numerator is its mineral potential that denominator is what has been actually done theres been really no significant exploration in South Africa since we found.
Robert Martin Friedland: The <unk> mine, which is itself the largest precious metals mine being developed in the world but.
Robert Martin Friedland: Given the well advertised problems in South Africa to secure mineral title.
Robert Martin Friedland: The 10 years.
Robert Martin Friedland: But we'd rather challenging during the zoom in euro.
Robert Martin Friedland: The world has just stayed away from South Africa for mineral exploration, but Ivanhoe Mines is there, and we see a number of very compelling opportunities for Tier 1 discoveries, the first of which is the mocha potty feeder. If that were to be the case, that would be a negative cost-based metals discovery because there are so many precious metals in diamonds. So this is a third or fourth quarter project, and we'll be telling you more about it in the near future. Thank you for the question. Thank you, Robert. I will turn it over to the microphone to the next speaker. Thank you very much.
Robert Martin Friedland: The World is just stayed away from South Africa for our mineral exploration, but I would remind us there and we see a number of very compelling opportunities for tier one discoveries.
Robert Martin Friedland: First of which is the local party feeder.
Robert Martin Friedland: Or is that to be the case that would be a negative cost base metals discovery, because there's so much precious metals.
Speaker Change: So this is our third or fourth quarter project and it'll be telling you more about it in the near future.
Speaker Change: Thank you for the question.
Speaker Change: Well, thank you Robert and I will turn the microphone to the next.
Matthew Richard Keevil: And I would now like to turn the call back to Matthew Keevil for additional questions from the web. Thanks very much, operator. We have a few minutes left here. I have just one or two questions from the web that warrant some attention.
Speaker Change: Speaker, Thank you very much.
Robert Martin Friedland: Okay.
Matthew Richard Keevil: I would now like to turn the call back to Matthew <unk> for additional questions from the web.
Matthew Richard Keevil: Thanks, very much operator, we have a few minutes left here I have just one or two questions from the web.
Robert Martin Friedland: So we'll just group them together. I think, Robert, this is probably geared towards you. I have a couple questions on premiums for low emissions and responsibly produced metals, both nickel and copper. Some people are asking if you could speak to the potential for seeing premiums on responsibly produced metals and what you're hearing in the market about that movement. 100% certain that Ivanhoe Mines will be rewarded with premiums for our metal because we're the lowest generator of global warming gas per unit of metal produced.
Matthew Richard Keevil: Warrants from Ascension. So, we'll just group them together I think Robert this is probably geared.
Robert Martin Friedland: Geared towards you I have a couple of questions on premiums for our low emissions and responsibly produced metals, both nickel and copper are some people asking if you could speak to the.
Robert Martin Friedland: The potential for seeing premiums on responsibly produce metal and what youre hearing in the market on that movement.
Robert Martin Friedland: The 100% certain.
Robert Martin Friedland: Is that iron ore mines will be rewarded with premiums for our metal.
Robert Martin Friedland: Because we are the lowest.
Robert Martin Friedland: Generator of global warming guests per unit metal produced in fact.
Robert Martin Friedland: In fact, it's becoming blatantly obvious to the mining industry in general that the giant porphyry coppers have only had to compete on one parameter, cash cost per pound of making copper. But when you look at the global warming gas per unit of copper produced, unless those open pit mines are powered by a nuclear power plant or hydropower, they create a horrendous amount of global warming gas per unit of copper produced, and it makes no sense for our kids or our grandkids to green the world economy if we're going to mine low-grade copper and grind it down to nothing, and get the same price as everybody else. Today, copper is $4.58 a pound, whether you produce clean copper or dirty copper. Now, that's coming to a screaming halt.
Robert: It's becoming blatantly obvious at the mining industry in general that the giant porphyry coffers.
Robert Martin Friedland: Have only had to compete on one parameter cash cost per pound of making copper.
Robert Martin Friedland: But when you look at the global warming guests per unit of copper produced unless that those open pit mines are powered by a nuclear power plant or a hydropower.
Robert Martin Friedland: Create a horrendous amount of global warming guess for years of copper produced so it makes no sense for kids or grandkids.
Robert Martin Friedland: The green the world economy, if we're going to mine.
Robert Martin Friedland: Low grade copper and grind it down to nothing.
Robert Martin Friedland: And get the same price as everybody else today covers $4.58 a pound.
Robert Martin Friedland: Whether you produce clean copper or Dirty Cup or no.
Robert Martin Friedland: Coming to a screaming halt.
Robert Martin Friedland: ABEX Technologies is about to begin trading metals in relation to their ESG characteristics on the Singapore Stock Exchange, and a lot of people don't realize how important the Singapore market is, but iron ore used to be traded between Rio Tinto and BHP and the Korean and Japanese steel mills once a year; they would agree a price in iron. Once Singapore started trading fungible iron contracts, all the iron in the world was traded there.
Robert Martin Friedland: <unk> technologies is about to begin trading.
Robert Martin Friedland: Metals in relation to their ESG characteristics on the Singapore deal.
Robert Martin Friedland: It's changed a lot of people don't realize.
Robert Martin Friedland: How important the Singapore market is but iron ore it used to be traded between Rio Tinto BHP and.
Robert Martin Friedland: The Korean and Japanese steel mills once a year they have a degree of pricing iron.
Robert Martin Friedland: Once Singapore started trading Punchable iron contracts, all the iron and the World has traded there.
Robert Martin Friedland: So we're about to see all metals traded according to their ESG characteristics by a company that found a way to institutionalize trust using the blockchain. It's not easy to have differential pricing on metals. You've seen it in sweet and sour crude oil or different grades of crude oil.
Robert Martin Friedland: So we're about to see all metals traded according to their ESG characteristics.
Robert Martin Friedland: By a company that found a way to institutionalize trust using the blockchain, it's not easy to have differential pricing on metals, you've seen it in sweet and sour crude oil or different grades of crude oil.
Robert Martin Friedland: You will now see it in different grades of copper and nickel and other metals, as well as in LNG and other forms of hydrocarbon. And that's because the world has failed to put a price on carbon. And that's so silly that we are the greenest producer of copper in the world that is significant, and yet we're getting the same price as everybody else.
Robert Martin Friedland: Now Susan different grades of copper and nickel and other metals as well as LNG and other forms of hydrocarbons and.
Robert Martin Friedland: And that's because the world has failed to put a price on carbon and that's so silly that we are the greenest producer.
Robert Martin Friedland: Copper in the world that is significant.
Robert Martin Friedland: We're getting the same prices everybody else that will not persist.
Robert Martin Friedland: That will not persist; as soon as we have markets that can reward people who make clean copper, then some German automakers will pay a premium for that clean copper, and if you're a dirty copper producer, you will get a discount. And that is how it should be. And that's why the Democratic Republic of the Congo is in the best position in the world for developing green metals. Yeah, the only place we're going to find these green metals at scale is on the African continent.
Robert Martin Friedland: As soon as we have markets that can reward people.
Robert Martin Friedland: Who make clean copper than some of the German automakers will pay a premium for the clean copper and if you're a dirty copper producer you will achieve a discount and that is how it should be and Thats why the Democratic Republic of Congo sits in the best position in the world for developing Green metals.
Robert Martin Friedland: Yeah, the only place we're going to find these green metals that scale is the African continent, that's where we have hydropower and high grades and this is becoming increasingly obvious to everybody.
Robert Martin Friedland: That's where we have hydropower and high grade, and this is becoming increasingly obvious to everybody. We're seeing discussions that the copper industry needs at least, say, $15,000 a ton to screw up their courage and build a large, low-tonnage copper mine. If you look at Cravato Blanca, it came in at close to double the capital that was predicted. And so, in an uncertain world in Latin America, you probably do need $15,000 a ton to bring on stream a significant 0.6 of 1% porphyry copper mine.
Robert Martin Friedland: We're seeing discussions.
Robert Martin Friedland: Copper industry needs at least say $15000 a tonne to <unk>.
Robert Martin Friedland: Grew up their courage to build a large low tonnage copper mine.
Robert Martin Friedland: If you look at it provide a block of it came in at close to double the capital that was predicted.
Robert Martin Friedland: And so in an uncertain world in Latin America, you're probably doing a $15000 a ton to bring on stream.
Robert Martin Friedland: Significant <unk> six of 1% porphyry copper mines.
Robert Martin Friedland: And a lot of the existing mines have grades that are declining in grids that burn coal to make electrical energy. I mean, you know, the sun only shines three or four hours a day in South America.
Robert Martin Friedland: Out of the existing mines have grades declining.
Robert Martin Friedland: In grids that burn coal to make electrical energy.
Robert Martin Friedland: Suddenly shines three or four hours a day.
Robert Martin Friedland: And so the grid is a coal-burning grid in countries like Peru and Chile. So we have a tremendous amount of interest in the production of green metals, and that's where the Congo will clearly lead the world. And we look forward to the day when we'll be able to show our shareholders a premium price for our copper, but 100% for sure, differential pricing in metals is opening soon at a theater near you, brought to you by ABEX Technologies. And these are serious people. They ran the backroom at Goldman Sachs, and they were involved in COMEX and then IMEX, which are the leading commodities traders in the world as exchanges.
Robert Martin Friedland: In South America, and so the grid is at coal burning grid in countries like.
Robert Martin Friedland: Peru and Chile.
Robert Martin Friedland: So we have a tremendous amount of interest in the production of green metal.
Robert Martin Friedland: That's where the Congo will clearly lead the world.
Robert Martin Friedland: And we look forward to the day.
Robert Martin Friedland: We will be able to assure shareholders a premium price for copper, but 100% for sure differential price in metals.
Robert Martin Friedland: Turning soon at a theater near you brought to you by apex technologies and these are serious people. They ran the backroom Goldman Sachs and they were involved in the comex and the Nymex, which is the leading <unk>.
Robert Martin Friedland: Commodities traders in the world as it changes so it took a long long time to do this but it's really going to happen.
Operator: So it took a long time to do this, but it's really going to happen. Thank you for the opportunity to pontificate on that important question. Thank you, Robert. I believe we've pretty much covered all the questions today online and on the phone, so we'll wrap up the call. Just a quick reminder, if you do have an outstanding question that wasn't answered during the course of this call, please do follow up with our IR team, Tommy, Alex, and myself, and we'd be happy to answer that question offline.
Operator: Thank you for the opportunity to pontificate on that important question.
Operator: Thank you Robert and I believe we've pretty much covered all the questions today online and on the phone. So we'll wrap up the call. Just a quick reminder, if you do all the outstanding question that wasn't answered during the course of this call. Please do follow up with our.
Operator: Our IR team, Tommy Alex or myself, and we'd be happy to answer that question offline, but this concludes the call I'd like to thank everyone for attending today's event and we look forward to speaking with you soon on the many exciting milestones coming up this year operator, please do feel free to wrap up.
Operator: But this concludes the call. I'd like to thank everyone for attending today's event, and we look forward to speaking with you soon on the many exciting milestones coming up this year. Operator, please do feel free to wrap up. Certainly. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Certainly thank you. Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.