Ivanhoe Mines Q2 Earnings Call Highlights

Key Points

• Strong Q2 performance: Ivanhoe Mines reported $179 million in adjusted EBITDA and $46 million in profit, supported by higher copper prices and contributions from Kamoa-Kakula and Kipushi. Kamoa-Kakula generated $385 million of EBITDA, while Kipushi achieved record quarterly zinc production of more than 70,000 tonnes.
• Kamoa-Kakula outlook: The company tightened its 2026 copper-production guidance to 290,000–310,000 tonnes and expects production to improve in the second half. Reducing copper inventories by roughly 10,000 tonnes could release working capital, while higher sulfuric-acid prices are expected to lower third-quarter cash costs.
• Growth projects remain on track: Ivanhoe maintained its 2026 production and capital-spending guidance, with Platreef Phase 2 targeted for completion by the end of 2027 and a major Western Forelands resource update expected in September. Solar-power expansion is also progressing and could reduce Kamoa-Kakula’s diesel consumption by 25%–30%.

Ivanhoe Mines TSE: IVN reported second-quarter adjusted EBITDA of $179 million and profit of $46 million, as higher copper prices and contributions from its Kamoa-Kakula copper complex and Kipushi zinc mine supported results.

The company said Kamoa-Kakula produced more than 64,000 tonnes of copper during the quarter and generated $385 million of EBITDA, while Kipushi produced more than 70,000 tonnes of zinc at a cash cost of $0.90 per pound. Ivanhoe maintained its 2026 production and capital-spending guidance across its projects.

President and Chief Executive Officer Marna Cloete said Ivanhoe has tightened Kamoa-Kakula’s 2026 copper-production guidance to between 290,000 and 310,000 tonnes. She said production rates are expected to progressively increase in the second half as the company advances its turnaround strategy at the operation.

Kamoa-Kakula results and second-half outlook

Kamoa-Kakula sold just over 61,000 tonnes of payable copper, in anodes and blister, during the second quarter. Chief Financial Officer David van Heerden said copper inventory remained near 40,000 tonnes, with production through the mills broadly matching sales volumes.

Ivanhoe expects to reduce inventory by about 10,000 tonnes during the second half, targeting year-end inventory of roughly 25,000 to 30,000 tonnes of copper. Van Heerden said the inventory reduction is expected to lower working capital and convert into cash.

Kamoa-Kakula recorded revenue of $880 million during the quarter, including $56 million from sulfuric acid sales and a $33 million positive mark-to-market effect from provisionally priced copper sales. The realized copper price was $5.99 per pound.

The operation’s second-quarter C1 cash cost was $2.84 per pound of payable copper in saleable product, while first-half cash costs averaged $2.70 per pound, near the lower end of guidance. Van Heerden attributed much of the quarter-over-quarter cost increase to diesel prices, which accounted for $0.18 per pound, or about 70%, of the increase.

The company said higher sulfuric-acid prices are expected to support costs in the third quarter. Kamoa-Kakula sold 120,000 tonnes of acid at an average price of $465 per tonne in the second quarter, while contracts signed in July were priced at about $840 per tonne. At current prices, Van Heerden said the sulfuric-acid byproduct credit could approach $0.60 per pound in the third quarter, compared with $0.38 per pound in the second quarter.

The company’s 500,000-tonne-per-year smelter produced 64,000 tonnes of blister and anode copper in the second quarter and was operating at about 60% of capacity. Chief Operating Officer Tom van den Berg said the smelter has been stable since its startup late in 2025, with future ramp-up tied to higher mining rates.

Kamoa-Kakula’s Phase 3 concentrator continued to operate above design capacity, at an annualized milling rate equivalent to 6.3 million tonnes. Phase 1 and 2 operations were affected by ore batching as surface stockpiles were depleted, but Ivanhoe expects throughput to increase as additional material is supplied from Kansoko and Kamoa.

Mining plans, power and operational risks

Ivanhoe said it expects Kamoa-Kakula to produce between 380,000 and 420,000 tonnes of copper in 2027. The company said higher mining rates, greater development access and the eventual start of stoping at Kakula are central to that outlook.

Executive Vice President of Technical Services Simon Bottoms said development progress around Kakula’s eastern barrier pillar is expected to support a production increase in the fourth quarter of 2027. He said the plan assumes a further improvement in development rates, though only by about 12% from current levels beginning in mid-2027.

Bottoms said dewatering has constrained the pace of advance in some areas. Ivanhoe has more than 8,500 liters per second of vertical pumping capacity but is currently using about 5,500 liters per second, he said. The company is installing additional horizontal pumping stations to improve access, particularly in the eastern areas of the mine.

Ivanhoe is also updating feasibility studies, mineral-resource models and geohydrological models across the Kamoa-Kakula complex. A 250-kilometer feasibility drilling program targeting mining areas planned for 2027 through 2031 has started and is expected to extend into 2027.

Meanwhile, the first phase of a 60-megawatt solar facility with battery backup is being ramped up. Ivanhoe expects to receive the final 30 megawatts from the two independent power producers by the end of September. Executive Vice President of Projects Steve Amos said the facility is designed to provide base-load power with 95% availability and should reduce diesel consumption by 25% to 30% once fully operational.

Ivanhoe has initiated a second 60-megawatt solar phase and is considering self-building a third phase.

Kipushi, Platreef and exploration

Kipushi achieved a quarterly production record of more than 70,000 tonnes of zinc. The mine processed a record 200,000 tonnes of ore at an average zinc grade of 38.7% and achieved recoveries of nearly 92%.

Kipushi generated $148 million of revenue and $51 million of EBITDA, for a 35% margin. The realized zinc price was $1.58 per pound. Ivanhoe maintained Kipushi’s 2026 guidance of 240,000 tonnes of zinc production and said the operation is expected to rank as the world’s third-largest zinc mine during the year.

About 14,000 tonnes of zinc finished goods accumulated during the quarter because the company could not secure enough trucks to move concentrate to port. Van Heerden said truck availability was affected by reduced sulfur shipments entering the Democratic Republic of Congo and by cobalt-production quotas. He said inventory had been cut in half since the end of June after the company secured more transport capacity.

At the Platreef project in South Africa, Ivanhoe said Phase 2 construction remains on track for completion by the end of 2027. The Phase 2 plant is planned to mill 3.3 million tonnes annually and produce an estimated 450,000 to 500,000 ounces of 3PGE+Au, along with about 10,000 tonnes of nickel.

The company also said it expects to publish an updated mineral-resource statement for its Western Forelands copper project in September. Bottoms said Ivanhoe anticipates total mineral resources will rise by more than 30%, alongside an increase in overall grade. The company has begun early project establishment work and expects future technical studies to evaluate multiple shallow open-pit opportunities.

Separately, Cloete reported the death of Muhammad Wambai on July 6 following a fall-of-ground incident during scaling activities at the Kakula underground mine. She said Ivanhoe identified the root cause, updated procedures and implemented expanded training for scaling operations and hazard identification.

About Ivanhoe Mines (TSE:IVN)

Ivanhoe Mines Ltd is a mineral exploration and development company. The company, together with its subsidiaries, explores, develops, and recovers minerals and precious gems from its property interests located in Africa. The group explores platinum, nickel, copper, gold, silver, cobalt, iron, vanadium, and chrome. It operates in four segments: Platreef property, Kamoa Holding joint venture, Kipushi properties, and the Company's treasury offices.

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