TORONTO, CANADA ? Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF) today announced its financial results for the three months ended March 31, 2022. The first quarter was highlighted by many important milestones, including: the early declaration of Phase 2 commercial copper production at the Kamoa-Kakula Mining Complex; the commencement of lateral mine development toward the high-grade Flatreef platinum-group-metals orebody at Platreef; a new agreement to return the ultra-high-grade Kipushi Zinc Mine to commercial production; and the initiation of an extensive regional drilling program at the Western Foreland Copper Exploration Project. All figures are in U.S. dollars unless otherwise stated.
- Ivanhoe Mines recorded a profit of $21.5 million for Q1 2022, compared to a profit of $20.4 million for the same period in 2021. Ivanhoe Mines’ share of profit from the Kamoa-Kakula copper joint venture and finance income therefrom totaling $115.4 million, were the principal contributors to the profit recorded in the first quarter.
- The Kamoa-Kakula Mining Complex set a new quarterly production record during the period, with 55,602 tonnes of copper in concentrate produced. Commercial production from the Phase 2 concentrator was declared on April 7, 2022.
- A de-bottlenecking program is underway at Kamoa-Kakula to expand processing capacity of Phase 1 and Phase 2 concentrators by 21%, to a combined 9.2 million tonnes of ore per year. Copper production from Kamoa Copper’s first two phases is projected to exceed 450,000 tonnes per year by Q2 2023.
- Kamoa-Kakula’s cost of sales per pound (lb.) of payable copper sold was $1.08/lb. for Q1 2022, while cash costs (C1) per pound of payable copper produced totaled $1.21/lb., compared to $1.12/lb. and $1.28/lb. respectively in Q4 2021.
- During Q1 2022, Kamoa-Kakula sold 51,919 tonnes of payable copper and recognized record EBITDA of $399.4 million and revenue of $519.6 million, with an operating profit of $380.5 million.
- On May 3, 2022, Ivanhoe Mines announced details of the Phase 3 expansion at Kamoa-Kakula, which will include an additional 5-million-tonnes-per-annum concentrator adjacent to new underground mines at Kamoa – named Kamoa 1 and Kamoa 2. Phase 3 will increase total processing capacity to more than 14 million tonnes of ore per annum, and grow annualized copper production to approximately 600,000 tonnes by the fourth quarter of 2024. This production level will elevate Kamoa-Kakula to the world’s third-largest copper mining complex, and the largest copper mining complex in Africa.
- Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of $562 million as at March 31, 2022, and expects that Kamoa-Kakula’s expansion capital for Phase 2 and Phase 3 will be funded from copper sales and facilities at Kamoa.
- During the first quarter of 2022, Ivanhoe commenced a regional drilling program, expected to total approximately 95,000 metres, targeting Kamoa-Kakula-style copper mineralization on its Western Foreland licences, which cover approximately 2,407 square kilometres in close proximity to the Kamoa-Kakula mining licenses.
- Exploration models that successfully led to the discoveries of Kakula, Kakula West, and the Kamoa North Bonanza Zone on the Kamoa-Kakula joint-venture mining licence are being applied to the extensive Western Foreland land package by the team of exploration geologists responsible for the previous discoveries.
- On May 9, 2022, Ivanhoe Mines announced the completion of the Platreef Project's Shaft 1 changeover to a production shaft, as well as the first blast on the 950-metre level, which marked the commencement of lateral mine development toward the high-grade Flatreef platinum-group-metals, nickel, copper and gold orebody.
- In February 2022, Ivanhoe Mines announced the outstanding results of a new independent feasibility study for the Platreef Project that builds on the alternate scenario to expedite production, based on a steady-state production rate of 5.2 million tonnes per annum, confirming the viability of a new phased-development pathway to fast track Platreef into production in Q3 2024.
- The Platreef 2022 Feasibility Study yields an after-tax NPV8% of $1.7 billion and IRR of 18.5% at long-term consensus metal prices. At spot prices as at May 6, 2022, the after-tax NPV8% increases to $3.5 billion and the IRR increases to 27%.
- In February 2022, Ivanhoe Mines and Gécamines signed a new agreement to return the ultra-high-grade Kipushi Zinc Mine back to commercial production.
- Ivanhoe Mines announced the positive findings of an independent feasibility study for the planned resumption of commercial production at Kipushi based on a two-year construction timeline. The Kipushi feasibility study’s sensitivity analysis at spot zinc prices of approximately $1.70/lb. (May 6, 2022), results in an after-tax NPV8% of $2.4 billion with an after-tax real IRR of 75.8%.
- On May 2, 2022, Ivanhoe Mines issued its fifth annual Sustainability Report, highlighting the company’s commitment to becoming a global ESG leader in mining.
Conference call information
Ivanhoe Mines will hold an investor conference call to discuss the Q1 2022 financial results at 4:30 p.m. South African time / 10:30 a.m. Eastern time / 7:30 a.m. Pacific time on May 10. The conference call dial-in is +1-647-794-4605 or toll free 1-888-204-4368, quote “Ivanhoe Mines Q1 2022 Financial Results” if requested. Media are invited to attend on a listen-only basis.
Link to join the live audio webcast: https://bit.ly/3DTATay
Principal projects and review of activities
1. Kamoa-Kakula Mining Complex
39.6%-owned by Ivanhoe Mines
Democratic Republic of Congo
The Kamoa-Kakula Mining Complex, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world’s fourth-largest copper deposit by international mining consultant Wood Mackenzie. The project is approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi. Kamoa-Kakula began producing copper in May 2021 and achieved commercial production on July 1, 2021.
Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining and a 1% share interest in Kamoa Holding to privately owned Crystal River in December 2015. Kamoa Holding holds an 80% interest in the project. Since the conclusion of the Zijin transaction, each shareholder has been required to fund expenditures at Kamoa-Kakula in an amount equivalent to its proportionate shareholding interest. Ivanhoe and Zijin Mining each hold an indirect 39.6% interest in the Kamoa-Kakula Mining Complex, Crystal River holds an indirect 0.8% interest and the DRC government holds a direct 20% interest.
Health and safety at Kamoa-Kakula
At the end of March 2022, Kamoa-Kakula reached 796,966 work hours free of a lost-time injury. Three lost-time injuries occurred in Q1 2022. The project continues to strive toward its workplace objective of zero harm to all employees and contractors.
Kamoa-Kakula has successfully focused on prevention, preparation, and mitigation in managing the risks associated with COVID-19. Large-scale testing, combined with focused preventative measures, ensured that positive cases were quickly identified, isolated, and treated, with cross contamination kept to a minimum. Kamoa-Kakula also continues to focus intensively on rolling out vaccinations across the workforce and local communities. More than two thousand employees have received at least one dose of the vaccine.
As the pandemic evolves, the medical team at the Kamoa-Kakula hospital continues to review and update risk-mitigation protocols to protect the health and safety of employees and community members.
Nursing staff inside the new medical facility at the Kamoa Hospital. (L-R) Alain Sambwe Masengo; Papy Wedialumbele Lumasa; Paulin Mwanza Umbanga; Augustin Kabedi Mujinga; Adellard Muyambo Kazenga; Salva Mujinga Tshibamba; Timothee Bwana Ngoie.
Kamoa-Kakula summary of operating and financial data
|Q1 2022||Q4 2021||Q3 2021|
|Ore tonnes milled (000’s tonnes)||1,083||1,059||861|
|Copper ore grade processed (%)||5.91%||5.96%||5.89%|
|Copper recovery (%)||87.10%||86.40%||83.40%|
|Copper in concentrate produced (tonnes)||55,602||54,481||41,545|
|Payable Copper sold (tonnes)||51,919||53,165||41,490|
|Sales revenue ($'000)||519,595||488,536||342,584|
|Cost of sales per pound ($ per lb)||1.08||1.12||1.08|
|Cash cost (C1) ($ per lb)||1.21||1.28||1.37|
This release includes EBITDA and "C1 cash costs per pound" which are non-GAAP financial performance measures. For a detailed description of each of the non-GAAP financial performance measures used in this release, and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the Non-GAAP Financial Performance Measures section of this release and to the company’s MD&A for the three months ending March 31, 2022. C1 cash costs are prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines, but are not measures recognized under IFRS. In calculating the C1 cash cost, the costs are measured on the same basis as the company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash costs are used by management to evaluate operating performance and includes all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered, finished metal. C1 cash costs exclude royalties and production taxes and non-routine charges, as they are not direct production costs.
C1 cash cost per pound of payable copper produced can be further broken down as follows:
|Q1 2022||Q4 2021||Q3 2021|
|Mining||($ per lb)||0.30||0.27||0.36|
|Processing||($ per lb)||0.15||0.17||0.16|
|Logistics charges (delivered to China)||($ per lb)||0.36||0.37||0.35|
|Treatment, refining and smelter charges||($ per lb)||0.20||0.24||0.21|
|General and administrative expenditure||($ per lb)||0.20||0.23||0.29|
|C1 cash cost per pound of payable copper produced||($ per lb)||1.21||1.28||1.37|
All figures in the above tables are on a 100%-project basis. Metal reported in concentrate is prior to refining losses or deductions associated with smelter terms.
Record quarterly production of 55,602 tonnes of copper in Q1 2022; Phase 2 concentrator declared commercial production on April 7, 2022
First ore was introduced into the Phase 2 milling circuit on March 21, 2022, and first copper concentrate was produced approximately four months ahead of the originally announced development schedule. The Phase 2 concentrator plant is a mirror image of the Phase 1 plant, with a design throughput of 475 dry tonnes per hour, or 3.8 million tonnes of ore per year. Over the last six months, the Phase 1 plant has consistently exceeded design ore throughput by approximately 10% to 15%.
During the first 17 days of production, Phase 2 regularly exceeded its design throughput capacity, and continues to perform at similar throughput and recovery rates to the Phase 1 concentrator. Commercial production from the Phase 2 concentrator was declared on April 7, 2022.
Copper recoveries progressively increased from an average of approximately 81% in July 2021 to approximately 85% in September 2021. Copper flotation recoveries averaged approximately 86% in the fourth quarter of 2021 and achieved a record 88.5% in December 2021. The Phase 1, steady-state-design copper recovery is approximately 86%, depending on ore feed grade.
The Phase 1 concentrator currently is running at a throughput that is in excess of its design capacity of 3.8 million tonnes per annum by more than 15%, with 117% of design throughput achieved in December.
Kamoa-Kakula set a new quarterly production record in the first quarter of 2022 with 55,602 tonnes of copper in concentrate produced, up from the 54,481 tonnes of copper in concentrate produced in the fourth quarter of 2021 and 41,545 in the third quarter of 2021. A total of 1.08 million ore tonnes were milled during the first quarter of 2022 at an average feed grade of 5.91% copper.
Phase 3 expansion to include additional 5 million-tonne-per-annum concentrator, adjacent to two new underground mines
Engineering and early works for the Phase 3 expansion, including a new box cut and twin declines to access new mining areas, are progressing quickly. Kamoa-Kakula's Phase 3 will consist of two new underground mines known as Kamoa 1 and Kamoa 2, as well as the initial decline development at Kakula West. A new, 5 million-tonne-per-annum concentrator (Mtpa) plant will be established adjacent to the two new mines at Kamoa.
Upon commencement of Phase 3 production, Kamoa Copper will have a total processing capacity greater than 14 million tonnes per annum. The existing Phase 1 and 2 concentrators will be de-bottlenecked and operating at a combined throughput of 9.2 million tonnes of ore per year by the second quarter of 2023, which will increase annual copper production to approximately 600,000 tonnes.
Phase 3 is making solid progress, with detailed design, budgeting and engineering advancing well. Construction on the new box cut excavation is advancing rapidly at the Kamoa 1 and Kamoa 2 mines, with decline development expected to start in early May 2022, which will provide access to the main Phase 3 mining areas.
The pre-feasibility study for the Phase 3 expansion is well advanced and expected to be announced during the second half of this year, while first production is anticipated to commence by the end of 2024.
Figure 1: Kamoa-Kakula’s base-case, pro-forma Phase 3 copper production (after Phase 1 and 2 de-bottlenecking is complete) relative to the world’s projected top 10 producing mines in 2022 by paid copper production.
Source: company filings, Wood Mackenzie (April 2022). Note: Kamoa-Kakula production of 600 kt copper in concentrate is based on expected Phase 1, 2 and 3 steady state production, following de-bottlenecking of both Phase 1 and 2 concentrators, and commercial ramp-up of the Phase 3 concentrator.
Kamoa-Kakula smelter basic engineering and earthworks underway
Early works on the planned direct-to-blister flash smelter at Kamoa-Kakula adjacent to the Phase 1 and Phase 2 concentrator plants is underway. The smelter is designed to use technology supplied by Metso Outotec of Espoo, Finland, and has been sized to process the bulk of the copper concentrate forecast to be produced by the Phase 1, 2 and 3 concentrator plants, with a production capacity of 500,000 tonnes per annum of approximately 99%-pure blister copper.
China Nerin Engineering Company Co., Ltd. has been appointed to carry out the basic engineering design and develop a control budget estimate for the smelter with some early works engineering and procurement activities running in parallel. Work is progressing well and tenders for all long lead item have been issued to the market.
The smelter, once in operation, will enable Kamoa-Kakula to reduce its C1 cash costs per pound of payable copper produced by approximately 10% to 20%, driven by significantly reduced transportation costs, decreasing overall volumes shipped by more than half.
Ore stockpiles now hold more than 4.8 million tonnes grading 4.57% copper, containing more than 220,000 tonnes of copper at the end of March 2022
Kamoa-Kakula’s total high- and medium-grade ore surface stockpiles totaled approximately 4.8 million tonnes at an estimated grade of 4.57% copper as of the end of March 2022. The operation mined 1.67 million tonnes of ore grading 5.29% copper in Q1 2022, which was comprised of 1.53 million tonnes grading 5.50% copper from the Kakula Mine, including 0.65 million tonnes grading 6.90% copper from the mine’s high-grade centre, and 0.14 million tonnes grading 3.08% copper from the Kansoko Mine.
Kamoa-Kamoa’s Phase 1 and Phase 2 concentrator plants and the ore stockpiles at the Kakula Mine’s northern decline. The direct-to-blister flash smelter is being constructed adjacent to the Phase 1 and Phase 2 concentrator plants.
Kamoa-Kakula Phase 2 off-take amendments signed
Kamoa Copper – the operating company of the joint venture between Ivanhoe Mines, Zijin Mining Group, Crystal River and the Government of the Democratic Republic of Congo – has signed amended copper concentrate and blister copper offtake agreements on competitive arm's-length commercial terms, for 100% of Kamoa-Kakula’s Phase 1 and 2 copper output.
The amended terms of the existing offtake agreements with CITIC Metal (HK) Limited (CITIC Metal) and Gold Mountains (H.K.) International Mining Company Limited, a subsidiary of Zijin, extend to include 50% each of the copper products from Kamoa-Kakula’s Phase 2 production, in addition to Phase 1 production currently under offtake. The offtake agreements are evergreen for the production volumes from Phase 1 and 2, including copper concentrate and blister copper resulting from processing of copper concentrates at the Lualaba Copper Smelter, but will exclude future copper products to be produced from Kamoa Copper’s own smelter, when commissioned.
The offtake agreements contain standard, international commercial terms, including copper payables and treatment and refining charges referenced against the annual benchmark across the copper industry.
CITIC Metal and Zijin will continue to purchase the copper concentrate at the Kakula Mine and the blister copper at the Lualaba Copper Smelter on a free-carrier basis, meaning the buyers will be responsible for arranging freight and shipment to the final destination via African ports.
Inga II partnership to supply additional clean hydroelectric power for the Phase 3 expansion and smelter; EPC contract signed for Turbine #5 refurbishment
In July 2021, Ivanhoe Mines Energy DRC, a sister company of Kamoa Copper tasked with delivering reliable, clean, renewable hydropower to the Kamoa-Kakula Mining Complex, signed an addendum of the financing agreement under a public-private partnership with the Democratic Republic of Congo's state-owned power company, La Société Nationale d'Electricité (SNEL), to upgrade a major turbine (#5) in the existing Inga II hydropower facility on the Congo River.
This partnership successfully refurbished and modernized the Mwadingusha hydropower plant in 2021, which now provides 78 megawatts (MW) to the national grid.
The Inga II project is expected to produce an additional 178 MW of renewable hydropower, providing the Kamoa-Kakula Mining Complex and associated smelter with sustainable electricity for Phase 3 and future expansions, while also benefitting local communities. The Inga II upgrade project is scheduled for completion in the fourth quarter of 2024.
The work at Turbine #5 will include the upgrade and replacement of all the unit line from intake equipment, turbine, speed governor, alternator, voltage regulator and transformers (water to wire).
The Inga II Turbine #5 project has much lower unitary capital cost per megawatt produced ($0.58/MW) compared to the completed Mwadingusha project ($1.45/MW).
The engineering, procurement, and construction (EPC) contract for the upgrading of Turbine #5 was signed in Heidenheim, Germany, on April 26, 2022, by SNEL and Voith Hydro, a leading German hydropower company.
Kamoa-Kakula aiming to be first net-zero carbon emitter among top-tier copper mines by electrifying its mining fleet with state-of-the-art equipment powered by electric batteries or hydrogen fuel cells
In May 2021, Ivanhoe Mines announced its pledge to achieve net-zero operational greenhouse gas emissions (Scope 1 and 2) at the industry-leading Kamoa-Kakula Mining Complex.
In support of the Paris Agreement on climate change, and in the spirit of the commitments at the April 2021 Leaders Summit on Climate by the Chinese and American governments to sharply cut emissions, Ivanhoe Mines has committed to working with its joint-venture partners and leading underground mining equipment manufacturers to ensure that Kamoa-Kakula becomes the first net-zero operational carbon emitter among the world’s top-tier copper producers.
Since the Kamoa-Kakula mines and concentrator plants are powered by clean, renewable hydro-generated electricity, the focus of the company’s net-zero commitment is on electrifying the project’s mining fleet with new, state-of-the-art equipment powered by electric batteries or hydrogen fuel cells.
Kamoa-Kakula is working closely with its mining equipment suppliers to evaluate the viability, safety and performance of new electric, hydrogen and hybrid technologies. The mine plans to introduce them into its mining fleet as soon as they become commercially available.
Empowering local communities through sustainable development
Ivanhoe Mines founded the Sustainable Livelihoods Program in 2010 to strengthen food security and farming capacity in the host communities near Kamoa-Kakula. Today, approximately 900 community farmers are benefiting from the Sustainable Livelihoods Program, producing high-quality food for their families and selling the surplus for additional income. The Sustainable Livelihoods Program, which commenced with maize and vegetable production, now includes fruit, aquaculture, poultry and honey.
Farm worker, Mapindji Kabwita Gracia, planting pineapples at the new pineapple garden.
Construction of 100 new fishponds near Kamoa-Kakula is complete, bringing the total number to 138.
Plans are underway for construction of another 100 fishponds. The project will significantly contribute toward local entrepreneurship and enhanced regional food security.
Additional non-farming-related activities continued including education programs, local economic development projects and enterprise and supplier development programs, and the supply of fresh water to a number of local communities using solar-powered boreholes. An adult literacy-training program is being undertaken by a group of community participants who have been trained as facilitators. Construction of the Muvunda Clinic progressed, with the building now is 80% complete. In addition, a group of community participants took part in, and graduated as facilitators for, an adult literacy-training program.
Implementation of the first regulatory five-year community development plan, the Cahier des Charges, has commenced. Construction of two early childhood development centres, planned for operation in September 2022, progressed well and now is 90% complete. The Muvunda poultry project also has been launched; two out of seven planned fishponds have been constructed at Mupenda; and the design of two rural health centres is underway.
Local community enterprise programs continued including brick making and sewing, which are currently being expanded, as well as landscaping and gardening, which are under review seeking to enhance business efficiency and growth. An order has been placed for a new brick-making machine, which will see the production capacity double to approximately 30,000 bricks per month.
COPPER PRODUCTION AND CASH COST GUIDANCE FOR 2022
The Kamoa-Kakula Phase 2, 3.8 million-tonne-per-annum concentrator plant successfully declared commercial production on April 7, 2022. First ore was introduced into the Phase 2 milling circuit on March 21, 2022, and first copper concentrate was produced approximately four months ahead of the originally announced development schedule. Management now expects the early commissioning of the Phase 2 concentrator plant will enable Kamoa-Kakula to reach the upper end of its 2022 copper production guidance of 290,000 to 340,000 tonnes.
The Kamoa-Kakula joint venture produced a total of 105,884 tonnes of copper in concentrate for the year ending December 31, 2021, and 55,602 tonnes in the first quarter of 2022. The figures are on a 100%-project basis and metal reported in concentrate is prior to refining losses, or deductions associated with smelter terms.
Cash costs (C1) per pound of payable copper amounted to $1.21 for the first quarter of 2022, trending towards the lower end of the full year guidance.
Guidance involves estimates of known and unknown risks, uncertainties and other factors, which may cause the actual results to be materially different.
|Kamoa-Kakula 2022 Guidance|
|Contained copper in concentrate (tonnes)||290,000 to 340,000|
|Cash cost (C1) ($ per pound)||1.20 to 1.40|
C1 cash cost is a non-GAAP measure used by management to evaluate operating performance and includes all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to final port of destination (typically China), which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered finished metal.
For historical comparatives, see the Non-GAAP Financial Performance Measures section of this news release.
2. Platreef Project
64%-owned by Ivanhoe Mines
The Platreef Project is owned by Ivanplats (Pty) Ltd (Ivanplats), which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically disadvantaged, broad-based, black economic empowerment (B-BBEE) partners, which include 20 local host communities with approximately 150,000 people, project employees and local entrepreneurs. A Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation, and Japan Gas Corporation, owns a 10% interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.
The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province – approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane.
On the Northern Limb, platinum-group metals mineralization is primarily hosted within the Platreef, a mineralized sequence traced for more than 30 kilometres along strike. Ivanhoe’s Platreef Project, within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and properties.
Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties that form part of the company’s mining right.
Aerial view of Platreef mine site showcasing latest construction, with Shaft 1 on the left and Shaft 2 hitch-to-collar construction on the right.
Health and safety at Platreef
As at the end of March 2022, the Platreef Project reached 836,970 lost-time, injury-free hours worked.
COVID-19 protocols are continuously reviewed and optimized and as a result, the company implemented several measures to prevent and mitigate the escalation of infections. In support of the National Department of Health’s national vaccine rollout strategy, Ivanplats launched an on-site COVID-19 vaccination campaign and all Ivanplats employees and contractors have now been vaccinated. On-site testing of employees and contractors showing COVID-19 symptoms continued with 335 COVID-19 tests conducted in the first quarter of 2022.
Shaft 1 changeover to a production shaft completed; lateral underground mine development commenced
The construction of the 996-metre-level station at the bottom of Shaft 1 was completed in July 2020. Shaft 1 initially will be used to access the orebody, and is approximately 450 metres away from a high-grade area of Flatreef that is planned for bulk, mechanized mining. The three development stations that will provide initial, underground access to the high-grade orebody also have been completed on the 750-, 850- and 950-metre levels. Ivanplats completed the initial blast on Platreef’s 950-metre level on April 22, 2022, marking the commencement of lateral mine development.
The auxiliary winder has been installed and commissioned. The headgear, both winders, equipping stage, conveyances and control systems comply with the highest current industry safety standards, with proven and tested safety and redundancy systems in place.
The winder used to successfully sink Shaft 1 was converted to function as the main equipping conveyance during the shaft changeover, and will serve as the permanent rock, personnel and material winder following the shaft-equipping phase. The shaft will be equipped with two cages on top of twin 12.5-tonne skips with hoisting capacity of 1 million tonnes per year, resulting from an amended configuration that does not require the cage to be interchanged mid-shift, thereby increasing the hoisting time during the initial phase of mining.
Shaft equipping commenced in May 2021 and was successfully completed in March 2022 with Shaft 1 now ready to commence rock hoisting. With the successful completion of the changeover work in the shaft, underground stations, and establishment of the ore and waste passes, lateral underground mine development commenced in April 2022 towards high-grade ore zones.
Ivanplats celebrated the first blast at Shaft 1’s 950-metre level on April 22, 2022.
Platreef takes delivery of initial battery-electric vehicles, construction of first solar power plant now underway
Ivanplats initial order with Epiroc of Stockholm, Sweden, for its primary mining fleet includes emissions-free, battery-electric jumbo face drill rigs, 14-tonne battery scooptrams, battery-electric bolting rigs and 42-tonne battery dump trucks. Ivanplats has received Platreef’s first battery powered underground equipment; a ST14 scooptram and a Manitou MHTX 790 telehandler, which have successfully been slung down to 950-metre level.
Construction of Platreef’s initial solar-power plant is scheduled to commence in August 2022, with commissioning expected in 2023. The solar-generated power from the initial plant will be used for mine development and construction activities, as well as for charging Platreef’s battery-powered underground mining fleet.
Outstanding results of new Platreef Feasibility Study
On February 28, 2022, Ivanhoe Mines announced the results of a new independent feasibility study for the Platreef Project (Platreef 2022 FS). The Platreef 2022 FS builds on the excellent results of the preliminary economic assessment (PEA) for an alternate scenario to expedite production, announced in November 2020, alongside the 2020 feasibility study.
The Platreef 2022 FS is based on a steady-state production rate of 5.2 million tonnes per annum, as well as an accelerated ramp up to steady state through the earlier development of Shaft 2. The 2022 FS is based on the detailed design and engineering scenario first presented in the 2020 PEA, confirming the viability of a new phased-development pathway to fast-track Platreef into production by the third quarter of 2024.
Highlights of the Platreef 2022 FS include:
- The Platreef 2022 FS evaluates the phased development of Platreef, with an initial 700,000-tonnes-per-annum (700-ktpa) underground mine and a 770-ktpa capacity concentrator, targeting high-grade mining areas close to Shaft 1, with an initial capital cost of $488 million.
- First concentrate production for Phase 1 is planned for Q3 2024, with the Phase 2 expansion based on the commissioning of Shaft 2 in 2027, followed by the commissioning of two 2.2-Mtpa concentrators in 2028 and 2029. This would increase the steady-state production to 5.2 Mtpa by using Shaft 2 as the primary production shaft.
- Expansion capital cost for Phase 2 is estimated at $1.5 billion, which may be partially funded by cash flows from Phase 1 and a project-financing package.
- Ivanplats’ dedicated engineering teams and leading consultants are evaluating optimizations to the sinking methodology for Shaft 2 to further accelerate the availability of the shaft for hoisting, which may fast track the overall development timeline.
- Phase 1 average annual production of 113,000 ounces (oz.) of palladium, rhodium, platinum and gold (3PE+Au), plus 5 million pounds of nickel and 3 million pounds of copper.
- Phase 2 average annual production of 591,000 oz. of 3PE+Au, plus 26 million pounds of nickel and 16 million pounds of copper, which would rank Platreef as the fifth largest primary PGM producer on a palladium equivalent basis.
- Life-of-mine cash cost of $514 per ounce of 3PE+Au, net of by-products, and including sustaining capital costs, would rank Platreef as the industry’s lowest cost primary PGM producer.
- After-tax net present value at an 8% discount rate (NPV8%) of $1.7 billion and an internal rate of return (IRR) of 18.5%, based on long-term consensus prices.
- At spot prices as at March 7, 2022, the after-tax NPV8% increases to $5.1 billion and the IRR increases to 33%.
Figure 2: Production and timeline schematic from the Platreef 2022 feasibility study.
Source: company filings, S&P Global Market Intelligence. Notes: Chart ranks the largest undeveloped primary palladium, platinum, gold, silver and rhodium projects from the S&P Global Market Intelligence database based on measured and indicated palladium equivalent resource. Palladium equivalent calculation includes palladium, platinum, gold, silver and rhodium ounces and has been calculated using spot price metal price assumptions (February 23, 2022) of US$1,095/oz. platinum, US$2,480/oz. palladium, US$18,750/oz. rhodium, US$1,909/oz. gold and US$24.55/oz. silver. Measured and Indicated resources for Platreef correspond to palladium, platinum, gold and rhodium ounces at a 1 g/t cut-off grade.
Platreef secures $200-million gold stream financing and additional $100-million palladium and platinum stream
In December 2021, Ivanplats entered into a gold, palladium and platinum stream financing with Orion Mine Finance, a leading international provider of customized financing to mining companies, and Nomad Royalty Company, a precious metals royalty company, in which Orion Mine Finance is a significant shareholder (Orion Mine Finance and Nomad Royalty Company, together, the Stream Purchasers). This transaction will fund a large portion of the Phase 1 capital costs, with first concentrate production for Phase 1 planned for the third quarter of 2024.
The stream facilities are a prepaid forward sale of refined metals, with prepayments totaling $300 million, available in two tranches with the first prepayment of $75 million received in December 2021 following the closing of the transaction, and $225 million to be paid upon satisfaction of certain conditions precedent.
Under the terms of the $200 million gold stream agreement, the Stream Purchasers will receive an aggregate total of 80% of contained gold in concentrate until 350,000 ounces have been delivered, after which the stream will be reduced to 64% of contained gold in concentrate for the remaining life of the facility. The expected life of this facility will extend from the effective date of the stream agreement until the date when 685,280 ounces of gold have been delivered to the Stream Purchasers. The Stream Purchasers will purchase each ounce of gold at a price equal to the lower of the market price of gold or $100 per ounce.
Under the terms of the $100 million palladium and platinum stream agreement, Orion Mine Finance will receive an aggregate total of 4.2% of contained palladium and platinum in concentrate until 350,000 ounces have been delivered, after which the stream will be reduced to 2.4% for the remaining life of the facility. The expected life of this facility will extend from the effective date of the stream agreement until the date when 485,115 ounces of palladium and platinum have been delivered to the purchaser, which will pay for each ounce at a price equal to 30% of the market price of palladium and platinum.
Conclusion of stream agreements allows Ivanplats to focus efforts on finalizing senior debt facility
Société Générale and Nedbank were appointed as mandated lead arrangers for a project debt facility in early 2021. Both the gold stream facility, and palladium and platinum stream facility, will be subordinated to any senior secured financing.
The senior debt facility is anticipated to be used only after the stream facilities are fully drawn. Ivanplats remains flexible to raise additional debt or equity at a later date, and has pre-agreed with the Stream Purchasers the inter-creditor arrangements for any future senior debt. While the stream facilities are guaranteed by Ivanplats and secured over the assets and Ivanhoe’s shares of Platreef, there is no recourse to Ivanhoe Mines.
Shaft 2 headgear construction from hitch to collar well underway
Early works surface construction for Shaft 2 began in 2017, including the excavation of a surface box-cut to a depth of approximately 29 metres below surface and construction of the concrete hitch for the 103-metre-tall concrete headgear (headframe), which will house the shaft’s permanent hoisting facilities and support the shaft collar.
The Shaft 2 headframe construction from hitch to collar has been completed, with the vent plenum and man-access tunnel, including the backfill, currently in progress with construction expected to be complete in August 2022. Ivanplats plans to continue the construction of the Shaft 2 headframe, and expects sinking to commence later this year, to allow optionality for possibly bringing the Phase 2 production timeline forward.
Long-term supply of bulk water for the Platreef Mine
The water requirement for the Phase 1 operation is projected to peak at approximately three million litres per day, which will then increase to nine million litres per day once the Phase 2 expansion is complete. In January 2022, Ivanplats signed new agreements for the rights to receive local, treated water to supply the bulk water needed for the phased development plan at Platreef. These agreements replace those originally signed in 2018.
Under the terms of a new offtake agreement, the Mogalakwena Local Municipality (MLM) has agreed to supply at least three million litres per day of treated effluent, up to a maximum of 10 million litres per day for 32 years, from the date of first production, sourced from the town of Mokopane’s Masodi Waste Water Treatment Works, currently under construction.
Ivanplats also has signed a sponsorship agreement where Ivanplats has undertaken the commitment to complete the partially constructed Masodi Waste Water Treatment Works, which was halted in 2018. Ivanplats anticipates spending approximately ZAR 215 million ($14 million) to complete the works, whereby Ivanplats’ financial contribution will take the form of a sponsorship in favour of the municipality. Ivanplats will purchase the treated water at a reduced rate of ZAR 5 per thousand litres. Arrangements are underway to re-commence the construction works in the third quarter of 2022, which are scheduled to take approximately 18 months.
Development of human resources and job skills
Implementation of the Platreef Project’s second Social and Labour Plan (SLP) is underway. Ivanplats plans to build on the first SLP and continue with its training and development suite, including 15 new mentors, internal skills training for 78 staff members, a legends program to prepare retiring employees with new/other skills, community adult education training for host community members, core technical skills training for at least 100 community members, portable skills training, and more. The Platreef Project also continues to support several educational programs and provide free Wi-Fi in host communities.
Equipping of the mine’s permanent training academy is progressing well, with the official launch planned later this year. Classrooms and offices at the training academy have been installed and the training and e-learning program has been instituted. The cadetship program was launched in 2021, providing learnership opportunities to 50 local students. Through this program, youth from the local community are afforded the opportunity to obtain a National Certificate in Health and Safety, as well as mining competencies, such as utility vehicle operations from the Murray & Roberts Training Academy. The cadetship program seeks to enhance gender diversity within the mine’s workforce, with 54% of the students being female.
Local economic development projects will contribute to community water-source development through the Mogalakwena Municipality boreholes program. Other projects, which will be conducted in partnership with other parties, include the refurbishment and equipping of a health clinic in Tshamahansi Village.
The enterprise and supplier development (ESD) commitments comprise of expanding the existing kiosk and laundry facilities. New equipment has been installed at the laundry facilities which increased capacity allows the laundry to service the laundry needs of both the company and all on-site contractors. The planned kiosk expansion project will incorporate three separate facilities on site. The process of identifying local entrepreneurs to manage the kiosks is underway. A five-year integrated business accelerator and funding project assists community members to obtain help with development and supplier readiness. The outsourced business accelerator program is firmly entrenched in ESD activities and is being enhanced with in-house training by the ESD department. The funding project, which has also been adopted by on-site contractors, continues to provide cash flow assistance to local suppliers.
3. Kipushi Project
68%-owned by Ivanhoe Mines
Democratic Republic of Congo
The Kipushi zinc-copper-germanium-silver-lead mine in the Democratic Republic of the Congo is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It is located on the Central African Copperbelt, approximately 250 kilometres southeast of the Kamoa-Kakula Mining Complex and less than one kilometre from the Zambian border.
Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011, through Kipushi Holding that is 100%-owned by Ivanhoe Mines. The balance of 32% in the Kipushi Project is held by the state-owned mining company, Gécamines.
Kipushi Holding and Gécamines have signed a new agreement to return the ultra-high-grade Kipushi Mine back to commercial production. Kipushi will be the world’s highest-grade major zinc mine, with an average grade of 36.4% zinc over the first five years of production.
The new agreement sets out the commercial terms that will form the basis of a new Kipushi joint-venture agreement, establishing a robust framework for the mutually beneficial operation of the Kipushi Mine for years to come, and is subject to execution of definitive documentation.
Activities in 2022 to date included the award of the mining contract for early works, repair of underground access roads required for future workings and recruitment of the key staff required for development. The company expects to proceed with the ordering of long-lead equipment and other construction activities once the revised joint venture agreement is signed and financing arrangements are in place. Financing and offtake discussions are advancing with a number of interested parties.
Highlights of the new agreement include:
- Kipushi Holding will transfer 6% of the share capital and voting rights in the Kipushi Project to Gécamines, after which Kipushi Holding and Gécamines will hold 62% and 38%, respectively.
- From January 25, 2027, 5% of the share capital and voting rights in the Kipushi Project shall be transferred from Kipushi Holding to Gécamines, after which Kipushi Holding and Gécamines will hold 57% and 43%, respectively.
- In the event that, after the 6% and 5% transfers, part of the Kipushi Project’s share capital is required to be transferred to the State or to any third party pursuant to an applicable legal or regulatory provision, Gécamines shall transfer the number of the Kipushi Project shares required, and Kipushi Holding shall retain 57% ownership in the Kipushi Project.
- Once a minimum of the current proven and probable reserves and up to 12 million tonnes has been mined and processed, an additional 37% of the share capital and voting rights in the Kipushi Project shall be transferred from Kipushi Holding to Gécamines, after which Kipushi Holding and Gécamines will hold 20% and 80%, respectively.
- A new supervisory board and executive committee will be established with appropriate shareholder representation.
- New initiatives will be implemented, focusing on the development of Congolese employees, including individual development, the identification of future leaders, succession planning and the promotion of gender equality across the workforce.
- A framework for tendering for the offtake of zinc concentrates produced by the Kipushi Mine has been established, which includes Gécamines’ participation.
- Kipushi Holding will continue to fund the Kipushi Project with the shareholder loan and/or procure financing from third parties for the development of the project. The interest on the shareholder loan will be 6%, which will be applicable from January 1, 2022, on the existing balance and any further advances. Under the terms of the current shareholder loan agreement, the shareholder loan carries interest of LIBOR plus 4%, which is applicable to 80% of the advanced amounts with the remaining 20% interest-free. As of March 31, 2022, the balance of the shareholder loan owing to Kipushi Holding, including accrued interest, was approximately $540 million.
Health and safety at Kipushi
At the end of March 2022, the Kipushi Project reached 4,365,235 work hours free of lost-time injuries. It has been more than three years since the last lost-time injury occurred at the project.
Community enrichment and development
The Kipushi Project has built a new potable water station to provide a free daily supply of water to the municipality of Kipushi. This daily supply to the Kipushi municipality community members includes power supply, disinfectant chemicals, routine maintenance, security and emergency repair of leaks to the primary reticulation to the benefit of an estimated 100,000 people, excluding those from rural areas. Approximately 1,000 cubic metres of potable water is pumped hourly and continuously to consumers on a daily basis.
50 boreholes of potable water are planned to be drilled around the Kipushi district over five years, to reach areas not served by current distribution. Four new water wells have been drilled, bringing the total to 16 solar-powered potable water wells, which have been installed by the Kipushi Project in the district.
The Kipushi Project continues to support educational initiatives through ongoing renovations at the Mungoti School, and the granting of bursaries and scholarships to students from Kipushi. Preparations for the new intake of beneficiaries for the bursary and scholarship program are underway. A local orphanage was presented with a donation of books and over 300 beneficiaries participated in an adult literacy and education program.
The sewing training centre project established by the Kipushi Project continued producing cloth face masks, donating approximately 2,000 masks a month to host communities. The sewing initiative has also been producing uniforms and other garments which are planned for distribution to local orphans and widows.
The Kipushi Project continued its efforts to combat COVID-19 through a vaccination campaign in collaboration with the local police and the health zone.
Kipushi feasibility study issued, heralding the planned re-start of the historic mine, with a two-year development timeline and exceptional economic results
On February 14, 2022, Ivanhoe Mines announced the positive findings of an independent, feasibility study for the planned resumption of commercial production at Kipushi.
The Kipushi 2022 feasibility study builds on the results of the pre-feasibility study published by Ivanhoe Mines in January 2018. The redevelopment of Kipushi is based on a two-year construction timeline, which utilizes the significant existing surface and underground infrastructure to allow for substantially lower capital costs than comparable development projects. The estimated pre-production capital cost, including contingency, is $382 million.
The 2022 feasibility study focuses on the mining of Kipushi’s zinc-rich Big Zinc and Southern Zinc zones, with an estimated 11.8 million tonnes of Measured and Indicated Mineral Resources grading 35.3% zinc. Kipushi’s exceptional zinc grade is more than twice that of the world’s next-highest-grade zinc project, according to Wood Mackenzie, a leading, international industry research and consulting group (see Figure 4).
Figure 4: World’s top 10 zinc projects, by contained zinc.
Source: Wood Mackenzie, January 2022. Note: All tonnes and metal grades of individual metals used in the equivalency calculation of the above-mentioned projects (except for Kipushi) are based on public disclosure and have been compiled by Wood Mackenzie. All metal grades have been converted by Wood Mackenzie to a zinc equivalent grade at Wood Mackenzie’s respective long-term price assumptions.
The 2022 feasibility study envisages the recommencement of underground mining operations, and the construction of a new concentrator facility on surface with annual processing capacity of 800,000 tonnes of ore, producing on average 240,000 tonnes of zinc contained in concentrate.
Highlights of the 2022 feasibility study results for the Kipushi Mine include:
- The 2022 feasibility study evaluates the development of an 800-ktpa underground mine and concentrator, with an increased resource base compared to the pre-feasibility study, extending the mine life to 14 years.
- Existing surface and underground infrastructure allows for significantly lower capital costs than comparable development projects, with the principal development activity being the construction of a conventional concentrator facility and new supporting infrastructure on surface in a two-year timeline.
- Pre-production capital costs, including contingency, estimated at $382 million.
- Life-of-mine average zinc production of 240,000 tonnes per annum, with a zinc grade of 32%, is expected to rank Kipushi among the world’s major zinc mines (Figure 3), once in production, with the highest grade by some margin.
- Life-of-mine average C1 cash cost of $0.65/lb. of zinc is expected to rank Kipushi, once in production, in the second quartile of the cash cost curve for zinc producers globally.
- At a long-term zinc price of $1.20/lb., the after-tax net present value (NPV) at an 8% real discount rate is $941 million, with an after-tax real internal rate of return (IRR) of 40.9% and project payback period of 2.3 years.
The Kipushi 2022 feasibility study was independently prepared on a 100%-project basis by OreWin Pty. Ltd., MSA Group (Pty.) Ltd., SRK Consulting (Pty) Ltd. and METC Engineering.
Project development and infrastructure
Significant progress has been made in recent years to modernize the Kipushi Mine’s underground infrastructure as part of preparations for the mine to resume commercial production, including the upgrading of a series of vertical mine shafts to various depths, with associated headframes, as well as underground mine excavations and infrastructure. The underground infrastructure also includes a series of high-capacity pumps to manage the mine’s water levels, which now are easily maintained at the bottom of the mine.
Members of Kipushi’s development team are all smiles after Ivanhoe Mines and Gécamines signed a new agreement to return the ultra-high-grade mine to production.
Shaft 5 is eight metres in diameter and 1,240 metres deep and has been upgraded and re-commissioned. The main personnel and material winder has been upgraded and modernized to meet international industry standards and safety criteria. The Shaft 5 rock-hoisting winder also is fully operational, with new rock skips, new head- and tail-ropes, and attachments installed. The two newly manufactured rock conveyances (skips) and the supporting frames (bridles) have been installed in the shaft to facilitate the hoisting of rock from the main ore and waste storage silos feeding rock on the 1,200-metre level.
Recently upgraded underground mine with easy access to stopes allows for rapid production ramp-up
Mining at Kipushi historically has been carried out from the surface to a depth of approximately 1,220 metres. Shaft 5 (P5) is planned to be the main production shaft with a maximum hoisting capacity of 1.8 million tonnes per annum and provides the primary access to the lower levels of the mine, including the Big Zinc Zone, through the 1,150-metre haulage level.
Mining will be performed using highly productive, mechanized methods and cemented rock fill will be utilized to fill open stopes. Material generated underground will be trucked to the base of the P5 shaft, crushed and hoisted to surface. Personnel and equipment access also are via the P5 shaft. The Big Zinc Zone will be accessed by way of the existing decline, without significant new development required. As the existing decline already is below the first planned stoping level, it is relatively quick to develop the first zinc stopes for the ramp up of mine production.
4. Western Foreland Exploration Project 90%- and 100%-owned by Ivanhoe Mines
Democratic Republic of Congo
Ivanhoe’s DRC exploration group is targeting Kamoa-Kakula-style copper mineralization through a regional exploration and drilling program on its Western Foreland exploration licences, located to the north, south and west of the Kamoa-Kakula Mining Complex. Ivanhoe’s Western Foreland Exploration Project consists of 17 licences that cover a combined area of approximately 2,407 km2.
Exploration models that successfully led to the discoveries of Kakula, Kakula West, and the Kamoa North Bonanza Zone on the Kamoa-Kakula joint-venture mining licence are being applied to the extensive Western Foreland land package by the same team of exploration geologists responsible for the previous discoveries.
Exploration drilling in the first quarter of 2022 focused on wide-scale regional dip sections along the axis of the Western Foreland permits at approximately 10 kilometre intervals. The drilling was designed to provide detailed stratigraphic and structural information ahead of processing and interpreting the geophysical surveys. The drill holes currently are being surveyed with downhole geophysical tools to provide density, conductivity and velocity information. Additional drilling focused on shallow drilling east of the Makoko Discovery area attempting to extend mineralization to the west and define potential additional resources. In total 4,429 metres were drilled during the quarter.
No surface sampling was completed during the first quarter of 2022 due to wet season weather conditions. Surface sampling and mapping is planned to resume during the second quarter of 2022 once remote access becomes easier.
Geophysical airborne surveys such as magnetics, gravity and electromagnetics recommenced in the fourth quarter 2021. The electromagnetic survey and additional gravity survey were 46% complete by the end of 2021 and were postponed until the 2022 wet season weather conditions improve sufficiently for flying. Continued interpretation and processing of completed surveys is underway and will be used to better understand the structural domains and basin architecture. Ground gravity survey work is still in progress and will be used in conjunction with the airborne gravity to provide increased definition where required.
Ivanhoe’s 2022 Western Foreland exploration expenditure is provisionally planned at $25 million. The main component of this expenditure is exploration drilling, with more than 50,000 metres of shallow (depth of less than 150 metres), air core, reverse-circulation and diamond drilling focussed on defining sub-outcrop positions and obtaining bedrock samples under the Kalahari sand cover. In addition, up to 45,000 metres of deeper regional drilling covering the entire 2,407-square-kilometre land package also is provisionally planned, some of which is dependent upon exploration success. Drilling activities are expected to pick up with the onset of dry season weather in May 2022.
SELECTED QUARTERLY FINANCIAL INFORMATION
The following table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any financial reporting period. All revenue from commercial production at the Kamoa-Kakula Mining Complex is recognized within the Kamoa Holding joint venture. Ivanhoe did not declare or pay any dividend or distribution in any financial reporting period.
DISCUSSION OF RESULTS OF OPERATIONS
Review of the three months ended March 31, 2022, vs. March 31, 2021
The company recorded a total comprehensive income of $42.6 million for Q1 2022 up from $16.2 million for the same period in 2021. The comprehensive income for Q1 2022 included an exchange gain on translation of foreign operations of $21.1 million, resulting from the strengthening of the South African Rand by 9% from December 31, 2021, to March 31, 2022, compared to an exchange loss on translation of foreign operations recognized in Q1 2021 of $4.2 million.
The Kamoa-Kakula Mining Complex sold 51,919 tonnes of payable copper in Q1 2022 realizing revenue of $519.6 million for the Kamoa Holding joint venture. The company recognized income in aggregate of $115.4 million from the joint venture in Q1 2022, which can be summarized as follows:
The company’s share of profit from the Kamoa Holding joint venture was $87.1 million in Q1 2022 compared to a loss of $4.1 million in Q1 2021. The following table summarizes the company’s share of profit (loss) of the joint venture for the three months ended March 31, 2022, and for the same period in 2021:
As explained in the accounting for the convertible notes section on page 41, the company recognized a loss on fair valuation of the embedded derivative financial liability of $66.4 million for Q1 2022, compared to a gain on fair valuation of the embedded derivative financial liability of $25.6 million for Q1 2021. Finance cost increased from $1.8 million for Q1 2021 to $7.4 million for the same period in 2022, the majority of which related to the interest on the convertible notes.
Finance income for Q1 2022 amounted to $31.5 million and was $8.7 million more than for the same period in 2021 ($22.8 million). Included in finance income is the interest earned on loans to the Kamoa Holding joint venture to fund operations that amounted to $28.3 million for Q1 2022, and $21.2 million for the same period in 2021, and increased as the accumulated loan balance increased.
Exploration and project evaluation expenditure amounted to $12.2 million in Q1 2022 and $8.7 million for the same period in 2021. Exploration and project evaluation expenditure related to exploration at Ivanhoe’s Western Foreland exploration licences and amounts spent at the Kipushi Project, which was on reduced activities and incurred limited cost of a capital nature in the periods. The main classes of expenditure at the Kipushi Project in Q1 2022 and for the same period in 2021 are set out in the following table: ?
The finance costs in the Kamoa Holding joint venture relate to shareholder loans where each shareholder is required to fund Kamoa Holding in an amount equivalent to its proportionate shareholding interest. The company is advancing Crystal River’s portion on its behalf in return for an increase in the promissory note due to Ivanhoe.
Financial position as at March 31, 2022, vs. December 31, 2021
The company’s total assets increased by $132.2 million, from $3,218.2 million as at December 31, 2021, to $3,350.4 million as at March 31, 2022. The main reason for the increase in total assets was attributable to the increase in the company’s investment in the Kamoa Holding joint venture by $115.4 million from $1,641.8 million as at December 31, 2021, to $1,757.2 million as at March 31, 2022.
The company’s share of profit from the joint venture amounted to $87.1 million, while the interest on the loan to the joint venture amounted to $28.3 million from December 31, 2021, to March 31, 2022. The company’s investment in the Kamoa Holding joint venture can be broken down as follows:
Prior to commencing commercial production in July 2021, the Kamoa Holding joint venture principally used loans advanced to it by its shareholders to advance the Kamoa-Kakula Mining Complex through investing in development costs and other property, plant and equipment. The net assets of the Kamoa Holding joint venture, and the company’s share thereof, can be broken down as follows:
Going forward, all Phase 1 and Phase 2 operating costs and the majority of Phase 3 capital expenditures are expected to be funded from copper sales and facilities in place at Kamoa-Kakula. Cash generated in excess of operational and expansion requirements is expected to be utilized to commence shareholder loan repayments.
The Kamoa Holding joint venture’s net increase in property, plant and equipment from December 31, 2021, to March 31, 2022, amounted to $128.2 million and can be further broken down as follows:
Ivanhoe’s cash and cash equivalents decreased by $46.2 million, from $608.2 million as at December 31, 2021, to $562.0 million as at March 31, 2022. The company utilized $23.8 million of its cash in operating activities and spent $19.2 million acquiring property, plant and equipment. The company also invested $13.3 million in acquiring a strategic equity stake in Renergen Ltd., a South African emerging energy and helium producer.
The company’s total liabilities increased by $80.8 million to $922.0 million as at March 31, 2022, from $841.2 million as at December 31, 2021, with the increase mainly due to the increase in the embedded derivative liability linked to the convertible senior notes described on page 41.
The net increase in property, plant and equipment amounted to $54.5 million, with additions of $19.4 million to project development and other property, plant and equipment. Of this total, $18.5 million pertained to development costs and other acquisitions of property, plant and equipment at the Platreef Project.
The main components of the additions to property, plant and equipment – including capitalized development costs – at the Platreef Project for the three months ended March 31, 2022, and for the same period in 2021, are set out in the following table:
Costs incurred at the Platreef Project are deemed necessary to bring the project to commercial production and are therefore capitalized as property, plant and equipment.
Accounting for the convertible notes closed in March 2021
The company closed a private placement offering of $575.0 million of 2.50% convertible senior notes maturing in 2026 on March 17, 2021. Upon conversion, the convertible notes may be settled, at the company’s election, in cash, common shares or a combination thereof. Due to this election right and conversion feature, the convertible notes have an embedded derivative liability that is measured at fair value with changes in value being recorded in profit or loss, as well as the host loan that is accounted for at amortized cost.
The convertible senior notes are senior unsecured obligations of the company, which will accrue interest payable semi-annually in arrears at a rate of 2.50% per annum and will mature on April 15, 2026, unless earlier repurchased, redeemed or converted. The initial conversion rate of the notes is 134.5682 Class A common shares of the company per $1,000 principal amount of notes, or an initial conversion price of approximately $7.43 (equivalent to approximately C$9.31) per common share.
Holders of the notes may convert the notes, at their option, in integral multiples of $1,000 principal amount, or in excess thereof, at any time until the close of business on the business day immediately preceding October 15, 2025, but only under the following circumstances:
- During any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of the company’s Class A common shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; or
- During the five consecutive business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the company’s Class A common shares and the conversion rate on each such trading day; or
- If the company calls any or all of the notes for redemption in certain circumstances or upon the occurrence of certain corporate events.
On or after October 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing conditions.
The convertible notes will not be redeemable at the company’s option prior to April 22, 2024, except upon the occurrence of certain tax law changes. On or after April 22, 2024, and on or prior to the 41st scheduled trading day immediately preceding the maturity date, the notes will be redeemable at the company’s option if the last reported sale price of the company’s common shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the company provides notice of redemption at a redemption price equal to 100% of the principal amount of the convertible notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Due to the fact that, upon conversion, the notes may be settled, at the company’s election, in cash, common shares or a combination thereof, the conversion feature is an embedded derivative liability. The effect of this is that the host liability will be accounted for at amortized cost, with an embedded derivative liability being measured at fair value with changes in value being recorded in profit or loss.
The effective interest rate of the host liability was deemed to be 9.39% and the interest recognized on the convertible notes amounted to $10.2 million in Q1 2022, $3.1 million of which was borrowing costs capitalized. The carrying value of the host liability was $447.6 million as at March 31, 2022, up from $437.4 million as at December 31, 2021.
The derivative liability had a fair value of $150.5 million on closure of the convertible notes offering and increased to $244.2 million as at December 31, 2021, and increased further to $310.6 million as at March 31, 2022, resulting in a loss on fair valuation of embedded derivative liability of $66.4 million for Q1 2022. The change in the fair value of the embedded derivative liability is largely due to the changes in the closing share price of the company’s common shares at the different reporting dates.
The following key inputs and assumptions were used in determining the fair value of the embedded derivative liability:
Transaction costs on the convertible notes offering relating to the embedded derivative liability amounted to $3.7 million and was expensed and included in the profit and loss for Q1 2021.
LIQUIDITY AND CAPITAL RESOURCES
The company had $562.0 million in cash and cash equivalents as at March 31, 2022. At this date, the company had consolidated working capital of approximately $615.4 million, compared to $654.8 million as at December 31, 2021.
The Platreef Project entered into a gold, palladium and platinum stream financing in December 2021 that will fund a large portion of the Phase 1 capital costs. The stream facilities are a prepaid forward sale of refined metals, with prepayments totaling $300 million, available in two tranches with the first prepayment of $75 million received in December 2021 following the closing of the transaction and $225 million to be paid upon satisfaction of certain conditions precedent.
The company’s main objectives for the remainder of 2022 at the Platreef Project are the continued development of the project towards the completion of its first phase currently scheduled for Q3 2024, as well as the continuation of the construction of the Shaft 2 headframe to allow optionality for possibly bringing Phase 2 forward. At Kipushi, with the finalization of the feasibility study and the development plan agreed, Ivanhoe expects to proceed with the ordering of long-lead equipment and other construction activities once the new joint venture agreement is signed and financing arrangements are in place. With Phase 1 and Phase 2 commercial production achieved at the Kamoa-Kakula Mining Complex, the focus now will be operational efficiency and de-bottlenecking the Phase 1 and 2 operations, as well as progressing the Phase 3 expansion.
The company has forecast to spend $150 million on further development at the Platreef Project; $80 million on development at the Kipushi Project; and $28 million on corporate overheads for the remainder of 2022. Exploration activities at the Western Foreland exploration project in the DRC and other targets will continue in 2022 with an initial budget of $21 million for the remainder of 2022 on Western Forelands and $7 million on other targets. At the Kamoa Holding joint venture, all operating and capital expansion costs are expected to be funded from copper sales and facilities in place at Kamoa.
The planned capital expenditure for 2022 can be broken down as follows:
Notes: (1) Amounts in the above table for the Kamoa-Kakula Mining Complex are on a 100%-project basis. (2) The amount for Phase 3 and smelter early works are initial budgets only and will be augmented on completion of the updated pre-feasibility study expected in Q3 2022.
On March 17, 2021, the company closed a private placement offering of $575 million of 2.50% convertible senior notes maturing in 2026. The convertible senior notes are senior unsecured obligations of the company, which will accrue interest payable semi-annually in arrears at a rate of 2.50% per annum and will mature on April 15, 2026, unless earlier repurchased, redeemed or converted. The notes will be convertible at the option of holders, prior to the close of business on the business day immediately preceding October 15, 2025, only under certain circumstances and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled, at the company’s election, in cash, common shares or a combination thereof. The carrying value of the host liability was $447.6 million and the fair value of the embedded derivative liability was $310.6 million as at March 31, 2022.
The company has a mortgage bond outstanding on its offices in London, United Kingdom, of ￡3.2 million ($4.3 million). The bond is fully repayable on August 28, 2025, secured by the property and incurs interest at a rate of GBP 1-month LIBOR plus 1.9% payable monthly in arrears. Only interest will be payable until maturity.
In 2013, the company became party to a loan payable to ITC Platinum Development Limited, which had a carrying value of $34.6 million as at March 31, 2022, and a contractual amount due of $35.3 million. The loan is repayable once the Platreef Project has residual cash flow, which is defined in the loan agreement as gross revenue generated by the Platreef Project, less all operating costs attributable thereto, including all mining development and operating costs. The loan attracts interest of USD 3-month LIBOR plus 2% calculated monthly in arrears. Interest is not compounded. The difference of $0.7 million between the contractual amount due and the carrying value of the loan is the benefit derived from the low-interest loan.
The company has an implied commitment in terms of spending on work programs submitted to regulatory bodies to maintain the good standing of exploration and exploitation permits at its mineral properties. The following table sets forth the company’s long-term obligations:
Debt in the above table represents the mortgage bond owing to Citibank and loan payable to ITC Platinum Development Limited, as described above.
The company is required to fund its Kamoa Holding joint venture in an amount equivalent to its proportionate shareholding interest.
Non-GAAP Financial Performance Measures
Kamoa-Kakula’s C1 cash costs and C1 cash costs per pound
C1 cash costs and C1 cash costs per pound are non-GAAP financial measures. These are disclosed to enable investors to better understand the performance of the Kamoa-Kakula Mining Complex in comparison to other copper producers who present results on a similar basis.
C1 cash costs are prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines but are not measures recognized under IFRS. In calculating the C1 cash cost, the costs are measured on the same basis as the company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash costs are used by management to evaluate operating performance and include all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of finished metal. C1 cash costs and C1 cash costs per pound, exclude royalties and production taxes and non-routine charges, as they are not direct production costs.
Reconciliation of Kamoa-Kakula’s cost of sales to C1 cash costs, including on a per pound basis:
All figures above are on a 100% basis.
EBITDA is a non-GAAP financial measure, which excludes income tax, finance costs, finance income and depreciation from net profit.
Ivanhoe believes that Kamoa-Kakula’s EBITDA is a valuable indicator of the Kamoa-Kakula Mining Complex’s ability to generate liquidity by producing operating cash flow to fund its working capital needs, service debt obligations, fund capital expenditures and distribute cash to its shareholders. EBITDA also is frequently used by investors and analysts for valuation purposes. EBITDA is intended to provide additional information to investors and analysts and does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently.
Reconciliation of profit (loss) after tax to EBITDA:
All figures above are for the Kamoa Holding joint venture on a 100% basis.
Qualified Persons and NI 43-101 Technical Reports
Disclosures of a scientific or technical nature regarding the revised capital expenditure and development scenarios at the Kamoa-Kakula Mining Complex in this news release have been reviewed and approved by Steve Amos, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Amos is not considered independent under NI 43-101 as he is the Head of the Kamoa Project. Mr. Amos has verified the technical data disclosed in this news release.
Other disclosures of a scientific or technical nature in this news release have been reviewed and approved by Stephen Torr, who is considered, by virtue of his education, experience and professional association, a Qualified Person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101, as he is the Vice President, Geosciences. Mr. Torr has verified the other technical data disclosed in this news release.
Ivanhoe has prepared a current, independent, NI 43-101-compliant technical report for each of the Kipushi Project and the Kamoa-Kakula Project, which are available under the company’s SEDAR profile at www.sedar.com:
- The Kamoa-Kakula Integrated Development Plan 2020 dated October 13, 2020, prepared by OreWin Pty Ltd., China Nerin Engineering Co., Ltd., DRA Global, Epoch Resources, Golder Associates Africa, KGHM Cuprum R&D Centre Ltd., Outotec Oyj, Paterson and Cooke, Stantec Consulting International LLC, SRK Consulting Inc., and Wood plc., covering the company’s Kamoa-Kakula Mining Complex; and
- The Kipushi 2022 Feasibility Study dated February 14, 2022, prepared by OreWin Pty Ltd., MSA Group (Pty) Ltd., SRK Consulting (South Africa) (Pty) Ltd, and METC Engineering, covering the company’s Kipushi Project.
- The Platreef 2022 Feasibility Study dated February 28, 2022, prepared by OreWin Pty Ltd., Mine Technical Services, SRK Consulting Inc., DRA Projects (Pty) Ltd and Golder Associates Africa, covering the company’s Platreef Project.
These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef Project, the Kipushi Project and the Kamoa-Kakula Mining Complex cited in this news release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this news release in respect of the Platreef Project, Kipushi Project and Kamoa-Kakula Mining Complex.
Matthew Keevil +1.604.558.1034
Certain statements in this news release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company, its projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the company’s current expectations regarding future events, performance and results and speak only as of the date of this news release.
Such statements include without limitation, the timing and results of: (i) statements regarding the expected increase in processing capacity resulting from the planned de-bottlenecking program and the cost thereof; (ii) statements regarding copper production from Kamoa Copper’s first two phases are projected to exceed 450,000 tonnes per year by Q2 2023; (iii) statements regarding the expectation that the majority of Kamoa-Kakula’s expansion capital expenditures on Phase 2 and Phase 3 will be funded from copper sales and facilities in place at Kamoa; (iv) statements that based on current market conditions, it is anticipated that Ivanhoe Mines will start to receive shareholder loan repayments from Kamoa-Kakula in 2022; (v) statements regarding Ivanhoe’s 2022 Western Foreland exploration expenditure is provisionally planned at $25 million and that the main component of this expenditure is exploration drilling, with more than 50,000 metres of shallow (depth of less than 150 metres), air core, reverse circulation and diamond drilling as well as up to an additional 45,000 metres of deeper regional drilling covering the entire 2,407-square-kilometre land package, some of which is dependent upon exploration success; (vi) statements regarding the planned resumption of commercial production at Kipushi based on a two-year construction timeline; (vii) statements regarding Kamoa-Kakula's Phase 3 consisting of two new underground mines known as Kamoa 1 and Kamoa 2, as well as the initial decline development at Kakula West and a new, 5 million-tonne-per-annum concentrator plant being established adjacent to the two new mines at Kamoa; (viii) statements regarding upon commencement of Phase 3 production, Kamoa Copper will have a total processing capacity greater than 14 million tonnes per annum, as the existing Phase 1 and 2 concentrators will be de-bottlenecked and operating at a combined throughput of 9.2 million tonnes of ore per year by the second quarter of 2023; (ix) statements regarding construction progress on the new box cut excavation advancing quickly at the Kamoa 1 and Kamoa 2 mines, with decline development expected to start in early May 2022, which will provide access to the major Phase 3 mining areas; (x) statements regarding the pre-feasibility study for the Phase 3 expansion being well advanced and expected to be announced during the third quarter of this year, while first production is expected to commence by the end of 2024; (xi) statements regarding the smelter, once in operation, will enable Kamoa-Kakula to reduce its C1 cash costs per pound of payable copper produced by approximately 10% to 20%, driven by significantly reduced transportation costs, decreasing overall volumes shipped by more than half; (xii) statements regarding Turbine 5 is expected to produce 162 MW of renewable hydropower, providing the Kamoa-Kakula Mining Complex and the planned, associated smelter with abundant, sustainable electricity for future expansions; xiii) statements regarding Kamoa-Kakula aiming to become the first net-zero carbon emitter among the top-tier copper mines by electrifying its mining fleet with state-of-the-art equipment powered by electric batteries or hydrogen fuel cells and that the mine plans to introduce them into its mining fleet as soon as they become commercially available; (xiii) statements regarding management now expects that the early commissioning of the Phase 2 concentrator plant will enable Kamoa-Kakula to reach the upper end of its 2022 copper production guidance of 290,000 to 340,000 tonnes; (xiv) statements regarding production guidance of between 290,000 and 340,000 tonnes of contained copper in concentrate for 2022 from the Kamoa-Kakula Mining Complex; (xv) statements regarding cash cost guidance of between $1.20 to $1.40 per pound for 2022 from the Kamoa-Kakula Mining Complex; (xvi) statements regarding new independent feasibility study for the Platreef Project and statements confirming the viability of a new phased development pathway to fast-track Platreef into production by Q3 2024; (xvii) statements regarding the senior debt facility for the Platreef Project including that it is anticipated to be used only after the stream facilities are fully drawn; (xviii) statements that Platreef’s shaft will be equipped with two cages on top of two 12.5-tonne skips with hoisting capacity of 1 million tonnes per year and that an amended configuration does not require the cage to be interchanged mid-shift, thereby increasing the hoisting time during the initial phase of mining; (xix) statements regarding construction of Ivanhoe’s first solar power plant at the Platreef Mine being scheduled for Q2 2022, with commissioning expected in early 2023; (xx) statements regarding the Shaft 2 construction of the vent plenum and man-access tunnel, including the backfill, currently being in progress with construction expected to be complete in August 2022 and that Ivanplats plans to continue the construction of the Shaft 2 headframe, and expects raise bore pilot drilling to commence later this year, to allow optionality for possibly bringing the Phase 2 production timeline forward; (xxi) statements regarding the water requirement at Platreef for the Phase 1 operation is projected to peak at approximately three million litres per day, which will then increase to nine million litres per day once the Phase 2 expansion is complete; (xxii) statements regarding Ivanplats purchasing the treated wastewater from the Masodi Treatment Works at a reduced rate of R5 per thousand litres; (xxiii) statements that arrangements are underway to re-commence the construction works of the Masodi Treatment Works in Q3 2022 and that it will take approximately 18 months; (xxiv) statements regarding implementation of the Platreef Project’s second Social and Labour Plan (SLP); (xxv) statements regarding equipping of the Platreef’s permanent training academy is continuing, with the official launch being planned for 2022; (xxvi) statements regarding the new agreement signed between Kipushi Holding and Gécamines to return the ultra-high-grade Kipushi Mine back to commercial production; (xxvii) statements that Kipushi Holding will continue to fund the Kipushi Project with the shareholder loan and/or procure financing from third parties for the development of the project; (xxviii) statements regarding 50 boreholes of potable water are planned to be drilled around the Kipushi district over five years, to reach areas not served by the current distribution; (xxix) statements regarding surface sampling at the Western Foreland Exploration Project and mapping being planned to resume during Q2 2022 once remote access becomes easier; (xxx) statements regarding Ivanhoe’s 2022 Western Foreland exploration expenditure being provisionally planned at $25 million and that the main component of this expenditure is exploration drilling, with more than 50,000 metres of shallow (depth of less than 150 metres), air core, reverse circulation and diamond drilling focussed on defining sub-outcrop positions and obtaining bed-rock samples under the Kalahari sand cover and that in addition, up to 45,000 metres of deeper regional drilling covering the entire 2,407-square-kilometre land package also is provisionally planned, some of which is dependent upon exploration success; and (xxxi) statements regarding the main objectives for 2022, the 2022 budget and the planned capital expenditure for 2022.
As well, all of the results of the feasibility study for the Kakula copper mine, the Kakula-Kansoko 2020 pre-feasibility study and the updated and expanded Kamoa-Kakula Mining Complex preliminary economic assessment, the Platreef 2022 feasibility study, and the Kipushi 2022 feasibility study, constitute forward-looking statements or information, and include future estimates of internal rates of return, net present value, future production, estimates of cash cost, proposed mining plans and methods, mine life estimates, cash flow forecasts, metal recoveries, estimates of capital and operating costs and the size and timing of phased development of the projects.
Furthermore, with respect to this specific forward-looking information concerning the operation and development of the Kamoa-Kakula, Platreef and Kipushi projects, the company has based its assumptions and analysis on certain factors that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii) geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc, platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities necessary to complete development; (vii) the cost of consumables and mining and processing equipment; (viii) unforeseen technological and engineering problems; (ix) accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in regulations; (xii) the compliance by joint venture partners with terms of agreements; (xiii) the availability and productivity of skilled labour; (xiv) the regulation of the mining industry by various governmental agencies; (xv) the ability to raise sufficient capital to develop such projects; (xvi) changes in project scope or design; (xvii) recoveries, mining rates and grade; (xviii) political factors; (xviii) water inflow into the mine and its potential effect on mining operations, and (xix) the consistency and availability of electric power.
This news release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources is inherently uncertain and involves subjective judgments about many relevant factors. Estimates of Mineral Reserves provide more certainty but still involve similar subjective judgments. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation (including estimated future production from the company’s projects, the anticipated tonnages and grades that will be mined and the estimated level of recovery that will be realized), which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that ultimately may prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on: (i) fluctuations in copper, nickel, zinc, platinum group elements (PGE), gold or other mineral prices; (ii) results of drilling; (iii) metallurgical testing and other studies; (iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates and/or changes in mine plans; (vi) the possible failure to receive required permits, approvals and licences; and (vii) changes in law or regulation.
Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to, the factors discussed below and under “Risk Factors”, and elsewhere in this news release, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.
Although the forward-looking statements contained in this news release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.
The company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors set forth below in the “Risk Factors” section in the company’s MD&A for the three months ended March 31, 2022.
加拿大多倫多 — 艾芬豪礦業 (TSX: IVN; OTCQX: IVPAF) 今天公布其截至2022年3月31日止三個月的財務業績。公司于第一季度實現多項重大里程碑，包括﹕卡莫阿-卡庫拉 (Kamoa-Kakula) 銅礦項目II期提前實現商業化生產、普拉特瑞夫 (Platreef)項目啟動水平巷道開拓向Flatreef高品位鉑族金屬礦體推進、基普什 (Kipushi) 超高品位鋅礦達成新框架協議開始復產建設，以及西部前沿 (Western Foreland) 勘查項目開展大規模的區域鉆探計劃。除非另有指明，所有貨幣數字均以美元為單位。
- 2022年第一季度，卡莫阿-卡庫拉的銷售成本為1.08美元/磅，現金成本 (C1) 為1.21美元/磅，2021年第四季度則分別為1.12美元/磅和1.28美元/磅。
- 2022年第一季度，卡莫阿-卡庫拉出售51,919噸銅，錄得EBITDA 3.994億美元及5.196億美元收入，營業利潤為3.805億美元。
- 2022年5月3日，艾芬豪礦業公布卡莫阿-卡庫拉III期擴建的詳細信息，包括在卡莫阿兩座新礦山 (卡莫阿1區和卡莫阿2區) 附近建設一座年處理礦石500萬噸的新選廠。III 期投產后，總礦石處理量將超過1,400萬噸/年。預計到2024年第四季度，年產銅將提升至約60萬噸，這將使卡莫阿-卡庫拉成為全球第三以及非洲最大的銅礦山。
- 根據普拉特瑞夫2022可行性研究，以長期共識的金屬價格估算，項目具有17億美元的稅后凈現值 (折現率8%) 和18.5%的內部收益率；以2022年5月6日的現貨價格計算，稅后凈現值將會提升至35億美元 (折現率8%)，內部收益率增加至27%。
- 2022年2月，艾芬豪礦業與杰卡明 (Gécamines) 簽署新框架協議，推進基普什超高品位礦山重啟商業化生產。
- 艾芬豪礦業公布基普什重啟商業化生產計劃的獨立可行性研究的樂觀結果，復產建設為期兩年?；帐部尚行匝芯棵舾行苑治?，采用2022年5月6日的現貨鋅價1.70美元/磅，項目稅后凈現值為24億美元 (折現率8%)，稅后內部收益率為75.8%。
艾芬豪礦業將于5月10日南非時間下午4:30 / 東部時間上午10:30 / 西部時間上午7:30召開投資者電話會議，討論2022年第一季度財務業績。電話會議撥入號碼為 +1-647-794-4605或免費撥號號碼 1-888-204-4368，如有要求，請引述"艾芬豪礦業2022年第一季度財務業績"，被邀媒體將在聽眾列席。
艾芬豪礦業持有 39.6% 權益
卡莫阿-卡庫拉銅礦是艾芬豪礦業與紫金礦業的合資項目，被國際礦業咨詢公司伍德曼肯茲 (Wood Mackenzie) 評為全球第 4 大銅礦床。該項目位于科盧韋齊 (Kolwezi)以西約 25 公里，盧本巴希 (Lubumbashi) 以西約 270 公里處?？?卡庫拉項目于2021年5月啟動銅生產，并于2021年7月1日正式實現商業化生產。
2015年12月，艾芬豪向紫金礦業出售卡莫阿控股有限公司 (以下簡稱 "卡莫阿控股") 49.5% 的權益，并向私營企業晶河全球出售卡莫阿控股 1% 的權益?？⒖毓沙钟许椖?80% 權益。與紫金礦業的交易完成后，每位股東須按其持有卡莫阿控股的股權比例承擔對卡莫阿-卡庫拉項目的出資。艾芬豪與紫金礦業各自間接持有卡莫阿-卡庫拉銅礦項目39.6% 的權益，晶河全球間接持有0.8% 權益，而剛果(金)政府則直接持有20% 權益。
護理人員在卡莫阿醫院的新建醫療大樓。(從左至右)﹕Alain Sambwe Masengo、Papy Wedialumbele Lumasa、Paulin Mwanza Umbanga、Augustin Kabedi Mujinga、Adellard Muyambo Kazenga、Salva Mujinga Tshibamba和Timothee Bwana Ngoie。
護士為礦山安全主任Johnny Masonga Mumba 接種COVID-19疫苗。
本新聞稿載述EBITDA 和“每磅C1現金成本”兩項非公認會計準則的財務指標。關于本新聞稿載述每項非公認會計準則財務指標的詳細說明，以及與國際財務報告準則 (IFRS) 最直接可比的詳細對賬，請參閱本新聞稿中“非公認會計準則財務指標”的部分及公司截至2022年3月31日止三個月的《管理層討論與分析》報告。C1 現金成本的計算基準與伍德曼肯茲成本指南制定的行業標準定義一致，但并非國際財務報告準則認可的方式。在計算 C1 現金成本時，成本的計量基準與財務報表中所述的公司應占卡莫阿控股合資企業的收益份額相同。管理層以C1 現金成本評估經營業績，其中包括所有直接采礦、選礦以及管理和行政成本。冶煉費和銷售至最終港口的運費扣減被列作銷售收入的一部分，將計入C1現金成本，以得出交付成品金屬的粗略成本。權益金、產品稅和非經常性費用并非直接生產成本，因此不會計入C1現金成本。
III期擴建的工程設計和前期工作進展迅速，其中包括新的井口和雙斜坡道?？?卡庫拉 III 期將包括卡莫阿1區和卡莫阿2區兩座新建的地下礦山，以及卡庫拉西區首條斜坡道的建設工程。將在卡莫阿兩座新礦山附近建設一座500萬噸/年的新選廠。
III 期擴建實現投產后，卡莫阿銅業的總礦石處理量將超過1,400萬噸/年。預計到2023年第二季度技改方案完成后，I 期和 II 期選廠的總設計產能將提升至920萬噸/年，整個項目銅年產量將提升至約60萬噸。
III 期擴建項目的預可行性研究進展順利，預計于下半年發布。預計 III 期擴建將于2024年底正式啟動投產。
圖1﹕卡莫阿-卡庫拉 III 期銅產量的基礎情形預測 (I 期和 II 期技改后)，與2022年全球十大生產礦山預測 (按可售銅產量排名) 比較
信息來源﹕公司文件、伍德曼肯茲 (2022年4月)。注：卡莫阿-卡庫拉精礦含銅60萬噸的產量預測，是基于 I 期和 II 期選廠技改后，預計 I 期、II 期和 III 期實現穩態產能以及 III 期選廠實現爬坡而作出的估算。
卡莫阿-卡庫拉規劃中的直接粗銅冶煉廠將建設在I期和II期選廠附近，利用芬蘭美卓奧圖泰 (Metso Outotec) 公司的技術，設計規模適合處理 I 期、II 期和 III 期選廠生產的大部分銅精礦，設計產能達50萬噸/年，生產含銅99%的粗銅。
卡莫阿銅業采礦主管Yann Kabeya Mubela在新井口和雙斜坡道的施工現場。
截至2022年3月底，卡莫阿-卡庫拉的地表堆存約480萬噸高品位和中品位礦石，平均銅品位約4.57%。2022年第一季度采出167萬噸礦石，銅品位 5.29%，包括在卡庫拉礦山采出的153萬噸礦石，銅品位5.50% (其中包括在礦床高品位中心采出65萬噸礦石，銅品位高達6.90%) 以及在卡索科 (Kansoko) 礦山采出的14萬噸礦石，銅品位3.08%。
卡莫阿銅業已按照公平競爭條款，就卡莫阿-卡庫拉 I 期和II期100%產量達成銅精礦及粗銅包銷協議的修訂?？~業是艾芬豪礦業、紫金礦業集團、晶河全球及剛果(金) 政府合資項目的運營公司。
卡莫阿銅業與中信金屬香港有限公司 (以下簡稱"中信金屬") 和金山(香港)國際礦業有限公司 (紫金礦業的子公司) 就現有的包銷協議簽署修訂條款，除現有I期的包銷協議外，擴大至就II期生產的銅產品簽署各50%產量的包銷協議。包銷協議為常青協議，涵蓋 I 期和II期礦山服務年限內的所有產品，包括銅精礦以及在盧阿拉巴銅冶煉廠生產的粗銅，但不包括日后在卡莫阿冶煉廠生產的銅產品。
英加水電站二期合作協議將為 III 期擴建及冶煉廠提供額外的清潔水電；5號渦輪機組升級工程的EPC合同已簽署
2021年7月，艾芬豪礦業剛果(金)能源公司 (Ivanhoe Mines Energy DRC) 與剛果(金)國有電力公司 La Société Nationale d'Electricité (以下簡稱“SNEL”) 擴展現有的融資協議，對位于剛果河上的英加二期水電站進行5號渦輪機組的升級改造。艾芬豪礦業剛果(金)能源公司為卡莫阿銅業的姊妹公司，專門負責為卡莫阿-卡庫拉銅礦提供可靠的清潔、可再生水電。
這項合作于2021年已成功為Mwadingusha水電站進行了升級和現代化改造，該水電站目前為國家電網提供 78 兆瓦的電力。
英加二期項目預計將產生額外的178兆瓦可再生水電，為卡莫阿-卡庫拉銅礦項目和冶煉廠提供穩定的清潔電力能源供應，配合 III 期及未來擴建計劃，同時使當地社區受惠。英加二期升級改造項目將于2024年第四季度完工。
5號渦輪機組的工程將包括升級和更換進氣設備、渦輪機、調速器、交流電機、電壓調整器和變壓器 (從水到電線) 的所有單元。
2022年4月26日，SNEL與領先的水電公司德國福伊特水電 (Voith Hydro) 在德國海登海姆簽署5號渦輪機組升級改造的工程、采購和施工管理 (EPCM)合同。
農工Mapindji Kabwita Gracia在新建的菠蘿園耕作。
為期五年的首個監管發展方案 "Cahier des Charges" 已經開始實施。兩所幼兒發展中心正在順利建設，現已完成90%并將于2022年9月投入使用。此外，Muvunda家禽項目已經開始運行；在Mupenda的兩個新魚塘已建成 (計劃共興建7個魚塘)；兩所農村保健中心的設計也在進行中。
當地社區的企業計劃繼續推行，包括目前正在擴展的制磚、縫紉、綠化和園藝合作社 (現正對于業務效益和持續發展作出評估)。計劃訂購一臺新的制磚機，產能將翻倍，每月可生產約 30,000 塊磚。
制磚工Kajimana Muluba和Kazadi Mujinga在卡莫阿-卡庫拉的Tujenge社區制磚廠。
卡莫阿-卡庫拉II期年處理礦石380萬噸的選廠已于2022年4月7日實現商業化生產。 2022年3月21日開始向II期選廠供礦，并已順利生產首批銅精礦，比原計劃提前約4個月。管理層預計II期選廠提前投產，將有利于卡莫阿-卡庫拉達到2022年銅生產指導目標 (290,000至340,000噸) 的上限。
C1 現金成本為非公認會計準則的財務指標。管理層以C1 現金成本評估經營業績，其中包括所有直接采礦、選礦以及管理和行政成本。冶煉費和銷售至最終港口 (通常是中國港口) 的運費扣減被列作銷售收入的一部分，將計入C1現金成本，以得出交付成品金屬的粗略成本。
普拉特瑞夫項目由 Ivanplats (Pty) Ltd. (以下簡稱 "Ivanplats") 持有，艾芬豪礦業持有Ivanplats公司64%的權益?！度嫣岣吆谌私洕鷮嵙Ψò浮?B-BBEE) 的南非受益人持有項目26%的權益，這些受益人包括 20 個當地社區，約150,000 位居民、項目雇員和當地企業主。伊藤忠商事株式會社、日本石油天然氣和金屬國家公司和日本天然氣公司組成的日本財團通過 2 輪投資 (共 2.9 億美元) 持有 Ivanplats 10% 的權益。
在布什維爾德北翼，鉑族金屬礦化主要賦存在普拉特瑞夫層位，是一套走向延伸30多公里的礦化序列。艾芬豪的普拉特瑞夫項目位于普拉特瑞夫層位的南部，由Turfspruit及Macalacaskop兩個相連的礦權組成。最北部的Turfspruit 礦權，鄰近且位于英美鉑金 (Anglo Platinum) Mogalakwena 礦山的走向延伸上。
自2007年以來，艾芬豪重點推進普拉特瑞夫的勘查和開發活動，以圈定和擴大早期發現的Flatreef礦床的深部延伸，以開展高度機械化的地下開采。整個Flatreef 礦區位于 Turfspruit 和 Macalacaskop 采礦權范圍內。
普拉特瑞夫項目繼續審核和優化其COVID-19疫情防控方案，實行各項措施以控制并降低傳播風險。為配合國家衛生部推行的全國疫苗接種計劃，Ivanplats 在礦山現場為員工接種COVID-19 疫苗，至今所有Ivanplats的員工和承包商已接種疫苗。項目繼續為現場職員和承包商員工進行檢測，2022年第一季度共進行了335次COVID-19檢測。
Ivanplats向瑞典斯德哥爾摩的安百拓 (Epiroc) 公司訂購的首批主要采礦設備包括零排放的電動掘進鑿巖臺車、載重14噸的鏟運機、電動錨索鉆機以及載重42噸的電動卡車。Ivanplats已接收普拉特瑞夫的首批電池動力地下采礦設備﹕一臺ST14鏟運機及曼尼通 (Manitou) 的MHTX 790伸縮臂叉車，并已成功運送到950米中段。
2022年2月28日，艾芬豪礦業公布普拉特瑞夫項目新的獨立可行性研究 (以下簡稱 “2022可行性研究”) 的結果。 2022出色的可行性研究，是以2020年11月發布的初步經濟評價 (以下簡稱“初步經濟評價”) 以及2020年可行性研究為基礎。
- I 期計劃于2024年第三季度實現首批精礦的生產，II 期擴建計劃于2027年2號豎井投產后展開，其后建造兩座220萬噸/年的選廠，計劃分別于2028年及2029年投產。2號豎井將用作首采井，以提升穩態產能至520萬噸/年。
- 估計II 期擴建資本性開支為15億美元，將由 I 期的現金流和項目融資方案提供部分資金。
- I 期平均年產11.3萬盎司的鈀、銠、鉑金和黃金 (以下簡稱“3PE+Au”) 以及500萬磅鎳和300萬磅銅。
- II 期平均年產59.1萬盎司的3PE+Au金屬以及2,600萬磅鎳和1,600萬磅銅；這將使普拉特瑞夫成為世界第五大主要鉑族金屬礦山 (以鈀金屬當量排名)。
- 礦山服務年限內的現金成本為每盎司 (3PE+Au) 514美元 (扣除副產品，并已計入維持性資本開支)。這將使普拉特瑞夫成為行業成本最低的主要鉑族金屬礦山。
- 以長期共識價格計算，稅后凈現值為17億美元 (折現率8%)，內部收益率為18.5%
- 以2022年3月7日的現貨價格計算，稅后凈現值將會提升至51億美元 (折現率8%)，內部收益率增加至33%。
信息來源﹕公司文件、標準普爾全球市場情報。根據標準普爾全球市場情報數據庫中最大規模的未被開發鈀、鉑金、黃金、銀和銠金屬項目進行排名 (以探明和控制的鈀當量金屬為標準)。鈀當量計算包括鈀、鉑、黃金、銀和銠盎司，并根據以下現貨金屬價格 (2022年2月23日) 假設計算﹕鉑1,095美元/盎司、鈀2,480美元/盎司、銠18,750美元/盎司、黃金1,909美元/盎司和銀24.55美元/盎司。普拉特瑞夫的探明和控制資源量，以1克/噸邊界品位估算。
2021年12月，Ivanplats就黃金、鈀及鉑金屬流融資與獵戶座礦業金融 (Orion Mine Finance) 及Nomad Royalty Company 達成協議。獵戶座礦業金融是世界領先的金融集團，為礦業公司提供定制化的融資。Nomad Royalty Company是一家擁有貴金屬特許使用權的公司，獵戶座是該公司的大股東之一 (獵戶座礦業金融及Nomad Royalty Company統稱為"金屬流買方")。交易將為I期大部分的資本性開支提供資金，項目I期將于2024年第三季度實現首批精礦生產。
金屬流融資是指買方以預付款購買預售的精煉金屬，預付款總額為 3 億美元，分兩期支付，第一期預付款7,500萬美元于2021年12月份交易結束時支付，剩余的2.25億美元將在滿足若干先決條件后支付。
根據 2 億美元黃金金屬流協議的條款，金屬流買方將獲得精礦所含黃金的80%，直至總交付量達35萬盎司，其后將減少至協議剩余有效期生產精礦所含黃金的64%。協議有效期將從金屬流協議的生效日期，直至總交付量達685,280盎司黃金當日結束。金屬流買方將按相等于黃金市價或100美元/盎司 (以較低者為準) 的價格購買每盎司黃金。
根據 1 億美元鈀-鉑金屬流協議的條款，獵戶座礦業金融將獲得精礦所含鈀及鉑金的4.2%，直至交付量達35萬盎司，其后將減少至協議剩余有效期相關產量的2.4%。協議有效期將從金屬流協議的生效日期，直至總交付量達485,115盎司鈀和鉑金當日結束。買方將按相等于鈀及鉑金市價30%的價格購買每盎司鈀及鉑金。
2號豎井井架 (從地基至井口) 的建設工程進度理想
2號豎井的前期地表工程已于2017年展開，包括地表以下約 29 米深的開口以及建造103 米高的混凝土井架的地基。該井架將設有豎井的永久提升設施并將用于支撐井口。
2號豎井井架 (從地基至井口) 的建設工程已順利完工，通風和工作人員通道 (包括回填) 的施工進展順利，預計于2022年8月完工。Ivanplats將繼續建設2號豎井的井架，預計于今年晚些時候開展鑿井工程以提前實現II期投產。
預計 I 期生產的用水需求最高約300萬公升/天，II 期擴建完工后將提高至900萬公升/天。2022年1月，艾芬豪公布已簽署新協議，將獲得當地經處理后的中水，以供應普拉特瑞夫分期開發所需的生產用水。這份協議取代了最初于2018年簽署的協議。
根據新包銷協議的條款，Mogalakwena當地政府 (以下簡稱“MLM”) 同意，自項目投產后的32年間由波特希特斯的 Masodi 廢水處理廠每天供應不少于300萬公升且不多于1,000萬公升經處理的中水。Masodi 廢水處理廠的施工正在進行中。
同時，Ivanplats已簽署資助協議，承諾實施Masodi廢水處理廠2018年中斷后的未完成工程。Ivanplats將向市政府提供經濟援助，預計投入約2.15億南非蘭特 (約1,400萬美元) 以完成Masodi處理廠的建設。Ivanplats將以5南非蘭特每1,000公升的較低價格購買中水。計劃2022年第三季度重新啟動建設工程，為期約18個月。
普拉特瑞夫項目的第二個社會和勞動計劃 (SLP) 已獲得批準。在第二個SLP中，Ivanplats計劃以第一個SLP為基礎，繼續專注于培訓和開發計劃，其中包括﹕增加15名新培訓師、向78名員工提供內部技術培訓、延續向即將退休的員工提供新/其他技術的培訓計劃、為項目社區成員提供社區成人教育，以及向最少100名社區成員提供核心技術培訓以及常用技能等。普拉特瑞夫項目繼續支持多個教育計劃，以及在運營社區提供免費無線上網。
礦山的常設培訓學院繼續添置設備，計劃于今年晚些時候正式開學。培訓學院的教室和辦公室已完工，并已制定培訓和電子學習計劃。學員計劃于2021年開始推行，為50名當地的年青學員提供學習機會，包括職業安全以及采礦技能 (例如Murray & Roberts培訓學院提供的工程車操作培訓) 的國家認可證書課程。學員計劃旨在促進性別多樣化，其中54%的學員都是女性。
企業和供應商發展 (ESD) 承諾包括進一步擴展現有的小賣店和洗衣店。洗衣店已增添新設備，以增加洗衣量配合公司和所有現場承包商的需求。小賣店擴展項目計劃在現場建設三家獨立商店，目前正物識當地企業負責管理。為期5年的綜合業務發展和資助項目計劃，將會幫助社區成員做好業務發展和作為供應商的準備。業務發展計劃由外商承辦，以ESD 活動為大前題，并由ESD部門通過內部培訓而進一步加強?，F場承包商還參與資助項目，繼續為當地供應商提供資金援助。
位于剛果民主共和國的基普什鋅-銅-鍺-銀-鉛礦，鄰近基普什鎮，距離盧本巴希西南約30公里?；帐驳靥幹蟹倾~礦帶，位于卡莫阿-卡庫拉銅礦項目東南約 250 公里，距離贊比亞邊境不足一公里。
2011年11月，艾芬豪通過其全資子公司基普什控股，收購了基普什項目 68% 的權益；其余 32% 權益由剛果(金)國有礦業公司杰卡明持有。
- 實施重點發展剛果 (金) 人才的新舉措，包括個人發展、物色未來管理層、人才梯隊計劃以及員工性別平等。
- 基普什控股將繼續通過股東貸款及/或第三方融資，為項目開發提供資金。股東貸款的利率為6%，從2022年1月1日起計息，適用于現有余額及任何后續貸款。根據現有股東貸款協議的條款，股東貸款的利率為倫敦同業拆借利率加4%，適用于80%的預付款，其余的20%免息。截至2022年3月31日，基普什控股的股東貸款余額 (已計入應付利息) 約5.4億美元。
基普什項目建設了新的飲用水供應站為基普什市免費供水?；帐彩猩鐓^成員從免費飲用水得到的日常支持涉及電力、化學消毒劑、日常維護、保安和緊急修復主要管網的泄漏，受惠人數多達十萬人 (未計郊區的居民)。日常每小時連續泵送約 1,000 立方米的飲用水供給使用者。
基普什項目高級經濟發展經理 Nathalie Kikaba (右) 與社區居民在 Kaponda 的太陽能水井取水。
基普什2022 年可行性研究以艾芬豪礦業于2018年1月發表的預可行性研究為基礎?；帐矎彤a開發的建設周期為兩年，與同類開發項目比較，利用現有的地表和地下大型基礎設施，可大幅降低資本性開支。估計投產前資本性開支(包括應急費用) 為3.82億美元。
基普什2022可行性研究的重點是大鋅礦帶和南鋅礦帶的開采，估算的探明和控制礦產資源量之礦石量達1,180萬噸，鋅品位35.3%?；帐矒碛谐壐叩匿\品位，國際礦業領先的研究咨詢集團伍德曼肯茲認為基普什鋅品位超過全球第二高項目兩倍以上 (見圖 4)。
信息來源﹕伍德曼肯茲 (2022年1月)。注：上述項目 (基普什除外) 中各金屬礦種的礦石量和金屬品位均以公開披露為基礎，由伍德曼肯茲編輯整理。伍德曼肯茲根據其對金屬的長期價格假設，將各金屬品位轉換為當量鋅品位。
- 投產前的資本性開支 (包括應急費用) 約為3.82億美元。
- 礦山服務年限內的平均年產量為24萬噸鋅 (精礦含鋅金屬量)，鋅品位32%，預計將使基普什躋身世界主要鋅礦山之列 (圖 3)，一旦投產，其品位將遠高于其它礦山。
- 以1.20美元/磅的長期鋅價估算，項目具有9.41億美元的稅后凈現值 (折現率8%) 和40.9%的稅后內部收益率，項目回報期2.3年。
基普什2022可行性研究由OreWin Pty. Ltd. 、MSA Group (Pty.) Ltd. 、SRK Consulting (Pty) Ltd.及METC Engineering按100%項目權益獨立開展。
5號豎井的直徑為8米、深 1,240 米，現已進行升級和重新試車。主要的工作人員和物料進出場的卷揚機已完成升級改造，以滿足全球行業標準和安全標準。5號豎井的提升巖石卷揚機已全面運行，并已安裝新的箕斗、鋼索以及相關配件。豎井已安裝兩個新制造的巖石運輸工具(箕斗)和支撐框架(控制電纜)，以方便從1,200 米中段的主礦石倉和廢石倉提升巖石。
在歷史上，基普什的開采作業從地表延伸至1,220 米的深度。計劃用作主要生產井的5號豎井，提升能力達180萬噸/年，并用作主要進場通道，經1,150米運輸中段進入礦山的較低中段 (包括大鋅礦帶)。
直升機飛行員Michael Juckes (左) 和 New Resolution Geophysics公司的現場工程師Jurie Human在艾芬豪的西部前沿開展電磁航測。
截至2022年3月31日止三個月 (對比 2022年3月31日) 的回顧
如本文可轉債部分所述，公司在2022年第一季度嵌入式衍生金融負債的公允價值錄得6,640萬美元的虧損，2021年第一季度嵌入式衍生金融負債的公允價值則錄得2,560萬美元收益。財務成本從 2021 年第一季度的 180 萬美元增加到 2022 年同期的 740 萬美元，大部分與可轉債的利息有關。
2022年第一季度的財務收入為3,150萬美元，與2021年同期 (2,280萬美元) 相比高出870萬美元。其中包括向卡莫阿控股合資企業提供的貸款利息，2022年第一季度的利息收入2,830萬美元，2021年同期所得的利息收入為2,120萬美元，隨著累計貸款余額增加。
卡莫阿控股合資企業的不動產、廠房和設備從 2021年12月31日增長至 2022年3月31日，達到1.282億美元，可進一步分解如下：
高級可轉債為公司的高級無抵押債務，息票率2.50%，每半年付息一次。除非提前回購、贖回或轉換，債券將于2026年4月15日到期。債券的初步轉換率為每份面值1,000美元的債券可轉換為134.5682股公司A類普通股，或相當于每普通股約7.43美元 (約9.31加元) 的初步轉換價。
- 在截至2021年6月30日止季度之后的任何季度期間 (以及僅在該季度期間)，如果本公司在30個連續交易日 (包括上一季度的最后一個交易日) 期間至少20個交易日 (不論是否連續) 的A類普通股收盤價格高于或相等于當時每個適用交易日轉換價格的130%；或
- 在任何10個連續交易日后的5個工作日期間 ("評估周期")，評估周期內每個交易日的每份面值1,000 美元的債券交易價格低于本公司A類普通股的收盤價格與這些交易日的轉換率乘積的98%；或
本公司不得在2024年4月22日之前贖回債券 (除非某些稅法有所修訂)。2024年4月22日或之后，以及在到期日前第41個交易日或之前，如果在本公司提供贖回通知前的任何30個連續交易日 (包括該期間的最后一個交易日) 期間至少20個交易日 (不論是否連續) 的普通股收盤價格高于或相等于當時轉換價格的130%，則本公司可以贖回債券。債券的贖回價格為債券面值的100%，加上應計未付利息 (但不包括贖回當日)。
主負債的實際利率為9.39%，在2022 年第一季度所得的可轉債的利息為1,020萬美元，其中310 萬美元為已資本化的借貸成本。主負債的賬面值從2021年12月31日的4.374億美元上升至2022年3月31日的4.476億美元。
普拉特瑞夫項目于2021年12月已就黃金、鈀及鉑金屬流融資達成協議，將為I期大部分的資本性開支提供資金。金屬流融資是指買方以預付款項購買預售的精煉金屬，預付款總額為 3 億美元，分兩期支付，第一期預付款7,500萬美元已于2021年12月份交易結束時到賬，剩余的2.25億美元將在滿足若干先決條件后支付。
在 2022 年剩余時間，公司對于普拉特瑞夫項目的主要目標是要繼續推進I期的建設工程，計劃于2024年第三季度投產，并繼續建設2號豎井的井架以提前II期投產?；帐岔椖康目尚行匝芯恳呀浲瓿?，且開發方案已達成協議；在合資企業協議修訂案簽字和融資安排完成后，艾芬豪將開展長周期設備的采購以及其它建設工程?？?卡庫拉項目I期和II期已實現商業化生產，項目將重點提高運營效率，在I期和II期實施技改方案以及推進III期擴建。
2022年剩余時間預算擬投入1.5億美元進一步開發普拉特瑞夫項目，8,000萬美元用于基普什項目，以及2,800萬美元用于公司經常性開支。 2022年剩余時間將繼續在剛果(金) 的西部前沿及其它靶區進行勘查，初步預算2,100萬美元用于西部前沿及700萬美元用于其它靶區。在卡莫阿控股合資企業方面，項目的所有運營支出及資本性開支將會從銅銷售收入和卡莫阿現有的信貸出資。
注：(1) 卡莫阿-卡庫拉框上的以上數據均以100%權益計算。(2) III期和冶煉廠早期工程的預算僅僅是初步方案，將在2022年第三季度預可行性研究更新完成后予以調整。
艾芬豪在其英國倫敦辦公室有一筆價值320萬英鎊 (430萬美元) 的抵押債券未償付，需于2025年8月28日全額償還，此抵押債券以物業資產擔保，按1個月期英鎊LIBOR加1.9 %的利率每月支付利息。利息僅在到期日支付。
2013年，艾芬豪獲ITC Platinum Development Limited提供合約金額3,530萬美元的貸款。截至2022年3月31日，該公司的賬面值為3,460萬美元。艾芬豪必須在普拉特瑞夫項目出現剩余現金流后，即時償還該項貸款。根據貸款協議，剩余現金流定義為普拉特瑞夫項目產生的總收入，扣除所有相關運營成本 (包括所有采礦建設和運營成本)。逾期貸款需按3個月期美元LIBOR加2%的利率每月支付利息，不以復利計息。應付合約金額與貸款賬面值相差70萬美元，主要由于低息貸款所致。
如上所述，上表列出的債務代表應向花旗銀行支付的抵押債券以及應付ITC Platinum Development Limited的貸款。
C1 現金成本的計算基準與伍德曼肯茲成本指南制定的行業標準定義一致，但并非IFRS 認可的計量。在計算 C1 現金成本時，成本的計量基準與財務報表中所述的公司應占卡莫阿控股合資企業的收益份額相同。管理層以C1 現金成本評估經營業績，其中包括所有直接采礦、選礦以及行政和管理成本。冶煉費和銷售至最終港口的運費扣減被列作銷售收入的一部分，將計入C1現金成本，以得出交付成品金屬的粗略成本。權益金、生產稅和非經常性費用并非直接生產成本，因此不會計入C1現金成本及每磅C1現金成本。
艾芬豪認為，卡莫阿-卡庫拉的 EBITDA 是衡量卡莫阿-卡庫拉銅礦項目是否有能力產生流動性的重要指標，通過產生運營現金流為其營運所需提供資金、償還債務、為資本性開支供資，以及向股東派發現金股利。投資者和分析師也經常使用 EBITDA進行估值。EBITDA 旨在向投資者和分析師提供額外信息，但并非由 IFRS 標準定義的，故不應被獨立評估或取代按照IFRS制訂的表現指標。EBITDA 撇除融資活動的現金成本和稅項的影響以及運營資金余額變動的影響，因此并不代表IFRS所定義的營業利潤或經營產生的現金流。公司計算 EBITDA 的方法可能與其他公司有所不同。