Ivanhoe Mines Q2 2026 Earnings Call Transcript

Ivanhoe Mines (TSX: IVN ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

70 per pound. The company is progressing on strategic initiatives such as its solar power plant, which is expected to significantly reduce diesel usage upon completion, and is expanding its exploration and development activities at Western Forelands and Platreef. Ivanhoe Mines has tightened its 2026 production guidance to 290,000-310,000 tonnes of copper and anticipates increased production and reduced working capital due to destocking plans. Operational highlights include a new 60-megawatt solar facility with battery backup, strong performance at Kipushi with 70,000 tonnes of zinc produced, and ongoing feasibility studies at Kamoa-Kakula and Western Forelands.

Management expressed confidence in future growth, emphasizing strong partnerships in the DRC and plans to increase local ownership in compliance with regulatory requirements. Full Transcript OPERATOR Good morning, ladies and gentlemen. Welcome to the Ivanhoe Mines Limited second quarter earnings call. At this time you are in a listen-only mode.

Following the presentation, we will conduct a question and answer period. This call is being recorded on Thursday, July 30, 2026. I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Tommy Horton, Vice President, Investor Relations and Corporate Development Thank you, operator. Hello everyone. My name is Tommy Horton and I am Vice President of Investor Relations and Corporate Development for Ivanhoe Mines. It is my pleasure to welcome you to our second quarter 2026 conference call.

This call is being recorded today, Thursday, July 30, 2026. On the line today from Ivanhoe Mines we have Ivanhoe Mines Founder and Co—Chairman Robert Friedland, President and Chief Executive Officer Marna Kloeter, Chief Operating Officer Tom van den Berg, Executive Vice President of Technical Services Simon Bottoms, and Executive Vice President of Projects Steve Amos. We will finish today's event with a question and answer session. You can submit questions using the Q&A box on our webcast page as well as through the conference operator via the phone line.

Given our time constraints, we will be unlikely to finish every question, but we will endeavour to follow up after the call via our investor relations team. Before we begin, I'd like to remind everyone that today's event will contain forward—looking statements that will involve risks and uncertainties that could differ from actual results materially. Details for our forward—looking statements are contained in our news release on July 29, as well as on SEDAR+ and on our website It's now my pleasure to hand over to Ivanhoe Mines Founder and Co—Chairman Robert Friedland for his opening remarks. Robert, please go ahead.

Robert Friedland, Founder and Co—Chairman Thank you to all of our shareholders and stakeholders. I'm speaking to you from a cloudy and relatively cool day in New York City. And I'd like to draw your attention to the slide on page three. As you see our phase one solar power plant generating 60 megawatts of power when it's fully running at the end of this quarter in a few weeks.

And you see those little white dots in the middle? Those are the battery storage systems. So this is not 60 megawatts only when the sun is shining. This is 60 megawatts 24 hours a day.

And in time it will be twice as big as this vast field of solar arrays and then it will be triple this size. So this is a very good paradigm for our issue, for our sort of vision for Ivanhoe Mines for the future. A company at the bottom of the world cost curve, sustainably producing copper metal in a green and sustainable way in the heart of Africa and in the heart of the richest copper mining region in the world. So I've been in this game for about 45 years and I rarely give investment advice.

I've seen shares overvalued and undervalued, but if you pay close attention to this conference call, you'll see why. It's obvious that it's intelligent to approach our shares from the long side. They're now oversold. There's nothing but upside going forward.

There's an incredible series of opportunities as we develop the largest precious metals mine in the world, the richest zinc mine in the world, and yes, in the near future, about the Western Forelands. So with that, I'm going to turn this over to a woman I love a lot. She's our Chief Executive Officer. She just celebrated her 20th anniversary with Ivanhoe Mines.

I've watched her grow enormously as a manager, as a human being, as a visionary, as a politician. She's great. And if you want blunt advice about what to do with your wallet, I'm happy to talk about it later at the end of this call. But now over to Marna, our President and CEO.

Marna Kloeter, President and Chief Executive Officer Thank you, Robert, and thank you for the kind words. And just because he loves you doesn't mean he goes easy on you. But it's been a great, great 20 years working for you and learning from you. The picture in the background on this slide is quite close to my heart.

Our crews, our mining crews at Kamoa actually constructed this box cut themselves. So we didn't get in a construction company to do this box cut development. We did it ourselves and they did it under budget and ahead of schedule. So definitely well performed and well executed box cut.

I also would just like to introduce David van Heerden, who's also on the call with us today. Tommy accidentally omitted him. I was a bit nervous because I thought maybe I was going to have to take you through our financials. But David is also with us on the call today and I'll introduce him shortly.

We can go into the highlights, Tommy. In the second quarter, Kamoa produced in excess of 64,000 tonnes of copper. 70 per pound. That was towards the lower end of guidance.

42 per pound smelter benefit. Kamoa—Kakula sold 120,000 tonnes of sulfuric acid at an average price of $465 per tonne. And in July our contracts are up to $840 per ton. So if you look at the sulfuric acid prices, it more than doubled from the beginning of the year to the contracts we are now concluding in July.

The production rates at Kamoa—Kakula are set to progressively increase towards the second half of the year. So we're really looking at an outstanding back half of the year after we've started implementing the turnaround strategy at Kamoa—Kakula. We have also tightened our guidance for 2026 to between 290,000 and 310,000 tonnes of copper produced. And during the quarter the first power of our 60—megawatt solar facility with battery backup, as Robert alluded to, was delivered.

And currently the ramp up is underway. 90 per pound. And at Western Forelands, where the Makoko discovery continues to grow, we plan to announce an upgraded mineral resource towards September of this year. Our adjusted EBITDA for Ivanhoe Mines amounted to 179 million for the quarter.

We can move to the next slide. It is with great sadness that I have to report the loss of life of Mr. Muhammad Wambai on the 6th of July at the Kakula underground mine. Mr.

Wambai was conducting scaling activities when a fall of ground occurred. The root cause of the incident has been identified and a large—scale training program for scaling, operation and hazard identification has been implemented for all our operators and supervisors. Our operating procedures have been updated based on learnings from this incident. Our thoughts are with his family in these terribly tragic times as well as with his colleagues.

In the second quarter, a large part of our sustainability initiatives focused on training and in particular also on underground safety. On the next slide it would be amiss of me not to focus on, and I quote a wise voice from earlier in the call, the richest copper mining district in the world. It would be amiss for us not to highlight some of the significant achievements of the DRC over the past couple of years. The DRC is now the second largest global copper exporter.

Forty percent of the DRC's GDP is directly derived from mining. Copper production in the DRC has increased by more than 300% in the past 10 years and that cemented its position as the second largest copper producer. 2 million tonnes in 2025, producing 14% of the world's copper. 25 billion.

And then Ivanhoe has been a long—standing citizen in the DRC and we've cemented very successful strategic partnerships with the DRC government as well as with Gécamines and we continue to foster those relationships and expand these projects that we are delivering in the DRC. With that as an introduction, I would now like to hand over to David van Heerden, our CFO, to take you through our quarterly financial results. Over to you, David. David van Heerden, Chief Financial Officer Thanks very much, Madha.

We can move to the next slide. So Kamoa-Kakula sold just over 61,000 tonnes of payable copper in the form of anodes and blister in the second quarter. The copper in concentrate produced through the mills was pretty close to the tonnes sold, leading to copper in inventory on hand remaining flat at around 40,000 tonnes. Although there was no destocking in the second quarter, we do expect that payable copper inventory to reduce to 20,000 by the end of the year at the current copper price.

It would be a significant boost to our cash flow, revenue, and EBITDA in coming quarters. 99 per pound, total revenue of $880 million, $56 million relating to the sale of sulfuric acid, and a $33 million positive impact from mark-to-market of provisionally priced sales. With high production on its way and the current copper price environment, we definitely expect to exceed the $1 billion of revenue mark on a quarterly basis pretty soon. 84 per pound of payable copper in saleable product produced.

The copper grade of ore processed was fairly similar to the previous two quarters, so the quarter-on-quarter decrease was primarily higher costs, most notably the direct impact of higher diesel prices, which was responsible for 18 or 70% of the quarter-on-quarter increase, but I'll provide more details on that on a following slide. Power costs increased to 20% of total cash cost if illustrated as a percentage of C1 cash cost, and the jump from Q4 last year was due to the smelter power usage as well as the impact of higher fuel prices. 70 is still at the lower end of our guidance range, which we maintain despite the higher pricing environment.

Kamoa-Kakula's EBITDA for Q2 was $385 million and only 3% lower than Q1 notwithstanding the lower tonnes sold and the higher cost environment. Higher copper prices of course played a role, and we continue to realize smelter benefits. Just looking at those smelter benefits again a little bit closer on the next slide, here we again show a waterfall to better illustrate the movement in our cash cost and highlight the benefits we get from our smelter. 70 per pound.

33 is easily offset by the reduction in logistics cost, the sulfuric acid credit, and then the savings on treatment charges. 50 saving on a per-pound basis if the saving of road and export taxes are included, and that would be even more in a normalized diesel environment. Then mining and processing, more to the right-hand side, is a little higher in the last six months due to the slightly higher power cost, the lower absorption of fixed costs due to the relatively lower production this year, and then of course the higher diesel price since the closure of the Strait of Hormuz. And that's exactly where I will focus on the next slide.

Here we look at the C1 cash cost for Q1 and Q2 with the direct diesel cost shown separately. 62 in the second quarter. 18 increase and represents 70% of our quarter-on-quarter cash cost increase. So just to be clear here, this is the direct diesel impact.

So it doesn't include the secondary impact of higher diesel prices like increased logistics charges, as an example. It's noteworthy that the current diesel price is a little bit higher than the average diesel price we achieved in the second quarter, but also that once the 60 megawatt of solar is operational later this quarter, our diesel consumption would go down by 25% to 30%. And an even bigger mover in Q3 will therefore be the expected increase in the sulfuric acid byproduct credit. So far this quarter we have been selling sulfuric acid at around $840 per tonne, which is much higher than the average selling price of $465 per tonne recognized in Q2.

60 per pound of payable copper produced in the third quarter. 38 recognized in Q2. Then on the right-hand side of the screen is just a reminder of where we forecast our C1 cash cost to be in the future as development rates and stoping tonnes and grades improve. On the next slide here we show the quarter-on-quarter EBITDA waterfall for Kamoa-Kakula.

Here you can see that $76 million of the quarter-on-quarter EBITDA increase was due to higher copper price for the second quarter when compared to Q1. $43 million of that $76 million was the impact of the remeasurement of contract receivables, which represents the mark-to-market of provisionally priced sales at the higher price in the second quarter. Revenue from acid sales was $7 million higher in Q2 than it was in Q1 and is expected to increase further, of course, as I've mentioned on the previous slide. Logistics and treatment charges did not move much, but this was also because we are now transporting significantly lower volumes due to the smelter.

And cost was up quarter-on-quarter mainly due to the higher diesel prices, as I've already explained. Lastly, you can see the impact of selling 5,000 tonnes less of payable copper in the second quarter compared to Q1, and we definitely expect that block to be green and sizable in the coming quarters as we increase production and as we destock on the current stock on hand. And then you end up with the quarterly EBITDA for Kamoa-Kakula, which is very close to what it was in the previous quarter. Moving to Kipushi on the next slide, it was another great quarter for Kipushi with another record of tonnes produced.

58 per pound of payable zinc. Kipushi did however not sell all the zinc produced, with roughly 14,000 tonnes increase in finished goods due to the inability to secure sufficient trucks to transport the concentrate to port. The closure of the Strait of Hormuz significantly decreased the number of trucks entering into the DRC with sulphur from Dar es Salaam and, with fewer trucks entering the DRC, fewer were available for backhaul with Kipushi concentrate.

To add to that, the quotas assigned to the DRC cobalt producers also impacted negatively on truck availability, but the team has since been able to make very good progress in securing the required volume of trucks, and inventory on site has halved since the end of June even with production running extremely well, so we will take advantage of these great current zinc prices. Still, Kipushi recognized revenue of $148 million in the second quarter and an EBITDA of $51 million at a margin of 35%. 88 for the year to date, still below the midpoint of our 2026 guidance, which we maintain.

Also noteworthy is that Kipushi generated cash from operations of $94 million in the first half of this year even with the buildup of inventory. So moving to Ivanhoe Mines consolidated results on the next slide: Ivanhoe Mines recorded a profit of $46 million in Q2 and an adjusted EBITDA of $179 million. Both our EBITDA and our profit are expected to continue to grow with the increase of expected production at Kamoa-Kakula and Kipushi, and with Platreef's contribution coming very soon.

Something I would just like to point out is people often forget that our profit and EBITDA are reduced by our continued investment in exploration, particularly on the Western Forelands, expensing exploration expenditure as an accounting policy decision. So it's not necessarily treated the same way by our peers, but important to take into account when looking at our results.