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CITIC Metal's Total Investment In Friedland's Ivanhoe Tops $1B

Kitco News

To advance the Kakula copper mine in Africa, Robert Friedland and Yufeng “Miles” Sun, co-chairmen of Ivanhoe Mines (TSX:IVN), announced today that CITIC Metal Co. will invest an additional US$454 million in Ivanhoe Mines.

The deal is priced at US$2.95 per share, a premium of 29% over the last closing price.

It is CITIC Metal’s second major investment in less than a year in Ivanhoe Mines. Total investment tallies US$1 billion.

Friedland touted the deal.

“CITIC Metal has been a shareholder in Ivanhoe Mines for eight months now, and in that time, CITIC has seen what we already know – that the Kamoa-Kakula Project is unquestionably the best copper development project in the world,” said Friedland in a news release.

“The investment announced today will comfortably provide Ivanhoe with the equity cushion required to fast-track Kamoa-Kakula’s 6 Mtpa Phase 1 mine to production. More importantly, it also is a profound vote of confidence in our management, in our key stakeholders and partners, and in the promising future of the Democratic Republic of Congo and South Africa. We look forward to hosting the DRC President at the Kamoa-Kakula and Kipushi projects later this year,” Friedland added.

“We now are in a position to finance our first two mines ─ Kakula and Kipushi ─ to commercial production, and significantly advance, or achieve, production at the Platreef Project. Ivanhoe also is positioned to have its planned expansions at the Kamoa-Kakula Project funded from internally generated cash flows.”

The cost to build the Kakula copper mine in the Democratic Republic of Congo is estimated at US$1.1 billion.

Ivanhoe’s joint venture partner in the project, Zijin Mining Group, is required to fund its equivalent share of approximately US$540 million of the mine’s initial capital costs. Ivanhoe and Zijin also are in financing discussions with international export-credit agencies and equipment-finance providers, which could materially reduce the amount of funding that Ivanhoe and Zijin would have to contribute.

A 2019 pre-feasibility study envisages an average annual production rate of 291,000 tonnes of copper at a mine-site cash cost of US $0.46 per pound (lb) copper and total cash cost of US $1.11/lb copper for the first 10 years of operations, and copper annual production of up to 360,000 tonnes by year four.

Written with material from Ivanhoe Mining's news release. Creative Commons image of copper heat sink courtesy of Razor512
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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