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'We would expect the market to revalue the shares' - BMO on Friedland's Kamoa-Kakula

Kitco News

BMO Capital markets lauded Ivanhoe Mining's quick progress on its giant Kamoa-Kakula copper complex that recently started production.

Andrew Mikitchook published a note yesterday rating Ivanhoe Mining (TSX:IVN) as an outperform.

"Ivanhoe has guided for 2021 production of 80-95,000 tonnes of copper, suggesting a quick ramp up to deliver almost half of the annual 200,000 tonne design capacity in H2 2021. We would expect the market to revalue the shares of Ivanhoe for delivery of the ramp-up and to also recognize progress towards the Phase 2 expansion construction," writes Mikitchook.

The bank increased increased Ivanhoe's target to $15 from $10 previously. Robert Friedland is founder and co-chair of Ivanhoe Mining.

"In our opinion, this multiple bump is justified by the catalysts from the start of production, expectation for a quick Phase 1 ramp-up and first production from Phase 2 expected in just over 12 months."

Kamoa-Kakula began producing copper concentrate on May 25, 2021, and made its first delivery of concentrates to the nearby Lualaba Copper Smelter, outside of Kolwezi, on June 1, 2021.

According to Ivanhoe, the mine is projected to be the world's highest-grade major copper mine. Based on independent benchmarking, the project's phased expansion scenario to 19 Mtpa would position Kamoa-Kakula as the world's second-largest copper mining complex, with peak annual copper production of more than 800,000 tonnes.

The Kamoa-Kakula copper project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%) and the Government of the Democratic Republic of Congo (20%).

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