Scotia UpdateKamoa-Kakula Ramp-Up Making Solid Initial Progress
OUR TAKE: Positive.
IVN released its monthly development update on the company's flagship Kamoa-Kakula Cu mine in the DRC. The Phase I 3.8Mtpa concentrator entered production on May 25. In its first month of operation, Kamoa-Kakula delivered 10.5kt of Cu concentrate to the local smelter. 2021 Cu production guidance of 80-95kt was reaffirmed.
Ore stockpiles now total 3.4Mt grading 4.78% Cu (vs. 3.3Mt grading 4.87% Cu at the end of May), containing more than 162kt of copper, as the operation mined 338kt of ore grading 4.59% Cu in June. Total underground mine development of 48.9km is ~17.5km ahead of schedule. Development of Phase II (7.6Mtpa) remains on schedule for a Q3/22 startup; engineering and procurement is already >80% compete. IVN continues to explore the potential acceleration of the Phase III expansion (11.4Mtpa). Overall, given the solid initial ramp-up progress of Phase I, which appears well supported by strong mining rates and a significant ore stockpile, we view the update as positive for the shares.
IVN's attributable share of Kamoa-Kakula (39.6%) represents 65% of our asset level 10% NAVPS estimate for the company.