Ivanhoe secures $575m funding

Ivanhoe Mines (TSX: IVN) announced on Wednesday the closing of its previously announced private placement offering of $575 million aggregate principal amount of 2.50% convertible senior notes due 2026.

“We received tremendous inbound interest in our convertible notes financing from leading North American and European fundamental institutional investors, as was evidenced by the order book being significantly oversubscribed,” Ivanhoe executive Co-Chairman Robert Friedland said in a media statement.

“We believe that the convertible notes, with a coupon rate of 2.50%, represent an extremely attractive form of financing to further advance our growth projects, which each have compelling projected rates of return. We also have the option of repaying the convertible notes in cash, rather than shares.”

The company intends to use the net proceeds from the offering for general corporate purposes.

Kakula

The company completed 80% of phase one work at the Kakula copper mine in the Democratic Republic of Congo (DRC), with first production targeted for July.

Ivanhoe is commissioning the concentrator plant at the Kamoa-Kakula operation, and has stockpiles already totalling over 2.16 million tonnes – containing an estimated 95,000 tonnes of copper.

The second phase expansion step remains set to begin during the September quarter of 2022. That phase will double the mill throughput to 7.6Mt/y. Phases 1 and 2 combined are forecast to produce up to 400,000t/y of copper.

The Kamoa-Kakula Project, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world’s fourth-largest copper deposit by Wood Mackenzie.

The updated resource estimate for the massive project shows it holds 1.4 billion indicated tonnes grading 2.74% copper for 83.7 billion pounds of copper and another 339 million inferred tonnes grading 1.68% copper for 12.5 billion pounds of copper at a 1% cut-off grade.

RELATED: Kamoa-Kakula ore value peerless among giant copper mines