Ivanhoe Mines Expands Exploration in 2024, Secures $575M Through Private Placement

Ivanhoe Mines Ltd. is preparing for an ambitious 2024 after quadrupling its exploration budget to $90 million. This increased budget will focus on activities around Kitoko, sedimentary copper reserves in the Western Foreland (Democratic Republic of Congo).

"Given the ongoing exploration success across the Western Foreland, highlighted by the recently announced high-grade Kitoko copper discovery and the release of the Makoko and Kiala maiden Mineral Resource estimates, we are really accelerating our exploration drilling into 2024," said founder and Executive Co-Chairman Robert Friedland.

He added Kitoko highlighted the potential for high-grade copper mineralization across a much greater area and within a wider variety than previously expected.

In a recent interview, Friedland forecasted copper prices to reach $9,000, stating that isn't enough to stimulate the industry to take on big capital expenditures, particularly in Latin America.

"We probably need about $15,000 a ton, stable for a long period of time, before the industry can really gear up and build those giant mines," he said for Bloomberg.

While demand for copper looks to be growing amid a green energy ramp-up, its supply has been waning. Most recent setbacks include a shutdown of the Cobre Panama mine, one of the largest in Latin America. This mine, which generated over 112,000 tonnes of copper in the third quarter of 2023, was responsible for 7,000 direct and 33,000 indirect jobs in the region.

Meanwhile, Vancouver-based Orla Mining, which trades on the Toronto Stock Exchange as OLA, stated Panama’s government had rejected its request for permit extensions of their Cerro Quema gold project — further confirming Friedland’s worries about market destabilization in that region.

Latin America accounted for 40% of the global production of copper and 35% of lithium, making it critical for the clean energy transition.

Financing the Vision Through a Private Placement

Still, Ivanhoe is not waiting for copper to reach $15,000. The company announced it has successfully closed its private placement, raising approximately C$575 million (US$430 million) through the issuance of 47,917,050 Class A common shares for C$12 per share. (Ivanhoe trades on the Toronto Stock Exchange as IVN.)

The private placement, including the entire exercise of the 15% agent's option granted to BMO Capital Markets, strengthens the company’s financial position, pushing its cash balance beyond $600 million.

"2024 will be an important turning point in Ivanhoe's history, with Kamoa-Kakula's Phase 3 expansion and smelter, as well as Platreef Phase 1 and Kipushi, all on track for completion within the year," Friedland stated in a press release.

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Photo: Kamoa-Kakula, courtesy Ivanhoe