Ivanhoe Mines stock drops as ‘seismic activity' halts Congo copper project
Ivanhoe Mines (IVN.TO) shares fell steeply on Monday as the company pulled its 2025 production and financial guidance for a mine in the Democratic Republic of the Congo where 'seismic activity' has made it unsafe to work underground.
Ivanhoe shares fell as much as 18.4 per cent on the Toronto Stock Exchange with the Monday trading session. Shares were down 17.04 per cent at $10.66 per share at 2:12 p.m. ET.
In a news release on Monday, Vancouver-based Ivanhoe says seismic activity at its Kakula mine has continued 'over the past few days,' prompting a suspension of underground activities on May 25. Ivanhoe says geotechnical experts are working to determine the cause and effect of the activity.
'We are working around the clock with the world's foremost geotechnical experts to establish the cause of the issues we faced and how we will resolve them,' CEO Marna Cloete stated on Monday.
While Ivanhoe says its nearby Kamoa Mine is continuing normal operations, the company withdrew its Kamoa-Kakula's production and cost guidance for 2025, along with the ramp-up schedule for its direct-to-blister smelter.
"I remind readers that SpaceX - today responsible for approximately 90 per cent of total payload launched into space by humanity - did not attain this status without numerous setbacks,' Ivanhoe founder and executive co-chairman Robert Friedland stated in Monday's news release.
'We approach our operations at Kamoa-Kakula with the same mindset.'
According to RBC Capital Markets, Ivanhoe anticipated full-year 2025 production of between 520,000 and 580,000 tonnes of copper from its Kamoa-Kakula complex at a cash cost of US$1.65 to US$1.85 per pound.
'Damage to pumping infrastructure has also led to increased water inflow into the mine so the focus now is on dewatering activity and additional equipment is being added to increase pumping capacity,' analyst Sam Crittenden wrote in a note to clients.
'This leaves uncertainty as we await further updates to determine the potential impact on production.'
Crittenden maintains a $24 price target on Ivanhoe shares, with an 'outperform' rating on the stock.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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