Finance

Ivanhoe Mines Stock Plummets After Seismic Activity Halts Congolese Copper Operations

2025-05-26

Author: Emma

Major Drop in Ivanhoe Shares

Ivanhoe Mines (IVN.TO) faced a dramatic plunge in share prices on Monday as the company suspended its 2025 production and financial forecasts for its Kakula mine in the Democratic Republic of the Congo due to unsafe underground conditions caused by "seismic activity." The company's stock tumbled as much as 18.4% during the trading day, ultimately closing down 16.19% at $10.77.

Safety First: Underground Work Comes to a Standstill

In a press release, the Vancouver-based company revealed that seismic events had prompted the suspension of all underground operations since May 25. Experts are currently assessing the situation to understand the risks involved. CEO Marna Cloete assured investors, "We are working around the clock with the world's foremost geotechnical experts to determine the cause and how we will resolve it."

Kamoa Mine Continues Operations Amid Uncertainty

While operations at its nearby Kamoa Mine progress normally, Ivanhoe has withdrawn its production and cost guidance for the Kamoa-Kakula complex for 2025, alongside plans for its direct-to-blister smelter ramp-up.

Lessons from Space Exploration: A Positive Spin

Robert Friedland, Ivanhoe's founder and co-chairman, referenced the journey of SpaceX, stating, "I remind readers that SpaceX—responsible for about 90% of humanity's space payloads—did not attain this status without numerous setbacks. We approach our operations at Kamoa-Kakula with the same mindset." This optimistic perspective aims to reassure investors amidst the operational challenges.

Production Projections in Limbo

RBC Capital Markets had previously forecasted production from the Kamoa-Kakula complex to hit between 520,000 and 580,000 tonnes of copper in 2025, with cash costs projected at $1.65 to $1.85 per pound. However, issues with the mine's pumping infrastructure have led to increased water inflow, necessitating immediate focus on dewatering efforts and the addition of equipment to boost pumping capacity.

Analysts Maintain Optimism Amidst Challenges

Analyst Sam Crittenden expressed caution as uncertainties linger regarding production impacts, but he maintains a price target of $24 on Ivanhoe shares and an "outperform" rating, suggesting potential for recovery once stability is achieved.