Investing.com -- Shares of Ivanhoe Mines Ltd. (TSX:IVN:TO) dropped by 5% as the mining company released its full-year operating results, along with guidance for 2025 that fell short of market expectations.
The guidance projected copper production between 520-580 kilotons, which is approximately 4-6% below consensus. Additionally, Ivanhoe raised its capital expenditure forecast for 2025 to around $1.9 billion, up from the previous estimate of $1.3 billion as of September.
The revision in guidance includes a significant $500 million increase in the projected capital expenditure for the Kamoa-Kakula project, raising it to $1.5 billion from the earlier $1 billion estimate. This adjustment comes on the heels of a fire on January 2 that damaged onsite generators, leading to a three-month delay in the commissioning of a smelter.
The company also cited power constraints as a reason for its more conservative production outlook, attributing the limitations to drought affecting imported power availability, ongoing grid instability in the Democratic Republic of Congo (DRC), and the recent fire.
Though Ivanhoe did not provide cost guidance in this release, there is anticipation that cost estimates may exceed current expectations, which are around $1.40 per pound according to RBC Capital Markets and consensus figures.
This is due to the setbacks with the smelter and the lower volume guidance. Ivanhoe Mines (OTC:IVPAF) is expected to release its financial results, including 2025 cash cost guidance and 2026 capital expenditure guidance, after the market closes on February 19th.
Morgan Stanley (NYSE:MS) analysts commented: "We expect the stock to underperform today due to lower-than expected 2025 copper guidance, at the mid-point, coupled with an increase in capex budget and a possible delay of the smelter ramp-up."
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