iVision Tech (BIT:IVN)
Historical Stock Chart
From Oct 2019 to Oct 2024
Ivanhoe Mines announces record copper production and operating
profit as part of 2004 year-end financial results
TORONTO, March 23 /PRNewswire-FirstCall/ -- Ivanhoe Mines today reported its
financial results for the year ended December 31, 2004. Major factors in the
2004 results included a record operating profit from mining operations of
US$27.5 million, achieved largely through record production at the Monywa
Copper Project joint venture and strong metal prices. Exploration spending of
US$98.2 million was primarily incurred on the ongoing Oyu Tolgoi (Turquoise
Hill) copper and gold mine development project, and other projects, in
Mongolia. The company recorded a net loss of US$89.6 million (or US$0.32 per
share) in 2004, compared to a net loss of US$73 million (or US$0.30 per share)
in 2003. Ivanhoe is continuing to follow a conservative accounting policy of
expensing all exploration, development and engineering costs.
Significant advances
- On January 18, 2005, Ivanhoe common shares began trading on the
New York Stock Exchange (NYSE) under the ticker symbol IVN.
- In February, 2005, Ivanhoe completed the sale of its Savage River iron
ore mine in Australia. The purchase price consisted of two initial
payments totalling US$21.5 million, plus a series of contingent,
escalating-scale annual payments based on the annual Nibrasco/JSM
pellet price. The escalating-scale payments are to be made over five
years, beginning March, 2006. For the year starting April 1, 2005, the
iron ore pellet price benchmark was increased by 71.5%, to
approximately US$65 per tonne. As a result, Ivanhoe expects to receive
cumulative payments totalling approximately US$44 million by the end
of March, 2006. If the US$65 a tonne benchmark price and the Savage
River pellet production are maintained over the next five years,
Ivanhoe would expect to receive total consideration of approximately
US$123 million from the sale of this operation. Due to the sale, the
iron ore division has been reported as discontinued operations in the
financial statements.
- In May and August, 2004, AMEC of Canada prepared independent, updated
resource estimates for Oyu Tolgoi. AMEC currently is working on a new
independent resource estimate for Oyu Tolgoi, which is expected to be
announced in the second quarter of 2005.
- The Oyu Tolgoi Project's Southern Oyu deposits, (comprised of the
Southwest Oyu, South Oyu, Far South Oyu and Central Oyu deposits),
appear to have been largely defined. In contrast, at the Hugo Dummett
Deposit, containing the Hugo South and the Hugo North deposits,
drilling is ongoing and the Hugo North deposit remains open both at
depth and to the north. The extent of high-grade mineralization at the
Hugo North deposit has yet to be established.
- An Integrated Development Plan for Oyu Tolgoi is expected to be issued
late in the second quarter of 2005. The plan will combine the findings
and economics from the open-pit feasibility study on the Southern Oyu
deposits and the underground pre-feasibility study on the large-scale,
underground block-caving operation at the Hugo North deposit. In
management's view, the Integrated Development Plan will present a more
informative, overall picture of the future development of the Oyu
Tolgoi Project, especially given the recent exploration success in
Hugo North and the expected 40-year mine life under the current plan.
To bring the underground resources into a proven and probable category
for feasibility purposes, actual underground development and
characterization within the Hugo North deposit is required. This will
be accomplished by the sinking of an exploration shaft, expected to
begin in April and be completed in early 2007, and subsequent
horizontal development.
- Assuming timely completion of the Integrated Development Plan and the
availability of project financing, Ivanhoe Mines expects that initial
commercial production from Oyu Tolgoi's Southern Oyu deposits could
commence in mid-2007, with some underground ore from development work
on Hugo North being milled in 2008. These plans remain subject to
change, based on unforeseen circumstances.
- During 2004, Ivanhoe Mines was engaged in ongoing discussions with
several major, Asia-based international mining finance institutions
concerning project financing and off-take arrangements in connection
with the proposed development of the Oyu Tolgoi Project.
- In November, 2004, Ivanhoe closed an agreement with Entree Gold to
explore and potentially develop approximately 40,000 hectares of
Entree's Shivee Tolgoi property contiguous to the northern property
boundary of the Hugo North Deposit at Oyu Tolgoi. By spending
US$35 million over eight years, including US$15 million in the first
three years, Ivanhoe has the option to earn up to 80% in
mineralization deeper than 560 metres and up to 70% in mineralization
above the 560-metre level. Ivanhoe also has the right to acquire all
of Entree's surface rights on the Shivee Tolgoi property by spending a
minimum of US$3 million in exploration in the first year.
- Negotiations are continuing with a formally designated working group
of the Mongolian government for a long-term stability agreement for
Oyu Tolgoi. That agreement is expected to establish the critical terms
and conditions that will apply to the Oyu Tolgoi Project during its
developmental and operational phases. Although the stability agreement
negotiations were delayed by the June, 2004, national elections in
Mongolia, Ivanhoe expects to successfully finalize these negotiations
shortly.
- In 2004, regional Mongolian reconnaissance work, rock sampling,
induced-polarization surveys and diamond drilling were carried out
mainly on the Kharmagtai property, the Bronze Fox District and the
extension of the existing Nariin Sukhait coal mine, a coal discovery
located in the South Gobi Region. In addition, Ivanhoe announced in
December, 2004, its intention to initiate the development of what the
company currently believes to be extensive coal deposits in the South
Gobi Region.
- In December, 2004, Ivanhoe received the final US$12.5 million tranche
from the Government of Mongolia, completing ahead of schedule the full
repayment of the US$50 million Treasury Bill purchased by the company
in December, 2003. During the one-year term of the investment, Ivanhoe
received interest payments totalling approximately US$1.3 million from
the Mongolian government.
- In July, 2004, Ivanhoe completed an equity financing by issuing
20 million common shares for gross proceeds of Cdn$140 million.
Financial results
- The joint-venture Monywa Copper Project in Myanmar reported a net
profit of US$22.1 million in 2004, compared to a net profit of
US$2.1 million in 2003. The mine produced 31,756 tonnes of copper
cathode (15,878 tonnes net to Ivanhoe) in 2004, an increase of 14%
over 2003 production. The average copper price received in 2004 was
US$1.34 a pound, compared to 79 cents US a pound in 2003. Minegate
cash costs in 2004 were approximately 42 cents US a pound. Following
the debt obligation payment at the end of February, 2005, the balance
on the original, US$90 million project debt was reduced to
US$7.5 million. Projected copper production for 2005 is estimated at
39,000 tonnes at minegate cash costs of approximately 42 cents US a
pound. The current copper price is approximately US$1.55 a pound. The
project currently receives a premium of approximately US$125 per tonne
of copper (5.7 cents US a pound) for its LME Grade A quality.
- Exploration expenses for all projects in 2004 totalled
US$98.2 million, compared to US$68 million in 2003. The increase in
exploration expenses was mainly attributed to 1) Ivanhoe's drilling
activities at Oyu Tolgoi, especially on the Hugo North deposit, 2) the
engineering expenses related to the Integrated Development Plan for
the Oyu Tolgoi deposit, and 3) exploration activities at other
Mongolian properties. Ivanhoe follows a conservative accounting policy
of expensing all exploration, development and engineering costs
related to all of its projects.
- Expenditures at the Bakyrchik Gold Mine in Kazakhstan were
US$3.8 million in 2004. In 2005, Ivanhoe is planning to obtain funding
from outside investors to finance Bakyrchik's development plans.
Full details of Ivanhoe's 2004 financial results are contained in the 2004
audited Consolidated Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations, available on the
SEDAR website at http://www.sedar.com/ and Ivanhoe's website at
http://www.ivanhoemines.com/.
Ivanhoe's shares are listed on the New York, Toronto and Australian stock
exchanges under the symbol IVN.
Information contacts:
Investors: Bill Trenaman, +1.604.688.5755 / Media: Bob Williamson,
+1.604.688.5755
Forward-Looking Statements: This document includes forward-looking statements.
Forward-looking statements include, but are not limited to, statements
concerning estimates of planned or expected copper and iron ore pellet
production, prices and minegate cash costs, statements relating to the
continued advancement of Ivanhoe Mines' projects and other statements which are
not historical facts. When used in this document, the words such as "could,"
"plan," "estimate," "expect," "intend," "may," "potential," "should," and
similar expressions are forward-looking statements. Although Ivanhoe Mines
believes that its expectations reflected in these forward-looking statements
are reasonable, such statements involve risks and uncertainties and no
assurance can be given that actual results will be consistent with these
forward-looking statements. Important factors that could cause actual results
to differ from these forward-looking statements are disclosed under the heading
"Risk Factors" and elsewhere in the corporation's periodic filings with
Canadian and Australian securities regulators.
DATASOURCE: Ivanhoe Mines Ltd.
CONTACT: Information contacts: Investors: Bill Trenaman, (604) 688-5755;
Media: Bob Williamson, (604) 688-5755;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.