Ivanhoe almost doubles Makoko copper resource in DRC

Ivanhoe Mines (TSX: IVN) said a new preliminary estimate for its Makoko district discoveries in the Democratic Republic of Congo shows that the resource base almost doubled from a year and a half ago.

Total delineated contained copper in the area now stands at 9.37 million tonnes, 89% more than the 5-million-tonne estimate released in November 2023, Ivanhoe said Wednesday. Makoko is located within the company’s Western Forelands exploration project.

Ivanhoe is stepping up drilling in the Western Forelands, a zone that covers 2,393 sq. km next to the company’s Kamoa-Kakula copper complex. Drilling in the area will advance at a “record pace” this year as geologists put together an updated mineral resource estimate due to be released in 2026, Ivanhoe said.

“Given the significant increase in contained copper, albeit at slightly lower grade, we view the update as positive for the shares,” Scotia Capital mining analyst Orest Wowkodaw said in a note Wednesday.

Ivanhoe rose 0.3% to C$14.69 in mid-afternoon trading Wednesday in Toronto. That gave the company a market value of about C$20 billion ($14.3bn).

Using a 1% copper cut-off, Makoko’s indicated resource now stand at 27.7 million tonnes grading 2.79% copper, Ivanhoe said. It also has 493.7 million inferred tonnes grading 1.7% copper.

Already large

“The resource estimate for the Makoko district already represents the potential for a significantly large, long life copper operation with upside potential as Ivanhoe will continue to explore the district with a C$50 million budget for 2025,” Raymond James mining analyst Farooq Hamed said in a note on Wednesday.

“Further, with the proximity of the Makoko district to the Kamoa-Kakula property – the eastern edge of Makoko district is about 10 km from western edge of Kakula – the property has significant infrastructure advantages that could potentially de-risk future construction of a mining operation at the Makoko district.”

Richly endowed in natural resources, the DRC ranked No. 2 after China for copper output in 2023. Thanks to the addition of a third concentrator, Kamoa-Kakula last year became the third-largest copper mining complex in the world. It is also the largest copper operation on the African continent.

Urbanization, artificial intelligence and the rapid expansion of data centres are among the reasons why copper demand is facing a 70% increase by mid-century, BHP (ASX: BHP) CEO Mike Henry predicted in March. Ivanhoe founder and executive co-chairman Robert Friedland sees a supply gap.

“The scarcity of high-quality, undeveloped copper resources is becoming increasingly evident, and the ongoing supply shortage in the copper concentrate market will do nothing but grow,” Friedland said in Wednesday’s statement.

Ivanhoe has completed more than 86,000 metres of diamond drilling in the Western Forelands since disclosing initial resource estimates in November 2023. Drilling was primarily focused on the Makoko, Makoko West and Kitoko discoveries, which are collectively referred to as the Makoko district. Since the previous resource update, Makoko has increased by 2 km to 13 km in strike length.

Decade’s 5^th-biggest

Makoko ranks as the highest-grade and fifth-largest new copper discovery of the past decade, Ivanhoe said. Mineralization “remains open in multiple directions, offering significant opportunities for further expansion,” Friedland said.

About two-thirds of holes drilled through the end of February intersected copper, Ivanhoe said.

The updated estimate is based on the results of 147,000 metres drilled in 311 holes, of which 86,000 metres in 123 holes have been added since November 2023. The total area has increased by 37.4 sq. km, with the indicated resource covering 1.6 sq. km and the inferred resource covering 57 square kilometres.