On Thursday, Morgan Stanley upgraded Ivanhoe Mines (OTC:IVPAF) Ltd. (IVN:CN) (OTC: IVPAF) stock from Equalweight to Overweight, increasing the price target to C$22.00 from C$20.00.
The firm expects significant growth for Ivanhoe, forecasting a compound annual growth rate (CAGR) of approximately 16% in the company's copper volumes, from an estimated 440 kilotons in 2024 to 680 kilotons by 2027.
The upgrade is attributed to Ivanhoe Mines' consistent progress towards its expansion goals, particularly with the nearing completion of the Kamoa-Kakula's phase 3 concentrator.
This development is set to boost production capacity to 650 kilotons per annum (ktpa). Additionally, the forthcoming "Project 95" is anticipated to further enhance copper recoveries to 95% from the current 87%, which could add another 30 kilotons per annum to production figures.
The positive outlook on Ivanhoe Mines is further bolstered by the potential completion of "Project 95" by late 2025. This project is expected to significantly increase copper recoveries, leading to an incremental rise in production. Moreover, Ivanhoe Mines is contemplating expediting a Phase 4 expansion that could further amplify production by the end of the decade, though these plans have not been factored into the current model.
Morgan Stanley's revised view reflects confidence in Ivanhoe Mines' strategic initiatives and its ability to scale production effectively. The company's advancements, particularly in increasing copper production and recovery rates, position it favorably for growth in the coming years. The analyst's comments underscore the company's delivery on near-term expansion targets and the anticipated increase in production capacity.
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