Good morning, ladies and gentlemen, and welcome to the Ivanhoe Mines Q3 2022 financial results conference call. At this time, all lines are in a listen only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, November 14th, 2022. I would now like to turn the conference over to Matthew Keevil, Director of Investor Relations and Corporate Communications. Please go ahead.
Thank you, operator. Hi everyone. My name is Matthew Keevil and I am the Director of Investor Relations and Corporate Communications with Ivanhoe Mines. It is my pleasure to welcome you to our Q3 2022 conference call. We will finish today's event with a question and answer session. You can submit a question using the Q&A box on the webcast page as well as through the conference operator via your phone line. Given our time constraints, we will likely be unable to answer every question, but please follow up with the IR team after the call. Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
Details of these forward-looking statements are contained in our November 14th news release as well as on SEDAR and at our website at www.ivanhoemines.com. It is now my pleasure to introduce Ivanhoe Mines' President, Marna Cloete.
Thank you, Matt, and welcome everyone to our third quarter earnings of 2022. We've had an extremely busy quarter with our expansion projects at Kamoa and activities ramping up at Platreef and Kipushi. This quarter, Kamoa-Kakula kept building on its reputation as a world-class mine with record sales of 94,000 tons of payable copper and copper production of 98,000 tons of copper for the quarter. This gave us the confidence to up the lower end of our production guidance to 325,000 tons of copper and concentrate, with the aim to achieve the upper end of guidance of 340,000 tons of copper and concentrate. The debottlenecking project is now 70% complete and it is expected to reach annualized copper production of 450,000 tons of copper in the second quarter of 2023.
Our phase III expansion activities are progressing well and is expected to increase production from Kamoa-Kakula to 600,000 tons by the fourth quarter of 2024. Our C1 cash costs continue to be impacted by higher than expected logistics charges. With current mitigation measures in place, we reiterate our guidance and expect to be at the upper end of cash cost guidance for the year. To this end, we have tightened the range to between $1.35 and $1.40 per pound. Before our CFO, David van Heerden, discuss our financial results in more detail, I would like to provide a quick update on the efforts of our sustainability team. During the quarter, Kamoa-Kakula commenced with bulk earthworks at the Kamoa Center of Excellence. A rendering of this facility is in the background of this slide.
This center, once in operation, aims to create a sustainable and community-centered learning environment in the heart of the DRC. It will be a world-class facility offering degrees, diplomas, and short courses in collaboration with internationally accredited institutions. At our livelihood programs at Kamoa, our teams are expanding our community farming footprint, which contributes to local entrepreneurs as well as food security. Our team at Platreef focus on enterprise and supplier development to enable small and medium enterprises to be included in our supply chain. At Kipushi we focused on access to water with a borehole program underway to assist our communities. With that as a short introduction, I would like to now hand over to David van Heerden for the financial results.
Thank you, Marna, and good day to everybody joining on call today. The third quarter of 2022 was another quarter of exceptional performance at Kamoa-Kakula. However, the results was impacted by further decline in the copper price at the end of the period and inflationary pressures, both of which I will discuss in more detail. This call is, of course, just a high-level summary of our quarterly results, and the presentation should be viewed in conjunction with our quarterly financial statements and MD&A for the three and nine months ended September 30, 2022.
During the quarter, Kamoa-Kakula sold almost 94,000 tons of payable copper and concentrate, leading to quarterly revenue from contract receivables of $570 million, before a negative remeasurement of $110 million at period end, bringing us to a total revenue of $460 million for Q3. C1 cash costs for the quarter was a fraction higher due to the ongoing elevated logistics charges, but we will go into that, in more detail in an upcoming slide. Notwithstanding the lower copper prices in the quarter, Kamoa-Kakula generated a very healthy EBITDA of $254 million.
Revenue from contract receivables, booked at an average copper price during the month of sale, was $570 million in Q3 compared to $699 million in the second quarter of 2022, with the sales provisionally priced at $3.48 per pound in Q3 compared to $4.32 per pound in the second quarter. Q2 sales was remeasured at the end of June at a copper price of $3.79 per pound, while the realized copper price for Q3 was $3.50 per pound. At the end of September, the outstanding balance of provisionally priced sales were remeasured using a copper price of $3.36 per pound, with these collectively resulting in the negative mark-to-market at the end of Q3 of $110 million.
Kamoa-Kakula's cost of sales for the third quarter was $216 million in total, and $1.15, $1.05 per pound of payable copper sold, down from $1.15 in the second quarter. After deducting general administrative expenditure, the operating profit for the third quarter of the year was $223 million. Kamoa-Kakula's EBITDA was $254 million. Kamoa Holding recorded finance cost of $81 million in Q3, which is principally the interest on the shareholder loans from Ivanhoe Mines, as well as the interest on Kamoa-Kakula's equipment financing facility. The deferred tax and tax expense for the quarter was $57 million, and compared to $62 million in the Q2, 2022.
The non-controlling interest of $20 million for the quarter represents the profit attributable to the DRC government's 20% interest in the Kamoa-Kakula Copper Complex, leaving a profit of $69 million attributable to the joint venture partners. Ivanhoe's share of which equals $34 million in Q3. We move to the next slide. Indicated at the top left of the chart is the quarter-on-quarter comparison of Kamoa's revenue, while also including the realized copper price in the period. The build-up of the year-to-date revenue to $1.5 billion has been exceptional considering the decline in copper price.
The top right chart indicates the cash Kamoa-Kakula generated from its operating activities, with the bottom left chart underlining the strong quarter-on-quarter EBITDA performance and margin, which has been more than sufficient to cover the current expansion expenditure with the capital expenditure per quarter summarized at the bottom right-hand side. We move to the next slide. Ivanhoe's consolidated results for Q3. The chart starts with Ivanhoe's share of profit from the Kamoa joint venture of $34 million, which was mentioned two slides back. Additionally, Ivanhoe earned interest income of $41 million from Kamoa Holding in the third quarter from shareholder loans advanced to the joint venture. During the quarter, the company spent $4 million on Western Foreland exploration and $9 million on general and administrative expenditure.
Costs incurred at the Platreef and Kipushi projects are deemed necessary to bring the projects to commercial production and are therefore capitalized as development costs in property, plant, and equipment. The $27 million loss on the fair valuation of the financial liability in the third quarter represents the change in the deemed fair value of the conversion feature attached to the $575 million, 2.5% convertible senior notes, which Ivanhoe closed in March 2021. The conversion feature is an embedded derivative financial liability, and the fair value change is principally due to the fluctuations in our share price, and the loss is therefore a result from the increase of Ivanhoe's share price from the end of June 2022 to the end of September this year.
Further, Ivanhoe recognized finance costs of $10 million in Q3, relating mainly to the interest on the convertible notes at the effective interest rate. The aforementioned ultimately builds up to Ivanhoe's profit for Q3 of $24 million. We go to the next slide. The cash cost per pound of payable copper produced for delivery to China was $1.43 per pound of payable copper for Q3 2022, and largely in line with the $1.42 per pound in the second quarter. The volume benefit from additional tons produced in the quarter resulted in decreases in G&A and processing costs, but was offset by the increase in logistics cost. Concentrate production at Kamoa-Kakula doubled over the last year, which has not been met with a sufficient supply of trucking capacity and has led to an increase in the trucking contractor market pricing.
In addition, the Lualaba Copper Smelter was closed in June for maintenance, thereby temporarily increasing logistics volumes and costs for the last two quarters. The Lualaba Copper Smelter completed its scheduled maintenance in early September, which will assist in reducing overall shipping volumes. As the export blister copper incurs lower logistics cost per unit compared to copper concentrate. These factors, together with border congestion, further increased trucking demand resulting in higher logistics cost. Importantly, though, Kamoa-Kakula was able to sell almost all tons in payable copper produced in the quarter, with a difference in payable copper sold and payable copper produced being less than 1,000 tons. As Marna mentioned, we still expect to come in on the upper end of our guidance range.
While our costs are higher than we like, and the previous slide has indicated that Kamoa-Kakula still generates excellent EBITDA and cash from its operating activities. Thank you. I will now hand over to Alex Pickard, our vice president. Oh, no, sorry. One more slide. Just looking at our strong balance sheet position, which supports our growth. We are well-positioned for further development of our projects with $663 million in cash and cash equivalents on hand, and consolidated working capital of $686 million. Of our liabilities of $989 million, $610 million relates to the convertible notes, with these only due in 2026, with possible earlier redemption.
While $284 million relates to deferred revenue, which represents the prepayment for future sale of refined gold and palladium and platinum to be delivered by the Platreef project in terms of our streams in the future. Which in the future will be amortized as the ounces are delivered to the stream purchasers. Our forecasted spend for the remainder of 2022 is $149 million on Platreef and Kipushi, as well as continued exploration on Western Foreland and overheads. All operating and capital expansion costs at Kamoa-Kakula are expected to be funded from copper sales and facilities in place at Kamoa. We are forecasting a very healthy cash position at the end of the year.
I will now hand over to Alex Pickard, our Vice President, Corporate Development, and Marna to provide a brief update on the development of our projects.
Thank you, David, and good day to everybody on the line. It's Alex Pickard here, VP, Corporate Development. I'll say I'm very glad you took us through the balance sheet there because I wasn't prepared to take over then. Now I'll take you through a brief update on Kamoa-Kakula operations and projects, and also talk a little bit about our exploration efforts out in the field. First of all, looking at Kamoa-Kakula's operational performance, we are very pleased to report another record-breaking production quarter of 97,800 tons of copper-containing concentrate. This included 33,500 tons produced in September alone. That comfortably exceeds an annualized production rate of 400,000 tons. We were pleased to also repeat this level of production during the month of October.
The chart on the right-hand side gives a bit of an indication of how this was achieved. As phase II has reached steady state, we've gradually improved our milling rate. For the quarter, we milled close to 2.1 million tons, which was up from 1.85 million tons in the previous quarter. At this milling rate, we're looking at an annualized overall milling rate of roughly 8.3 million tons. That's exceeding our original design throughput of 7.6 million tons. We're also very pleased that the grades increased slightly during the quarter to 5.6%. This is a reflection of the continuing optimization effort that we're going through with our mining activities at Kakula in particular.
Given that phase II is also now ramped up to full capacity, we are pleased to see that the recoveries are hitting our design target of very close to 86% overall. Where that leaves us today is that as at the end of October, we've produced just over 274,000 tons of copper. As Marna mentioned at the beginning of the call, that's given us the confidence to increase the lower bound of our production guidance to 325,000-340,000 tons of copper for 2022. Finally, just looking at the debottlenecking program, that's also tracking ahead of schedule. We are roughly 70% complete today, and so we are targeting to be fully up and running by the second quarter of next year.
This will increase the overall milling capacity to 9.2 million tons. That's roughly 10% higher than what we milled in the previous quarter. In terms of copper production, that's around 450,000 tons of copper output. We will be giving more detailed guidance for 2023 early in January. Next slide, please. Moving on to our larger phase III expansion project at Kamoa-Kakula. The construction activities are going ahead very much as planned, and we have no change to our target for commissioning in the fourth quarter of 2024. This phase III project includes the construction of a new mine and concentrator in the Kamoa area of the mining license. That's roughly 10 km to the north of the existing concentrator at Kakula.
As well as the mine and concentrator expansion, we will also be building the largest direct-to-blister smelter in Africa, which has a capacity of 500,000 tons of copper anode. We anticipate that this smelter will be very much a game changer for the overall logistics at Kamoa, and will further reduce our cost structure, which we already feel is very competitive. Where we are today, we've completed basic engineering for the entire project, and this will all be incorporated into a new technical report for phase III and beyond that will be published early next year. On site, we are well underway with the earthworks and the early civil works.
We are in the process of advancing new declines in order to open up the new underground mines at Kamoa One and Kamoa Two that will ultimately support the phase three concentrator throughput. On the power side, we are also busy with the refurbishment of Turbine 5 at Inga II dam, which will provide an additional 178 MW of renewable power for phase III. At that site at Inga, we recently completed mobilization with the contractors, and we're pleased to say that the manufacturing of the key long lead equipment is also well underway in China. Now moving on to our exploration activities and starting with the Western Foreland project adjacent to Kamoa-Kakula.
Currently we are in the process of wrapping up the bulk of our regional large scale drilling for this year as we now head into the wet season in the DRC. We've been busy drilling extensions at a zone known as Makoko West, so this is adjoining a copper discovery that we initially made in 2016, I believe it was known as Makoko. In addition to the drilling at Makoko, we are conducting stratigraphic drilling at Lupemba, which is located in the far southwest of the Western Foreland, as well as testing for the edge of the Roan Sandstone, which is to the north of the existing Kamoa far north mining area on the Kamoa-Kakula mining right.
Finally, a few weeks ago, we made an announcement that we've been awarded new exploration rights in South Africa. These are directly adjacent to Platreef's mining right, and are actually slightly larger in size than the two farms that make up the Platreef mining right at roughly 80 sq km. Looking at the diagram on the right hand side as an illustration, what we are looking to understand is a very significant gravity anomaly, which is known as the Mokopane Feeder, and the intersection of this anomaly with a regional fault system which occurs on these new licenses. Following that award a few weeks ago, we are now kicking off with high resolution geophysical work, and we look forward to providing more information on this new project in due course.
With that, I will hand back to Marna to finish off with Platreef and Kipushi.
Thank you, Alex. Just a quick reminder that we are currently executing phase one, a 700,000 ton per annum mine at our Platreef project in South Africa, which is anticipated to start first production in the third quarter of 2024. Our aim is to seamlessly con-
Her line just dropped. Can somebody please take over?
Sure, I'm happy to do so. Where we are with Platreef today is based on the completed Shaft 1. We are well underway with the underground mining, so we've completed over 300 meters of lateral development work. What we're doing right now is working towards the bottom of the first ventilation shaft, which will allow us to significantly increase the number of crews in the mining activity underground. On surface, we have a lot of activity going on. We started the construction of the processing plant for phase II. The civil works are underway there. The long lead time orders have been placed.
We are also in construction with the first 5-MW solar power plant for Platreef, and that's largely to support our construction activities and also to charge the battery electric underground fleet that we are trial using at Platreef today. In terms of the remainder of this year, we are forecast to spend $72 million. As David mentioned, all of our expenditures at Platreef are currently being funded by the streaming agreements and we made the final drawdown on those $300 million facilities. We are very much targeting first production in Q3 of 2024. There's no change there. Really with Platreef, you know, we're much more excited about the ultimate expansion and scale of this project, which will be dictated by Shaft 2 .
We are continuing with the sinking works of Shaft 2. You will start to see the headframe going up very quickly there. Ultimately the goal with Platreef is to become one of the largest and lowest cost producers of the PGM metals, platinum, palladium, rhodium, gold, as well as a significant quantity of nickel and copper, which contribute roughly up to 30% of the total value of the resource at Platreef. Next slide, please. At Kipushi, we've also had a very busy quarter in terms of we kicked off with a breaking of ground ceremony in August. That was attended by Ivanhoe Mines, members of the DRC government as well, of course, as our partners, Gécamines.
The first concrete pour took place last month, and we are in the process of ordering the long lead items for the processing plant. That is all underway. We have mining crews operating underground now at Kipushi for the first time since the early 1990s, so that's a very exciting milestone for the team on site. We announced that we have a study underway, which is to investigate options to upgrade the DRC Zambia border crossing at Kipushi, which will allow Kipushi to have a direct access for commercial imports and exports and will also hopefully have knock-on positive effects for Kamoa. We hope to come to the market soon with an update on our financing and offtake discussions, but it's safe to say they are well advanced with several interested parties.
Looking at the overall schedule for Kipushi, we are keeping the project on track for a 18- 24 month construction timeline overall. Looking to have Kipushi together with Platreef, together with the third phase of Kamoa-Kakula all in production by the end of 2024. Perhaps with that, I will pass back to Matt Keevil to conduct the Q&A.
Thanks. Thank you, Alex. We'll now begin the Q&A session. Just a reminder that if you would like to ask a question, please submit it via the question box on the bottom left-hand corner of this webcast page or via the conference line. We'll again do our best to answer as many questions as possible with the time remaining, but may not get to all of them. Please do follow up with our IR team if you have an unanswered question. First and foremost, I think we'll hand it back to the operator, just to get to everyone who's waiting on the line. Operator, could we jump over to some questions on the line, please?
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star key followed by the number one on your touch tone phone. You'll hear a three-tone prompt acknowledging your request. Questions will be taken in the order they are received. If you're using a speakerphone, please lift up your handset before pressing any keys. We'll take our first question from Lawson Winder with Bank of America Securities. Your line's open.
Good afternoon, guys. Can you hear me fine?
Yes.
Go ahead.
Okay, perfect. I just wanted to ask about the logistics cost. Just to begin with the $56 per pound reported in Q1 through to Q3 2022. Are you able to kind of break down for us how that splits between Lualaba being closed versus trucker availability and border issues?
David, would you like to take that?
Yeah. I think, Lawson, I mean, it's a bit of an interesting mix. Although with the border issues probably around, and these are order of magnitude estimates, but yeah $0.03 per pound. If we look at just the increase in cost from our logistics service providers, that's gone up around 20%. I think if we look at ocean freight that we have seen an increase, I think globally over past quarters, but we've seen that sort of come down in Q3. It's a combination of everything.
If we compare the smelter with concentrate logistics charges on a like for like comparison, and there's, you know, about a 20% difference per pound between the two.
Maybe I'll ask it. Thank you for that. I'll ask the question again, maybe from a different point of view, which is like looking into 2023, I mean, do you expect $0.56 per pound to be the transportation cost going forward?
Lawson, I think we would like to see where logistics cost goes with our current initiatives that we've announced, see what impact that's got on the cost in the near term. As that becomes, you know, apparent, we will, you know, look to include that in our guidance provided for 2023, which we will issue early next year.
Okay. Also, a similar question. What was kind of the exit rate cost from the quarter? As of like September 30th, 2020, to what, where would you then run? Would it have been above $0.56 or below that $0.56?
C1 cash cost at the end of the quarter and below 56 because of the fact that we utilized Lualaba in September.
Do you have a specific number by chance?
I think I don't wanna be too specific, and give too much information other than, I mean, that we still expect to be within our guidance range for the fourth quarter.
Okay, just maybe one final question for me on the head grade. I think, I mean, the expectation for a couple of quarters had been that head grades would start to approach 6%. Why do you think it's still running a little bit below 6%? You know, into Q4 and into 2023, I mean, is 6% head grade to the mill a reasonable expectation?
Maybe I'll give some color on that one for you, Lawson. Look, I guess in terms of where we are today, it's really a function of how much
Can Kakula on a standalone basis, because of course, Kakula has significantly higher grades than Kansoko. How much can Kakula support the current milling rate? Which as I mentioned in my section, as of the last quarter was about 8.3-8.4 million tons per annum. What that means in practice is doing effectively more development along the sides of Kakula to open up more panels so that we can have a greater availability of these high-grade panels for the mining crews at Kakula.
That sounds very simple in theory, but in practice it, you know, it does take some time to get it right. There is a bit of a lag. It will require putting in, you know, more ore handling infrastructure. For example, we're looking at an additional conveyor to complement the Kakula South decline. And all of this will take, you know, some months to get up to speed. We're very confident that we will get there, but in the meantime, you know, we will continue to feed all from the run of mine. Sorry, I should say really the development stockpiles, which comes in at a slightly lower grade. You know, the advantage is that's already been paid for effectively from a cash flow point of view.
We can keep our mill as full as possible in the meantime. Looking forward to 2023, you know, we've got this kind of double effect because, while we should be catching up from a mining point of view and having more availability, the mill also isn't standing still. We'll probably have an additional one million tons of capacity following the debottlenecking. The mine will continue to catch up through 2023. In terms of where we get to, you know, I'd say we'd hopefully be somewhere between 5.6% and 6%. But we will probably give a more firm view on that at a later date.
Yep. Okay. Thanks a lot for that color, Alex. Thank you all for those responses.
Okay. Next we'll go to Farooq Hamed with Raymond James. Your line's open.
Hi. Good morning or good afternoon, everyone. My question is maybe a little bit bigger picture. Just looking at your CapEx expenditures, they seem to be ramping up as we get into the fourth quarter here. As we talk about your project timelines with all three projects, you know, either the expansion or with Platreef and Kipushi, you know, being delivered in the second half of 2024, it looks like there's gonna be, you know, quite an increase in intensity here at all three sites. I'm just wondering, you know, we've looked at other companies when they start expanding and start, you know, trying to do work on multiple assets at the same time.
There tends to be an increased risk of timeline slippage of projects, you know, starting to have like creep in different ways, cost creep, whatever it may be, because you have just so many fronts that you're moving forward at the same time. Can you talk a little bit about, you know, what kind of fail-safes or what processes do you have in place to ensure that you can move all three projects forward on the timelines that you have, you know, guided for, without having these risks that we've seen, you know, multiple companies in the mining industry have in the past?
Maybe I'll take this one. We've made a great effort in ensuring that we learn from what we've done at Kamoa, and we've recently announced that Mark Farren's joining us as our Chief Operating Officer, and he started on the first of November, so he's fully back in the saddle. He'll probably join us on the next quarterly call. We've also pulled Steve Amos, who did the project execution at Kamoa-Kakula, into the group to ensure that we take the learnings forward from Kamoa-Kakula. What we've also done over the past year is capacitating both Kipushi and Platreef with the right skills levels to ensure that we can deliver these projects because we do know what it takes. We are ensuring that we remain on track with long lead order items. We schedule things well in advance.
I must say, we do have a competitive edge with our Chinese shareholders assisting with procurement out of China and ensuring that everything remains on track. I think we actually have an edge over our peers in terms of our structures with our shareholders to deliver these projects. In terms of capital allocation in the earlier part of your question, we've carefully crafted each and every project to be able to sustain itself with local facilities and also be augmented by Ivanhoe Mines for Kipushi and for Platreef in terms of our treasury. We flushed all those numbers through, and we are comfortable that we will be able to execute these projects with confidence over the next two years.
Okay. No, that's helpful to understand kind of what you've done internally and, you know, the benchmarking you've done on the capital. Just a follow-up to that then. Given that these projects are really getting started and, obviously they've been started before, but in earnest here, do you intend to provide kind of milestone updates on a quarterly basis to the market so that we can see how these projects are tracking, individually, so that we know, you know, when to anticipate, you know, production and, if there are issues that arise, you know, along the way?
Most definitely. We joke because everything's happening in 2024 for us. We'll be delivering the smelter and phase III at Kamoa-Kakula in 2024.
Platreef will go into production in Q3 2024. Kipushi will go into production in 2024. You will see a lot of news flow from us over the next couple of quarters to show you the progress as we do the builds at both Platreef and Kipushi and as we ramp up our construction activities at Kamoa-Kakula.
Okay. Thanks for that. Maybe just one last one for me, just as it relates to the CapEx estimates. So for Platreef, I believe it was $488 million and $382 million at Kipushi. Those numbers were provided earlier in the year. Across the industry, we've seen, you know, inflation impact CapEx estimates for projects and brownfield projects and greenfield projects. Can you tell us how are you tracking to those estimates that you provided at the beginning of the year? Are you seeing inflation pressure on those costs? Do you anticipate having to remeasure those costs in the coming quarters? Or at this point, are you still comfortable with those CapEx estimates?
We all comfortable to a large degree because we did place a large number of the long lead order items, based on our cost estimates. We are all seeing some element of inflation. Where we are seeing inflation, that will be communicated, once those numbers are firmed up. It's not inflating the numbers to a degree where, you know, the project will be impacted severely negatively, but it is normal inflation, that we are seeing coming through. I don't know, David, if you maybe wanna add a bit more granular information on the capital inflation we are seeing.
No. Thanks, Marna. I think you've summarized it well. Together with our production guidance, which we will issue early next year, we will also update the market on our guidance around our capital expenditure for 2023, and that would include a more detailed indication of where we see there has been inflationary pressures and increases. Just a bit more granular detail, I think, on Platreef, specifically because of the weakening of the South African rand. The impact of inflation has been less felt when compared to Kipushi, for instance.
On Kamoa, we've got the benefit of being busy with the pre-feasibility study at this stage, so we can build in any, you know, the latest estimates on inflation as well, and that'll be reflected in the study.
Okay. Sorry, did you just say the timing of that study?
The timing of that study is late this year, early next.
Okay. Thanks very much.
No problem.
Next, we'll go to Andrew Mikitchook with BMO Capital Markets. Your line is now open.
Hi. I just wanted to go back to the Western Foreland exploration that slide 16, if I'm reading this correctly. Can you just go back to the significance or the prioritizing of Lupemba and Mushiji versus, you know, the regional work and extending the known mineralizations at Kansoko West. Just so we have a sense of that, please.
Hi, Andrew. Perhaps I'll take this one. I mean, look, it's difficult to give a definitive view on priority ranking, but they are sort of looking to achieve different things. Perhaps starting with Kansoko, that is more kind of how I would view it as low-hanging fruit in terms of expanding our knowledge of an existing deposit, and seeing what sort of additional resources we can add to that area. We're drilling there with a sort of reasonable degree of certainty.
Whereas what is going on elsewhere in the license, whether that is Lupemba or which is in the far southwest or Mushiji up in the north is, you know, what we're trying to do really is cast the net as wide as possible to begin with on the Western Foreland as a whole, to test our knowledge based on the geophysics and the geochem information that we've acquired over the last couple of years. Really what we're doing is testing our knowledge of the underlying basinal structure and what leads to the sort of Kamoa-Kakula style mineralization that ultimately we're searching for.
And then you know, if we don't find exactly what we're looking for because we've sort of gone beyond the bounds of the Roan Sandstone, which is the horizon that we're looking for in particular, we sort of bring the net back narrower, and closer towards our existing operations. Obviously, you know, there's a very rational reason for testing the edges and the perimeter of the portfolio first because, you know, we're not sort of done in terms of looking at what else might be out there in the Western Foreland. Hopefully that just gives a bit of context as to the, it's not so much the ranking, but how we see things.
No, that's great. Thank you very much for the added detail. Some of my other questions have already been asked, so I will sign off. Thank you.
Okay. I show we have no further questions on the phone. I'll turn it back over to Matthew Keevil for further questions.
Thanks very much, operator. We have time for a few from the web, so we'll dive in. Well, there's a few repeats here, so we may consolidate some questions as we move forward just to get through as many as possible. First and foremost, we'll start at the top. Marna and David, this is probably a good question for you. This is a popular one on the web client. Given sort of the volatile copper environment recently, how have your expectations changed in terms of shareholder returns, dividends, and sort of the repayment of those loans over the next five years?
Yeah. Thanks, Matt. I think dividends and shareholder returns is obviously copper price dependent. I think at the moment the focus is on expansion because we do feel that, yeah, firstly, expansion of phase III at Kamoa-Kakula is the most value creative thing we can do. Also the continued development at Platreef and Kipushi. I mean, as we've highlighted on the call already, everything sort of comes to an end in 2024. I think, yeah, I mean, after that, this will definitely be a lot of options open to us.
Great. Thanks, David. The next one, Marna, I think this is probably well-placed for you, to just elaborate a little bit on the logistics situation, within Congo as well as, sort of what's going on regionally, in terms of those, transport items.
Yeah, we've experienced a few issues this past quarter around border congestion, and I think, you know, we had a couple of breakthroughs. During the previous quarter, there was only one border, which is Kasumbalesa, that was open for imports and exports. Subsequently, Sakania also opened for imports and exports, and we've got a third border that's available for imports called Mokambo. We ourselves are currently working on a solution at Kipushi that will also cater potentially for volumes from Kamoa, which would further alleviate pressures. But ultimately, we are also looking at rail solutions, which we see as the medium to long-term solution for Kamoa-Kakula. Not only is it a greener solution, but it will be a cheaper solution, a much shorter route if we follow the Western corridor.
That's a development that we have a keen interest in. We have been working with our local logistics service providers to ensure that we get guaranteed trucking availability to Kamoa-Kakula. We haven't really experienced truck shortages over the past quarter. We've had enough availability of trucks, but it's really been around turnaround times on borders. One of the big items that we did also manage to negotiate was longer operating hours at some of the borders, and that also made a huge difference. It does take, however, a bit of time for these costs to flush through your balance sheet and income statement. We are hoping to see some of the fruits of our efforts in the fourth quarter.
Thanks, Marna. Just another popular question on the web. Alex, this is probably best positioned for you. Talking a little bit about the company's broader, sort of not necessarily M&A strategy, but growth strategy, following the Mokopane Feeder acquisition and what you see moving forward in terms of exploration and development.
Well, thanks, Matt. That's a good question. Look, I think our announcement with the Mokopane Feeder, hopefully it illustrates to the market that, you know, we're certainly not done with the three projects that we are advancing into production or, sorry, in the case of Kamoa-Kakula, we're in production but expanding. As we've alluded to on this call, you know, we see a really pivotal year for Ivanhoe Mines in 2024, where we will be a material producer with three effectively diversified assets online. That naturally leads to a bit of a question about what's next in the hopper.
You know, I think where Ivanhoe Mines has had its greatest successes in the past have been with the drill bit, but also, with our sort of differentiated approach to project development, and the project development expertise that we've certainly built up with Kamoa-Kakula. We feel that there are value accretive opportunities out there to find things in a similar vein where we can apply our model, and hopefully generate the, you know, fourth and fifth and sixth projects, major projects for the Ivanhoe Mines portfolio. Yeah, you know, we're certainly interested. We're certainly looking around.
Great. Thanks, Alex. With that, we've run slightly a bit over our hour time, so we'll conclude the call. Yeah, this concludes Ivanhoe Mines' third quarter 2022 financial results call. Thanks again for everyone attending, and we look forward to speaking to you about the exciting milestones coming in 2023. Again, if you had outstanding questions, please do not hesitate to reach out to our IR team, and we can answer those on a one-on-one basis. With that, I will pass over to the operator to close the call.
Thank you. Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation. You may now disconnect your line.