For years now, Ivanhoe Mines (Toronto: IVN) has been one of my favorite natural resource stocks, and it’s my top pick for 2021, explains Frank Holmes, CEO or U.S. Global Investors and editor of Frank Talk.
The company traded up a little over 61% last year as investors anticipated the start of production at its tier-one Kamora-Kakula Copper Project in the Democratic Republic of the Congo (DRC).
The project has the potential to become the world’s second-largest copper mining complex, with annual output projected to be 800,000 metric tonnes a year.
We’re now only six months away from scheduled initial production at Kakula, but already Ivanhoe has begun underground development. The company reported stockpiling some 269,000 tonnes of high-grade copper ore.
It’s impossible to overstate how exciting the news is. As many of you know, a new mine of this scale and quality doesn’t come online too often these days.
The copper grade at Kakula is ultra-high at 6.6 percent over the first five years of production, a grade “that is an order of magnitude higher than the majority of the world’s other major copper mines,” according to Ivanhoe founder and co-chairman Robert Friedland.
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Sure to please ESG investors, operations at the complex will be powered by clean, renewable hydropower, allowing the company to achieve its goal of becoming the world’s “greenest” copper miner.
Production at the mine will continue to ramp up in phases until full processing capacity is reached sometime between 2028 and 2030.
This makes Ivanhoe a true long-term play on copper, a metal that should only increase in importance as the “electrification of everything” trend accelerates. With Kakula set to begin production, I believe Ivanhoe is very well-positioned to ride the wave higher.