Continuing seismic activity has forced Ivanhoe Mines Ltd. IVN-T to pull its copper production and cost forecast at one of its anchor operations in the Democratic Republic of Congo.
Vancouver-based Ivanhoe suspended operations at its Kakula mine on May 20 because of the danger.
In a statement Monday, Ivanhoe said that seismic activity at Kakula has continued over the past few days.
“Preliminary indications are that seismic activity at the Kakula underground could potentially continue for weeks, which would inhibit access to the mine and prolong the temporary suspension of operations,” the statement said.
The company has seen water inflow levels rise in the mine because of the impact on its pumping and electrical equipment. It is working on a dewatering plan, including acquiring new pumps, and also consulting with geotechnical experts.
Ivanhoe withdrew its production and copper forecast for the Kamoa-Kakula complex on Monday, owing to the uncertainty.
Shares in Ivanhoe fell by 16.2 per cent Monday on the Toronto Stock Exchange to close at $10.77 apiece. The stock is down by more than 20 per cent since news of the seismic activity was first disclosed.
“On straight math, this seems like an overreaction,” Sam Crittenden, analyst with RBC Dominion Securities, wrote in a note to clients Monday. “However, there is uncertainty around how quickly it could come back online and any longer term impacts, while the residual risk around a recurrence is harder to quantify.”
Ivanhoe, which is one of Canada’s biggest copper mining companies, was founded by well-known financier Robert Friedland.
Ivanhoe and China’s Zijin Mining each own a 39.6-per-cent stake in Kamoa-Kakula. The DRC government owns a 20-per-cent stake. Chinese investment company Crystal River Global Limited holds a 0.8-per-cent stake.
Ivanhoe last week disputed elements of a press release sent out by its partner Zijin Mining that described the state of some of the mine after the seismic activity.
“The press release by Zijin Mining refers to ‘multiple roof-falling and rib-spalling in the eastern section of the [Kakula] mine.’ Ivanhoe Mines does not agree with this statement,” the company said.